China Counting On 5G To Reignite Growth Engine

The Chinese government has pushed its local factories to resume production and rolled out relief measures to help industries hit by the coronavirus disease, with a heavy emphasis on the 5G sector’s role to restore its growth engine.

China is now moving at full throttle trying to ramp up production at all levels of industries as the first stage of its relief efforts so as to ease social anxiety fueld by city lockdowns, travel curbs, and labor and materials shortages.

Most of China’s industries saw their capacity resumption rates reach 60% or even higher than 70% as of the end of February, with prospects to see the resumption to recover to 90% or higher by the end of March.

However, China’s central government has reiterated that the nation also must accelerate the construction of 5G and other new infrastructure to help lift its national prowess harmed by the virus.

It also wants its 5G networks to deepen its integration with a number of vertical industries such as manufacturing, medical care, education, and IoV, and also demand its telecom operators come up with new 5G applications and services leveraging expertise gained from the recent pandemic control efforts.

China’s three telecom operators have switched on 156,000 5G base stations in early February 2020, with plans to turning on as many as 550,000 5G base stations by the end of the year.

By 2025, China’s total investments on 5G infrastructure and networks will reach CNY1.2 trillion (US$169.59 billion). Besides, the vast government-backed 5G investments are likely to attrack additional investments of up to CNY3.5 trillion from related upstream and downstream industries.

The next stage of China’s efforts to reboot its economy will include measures to spur the replacement demand for 5G smartphones, such as subsidies for the purchase of new phones.

Cashing in on the improved 5G network environments and the likelihood of government subsidies, China’s handset makers are keen to develop 5G phones with a price tag below CNY3,000 to significantly expand the market base for the new segment.

China expects its commercial 5G operations to indirectly generate a production value of CNY24.8 trillion in 2020-2025 in terms of economic output, China Academy of Information and Communications Technology (CAICT) has projected.

―Digitimes