Workers from China Telecom install mini 5G base stations at a telephone booth in Shanghai on Friday. The company is expected to install similar 5G equipment in more than 100 telephone booths by the end of the year. China is investing billions of yuan in the field. Photo: AFP

China is counting on investment in the "new infrastructure" sector to fuel its declining economy exacerbated by the coronavirus fallout, as this year's government work report will allocate a large portion of government investment to areas such as 5G and new-energy vehicles (NEVs).

Business leaders from home and abroad said they welcomed the new emphasis, expressing eagerness to provide services to propel high-tech development in the country. 

The work report states that the local governments will be allowed by the National People's Congress to issue special bonds worth 3.75 trillion yuan ($525 billion) this year, up 1.6 trillion yuan compared with last year. The central government will also allocate 600 billion yuan to local governments to fuel infrastructure investment. 

A part of the investment capital will be channeled to build new infrastructure, develop new-generation information networks, expand 5G applications, build charging stations and promote NEVs, the report said. 

Cong Yi, a professor at the Tianjin University of Finance and Economics, predicted that total investment in new infrastructure area is likely to reach one trillion yuan.

The government is focusing on new infrastructure as the economy is struggling in the aftermath of Covid-19 outbreak. In the first quarter, China's economy shrank by 6.8 percent, the first quarterly contraction in 28 years. 

"China's new infrastructure strategy is a plan to stimulate investment, but it is not simply replicating traditional infrastructure investment. As future economic growth will be driven by the digital economy and innovations, new infrastructure plays an important role to support that," Raymond Wang, partner of global consultancy firm Roland Berger, told the Global Times.

Both foreign and domestic companies are eager to participate in the expected wave of new infrastructure construction which will unleash business opportunities for a wide range of high-tech and traditional industries. 

Zhao Juntao, president of Ericsson China, told the Global Times in a recent interview that Ericsson will fully support China's 5G rollout by applying the world's leading 5G technology to the market.

"China has included the construction of 5G networks as a key in the country's new infrastructure, providing clear guidance for manufacturers and participants in the telecommunications industry," he said. 

According to Wang from Roland Berger, there is no limit to foreign companies in participating in China's new infrastructure sector. "China will be the leading market in new infrastructure, and not participating in the plan may cause foreign firms to lose advantage globally," he said. 

He also said that the information and communication technology market is quite open in China, but due to the recent US ban on the Chinese industry, China may have to consider backing up some local supply chains.

"But foreign advanced technologies remain welcome, and there will be more opportunities for them in applications or services," he said. 

Apart from overseas industry players, domestic companies were active during the two sessions by advancing proposals on how to develop high-tech industries. 

Yang Yuanqing, chairman and CEO of Lenovo and a deputy to NPC, told the Global Times that he suggested the government speed up new infrastructure like 5G while push the integration of smart technologies. 

According to Cong, new infrastructure construction like broader 5G rollout, can stimulate industrial chain growth just like traditional infrastructure sectors do, but they are more special in that they can help China gain advantages in future tech competition. 

"Traditional infrastructure has benefited regional economic growth in the past decades, but the government's massive investment in new infrastructure projects will fuel the development of future industries and help reshape the global economic landscape," Cong said.