China to Invest 1,730 Trillion Won in Advanced New Technologies by 2025

[Image source=Reuters Yonhap News]

[Asia Economy Beijing=Special Correspondent Sunmi Park] China is expected to invest 1,730 trillion won by 2025 in advanced new technology fields such as artificial intelligence (AI) and the Internet of Things (IoT).

On the 21st, Bloomberg reported that China has a new plan to invest 10 trillion yuan (approximately 1,730 trillion won) by 2025 to take the top spot in the global advanced technology sector from the United States. The plan is likely to be approved during the Two Sessions (CPPCC, NPC), which open this afternoon and run until the 28th. It is also part of the fiscal policy promoted by the Chinese government, but it shares the direction of the 'Made in China 2025' project, which has faced US restrictions, and is related to reducing China's dependence on foreign technology.

This plan, which will inject 1,730 trillion won over six years from this year to 2025, involves local governments and leading Chinese IT companies such as Huawei, Alibaba, Tencent, Digital China, and SenseTime playing central roles. Focused investment targets include the construction of 5th generation (5G) communication networks, cloud computing, IoT, big data, AI software supporting autonomous driving, factory automation, and facial recognition.

Bloomberg stated that China's attempt comes amid moves by the Donald Trump administration to block the rise of Chinese companies, such as Huawei being targeted by US sanctions. Especially, since the Chinese government received the worst economic performance in the first quarter with -6.8% growth due to the impact of COVID-19, it is planning large-scale infrastructure investments to overcome this, creating an optimal environment for investment in new technologies. However, it also expressed concerns that such attempts by China could cause ripple effects that cause US companies to lose existing businesses.

Nanan Kou, head of research at market research firm BloombergNEF, explained, "China's new stimulus plan could drive the integration of industrial internet companies," adding, "Industry 'giants' capable of competing with major global leaders like General Electric (GE) and Siemens could emerge. By 2025, China could produce one of the world's top three companies in the IoT platform sector." Morgan Stanley recently reported that "China could invest about $18 billion annually, totaling $1.98 trillion, in new infrastructure over the next 11 years," diagnosing that companies such as Alibaba, GDS Holdings, China Tower, and Advantech are likely to benefit.

This content was produced with the assistance of AI translation services.