Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.
The PAGEs (see Tabs, above) attempt to make the information more meaningful by putting some structure to the information we have researched and assembled since 2006.
The tech investment push is part of a fiscal package waiting to be signed off by the National People’s Congress, which convenes this week
This initiative will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the ‘Made in China 2025’ programme
A conductor rehearses the military band on the sidelines of the National People’s Congress in Beijing’s Great Hall of the People in March of last year. China’s legislature is expected to sign off on a massive tech-led stimulus plan. Photo: AP
Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than a trillion dollars into the economy through the roll-out of everything from next-generation wireless networks to artificial intelligence (AI).
In the master plan backed by President Xi Jinping himself, China will invest an estimated 10 trillion yuan (US$1.4 trillion) over six years to 2025, calling on urban governments and private hi-tech giants like Huawei Technologies to help lay 5G wireless networks, install cameras and sensors, and develop AI software that will underpin
and Huawei to SenseTime Group at the expense of US companies.
As tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the “Made in China 2025”
programme. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei.
How will China’s annual legislative meetings affect the stock investor? Five key industries to watch
18 May 2020
“Nothing like this has happened before, this is China’s gambit to win the global tech race,” said Digital China Holdings chief operating officer Maria Kwok, as she sat in a Hong Kong office surrounded by facial recognition cameras and sensors. “Starting this year, we are really beginning to see the money flow through.”
The tech investment push is part of a fiscal package waiting to be signed off by China’s legislature, the National People’s Congress, which convenes this week. The government is expected to announce infrastructure funding of as much as US$563 billion this year, against the backdrop of the country’s worst economic performance since the Mao era.
The nation’s biggest purveyors of cloud computing and data analysis Alibaba, the parent company of the South China Morning Post, and Tencent Holding will be linchpins of the upcoming endeavour. China has already entrusted Huawei, the world’s largest telecommunications equipment supplier, to help galvanise 5G. Tech leaders including Pony Ma Huateng and Jack Ma are espousing the programme.
Maria Kwok’s company is a government-backed information technology systems integration provider, among many that are jumping at the chance. In the southern city of Guangzhou, Digital China is bringing half a million units of project housing online, including a complex three quarters the size of Central Park in New York City. To find a home, a user just has to log on to an app, scan their face and verify their identity. Leases can be signed digitally via smartphone and the renting authority is automatically flagged if a tenant’s payment is late.
China is no stranger to far-reaching plans with massive price tags that appear to achieve little. There is no guarantee this programme will deliver the economic rejuvenation its proponents promise. Unlike previous efforts to resuscitate the economy with “dumb” bridges and highways, this newly laid digital infrastructure will help national champions develop cutting-edge technologies.
“China’s new stimulus plan will likely lead to a consolidation of industrial internet
providers, and could lead to the emergence of some larger companies able to compete with global leaders, such as GE and Siemens,” said Nannan Kou, head of research at BloombergNEF, in a report. “One bet is on industrial internet-of-things (IoT) platforms, as China aims to cultivate three world leading companies in this area by 2025.”
China is not alone in pumping money into the technology sector as a way to get out of the post-coronavirus economic slump. Earlier this month, South Korea said AI and wireless communications would be at the core of it its “New Deal” to create jobs and boost growth.
Nothing like this has happened before, this is China’s gambit to win the global tech raceMaria Kwok, COO at Digital China Holdings
The 10 trillion yuan that China is estimated to spend from now until 2025 encompasses areas typically considered leading edge, such as AI and IoT, as well as items such as ultra-high voltage lines and high-speed rail, according to the government-backed China Centre for Information Industry Development. More than 20 of mainland China’s 31 provinces and regions have announced projects totaling over 1 trillion yuan with active participation from private capital, a state-backed newspaper reported on Wednesday.
Separate estimates by Morgan Stanley put new infrastructure at around US$180 billion each year for the next 11 years – or US$1.98 trillion in total. Those calculations also include power and rail lines. That annual figure would be almost double the past three-year average, the investment bank said in a March report that listed key stock beneficiaries including companies such as China Tower Corp, Alibaba, GDS Holdings, Quanta Computer and Advantech Co.
Beijing’s half-formed vision is already stirring a plethora of stocks, a big reason why five of China’s 10 best-performing stocks this year are tech plays like networking gear maker Dawning Information Industry and Apple supplier GoerTek. The bare outlines of the master plan were enough to drive pundits toward everything from satellite operators to broadband providers.
China’s telecoms carriers push to complete ‘political task’ of 5G network roll-out amid coronavirus crisis
6 Mar 2020
It is unlikely that US companies will benefit much from the tech-led stimulus and in some cases they stand to lose existing business. Earlier this year, when the country’s largest telecoms carrier China Mobile awarded contracts worth 37 billion yuan for 5G base stations, the lion’s share went to Huawei and other Chinese companies. Sweden’s Ericsson got only a little over 10 per cent of the business in the first four months. In one of its projects, Digital China will help the northeastern city of Changchun swap out American cloud computing staples IBM, Oracle and EMC with home-grown technology.
It is in data centres that a considerable chunk of the new infrastructure development will take place. Over 20 provinces have launched policies to support enterprises using cloud computing services, according to a March research note from UBS Group.
