The central government has set the tone, and the "new infrastructure" is completely popular! These seven major technology fields are about to explode

The construction of new infrastructure has become completely popular.

On March 4, at a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee, the decision-makers emphasized the need to accelerate the construction of major projects and infrastructure that have been clearly defined in the national plan, including accelerating the construction of new infrastructure such as 5G networks and data centers. This short sentence has made "new infrastructure construction" a hot word again.

In fact, the construction of new infrastructure is not a new concept.

New infrastructure construction, or "new infrastructure", is a relative concept in infrastructure construction.

In the past, infrastructure construction mainly refers to the construction of railways, highways, airports, ports, water conservancy facilities and other projects, so they are also called "railway, highway and basic infrastructure", which have played an important basic role in the process of my country's economic development. However, under the new social development conditions, the traditional infrastructure construction represented by "railway, highway and basic infrastructure" can no longer meet the requirements.

Thus, the concept of new infrastructure construction came into being.

In December 2018, at the Central Economic Work Conference, decision-makers emphasized the need to play a key role in investment, intensify technological transformation and equipment upgrades in the manufacturing industry, accelerate the pace of 5G commercialization, strengthen the construction of new infrastructure such as artificial intelligence, industrial Internet, and Internet of Things, increase investment in intercity transportation, logistics, and municipal infrastructure, make up for the shortcomings in the construction of rural infrastructure and public service facilities, and strengthen the construction of natural disaster prevention and control capabilities.

As a result, new infrastructure construction, as a new term, began to appear in national-level documents.

By 2019, new infrastructure construction not only frequently appeared in official statements, but also was fully reflected in actual operations. Wu Qi, a senior researcher at Pangu Think Tank, said that the focus of investment in 2019 is on infrastructure construction. Against the background of the weakening marginal effect of traditional infrastructure on economic growth, new infrastructure construction will play an increasingly important role in stabilizing investment. The construction of artificial intelligence, industrial Internet, Internet of Things, etc. will also generate long-term and large-scale capital demand.

There are even voices that believe that the construction of new infrastructure will become the top priority in the investment field in 2019.

However, the specific scope of new infrastructure construction has not been clearly defined in the relevant central documents, but a number of official media have voiced their opinions. For example, the Outlook magazine under Xinhua News Agency believes in its article "Outlook | "New Infrastructure" Brings New Opportunities":

"New infrastructure" mainly refers to new infrastructure represented by 5G, artificial intelligence, industrial Internet, and Internet of Things, which is essentially information digitalization infrastructure... Information infrastructure that can support the development of traditional industries towards networking, digitalization, and intelligence, including a new round of network construction, such as fiber-optic broadband, narrowband Internet of Things, etc.; data information-related services, such as big data centers, cloud computing centers, and information and network security, will also become the core of my country's "new infrastructure."

However, in the definition of CCTV's Chinese International Channel, new infrastructure construction refers to infrastructure construction focused on the technological end, mainly including seven major areas: 5G infrastructure, ultra-high voltage, intercity high-speed railways and intercity rail transit, new energy vehicle charging piles, big data centers, artificial intelligence, and industrial Internet. It involves multiple key social and people's livelihood industries such as communications, electricity, transportation, and digital technology.

Relatively speaking, CCTV’s definition of “new infrastructure construction” is broader; so far, this definition has also gained greater social recognition.

In this article, we might as well analyze the construction of new infrastructure one by one from the seven major areas with higher social recognition.

As a major change point in the field of mobile communications, 5G is the leading field of the current "new infrastructure". Previously, 5G has been defined by senior officials as a "new driving force for economic development". Whether from the perspective of the scale of industries to be undertaken in the future or the technical role it plays in emerging industries, 5G is the most worth looking forward to.

In fact, all the major emerging industries that my country focuses on developing, such as industrial Internet, Internet of Vehicles, enterprise cloud computing, artificial intelligence, and telemedicine, need 5G as an industrial support; and the upstream and downstream industrial chains of 5G itself are also very broad, even extending directly to the consumer field.

UHV refers to voltage levels of ±800 kV and above for direct current and 1000 kV and above for alternating current, which can greatly enhance the transmission capacity of my country's power grid. my country is the only country in the world that has put UHV transmission projects into commercial operation, and UHV construction began as early as 1986. my country's UHV construction potential is still huge. As of January 2019, the country has planned about 50-60 UHV projects of various types.

