Premier says pandemic has highlighted importance of information and internet sector

The State Council wants to see more new infrastructure developed to promote industrial upgrading, foster drivers of economic growth and spur job creation.

At its executive meeting on April 28, the Cabinet decided on a host of measures to boost the growth of information networks and other new infrastructure, with efforts to apply new investment and development models and prioritize investment from market channels.

The government will support involvement by diverse market entities, with financial institutions to be encouraged to develop new products and services to bolster investment and development, the Cabinet said in a statement.

The meeting also underlined the importance of exploring the application of new infrastructure and encouraging the building of the industrial internet with a view to promoting industrial upgrading and the development of smart manufacturing.

Premier Li Keqiang told the meeting the information and internet sector would have a key role to play in spurring spending and investment, with the sector's importance on full display during the novel coronavirus pneumonia pandemic.

He said the market would have the most important say in creating new applications to help drive consumption and investment.

The meeting emphasized the need to spur digital consumption, with measures to encourage applications related to online working, distance learning, telemedicine, vehicle networking and smart city technologies.

It also pledged steps to promote openness and cooperation between the telecommunications sector and other sectors and to eliminate barriers to cross-sector application. The goal is to create an environment that will encourage the development of the platform economy and the opening up and integration of sectors, and foster an ecosystem in which platforms and their participants achieve win-win outcomes.

The protection of personal privacy and the security of networks and data will be bolstered, and the opening up of relevant sectors and international cooperation will be deepened to enable common development, the Cabinet said.

Wu Hao, head of the National Reform and Development Commission's department of high-tech industry, said last month that new infrastructure encompasses a range of sectors, from fifth-generation telecommunications, the industrial internet and artificial intelligence to blockchain technology, data centers, and smart transport and energy infrastructure.

Liu Duo, president of the China Academy of Information and Communications Technology, said China could spend 750 billion yuan ($106.2 billion) on new information infrastructure this year, with 380 billion yuan of that invested in network infrastructure, including 5G.

She told a symposium last month that digital infrastructure would be the key part of China's new infrastructure construction push, with 5G the key pillar for the digital economy.

By February, China had set up over 160,000 5G base stations and launched large-scale commercial use of the telecommunications network in 50 cities, with the number of users reaching 13 million, according to data from the academy.

"Compared with its own development, the value of 5G lies more in the fact that it can empower industries," Liu said.

She said she expected 5G to spur 1.2 trillion yuan in investment by telecommunications service providers in the next five years, with the commercial use of the technology to drive a 1.8 trillion yuan market in mobile data traffic, 2 trillion yuan in information services and 4.5 trillion yuan in final consumption.

It will directly create 3 million jobs by 2025, Liu added.

Jia Kang, head of the China Academy of New Supply-Side Economics, said smaller businesses were unlikely to take part in the new infrastructure push directly, but they would be one of the main beneficiaries of the emerging sectors' extended industry chains.

"A main feature of the new infrastructure and emerging sectors is their highly extended industry chains," he said. "They will set the stage for the development of small and medium-sized businesses in urban areas and even businesses in poor areas."

It was important to avoid the construction of lavish and luxurious buildings during the development of new infrastructure, he added, and make sure new facilities catered to actual economic demand.