(Yicai Global) Sept. 7 -- In response to Chinese Vice Premier Liu He’s statement that “moderately ahead-of-time infrastructure construction” is essential to the development of the digital economy, experts believe that such a move could provide new economic impetus.

But it should be implemented in a step by step manner, according to the financial and debt situation, to avoid generating new local debt risks, they cautioned.

During the development of the digital economy, the government should make talent a top priority and work to create a soft environment, constantly improve the legal framework and implement "moderately ahead-of-time infrastructure construction," Liu said at the 2021 China International Digital Economy Expo that kicked off yesterday.

The infrastructure in question is ‘digital infrastructure,’ meaning basic facilities that support the universalization of digital technologies to the whole of society and the economy, Wei Liurong, deputy chief engineer with the Policy and Economics Research Institute under the China Academy of Information and Communications Technology, told Yicai Global. 

That includes fifth-generation mobile networks, gigabit fiber-optic networks, satellite internet, data centers, cloud and edge computing, supercomputing, artificial intelligence infrastructure, blockchain infrastructure, industrial internet, Internet of Vehicles, Smart City and City Brain, he noted. 

Wei believes that as the digital economy’s growth enters a new stage when the digitalization of industries is the focus, China can seize the initiative in global competition if it advances moderately ahead-of-time infrastructure construction.

That will also provide new room for development of the country’s private economy and leverage companies’ digital transformation and markets where digital technologies are applied, he added.

In response to public doubts about the high cost of new 5G infrastructure investment and long payback period, Wen Ku, an ex-spokesperson and former director of the Ministry of Industry and Information Technology’s department of information and communications development, said that moderately ahead-of-time construction is a common feature of public infrastructure.

With large-scale deployment, network costs will keep falling and the bright prospects of 5G application will ensure sustainability of investment and construction, he told Yicai Global.

The core of the new infrastructure is to support the growth of the digital economy, said Shen Jianguang, chief economist at fintech provider JD Digits. China has been in the forefront of the digital economy sector and boasts advantages in spending on research and development, number of patents and market share.

In future, China should grab the growth opportunities of the digital economy amid the Covid-19 pandemic to bring into play the industrial effect of the new infrastructure and strive to become the world’s leading digital economy power, Shen noted.

But Wei cautioned that ‘moderately ahead-of-time’ does not mean ‘much in advance’ and that it should be carried out progressively, in order to prevent local governments and companies flocking to the market, causing repeated construction and blind investment.

Editors: Zhang Yushuo, Peter Thomas