China’s public and private sectors are set to spend 10.6 trillion yuan (US$1.6 trillion) through 2025 to develop next-generation infrastructure, including the 5G network and electric-vehicle charging stations. This is especially important for the economic juggernaut as trade friction with the US looks likely to continue despite the change in administration.

The investment will account for roughly 10 percent of all social infrastructure spending, according to the China Academy of Information and Communications Technology, a government think tank that released the outlook.

According to predictions by US data provider Gartner, the global spending on communication services, data centres and other information technology infrastructure is expected to come to US$3.75 trillion this year alone. With this in mind, one could argue that China’s expenditure is not particularly extraordinary.

But China’s annual tech infrastructure spending through 2025 would nearly double the 1.2 trillion yuan in comparable spending last year, according to an estimate by the Bank of China. The government has begun its ‘new infrastructure initiative’ with the goal of focusing development on seven main areas, including 5G communication network, artificial intelligence, and electric vehicle support.

Regional governments will lead investment into the program. For example, the Guangzhou Province, located in the south, plans to spend 1 trillion yuan over the next few years. The funding will go into 5G base stations and expanding the network of electric vehicle charging stations.

Through this initiative, China seeks to prop-up the nation’s economy which has suffered severe setbacks as a result of the global coronavirus pandemic. The country is now hoping to revive the high-tech industry which has more or less stalled since the onset of Covid-19. In the government work report Premier Li Keqiang delivered in May, he said “priority will be given to new infrastructure” in the interest of boosting consumption and facilitating structural reforms.


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