China to offset post-COVID19 economic impact with infrastructure investment: expert

Photo: Xinhua

Amid tumbling oil prices, the world’s largest oil producers closed a deal on April 9 to rescue global crude markets from a Covid-19-induced collapse by reducing daily production to 6 million barrels per day in April, and further reductions are possible.

Cheaper oil and gas may create a slight surge in some developing and developed countries, but that situation cannot last for long, especially after the Paris Agreement pointed out that renewable energy is the right path for humans, Energy Foundation China President Zou Ji said in an interview on April 10.

Specifically, China has entered the second phase of the coronavirus pandemic, with a relatively low possibility of large-scale resurgence domestically. In addition, as the Chinese market gradually recovers from the nationwide measures to stop the spread of the virus, China is eyeing opportunity of new infrastructure projects to maintain sustainable development and offset the post-Covid-19 economic impact, Zou observed.

Rather than striving to maintain a certain GDP growth rate, the Chinese government is pursuing a solution for a sustainable economy, which requires a comprehensive assessment system, according to Zou.

Unlike previous infrastructure investment on railways, electricity transmission, and urban planning and building, the new projects will focus on high-tech infrastructure that empowers innovation, including 5G networks, big data centers, AI, and the Industrial Internet.

A meeting of the Standing Committee of the Political Bureau of the Communist Party of China’s Central Committee on March 4 clearly stated that China would beef up input in key projects and speed up the construction of new infrastructure such as 5G networks and data centers.

“Actually, it is not new, as the construction has been ongoing for quite some time now. Expectations for the new infrastructure is high, but it will not become a backbone by this year or the next, considering the speed of social resources deployment and the demand of big investment, but we will see a leap in five years. That we can count on,” Zou said.

He pointed out that the construction of new infrastructure will unavoidably consume lots of energy, so building energy storage systems for power systems, pumped storage, and chemical storage is a top priority.

For example, the construction of big data centers will grow to be major power consumers and this requires improved energy efficiency, but as fundamental infrastructure for AI and the Industrial Internet, the distribution of these centers will make them economical by optimizing the production process.

Intermodal freight transport is another key element for China to contribute to the global reduction of carbon emissions, which will eventually benefit the transformation of the public transportation system both domestically and overseas, Zou said.