Released at 15:08:38 April 13, 2021 Source: Economic Information Daily
The Outline of the14th Five-Year Plan regards construction of infrastructure as the emphasis of expansion of investment space. Recently, several government ministries announced plans in succession, including launching planning for construction of new type of infrastructure at a faster pace and increasing investment moderately ahead. Different localities also actively drive development of infrastructure through major projects. According to the rough estimation by the journalist, nearly 20 cities and provinces such as Beijing, Tianjin, Hubei, Zhejiang and Anhui have launched their respective version of “Outline of the 14th Five-Year Plan”, which covers 5G construction in the next five years and construction of a batch of major projects such as big data center and the Industrial Internet. Statistics of the China Academy of Information and Communications Technology indicate that catalyzed by benefits of multiple policies, investment in new infrastructure during the 14th Five-Year Plan is expected to exceed ten trillion yuan.
Several government ministries are planning for a new round of supportive measures for construction of new type of infrastructure. The National Development and Reform Commission expressed that it is going to release planning for construction of new type of infrastructure during the 14th Five-Year Plan, expand application of 5G and accelerate building of Industrial Internet and data center. The Ministry of Industry and Information Technology announced that it will step up investment based on the demand-driven, systematic layout and future-oriented principles, and constantly facilitate construction of 5G, the Industrial Internet and data center, building a high-speed, mobile, safe and universally-carried new type of infrastructure. The State-owned Assets Supervision and Administration Commission of the State Council recently put forward that to accelerate optimization of layout of state-owned assets and adjustment of industrial structure, the rallying point of development should be placed in the real economy to steadily advance strategic restructuring and professional integration and to increase investment in new type of infrastructure.
Local governments are also making efforts to launch local plans. According to the rough estimation by the journalist, nearly 20 cities and provinces such as Beijing, Tianjin, Shanghai, Chongqing, Sichuan, Hubei, Zhejiang, Jiangsu and Anhui have launched their respective version of “Outline of the 14th Five-Year Plan” for major new type of infrastructure project, which covers 5G construction in the next five years with the number of base stations increasing from tens of thousands to hundreds of thousands. For instance, the 14th Five-Year Plan of Hubei Province sets up the goal of building more than 130,000 5G base stations. Zhejiang Province aims to build 200,000 base stations by 2025, realizing coverage of 5G network in areas above the level of administrative village, highways and high-speed rails.
Many localities have collectively launched a batch of major projects with accelerating construction of new type of infrastructure being an important option for expanding effective investment. On April 6, Henan Province announced the list of 5G projects in 2021, which includes 559 projects with a total investment of more than 58 billion yuan. Hunan Province recently released the list of 100 signatory “new digital infrastructure” projects of 2021 with investment of each project above 20 million yuan. Among them, 25 projects involve investment of over 100 million yuan, 5 projects with an investment of over one billion yuan and 2 projects with investment of over three billion yuan. Guangzhou has released the plan for new infrastructure in the field of technological innovation of 2021 with the first batch of investment worth of 168.1 billion yuan. It is also indicated in the plan that construction of supercomputing center, data center and cloud computing center will be accelerated this year.
Meanwhile, centering around major areas such as Industrial Internet and big data center, a batch of key projects were also launched collectively. Beijing took measures to support new type of infrastructure, accelerate construction of national top-level node of identification and resolution system of Industrial Internet and national Industrial Internet big data center; build data intelligent infrastructure such as AI supercomputing center, integrated big data platform and blockchain common platform. Anhui announced implementation of “new infrastructure+” action, aiming to build more than 200 Industrial Internet platforms by 2025 and accelerate construction of key projects such as Hefei Huayun Xinchuang Cloud Data Center, Huaibei Big Data Center and Fuyang Big Data Center.
The industry holds that driven by a series of favorable policies, construction of new infrastructure in the next five years will witness large and long-term effective investment. The journalist of Economic Information Daily learned from the China Academy of Information and Communications Technology that the estimated investment in new infrastructure in 2021 is about 1.78 trillion yuan and the estimated investment throughout the 14th Five-Year Plan is about 10.53 trillion yuan.
“As important support for high-end, intelligent and green development, new infrastructure is faced with a huge investment demand driven by the current intelligent upgrading and strategic goals of peak carbon dioxide emissions and carbon-neutral. Fan Meng, Deputy Director of the Industrial Investment Research Office of the Planning Department of the China Electronics and Information Industry Development Research Institute told the journalist of theEconomic Information Daily that serving the industrial field, new infrastructure as the priority of the investment planning involves network infrastructure such as 5G, the Internet of Things and Industrial Internet as well as computing infrastructure such as cloud computing, data center and intelligent computing center.
Zhang Yunyong, General Manager of the Product Center of China Unicom, also expressed that information infrastructure such as 5G and fiber-optic network will become the deployment focus. It contains public-oriented deployment involving network coverage and integrated connection in indoor hotspot, high-speed rail and village scenarios. On the other hand, the deployment also involves virtual private network designed for scenarios such as intelligent manufacturing and the vehicle-to-everything, which will attract more investment along with industrial upgrading. Against the backdrop of peak carbon dioxide emissions and carbon-neutral, green development of new type of infrastructure has also become an important direction. For instance, integrated innovation of energy-conserving of 5G and data center, and of information network and energy network is expected to emerge as the new highlight.
In terms of sources of the funds, diversified investment approaches will be further explored. For example, it was pointed out in the recently released “Tianjin’s Three-Year Action Plan for Construction of New Type of Infrastructure (2021-2023)” that special funds for intelligent manufacturing should be used in a coordinated manner and the leading roles of Haihe River Industry Fund and Binhai Industrial Development Fund should be made better use of to mobilize social capitals for greater investment. Financial institutes are encouraged to step up support for credit capital and qualified projects are also encouraged to carry out pilot program of Real Estate Investment Trusts (REITs). Foshan also suggested to strengthen leverage role of the fiscal capitals at the city and district levels so as to bring into play the government’s leading role and promote wider participation of social capitals in construction of new infrastructure.
Enterprises will also increase investment. Take 5G as the example, relevant investment of the central enterprises in the field of telecommunication in 2021 witnessed steady growth. Plans released by the three major operators China Mobile, China Unicom and China Telecom indicate that 5G-related expense and budget totally reach 184.7 billion yuan, up by 2.44% year-on-year. Moreover, China Tower also planned to arrange an investment of 18.4 billion yuan in 5G in 2021.
“Characterized by fast upgrading of technologies and abundant intangible assets, new infrastructure requires constant introduction of capitals.” Fan Meng expressed that based on the focus of new infrastructure on future yields, efforts can be made to explore and develop financial products in accordance with future yields such as pledge financing of orders of facilities and pledge financing of rights government purchase of services. At the same time, investment in new infrastructure can take a moderately larger proportion in the overall investment made by the local government debts. Enterprises are encouraged to realize revitalization of existing assets by issuing REITs or raise fund through future cash flow such as asset-backed security (ABS) and asset-backed note (ABN).
Zhang Yunyong also expressed that introduction of PPP and REITs pattens in the market-based investment of new infrastructure is expected to point the direction for future development. Advantages of social capitals in areas such as planning, design, construction, business attraction and operation should be brought into play and promote innovation patterns that combine fiscal capitals, government bonds and market-based investment. When planning for new infrastructure projects, local governments should conduct evaluation through multiple dimensions such as investment return, integrated development and sustainable operation. Equal emphasis should be placed on efficiency and effectiveness and efforts should be made to attract more medium and long-term capitals to participate in construction of new infrastructure projects.
