China's digital economy to be driven by 5G: forum

Commercial 5G licenses will be catalysts for the construction of China's digital economy, which will form the core of the country's broader economy, said Kitty Fok, IDC China managing director.

On Wednesday at an IDC forum in Beijing on China's ICT market, