According to the China State Information Industry Development Center (CCID), 10 trillion yuan ($ 1.4 trillion) that the country plans to spend up to 2025 goals will be invested in such advanced areas as artificial intelligence, the Internet of things, ultra-high voltage lines and high-speed rail. 20 of the 31 mainland provinces of the Celestial Empire have already announced projects worth more than 1 trillion yuan, in which private investors will also take an active part.
Separate calculations by Morgan Stanley suggest that in the next 11 years, China will annually invest about $ 180 billion in new infrastructure (these figures include the cost of building ultra-high voltage lines and high-speed rail). Thus, annual infrastructure spending will almost double its average value over the past three years (the graph at the beginning of the article reflects data on China’s investments in various sectors of the economy in 2017-2019 (orange) and a similar forecast by Morgan Stanley for 2020-2030 ( gray) in billions of dollars – approx. ProFinance.ru). Among the main beneficiaries of the new infrastructure program, the bank names China Tower., Alibaba, GDS Holdings, Quanta Computer and Advantech.
American companies, by contrast, are unlikely to gain anything from the implementation of this program, and, more likely, even lose. When China Mobile, the largest mobile operator in China, distributed 37 billion yuan contracts for the construction of 5G base stations this year, Huawei and other local companies received the lion’s share, while Swedish Ericsson received only about 10% of this amount.
Western companies are likely to lose some of the already existing businesses. For example, system integrator Digital China plans to oust such “monsters” as IBM, Oracle and EMC from the city of Changchun (Jilin Province) as one of its projects, which provide cloud computing services there.
An important role in the new infrastructure program will be played by the modernization and construction of new data centers. Over 20 provinces in China are already supporting companies that use cloud computing, UBS experts wrote in their March report. Tony Yu, head of the H3C (Chinese server manufacturer), said he saw a noticeable increase in demand for equipment for data centers from leading Internet companies in the country.