The China 5G opportunity

Investing in China 5G offers exposure to one of the biggest technological upgrades in recent times.

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What makes China 5G special?

China is the world leader in 5G, and this sets the country up for a promising technological future. This also offers investors a unique opportunity to gain early exposure to a transformative innovation.

Biggest 5G spender worldwide

China’s telcos will spend at least USD 130bn on 5G over the next five years, representing almost a third of global capital expenditures on the technology.

5G infrastructure is cheap in China

Still, at USD 92 per person, China is spending much less per capita than its global peers. Costs to build and maintain 5G infrastructure in China are much less thanks to homegrown inventor Huawei, the sharing of 3.5GHz bands between telcos and the free licensing of 5G bandwidth.

Plans are cheap too

The average monthly price of a low-end 5G plan (30GB) in China is USD 18 (CNY 128), among the lowest worldwide. And over 20% of 5G-enabled smartphones in China are under USD 286 (CNY 2,000), also among the lowest globally. Such affordable rates should accelerate adoption.

Sino-US tensions a key risk

A risk to the rollout of 5G in China is the White House’s ban on American companies selling parts to Huawei, which sources critical components from US suppliers. This will likely be a key focus in future negotiations.

5G a strategic priority

Nonetheless, there is no stopping 5G in China. The benefits to the public, businesses and the country’s strategic direction are too great. People and companies using 5G will enjoy faster speeds, increased capacity and lower latency. The jump in internet power will propel the advancement of industries from retail to transportation.

Autonomous driving

Autonomous driving stands to gain the most. China’s sizeable aging non-driving population and relatively smaller percentage of licensed drivers (compared to other developed countries) will fuel demand for autonomous vehicles, which 5G can enable to a far greater degree than 4G.


Investment opportunities

Given the huge capex, disruption and economic value to be generated by 5G, as well as its role as a key enabler of smart city development in China, we see significant investment opportunities for investors.

Near term

  • Chinese tower companies
  • Smartphone supply chain

Medium term

  • Cloud operators, data centers, cloud gaming, AI, AR and VR
  • Disruptors in e-commerce, logistics, manufacturing and healthcare

Long term

  • Autonomous driving
  • Local semiconductor/tech firms

Have questions or want to find out more?

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