China’s Investment in New Infrastructure Could Drive 1.5x Rise in Blockchain Spending

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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.

  1. 5G,
  2. Big data centres,
  3. Artificial intelligence,
  4. The Industrial Internet of Things,
  5. Ultra high voltage,
  6. Inter-city high-speed rail and trail transportation,
  7. Clean energy charging stations,
  8. Satellite internet,
  9. 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 area2020 investment forecast (billion yuan)
5G stations240 – 300
Ultra-high voltage80 – 100
Inter-city high speed and urban rail transport540 – 640
Clean energy vehicle charging stations20 – 30
Big data centres, artificial intelligence, industrial Internet of Things120

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