Tony Yu, chief executive of Chinese server maker H3C, said that his company was seeing a significant increase in demand for data centre services from some of the country’s top internet companies. “Rapid growth in up-and-coming sectors will bring a new force to China’s economy after the pandemic passes,” he told Bloomberg News.
From there, more investment should flow. Bain Capital-backed data centre operator ChinData Group estimated that for every one dollar spent on data centres another US$5 to US$10 in investment in related sectors would take place, including in networking, power grid and advanced equipment manufacturing. “A whole host of supply chain companies will benefit,” the company said in a statement.
There is concern about whether this long-term strategy provides much in the way of stimulus now, and where the money will come from. “It’s impossible to prop up China’s economy with new infrastructure alone,” said Zhu Tian, professor of economics at China Europe International Business School in Shanghai. “If you are worried about the government’s added debt levels and their debt servicing abilities right now, of course you wouldn’t do it. But it’s a necessary thing to do at a time of crisis.”
Digital China is confident that follow-up projects from its housing initiative in Guangzhou could generate 30 million yuan in revenue for the company. It is also hoping to replicate those efforts with local governments in the northeastern province of Jilin, where it has 3.3 billion yuan worth of projects approved. These include building a so-called city brain that will for the first time connect databases including traffic, schools and civil matters such as marriage registry. “The concept of smart cities has been touted for years but now we are finally seeing the investment,” said Kwok.
As China prepares its 14th five-year plan, researchers at one state-affiliated think tank predicted a more hostile global situation
Beijing urged to strengthen home-grown innovation and use vast domestic market to power economy post-coronavirus
A think tank linked to China’s State Council has encouraged Beijing to focus on home-grown technology and its vast consumer market over the next five years. Photo: Xinhua
China’s will face an increasingly hostile world over the next five years, meaning its policy plan should be focused on its vast domestic market, home-grown technological innovation and improving its citizen’s welfare, according to recommendations in a new paper.
The report by the Chinese Academy of Social Sciences (CASS), a think tank affiliated with the State Council, foresees the next five years presenting “major changes unseen in a century” for China, as “the strategic game between superpowers has intensified, while international systems and orders are reshuffled”.
While the report does not mention the coronavirus specifically, its recommendations suggest that China should become more self-reliant in response to the pandemic. This view represents one side of a lively debate among policymakers and scholars in China, ahead of the next five-year plan, which will come into place next year.
Between 2021 and 2025, the globalised economy which helped China grow into an economic power will be radically different, the report said, meaning it must adapt if it is to continue to thrive.
“The disadvantages of economic globalisation have increasingly stood out. Populism has risen as the global economy weakens, while countries are divided as imbalances expand. The old multilateral [trading] system is under pressure,” read the paper, part of a wave of preliminary studies offering advice ahead of China’s 14th five-year plan, a blueprint for economic and social development.
China is the only major economy that publishes a five-year policy plan and has been doing so since 1953, in a tradition borrowed from the Soviet Union. China’s own plans are broad strategic guidelines, rather than Moscow’s previously detailed command economy production worksheets.
China is currently in the final year of its 13th five-year plan, the stage during which the Soviet Union collapsed. The 14th plan is expected to be published in early-2021, but brainstorming about challenges and policy options is well under way among academics and state planning officials.
That debate is expected to feature prominently in the coming meetings of the “Two Sessions,” the Chinese People’s Political Consultative Congress, which is due to meet in Beijing on May 21, and the National People’s Congress, which will begin to meet a day later.
A common point in the debate is that the lessons of the past few years have shown the need to be more self-reliant. Even before the coronavirus outbreak, the US-China trade war and the growing superpower rivalry have made many think that Beijing can no longer rely on the goodwill of trading partners to continue the expansion it has enjoyed since the late-1970s.
Coronavirus pandemic creates ‘new Cold War’ as US-China relations sink to lowest point in decades
In December 2017, US President Donald Trump declared China a “strategic competitor” in anticipation of the Chinese economy reaching two-thirds the size of America’s, which happened in 2018. Since then, the two have engaged in a tit-for-tat tariff battle, while the coronavirus has served to sharpen tensions and fuel arguments for further decoupling.
“Uncertainties and instabilities are clearly increasing,” read the analysis published in the academic journal Economic Perspectives this week.
Without citing coronavirus directly, the CASS researchers suggested that China should “stick to its developmental direction and concentrate on doing its own things well”.
China now has a middle income group of between 500 and 700 million people and that alone can be a source empowering China’s economic growth for the next five years, the report said.
However, China must also attempt to smooth out a major weakness, namely unbalanced growth, including the yawning wealth gap between urban and rural groups.
In terms of innovation, the researchers led by Huang Qunhui said China should rely less on foreign technologies. “China’s innovation capacity is still lagging behind developed countries. Breakthroughs in core technologies are in urgent need,” read the report.
The Made in China 2025 plan, published in 2015, stated Beijing’s ambitions to dominate future technologies such as robotics and artificial intelligence. However, after loud complaints from the US and European Union, China has been forced to play down such bold innovative goals.
CHINDIA ALERT: You'll be living in their world, very soon 