BEIJING, May 22 -- China has pledged fresh efforts in advancing the construction of new infrastructure projects in a bid to further stimulate new consumption demand and boost industrial upgrading.
The country plans to issue 3.75 trillion yuan (about 529 billion U.S. dollars) of special local government bonds this year, up 1.6 trillion yuan from the previous year, with priority given to new infrastructure, new urbanization initiatives and major projects, according to a government work report submitted to the national legislature for deliberation on Friday.
In terms of new infrastructure, China will develop next-generation information networks and expand 5G applications, said the report. Also, more charging facilities will be built to promote wider use of new energy vehicles.
Rather than resorting to a massive government-led stimulus to shore up growth, China is seeking more targeted investments in projects that facilitate innovation and improve weak areas in economic and social development.
The prioritized efforts are expected to not only boost consumption and benefit the people, but also facilitate structural adjustments and enhance the sustainability of growth, according to the report.
Take 5G as an example. China's investment in 5G network construction will reach 1.2 trillion yuan in aggregate by 2025, and is expected to leverage about 3.5 trillion yuan of investment in the upstream and downstream of the industrial chain as well as in other areas, according to the China Academy of Information and Communications Technology.
Moreover, total economic output indirectly driven by 5G businesses in China will hit 24.8 trillion yuan over the next five years, the academy predicted.
To grab the opportunities, local authorities have unveiled massive investment plans for new infrastructure projects including information networks and data centers.
Shanghai, for instance, announced that it will invest around 270 billion yuan in its first batch of 48 major new infrastructure projects in the next three years, focusing on the construction of new generation network, innovative infrastructure, artificial intelligence platforms and intelligent terminals.
In the period, the metropolis plans to set up 34,000 new 5G base stations and 100,000 smart charging piles for electric vehicles, along with unmanned factories, production lines and workshops.
Meanwhile, south China's Guangdong Province has arranged 1,230 major projects this year with a total investment of 5.9 trillion yuan, focusing on 5G telecom networks and inter-city transit systems.
Wen Bin, chief analyst at China Minsheng Bank, said construction of projects on 5G, Internet of Things, artificial intelligence and cloud computing, among others, is expected to stimulate economic vitality.
Industrial observers also noted that with the implementation of these projects, a batch of new infrastructure industrial clusters are expected to spring up.
In Guangzhou, the capital of Guangdong, authorities are planning to forge eight major industrial clusters centered on intelligent connected vehicles and smart robots, among others.
Next, China needs to move faster in putting in place related supplementary policies and widening fund-raising channels for the new infrastructure, said Zhou You, a researcher with the think tank CCID under the Ministry of Industry and Information Technology.