Growth of latest digital infrastructure underway

China is actively accelerating the construction of a new round of digital infrastructure in an effort to offset economic sluggishness and foster high-quality development, the country’s top industry regulator said on Wednesday.

Xie Shaofeng, spokesman for the Ministry of Industry and Information Technology, said new infrastructure construction — such as 5G and data centers — will be a key step to inject new impetus into the economy.

“It will help offset short-term downside pressure and this considerable increase in investment will play a prominent role in fueling economic growth,” Xie said at a news conference in Beijing. “In the long run, new infrastructure construction will foster new growth drivers to develop the digital economy and promote high-quality development.”

At this critical stage, Xie said the ministry will speed up construction of new infrastructure in key areas such as 5G networks, industrial internet, data centers and basic software in order to accelerate the push for digital transformation and foster new growth drivers.

According to Xie, more effort will also be made to improve the development of cloud computing and other cloud services and encourage more small and medium-sized companies, large firms, government agencies and financial institutions to use cloud services.

Yang Yiqing, deputy director of the Institute for Zhejiang Merchants Development at Zhejiang Gongshang University, said massive spending in new infrastructure will help boost industrial upgrading and structural optimization.

“It will help improve the overall competitiveness of the Chinese economy and hedge against the epidemic’s impact,” Yang said.

Amid the coronavirus outbreak, the country has also seen a growth opportunity for new types of consumption in fields such as online shopping, 5G, virtual reality-powered online shopping platforms, smart education and telemedicine.

In light of the surging trend, the MIIT said it will take targeted measures to cultivate new consumption and foster consumption upgrades in an effort to develop new growth drivers.

Xie added measures include increasing financial support for companies in hard-hit fields, promoting new business development and prompting growth of both online and offline consumption.

“We’ll see a change in people’s spending habits and a spike in consumption after the end of the coronavirus epidemic,” said Wang Yun, director of the consumption office of the economics institute at the Academy of Macroeconomic Research.

“A growing number of consumers will shop online and purchase new types of online services such online education and online health services,” Wang said.