China’s Investment in New Infrastructure Could Drive 1.5x Rise in Blockchain Spending
China’s blockchain sector is expected to see a surge in investment levels following the unveiling of plans by Beijing to dramatically expand spending in infrastructure in the wake of the COVID-19 pandemic.
On 17 April a meeting convened by the Chinese Politburo called for “expanding effective investment, strengthening investment in traditional and new infrastructure, expediting upgrades to traditional industry, and expanding investment in emerging strategic industries.”
On 20 April China’s National Development and Reform Commission (NDRC) expanded its definition of “new infrastructure” from seven to nine areas to include satellite internet and blockchain technology.
- Big data centres,
- Artificial intelligence,
- The Industrial Internet of Things,
- Ultra high voltage,
- Inter-city high-speed rail and trail transportation,
- Clean energy charging stations,
- Satellite internet,
- Blockchain technology.
While a forecast from IDC report in the first half of 2019 saw Chinese blockchain investment reaching around 4 billion yuan in 2020, analysts from Hulian Maibo (互链脉搏 ) now predict that this figure could rise to as high as 10 billion yuan.
Hulian Maibo sees 2020 infrastructure investment rise by around 10% YoY to reach approximately 15 trillion yuan.
Zhao Yayun (赵亚赟), a researcher from the CITIC Foundation for Reform and Development Studies (中信改革发展基金会) said to Securities Daily that she expects 2020 full year infrastructure investment to be between 22 – 26 trillion yuan.
Investment in new infrastructure is expect to comprise 7% – 12% of all infrastructure spending, with China International Capital Corporation (CICC) seeing new infrastructure investment of between 1 – 1.8 trillion yuan.
GF Securities expects most of this new infrastructure investment to go to transit development.
|New infrastructure area||2020 investment forecast (billion yuan)|
|5G stations||240 – 300|
|Ultra-high voltage||80 – 100|
|Inter-city high speed and urban rail transport||540 – 640|
|Clean energy vehicle charging stations||20 – 30|
|Big data centres, artificial intelligence, industrial Internet of Things||120|