Significance of New Infrastructure
Accelerating the construction of new infrastructure is a major strategy for China, and includes 5G networks, the industrial Internet, ultra-high voltage power transmission, inter-city transportation and inner-city rail systems, new-energy vehicles and charging piles, big data centers and artificial intelligence. But why is China focusing on new infrastructure now?
Infrastructure serves as the cornerstone of economic and social development. After the adoption of the reform and opening-up policy, China accelerated the construction of traditional infrastructure to boost its economy. With great advancements such as housing, roads and railways over the last 40 years, traditional infrastructure is no longer such a powerful driving force for the economy.
New growth impetus is needed, and new infrastructure fits the bill. During the Central Economic Work Conference of 2018, the Chinese Government decided to accelerate the construction of new infrastructure.
New infrastructure can also meet the demands of China to improve the quality of its development. To achieve high-quality development, China must realize both innovation-driven and integrated development. The former requires the promotion of forward-looking technology and innovation, so as to lay solid foundations for development. The latter requires new infrastructure to improve the efficiency of traditional infrastructure and coordinate the construction of intelligent transportation, power grid and smart cities so as to build a system to serve the development of an intelligent economy and society. Accelerating the construction of new infrastructure will help promote intelligent development and the transformation of related industries and improve productivity, all of which are key for high-quality and sustainable development.
China’s economy has been damaged by the outbreak of the novel coronavirus. Launching major projects has always been an important measure for spurring the economy. New infrastructure involves numerous large-scale undertakings, and so the acceleration of this new industry will increase demand for consumption and investment, ultimately driving the economy forward.
China has been paving the way for new infrastructure for several years, and some market-oriented new infrastructure projects have already achieved remarkable results. In accelerating the construction of new infrastructure, the government must let market forces play a major role, work out an overall strategic plan and provide the public services needed by the new infrastructure market.