Technological innovation and digital economy
As an important guidance for China’s economic development, although the issuance of the “14 Five-Year Plans” does not directly affect market conditions, policy dividends in the short to medium term will still greatly benefit related industries.
Technology was mentioned 36 times, in the 14th Five Year Plan, indicating that technological innovation and digital economy will become the core driving force for the development of China’s economy in the next five years. With accelerated construction of new infrastructure such as 5G networks and data centers, we will see industries such as artificial intelligence, cloud computing, big data, blockchain, new energy, new materials, Internet of Things and industrial Internet, develop new opportunities.
In the information and communication industry, the plan proposes to focus on strengthening digital transformation, upgrading intelligence, integrating innovation support, as well as plan, integration and innovation of the construction of information infrastructure. Among them, 5G is regarded as the representative field of information infrastructure and it is also one of the seven major sectors of “new infrastructure” (new infrastructure construction was first proposed at the China Central Economic Work Conference at the end of 2018).
According to data from the Ministry of Industry and Information Technology, China has built more than 718,000 5G base stations, accounting for approximately 70% of the total number globally. Standalone 5G networks have covered all cities in China and the number of 5G terminal connections has exceeded 200 million. With the improvement of the 5G network, the applied ecosystem with the highest market value under the 5G industry chain is being built rapidly. Combined with new technologies such as artificial intelligence, industrial Internet, cloud computing and the Internet of Things, the scenarios where 5G can be applied to empower thousands of industries are becoming more abundant.
In this regard, the plan also clearly proposes to build scenarios with 5G applied and industrial ecology, and carry out pilot demonstrations in key areas such as smart transportation, smart logistics, smart energy and smart medical care. In the next few years, scenarios with 5G applied in industrial Internet, remote education and will be further developed.
Carbon peaking and carbon neutrality
In September 2020, Chinese leaders stated at the United Nations General Assembly that China will increase its contributions and adopt more powerful policies and measures, to reach the minimum carbon dioxide emissions by 2030, achieving carbon neutrality by 2060. This concept further elaborated at the 2021 “Two Sessions” for environmental protection, energy, agriculture, finance, law and Internet industries.
The “Government Work Report” set clear requirements for the key tasks of the energy industry in 2021. “Clean”, “low-carbon”, “safe” and “efficient” were prominent keywords for the task. However, the goal of carbon neutrality can only be achieved with joint efforts from multiple industries, such as energy, environmental protection, transportation, industry, agriculture, construction, new materials and digital technology. These industries have an extremely long industrial chain and covers a wide range of fields, accommodating a larger number of companies and funds. This will lead to a rise in market trend, as it had two years ago with new energy vehicles and photovoltaics.
There are also outstanding companies with strong competitive power and growth opportunities in new materials, energy conservation and environmental protection, industry, construction and other fields. Enterprises should focus their attention on these sectors, and those of clean energy e.g. wind power & hydrogen energy, energy conservation and environmental protection requirements e.g. environmental monitoring, degradable plastics, energy-saving systems and green building materials.
Have you heard of the “Chinese Voices”? Read part one here, or Ask LEWIS for a recap here.