Bloomberg: China is winning the multi-trillion dollar war for 5G

The coronavirus has not slowed down China’s steady deployment of 5G infrastructure. A Bloomberg article concluded that China is building tens of thousands of 5G base stations every week, which will restore the domestic supply chain and consolidate and enhance China’s position as the world’s factory.

An excellent 5G supply chain is under development

The article states that by the end of 2020, the number of 5G base stations in China will exceed 500,000, a rapid climb from the approximately 200,000 already in use. The ultimate goal is to have 5 million.

In comparison, South Korea, which currently has a relatively high 5G penetration rate in the world, is about 10%. As of April, about 115,000 such sites were in operation.

Each station costs about 500,000 yuan ($71,361) and has a long value chain that includes electrical components, semiconductors, antenna units and circuit boards.

With such a massive 5G buildout underway, the many businesses spawned by the 5G project are driving China’s success. They will master the production of all things 5G and become the supplier of the 5G parts that most countries will need soon, the author wrote.

A host of Chinese companies have emerged to make components from sensors and data clouds to chips, collaborative robots and computer-controlled machinery.

The authors also observe that global dependence on China will not decline, as other countries and telecom operators devastated by COVID-19 will struggle to match Chinese spending.

Goldman Sachs estimates that China’s capital spending on 5G could peak at $30 billion this year, up from $5 billion last year, with spending reaching $1.4 trillion by 2025.

5G enhances China's manufacturing advantages

5G stands for the fifth generation of wireless network technology. It is an important part of China's "new infrastructure" movement, which aims to promote the deep integration of the "Internet of Things" and the real economy.

This will lead to a more automated industrial landscape, regaining the upper hand over the already dominant China.

Why so? For industrial parks, 5G will enable greater connectivity between machines and more data transmission and collection, which is expected to have a huge impact through increasingly efficient and automated factory equipment and tracking the movement of inventory and the progress of production lines and assets.

Analysts at Bernstein Research said manufacturing will account for nearly 40% of the output of industries supporting 5G.