China bets big on 5G, to spend $150 billion in next 6 years

China is planning to spend $150 billion on 5G wireless technology in the next six years — a move to jump-start automated manufacturing and enable Beijing to emerge as a world leader in Artificial Intelligence (AI.

China’s heavy investment in 5G has huge implications as it could sharpen Beijing’s competitive edge, vis-à-vis the U.S., the world’s largest economy.

“China regards next-generation 5G networks — which offer faster data rates, reduced latency, energy savings, cost reductions, higher system capacity and massive device connectivity — as a chance to get out in front for the first time,” says the China Internet Report (CIR 2019, published jointly by South China Morning Post (SCMP and Abacus.

5G networks would be at the heart of a Wi-Fi linked “connected” world. “Every asset can be connected through the internet,” says Cui Kai, a Beijing-based analyst of Internet of Things (IoT for the IDC, as quoted by SCMP. “Every device, even your clock on the wall, could become internet connected,” the daily quoted Werner Vogels, chief technology officer at Amazon as saying.

Sophisticated networks

Over several decades, China has accumulated expertise in cloud computing and Big Data, which could now be channelled by sophisticated 5G networks, activating millions of AI applications to work simultaneously. “If ‘big data’ is the new oil of the digital era,” SCMP observes, “then 5G is the next set of pipes that will deliver it and unlike previous generations, China is determined to own more of this infrastructure, giving it mastery of its own industrial future”.

Unsurprisingly, China is in overdrive to acquire 5G patents as possible — a move that would help Beijing set the rules for the technology’s future development. China already commands 3,400 5G patents, ahead of South Korea, which has 2,051, with the U.S. at number three having 1,368, according to the CIR report.

The potential of 5G in setting the global pecking order, where an Asian power, which is acquiring pole position, is driving a fierce Sino-U.S. rivalry for global technological dominance.

A recent paper by the Defence Innovation Board, an independent federal committee that advises the U.S. Defence Department, concluded that “the leader of 5G stands to gain hundreds of billions of dollars in revenue over the next decade, with widespread job creation across the wireless technology sector”. It added: “The country that owns 5G will own many of these innovations and set the standards for the rest of the world… that country is currently not likely to be the U.S.”

Chinese companies Huawei Technologies and ZTE are in the cross-hairs of the Trump administration. In May, Washington logged Huawei in its trade backlist, citing security concerns, effectively blocking the company from sourcing hardware, software and services from U.S. suppliers.

Despite these impediments, China is going ahead with its 5G plans. In a report, state-run Xinhua has quoted a note by Allen Chang, a researcher at Goldman Sachs, as saying that by 2025, China will spend $50 billion dollars more than the $100 billion it spent between 2013 and 2018 on 4G because of “the higher number of 5G base stations and higher initial cost of 5G equipment”.

Commercial service

China has officially approved 5G commercial services earlier in June, and is currently testing the technology in all major cities and provincial regions. Small scale commercial use of 5G tech is expected this year, followed by large-scale deployment next year.

The report points out that by 2025, 28% of China’s mobile connections will operate on 5G networks, taking up about a third of all 5G connections globally. “China is expected to deploy upwards of 2,00,000 5G base stations across the country by the end of the year,” says Yang Chaobin, President of 5G Product Line, Huawei, as quoted in the CIR report.

Despite the revolutionary impact of 5G on everyday life, the technology has heightened global privacy concerns.

5G-powered IoT devices will be key to undertake saturation surveillance covering the citizenry. Unlike other networks, IoT technology enables such items as smart phones, smart wristbands, smart locks, drones, self-driving cars, surveillance cameras, to provide pervasive real-time information required by the state.