“New infrastructure” is a widely discussed concept in recent days. The role of new infrastructure projects in hedging the economic downturn and driving economic transformation is highly anticipated by industry insiders.

A staff member (R) guides a visitor experience AR technology at the 2019 World 5G Convention in Beijing, Nov. 21, 2019. (Xinhua/Ren Chao)

A recent meeting of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee declared that the country will accelerate the construction of new infrastructure types such as 5G networks and data centers during this time.

Feng Sheng, an analyst with Zhongtai Securities, said the reason why the Chinese government pays great attention to new infrastructure is that accelerated development of the sector will stabilize growth, and employment amid the novel coronavirus, which has exerted a relatively big impact on the Chinese economy.

Infrastructure projects based on high technologies, including 5G networks, extra-high-voltage power transmission projects, inter-city transit systems, and urban rail transport projects, vehicle charging stations and data centers, are all considered to be examples of new infrastructure.

Ren Zeping, chief economist and director of the Evergrande Think Tank, pointed out that new infrastructure will be a cornerstone for China to achieve economic and social prosperity.

New infrastructure is a weak point for future development, as well as the best area for stimulating effective demand and increasing long-term effective supply. It is a powerful weapon for the country to overcome the “middle-income trap” and march toward high-quality and innovative development.

Industry insiders pointed out that the scale of new infrastructure is too small, and it is hard to push the economy a lot simply by increasing investment, calling for integrated investment in new as well as traditional infrastructure.

According to Hua Changchun, chief economist from Guotai Junan Securities, the value of public-private partnership (PPP) projects in China stands at 17.6 trillion yuan, and the share of new infrastructure is just a little less than 3 trillion yuan or 15 percent of the total value of infrastructure projects.

Therefore, Hua projects that China could push forward construction of both traditional and new infrastructure to achieve economic recovery and transformation in fusion.

Jiang Chao, chief analyst of Haitong Securities, pointed out that new infrastructure is an extension of traditional infrastructure and that it guarantees stable growth and innovation. Moreover, it is a key area for making upgrades in the manufacturing industry.

Orient Securities believes that China’s 5G network construction is projected to surpass market expectations.

China Galaxy Securities holds that China approved 12 extra-high voltage transmission projects in September 2018. If each project absorbs 20 billion yuan of investment, then the newly approved 7 extra-high voltage transmission projects in 2020 are expected to bring about 150 billion yuan of market value.

BOC International Holdings Limited, the wholly-owned subsidiary of Bank of China, noted that 40 Chinese cities had opened inter-city transit routes by the end of 2019. As a powerful tool for stabilizing the economy, more such routes are expected to be built across the country, bringing the mileage of inter-city transit routes from 6,730 kilometers in 2019 to 7,730 by the end of 2020.

New Times Securities estimates that the value of the battery-cell charging service market will reach 40 billion yuan, as the number of new energy vehicles has reached 20 million and the approx. 2,000 kilowatt-hours of electricity demanded to charge each vehicle per year.

Pingan Securities forecasts that more data centers will be established in cities surrounding metropolises such as Beijing, Shanghai, Guangzhou and Shenzhen, and moreover, the northwestern and southwestern regions of the country will enjoy huge advantages once establishing data centers.

According to the Beijing-based consultancy Qianzhan Industry Research Institute, the value of the domestic artificial intelligence market will grow by 45 percent in 2020, far exceeding the global average speed.

Yan Lei, an analyst with Pingan Securities, said the novel coronavirus epidemic will accelerate the construction of 5G infrastructure, Industrial Internet of Things (IIoT), and cloud computing, adding that increasing investment in new infrastructure is expected to narrow China’s gap with developed countries in this respect.