China’s infrastructure spending strategy for post-COVID recovery

Published by Will Needham on

This article contains translated extracts from an article published here, on 2020/05/16, by Gao Qing. Shared in interests of knowledge-sharing and collaboration. 

For the first time since its inception, China will not be meeting their annual GDP growth target of 6% per annum, it was reported this week. So how do they plan on recovering?

Like many countries, China plans to use infrastructure spending as a core financial instrument to get their economy back on track, just as they did in recovering from the 2008 financial crisis.

However, this recovery will focus on “new infrastructure” over “old infrastructure”. Qinq explains the differences as follows.

What is “old infrastructure”?

“In the past, China talked about infrastructure, usually described as “iron cock”, which refers to railways, highways and bridges, water conservancy, energy and other facilities.

In the past, to stabilize the economy, it was customary to invest heavily in such infrastructure to boost economic growth. But the biggest problem with the old infrastructure is the sequelae of repeated construction, waste of resources and overcapacity.

After the global financial turmoil in 2008, the central government invested trillions of dollars to stabilize the economy, and the resulting economic bubble has not yet been completely eliminated”

– Gao Qinq,

Chinese president to focus on digital infrastructure

In a speech this week, president Xi Jinping made clear how the country planned to invest to fuel an economic recovery:

“”We must seize the opportunities afforded by industrial digitalization and digital industrialization, accelerate the construction of new infrastructure such as 5G networks and data centers, and seize the layout of the digital economy and life Strategic emerging industries such as health and new materials, and future industries, vigorously promote technological innovation, strive to expand new growth points, and form new development momentum. ”

– Xi Jinping, President of China


Three pillars of infrastructure recovery in China

The Chinese National Development and Reform Commission recently gave a statement on that summarised these intentions of the Chinese President into three core pillars of infrastructure investment to fuel the economic recovery.

Information infrastructure

Whilst already being world leaders in Information Infrastructure, they will continue to invest heavily in these areas, including data centers, 5G, Internet of Things, Artificial Intelligence & Blockchain.

Converged infrastructure

Secondly, they will be investing heavily in what they call converged infrastructure. This represents the convergence of physical infrastructure (roads, rail, bridges) and digital infrastructure (sensors, actuators, industrialised IoT). This will result in the upgrading of existing ‘traditional’ infrastructure, resulting in intelligent transport solutions, and smart energy infrastructure.

Innovation infrastructure

Thirdly, an investment in innovation infrastructure. This can be described as the mechanisms to be put in place to support scientific research, technology development, and product development. This includes major scientific and technological infrastructure, science and education infrastructure and industrial technology innovation infrastructure.

China to lead a Smart revolution in the 2020’s

In the 2010’s, China invested in traditional infrastructure to fuel economic recovery. They built infrastructure at an unprecedented rate which is unrivaled by any other country.

The pace of innovation we are about to see from China in the 2020’s is sure to be no different. But this time they will focus on new priorities. Priorities to maintain their leadership in digital infrastructure, technology and innovation.

This article is a translation of the recent news article, published here, on 2020/05/16, by Gao Qing. Shared in interests of knowledge-sharing and collaboration. 

Categories: Blog

Will Needham

I believe in a future built environment that is safe, sustainable, healthy, efficient & productive. Actually, I believe pockets of excellence in each of these things already exist; they are just distributed geographically in different parts of the world. My mission is to go out there and find these pockets of excellence and tell the stories of the people, projects, policies that are responsible for such positive steps.


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