China’s 5G market set to expand, fuel economic growth as tech solidifies status as pillar industry

China’s flourishing 5G market is expected to add almost US$260 billion to its gross domestic product in 2030, with its 5G connections accounting for nearly a third of the worldwide total according to a recent report.

The mobile industry contributed to 5.5 per cent of China’s GDP last year, and in each of the coming years through 2030, nearly a quarter of that contribution will come from 5G – the highest echelon of current cellular technology – per the results of a study issued on Tuesday by the Groupe Speciale Mobile Association (GSMA).

Telecommunications is a pillar industry buttressing the country’s fast-growing digital ecosystem, the likeliest source of future growth amid a structural transformation of its economy and an intense tech rivalry with the United States.

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China has built 6 times the number of 5G towers in 3 months than the US has installed in 2 years

Overall, the mobile market’s contribution to the Chinese economy will reach around US$1.1 trillion in 2030, the association said.

In its The Mobile Economy China 2024 report, the GSMA said the country’s entire mobile sector has so far provided a total of nearly 8 million jobs directly and indirectly, and generated US$110 billion in tax revenue in 2023 alone.

The association’s findings were in line with a predicted boom in the sector, as Beijing tries to revamp its economy through the adoption and development of new technologies – a sector with the capacity to drive new growth and serve as a remedy for an ailing real estate market, a rapidly ageing population and geopolitical uncertainties.

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5G adoption in China “is growing faster than anticipated due to the speed of network deployments and a maturing device ecosystem”, the GSMA said, projecting that the number of 5G connections will surpass 1.6 billion by 2030, nearly a third of the global total.

By the end of last year, China’s 5G users numbered 810 million for an adoption rate of 45 per cent as a proportion of total mobile users. Only the US and South Korea ranked higher.

In absolute terms, however, China has the world’s most mobile phone users by a wide margin. As of the end of last year, there were 122.5 mobile phones for every 100 people, according to figures from the National Bureau of Statistics.

China continues to set the pace for cutting-edge 5G technology standards

Groupe Speciale Mobile Association report

At the same time, the number of 5G base stations was nearly 3.38 million – a surge of 46 per cent from a year earlier.

In his government work report delivered earlier this month, Premier Li Qiang promoted further acceleration in digital innovation, saying digital infrastructure in China should “be built moderately ahead of schedule”.

“China continues to set the pace for cutting-edge 5G technology standards”, the GSMA said, adding the country’s operators are “leading the way” in the transition to 5G-advanced and 5G reduced capability networks.

“This is anticipated to kick-start a new round of 5G investment in 2024 and beyond.”

China is also investing heavily in research and development for the next generation of mobile technology, part of a global race to reach the next stratum of connectivity.

Though 6G has not yet been formally standardised, China Mobile, the world’s largest telecoms operator in terms of mobile subscribers, announced last month that it successfully launched the world’s first satellite to test 6G architecture.

South China Morning Post