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Economy · Data
Chinese 5G investment projected to overtake North America through rapid growth
2019/07/19 09:23:32
China 5G, China tech war, China’s 5G investment, China telcoms

Jul 19, 2019 (China Knowledge) - China's 5G network investments are projected to surpass that of North America between 2019 and 2023 as the world's fastest growing economy rapidly shifts from its current 4G networks to the next generation mobile technology amidst trade disputes with the US.

As reported by Dell' Oro group, total spending on Chinese telecom companies will double that off North America's 5G spending over that 4-year period, despite not providing actual numerical projections. However, US-based Dell’Oro is reliable source as it is a leader in independent market research for the telecommunications industry.

Initial 5G mobile services have already been rolled out in the US, Australia, the UK, Spain, Switzerland, and South Korea. However, the scale of China's market negates any initial advantage these countries have in providing a country-wide next generation network. The pace of the 5G expenditure in China is what sets it apart from other countries in the global race to roll out an ultra-fast network that will help power the next era of industrial internet, autonomous driving, and smarter cities. One forecast from the China Academy of Information and Communications Technology has total capital expenditure ranging from CNY 900 billion to CNY 1.5 trillion.

These expenditures will be used to build infrastructure and interfaces, likely led by China's top 3 telecom operators China Mobile, China Unicom, and China Telecom. China Mobile has already begun promoting their 5G network, by remotely driving a car controlled from an entirely different city. At Shanghai’s Auto Show in April, a driver in Shanghai controlled a car in Beijing, more than 1,000 kilometers away.

Worldwide spending is projected to reach USD 1.3 trillion between 2019 and 2025 as 5G continues to develop at a fast pace. China is expected to have 460 million 5G connections by itself before the end of 2025, accounting for more than a fourth of the whole market according to China Internet Report.

Despite these huge possibilities for China, their efforts to accelerate their 5G program may be thwarted for the time being, because of trade disputes with the US. Their trade blacklisting of Huawei has crippled the Chinese tech giant from buying valuable hardware from hi-tech suppliers in America. The Trump administration has said it would eventually ease up on these restrictions, however, if the ban continues for an extended period of time, Huawei’s limited inventory may affect equipment delivery that is imperative to 5G infrastructure development.

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