China Working for Future on Pace
Every week, China is building 10 thousands of 5G base stations. Though the issues of pandemic in the world is giving the economies a major thought on the question that how is globalization is exactly done. But still China is approaching it idea of Technological Dominance in world, it is successful or not is still a question. It is continuing to maintain and advance the supply chains in the country and strengthen its factory grounds.
It is believed that, before 2020 ends China will be building half a million of 5G towers. Goal of China is building 5 Million such towers and about 200,000 are already in use. This is giving a strength to faster communication for hundreds of millions of smartphone users. Currently South Korea has about 10% penetration rate for 5G usage, highest percentage worldwide with 115,000 such towers were active in April.
The towers are a part of a raft of projects that the State Council announced last week to spice up industrial innovation under the “New Infrastructure” campaign of China. It is aimed toward furthering “the deep integration of the web of Things” and therefore the boost to real economy. China is with an aim of paying $1.4 trillion by year of 2025, the aggregative buildup toward a more automated industrial landscape will give China a renewed advantage where it already dominates in field of manufacturing.
The Pandemic has Disturbed World
The pandemic has caused the whole world to rethink its idea of supply chain that are away from China. What analysts are calling “peak” globalization and therefore the rise of factory automation could shift production to higher-cost countries in North America and Southeast Asia. It’ll take a short while, but the worldwide dependence on China will come down and become self-dependent, the thinking goes. Still, with trade ravaged by Covid-19 between countries, other countries and telecom operators will struggle to match China’s gross spending.
For China, there’s an opportunity to clear the path to forcefully and willingly implement its industrial policy agenda, without interference from criticism over subsidies and unfair competition in the market already. The so-called Central Comprehensively Deepening Reforms Commission of China, headed by President Xi Jinping (LIFE TIME PRESIDENT), has approved a three-year strategy to give state-owned enterprises yet more swing in the economy.
Ambitious programs of Beijing are still in the construction phase at least for few years. Macro base stations are the nuts and bolts of building out 5G networks in the China Mainland, and will exceed their 4G predecessors, multiplying it by 1.5 times. Capital expenditure could peak at $30 billion this year in China, according to Goldman Sachs Group Inc. analysts, up from $5 billion last year, a rise of 600%. Beijing wants more local governments and companies to get involved in their development project to boost it as much as possible. Cost of each station at an average is around 500,000 yuan ($71,361) and has a long value chain that includes electrical components, semiconductors, antenna units and circuit boards, making it fully electronic. The vast number of companies spawned by the project are all contributing to China’s push to get ahead with time, but can they do so or not is a big question.
Full Automation of Industries
The onset of 5G, for the industrial complex, will enable greater connectivity between machines and much more data transfer and collection. Fifth-generation technology is expected to have a big impact through the idea of increasingly efficient and automated factory equipment in the industry. Adding on the tracking of movement of inventory and progress of production lines and assets just sitting by a place far away. According to Bernstein Research analysts, Manufacturing is expected to account for almost 40% of 5G-enabled industry output.
Just think the idea of full automation, from sensors and data clouds, to chips and collaborative robots and computer-controlled machinery, a whole universe of little-known Chinese companies is coming to the future, maybe to rule us (not serious), at least now world is uniting against China. Memory chip maker Gigadevice Semiconductor (Beijing) Inc., Yonyou Network Technology Co., China’s version of Salesforce.com Inc. has ridden the trend. For some of these companies, government subsidies are a significant part of earnings and saves tax. For many companies stock prices have increased, a slight increase in recent months for firms like Shennan Circuits Co., which makes printed circuit boards, and Maxscend Microelectronics Co., a manufacturer of radio frequency chips, as demand has increased. Some are seeing their market capitalization values balloon by billions of dollars as Beijing has upped the ante on new infrastructure, as idea of 100% automation.
Will China Succeed?
Just to be predictable, for a country like China it isn’t hard to imagine a hinterland speckled with ghost towers and base stations in coming years as China’s propensity to overbuild beyond any reasonable capacity kicks in or any demand. The past shows that questions of quality of product will be common when too many sub-par manufacturer’s come up, incentivized by the state’s largesse. Nonetheless, this is the technology of the not-so-distant future, and building up the basic infrastructure isn’t misguided from this step.
As Covid-19 still is center of attraction of world, Beijing’s steady focus on implementing this industrial policy may make China the manufacturer of parts that most countries will need soon in late future. In other words, it will yet again become the factory floor, mastering the production of all things through 5G network.