In addition, State Grid has already initiated mixed-ownership reform and opened up UHV investment to social capital for the first time, further increasing the certainty of continued UHV construction by solving funding issues.

High-speed rail is China's technology's business card to the world and is also the main artery of China's transportation. At the same time, rail transit is a key link in the urbanization process. At present, many major high-speed rail projects are under intensive construction. At the same time, many cities are formally vigorously promoting the construction of urban rail transit. Even in Beijing, Shanghai, Guangzhou and Shenzhen, where rail transit is relatively developed, there is still a very large gap.

In terms of industrial direction, the industrial chain of intercity high-speed railways and intercity rail transit is also very long. From raw materials, machinery to electrical equipment to utilities and transportation services, it will play a fundamental role in promoting the development of the entire society and the digitalization and intelligence of transportation.

Charging piles can be said to be the "gas stations" for new energy vehicles. As of October 2018, the total number of charging piles in my country was only 686,000; as of October 2019, the total number of public and private charging piles in the country was 1.144 million, a year-on-year increase of 66.7% - although the growth seems very rapid, the gap in charging piles is still large.

According to the "Guidelines for the Development of Electric Vehicle Charging Infrastructure (2015-2020)" jointly issued by four national ministries, by 2020, there will be more than 12,000 new centralized charging and swapping stations and more than 4.8 million decentralized charging piles to meet the charging needs of 5 million electric vehicles nationwide - obviously, there is still a lot of room for growth in the entire field.

Big data centers can be said to be the Noah's Ark in the era of massive information. The future development of emerging industries will rely heavily on data resources. Therefore, from national government affairs to major industries, the establishment of data centers will help promote industry transformation and enable enterprises to move to the cloud.

In today's technological wave, Internet data centers are the most important trend. According to survey data from market research firm Synergy Research, if the world's top cloud computing service providers want to succeed in market competition, each company must invest at least $1 billion per quarter in infrastructure. However, the total amount of global data doubles every 18 months, and data center construction cannot keep up with the pace of big data explosion.

另外，在云计算之外，5G、产业互联网、人工智能等新兴领域的一日千里，亦在共同显著推高着人类社会对数据中心的需求。

The importance of artificial intelligence is self-evident.

From a broad perspective, artificial intelligence is a strategic technology that is leading a new round of scientific and technological revolution, industrial transformation, and social change. It is having a significant and far-reaching impact on economic development, social progress, and the international political and economic landscape. In fact, at the highest decision-making level in the country, artificial intelligence has already received special attention.

From the perspective of industrial development, artificial intelligence, as the core driving force of a new round of industrial transformation, is releasing the huge energy accumulated from previous scientific and technological revolutions and industrial changes, and continuously exploring the application scenarios of the new generation of artificial intelligence. It will reconstruct all aspects of economic activities such as production, distribution, exchange, and consumption, and give birth to new technologies, new products, and new industries.

It is worth mentioning that according to the national plan, by 2020, my country's overall artificial intelligence technology and applications will be synchronized with the world's advanced level, and the artificial intelligence industry will become a new important economic growth point - this shows the importance of this year for the development of artificial intelligence.

Industrial Internet is the foundation for the development of intelligent manufacturing and can provide common infrastructure and capabilities. my country has already regarded Industrial Internet as an important infrastructure to support industrial intelligence. In 2012, "Industrial Internet" was proposed. At the end of 2017, the country issued the top-level planning of Industrial Internet. In 2019, "Industrial Internet" was written into the "Government Work Report", and Industrial Internet has gradually entered the substantive implementation stage.

It is worth mentioning that on February 25, 2020, the Ministry of Industry and Information Technology announced the 2019 Industrial Internet pilot demonstration projects, with a total of 81 projects at the three levels of network, platform, and security; overall, 5G, platform, and security will be the three most important directions for the future of the industrial Internet industry.

Entering 2020, “new infrastructure” has entered the high-level planning as never before.

From a time point of view:

• On January 3, the State Council held an executive meeting: vigorously develop advanced manufacturing, introduce investment support policies for new infrastructure such as information networks, and promote intelligent and green manufacturing;

• On February 14, the 12th meeting of the Central Committee for Comprehensively Deepening Reforms stated: Infrastructure is an important support for economic and social development. It should be guided by overall optimization and coordinated integration, coordinate the development of existing and incremental, traditional and new infrastructure, and create an intensive, efficient, economical, affordable, intelligent, green, safe and reliable modern infrastructure system.

