Several Misunderstandings about New Infrastructure

With the strong promotion of the central government and the media's publicity, "new infrastructure" has become popular. Whether from the perspective of economic restart after the epidemic or digital development in the next few years, the status of "new infrastructure" is very important. However, there are still many misunderstandings about what the connotation of "new infrastructure" is and how the investment situation is.

Today, the author will try to clarify some of the details in this article and discuss it with netizens who are concerned about the "new infrastructure".

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Seven Heroes of “New Infrastructure”?

When it comes to the areas involved in the "new infrastructure", it is generally believed that it includes seven items: 5G infrastructure, big data centers, artificial intelligence, ultra-high voltage, industrial Internet, car charging piles, and intercity rail transit. This is also the summary made on CCTV News, which is relatively official.

In addition, some media have created the "Eight Immortals of New Infrastructure". In addition to the seven heroes of CCTV's version, a "Beidou Navigation" was also added.

In fact, the areas involved in "new infrastructure" are quite broad and complex, and are by no means limited to these areas.

The concept of "new infrastructure" can be traced back to 2015. It was mentioned many times afterwards, until the Central Economic Work Conference in December 2018, when the concept of "new infrastructure construction" was first clarified and written into the government work report in 2019. CCTV and other media also summarized the seven major areas of "new infrastructure" based on this conference.

However, this summary is worth discussing. First of all, there is no document or notice at the central level to confirm the industrial scope of "new infrastructure". Although CCTV is an official media, it can only be regarded as a "media summary" and cannot represent the government's recognition.

Secondly, in the official context, the listing of “new infrastructure” industries has also changed from time to time. The most notable recent examples are the “5G network, data center and other new infrastructure construction” mentioned at the working meeting of the Standing Committee of the Political Bureau of the CPC Central Committee on March 4 and during the top leader’s inspection of Zhejiang in early April.

The biggest change is the first mention of "data center". Ordinary people may not notice the difference and think that "data center" is "big data center". But for IT practitioners, these two are completely different industrial concepts. Data center is the very bottom hardware foundation, while big data center is the upper application system.

Of course, this does not mean that big data centers have been removed from the "new infrastructure". The correct understanding should be that the concept of "new infrastructure" is broad. In different environments and backgrounds, the government has selected several key areas for example, but it does not mean to designate who is the "new infrastructure".

50 trillion investment?

After the Politburo meeting on March 4, "new infrastructure" once again attracted attention. At the same time, an explosive piece of information broke out in the environment suppressed by the epidemic at that time: this year, local governments in many provinces will invest trillions of yuan in the field of "new infrastructure". The relevant amount has also increased from 27 trillion yuan at the beginning to 34 trillion yuan, to the recent 47 trillion yuan, and even 50 trillion yuan.

If you look carefully at the relevant documents released by the provincial governments, you will know that this is another intentional or unintentional exaggeration and misinterpretation by the media. Most of the summaries by the media are the investment plans for key projects in 2020 released by various provinces. Although there are many contents related to "new infrastructure", they are not entirely investments in "new infrastructure", but also include traditional infrastructure, ecological protection, financial innovation, medical health and other aspects needed by society.

In addition, although these projects are called the 2020 key project investment plan, many projects have a long execution period, with many taking more than a year, or even accounting for the majority. Some provinces have therefore separately listed their annual investment plans for 2020, but most provinces still announce them according to the overall amount, so it is still difficult to determine the specific investment amount in 2020.

In any case, the "trillion-dollar investment" does exist. Moreover, the "new infrastructure" also encourages the active participation of private capital, and requires the executive departments to enhance the initiative of private capital. Therefore, for companies or investors interested in the "new infrastructure", this is a good opportunity not to be missed.

Emerging industries?

So we are back to the old question: How do we determine whether an industry belongs to "new infrastructure"?

This starts from the concept of "new infrastructure construction", which is actually information infrastructure, and its purpose is to lay the foundation for a digital society. It can be digital equipment such as 5G and data centers, or it can be the information version of traditional "rail, road and air" such as car charging piles and intercity rail transit.

Therefore, it can be seen that "new infrastructure" is not equal to new industries. It includes the new industrial field composed of 5G networks and the industrial chain born from them, as well as traditional industries such as energy, electricity, and roads that need digital transformation. In fact, including the Internet, they can all be regarded as "old" industries.

Contrary to popular belief, the Internet has penetrated almost every aspect of ordinary people's lives, but the degree of Internetization at the industrial level is still very low, and it is a field that needs continuous investment and transformation. If we only look at the "old" part of "new infrastructure", it can be roughly summarized as the term "industrial Internet", which is a bit old.

Therefore, the era of "new infrastructure" is also the era of the improvement and rise of industrial Internet. With the help of new information technologies, such as 5G networks and artificial intelligence, traditional infrastructure including energy, transportation, medical care, education, etc. will undoubtedly further release greater energy.