BEIJING: Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than a trillion dollars into the economy through the rollout of everything from wireless networks to artificial intelligence.
In the masterplan backed by President Xi Jinping himself, China will invest an estimated US$1.4 trillion over six years to 2025, calling on urban governments and private tech giants like Huawei Technologies Co to lay fifth generation wireless networks, install cameras and sensors, and develop AI software that will underpin autonomous driving to automated factories and mass surveillance.
The new infrastructure initiative is expected to drive mainly local giants from Alibaba and Huawei to SenseTime Group Ltd at the expense of US companies. As tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the Made in China 2025 programme. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei.
“Nothing like this has happened before, this is China’s gambit to win the global tech race, ” said Digital China Holdings chief operating officer Maria Kwok, as she sat in a Hong Kong office surrounded by facial recognition cameras and sensors. “Starting this year, we are really beginning to see the money flow through.”
The tech investment push is part of a fiscal package waiting to be signed off by China’s legislature, which convenes this week. The government is expected to announce infrastructure funding of as much as US$563bil this year, against the backdrop of the country’s worst economic performance since the Mao era.
The nation’s biggest purveyors of cloud computing and data analysis Alibaba Group Holding Ltd. and Tencent Holdings Ltd. will be linchpins of the upcoming endeavour. China has already entrusted Huawei to galvanise 5G. Tech leaders including Pony Ma and Jack Ma are espousing the programme.
Maria Kwok’s company is a government-backed systems integration provider, among many that are jumping at the chance. In the southern city of Guangzhou, Digital China is bringing half a million units of project housing online, including a complex three quarters the size of Central Park. To find a home, a user just has to log on to an app, scan their face and verify their identity. Leases can be signed digitally via smartphone and the renting authority is automatically flagged if a tenant’s payment is late.
China is no stranger to far-reaching plans with massive price tags that appear to achieve little. There’s no guarantee this program will deliver the economic rejuvenation its proponents promise. Unlike previous efforts to resuscitate the economy with “dumb” bridges and highways, this newly laid digital infrastructure will help national champions develop cutting-edge technologies.
China isn’t alone in pumping money into the tech sector as a way to get out of the post-virus economic slump. Earlier this month, South Korea said AI and wireless communications would be at the core of it its “New Deal” to create jobs and boost growth.
According to the government-backed China Centre for Information Industry Development, the 10 trillion yuan (US$1.4 trillion) that China is estimated to spend from now until 2025 encompasses areas typically considered leading edge such as AI and IoT as well as items such as ultra-high voltage lines and high-speed rail.
Separate estimates by Morgan Stanley put new infrastructure at around US$180bil each year for the next 11 years -- or US$1.98 trillion in total. Those calculations also include power and rail lines. —- Bloomberg
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