• On February 21, the Political Bureau of the CPC Central Committee held a meeting to increase support for the research and development of reagents, drugs, and vaccines, and to promote the accelerated development of biomedicine, medical equipment, 5G networks, and the industrial Internet.

• On February 23, the Central Committee held a meeting to coordinate the prevention and control of the new coronavirus epidemic and economic and social development. Some traditional industries have been hit hard, while emerging industries such as smart manufacturing, unmanned delivery, online consumption, and medical health have shown great growth potential. We must take this opportunity to transform and upgrade traditional industries and cultivate and expand emerging industries.

• On March 4, the Standing Committee of the Political Bureau of the CPC Central Committee held a meeting stating that it is necessary to increase investment in public health services and emergency material support, and accelerate the construction of new infrastructure such as 5G networks and data centers.

A series of meetings have greatly emphasized the importance of new infrastructure construction and greatly enriched the new connotation of new infrastructure construction. Among them, in the meeting on March 4, senior officials mentioned data centers in "new infrastructure" for the first time, although this was not surprising.

It is worth mentioning that according to statistics from the 21st Century Business Herald, as of March 1, 13 provinces, cities and districts including Beijing, Shanghai, Jiangsu, Fujian, Henan, Chongqing, etc. have released a list of investment plans for key projects in 2020, including 10,326 projects, of which 8 provinces have announced their total planned investment amounts, totaling 33.83 trillion yuan - among which infrastructure investment is an important part of the investment plans of various regions, and the planned infrastructure investment in some regions even accounts for more than half of the total investment.

Among these infrastructure investments, a considerable portion is the construction of new infrastructure.

Of course, the enthusiasm for "new infrastructure" is also reflected in the stock market. After the opening on March 5, the "new infrastructure" sector supported by policies performed well, and sectors such as ultra-high voltage and charging piles rose sharply; for example, in the ultra-high voltage sector, many stocks such as China Western Power, Pinggao Elevator, Special Electric, and Dalian Electric Ceramics hit the daily limit, and the sector's half-day turnover was 7.8 billion yuan, with a net inflow of more than 813 million yuan.

In this regard, Changjiang Securities analyst Yu Haining believes:

The overseas epidemic spreads, and there are uncertainties in all links of the global industrial chain. Against the backdrop of steady economic growth, communication networks, as the infrastructure for the development of strategic emerging industries such as cloud computing, artificial intelligence, and the Internet of Things, are in line with the direction of economic transformation and are expected to become the main focus of "new infrastructure" to accelerate construction and development, and the industry continues to demonstrate its "counter-cyclical" attributes.

However, some industry researchers remain cautious about the popularity of "new infrastructure."

For example, Hua Changchun, global chief economist of the Guotai Junan Research Institute, clearly pointed out that the "new infrastructure" has huge room for development, but it is not enough to support stable growth; because the "new infrastructure" projects account for a very small proportion of the more than 17 trillion PPP project library, less than 100 billion yuan, accounting for only 0.5%. Therefore, the government will actually use "old infrastructure" such as major projects related to the national economy and people's livelihood to support the recovery, and use "new infrastructure" as the main driving force, that is, "old infrastructure recovers and new infrastructure is strengthened."

In addition, there are also voices that believe that new infrastructure is a good medicine for my country to hedge against the epidemic and economic downturn in 2020. For example, Ren Zeping, president of Evergrande Economic Research Institute, believes that my country should prepare projects in advance, vigorously promote infrastructure and reduce taxes after the epidemic, and carry out appropriate advanced infrastructure construction in urban agglomerations in areas with population inflow; he also said:

How to hedge against the epidemic and economic downturn? In fact, the simplest and most effective way is infrastructure. "New infrastructure" will help expand demand, stabilize growth and employment in the short term, and release China's economic growth potential, enhance competitiveness and improve people's livelihood and welfare in the long term.

In any case, supported by macro policies, expert opinions, industry demand, capital markets and other factors, the construction of new infrastructure is indeed showing a very good situation at present.

The final question is: Will the “new infrastructure” explode in 2020?