Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than US$1 trillion into the economy through the introduction of everything from wireless networks to artificial intelligence (AI).
In a master plan backed by Chinese President Xi Jinping (習近平), Beijing plans to invest about US$1.4 trillion over six years to 2025, calling on urban governments and private tech giants such as Huawei Technologies Co (華為) to lay 5G wireless networks, install cameras and sensors, and develop AI software that would underpin autonomous driving to automated factories and mass surveillance.
The new infrastructure initiative is expected to mainly bolster local giants — from Alibaba Group Holding Ltd (阿里巴巴) and Huawei to SenseTime Group Ltd (商湯科技) — at the expense of US companies.
As tech nationalism mounts, the investment drive would reduce China’s dependence on foreign technology, echoing objectives set forth previously in the “Made in China 2025” program.
Such initiatives have already drawn fierce criticism from US President Donald Trump’s 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 Ltd (神州數碼) CEO 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 National People’s Congress, which convenes today. The government is expected to announce infrastructure funding of as much as US$563 billion this year, against the backdrop of the country’s worst economic performance since the Mao Zedong (毛澤東) era.
The nation’s biggest purveyors of cloud computing and data analysis, Alibaba Group Holding Ltd (阿里巴巴) and Tencent Holdings Ltd (騰訊), would be linchpins of the upcoming endeavor. China has already entrusted Huawei to galvanize 5G.
Tech leaders, including Pony Ma (馬化騰) and Jack Ma (馬雲), are espousing the program.
Digital China is a government-backed systems integration provider, among many that are jumping at the chance. It is bringing half a million units of project housing in Guangzhou online, including a complex three-quarters the size of New York City’s Central Park.
To find a home in Guangzhou, 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 and there is no guarantee that this program will deliver the economic rejuvenation that its proponents promise. Unlike previous efforts to resuscitate the economy with “dumb” bridges and highways, this newly laid digital infrastructure would help national champions develop cutting-edge technologies.
Bloomberg NEF China Research head Nannan Kou said that China’s new stimulus plan is likely to lead to a consolidation of industrial Internet providers, and could lead to the emergence of some larger companies capable of competing with global leaders such as GE and Siemens.
One bet is on industrial Internet of Things platforms, as China aims to cultivate three world-leading companies in this area by 2025, Kou added.
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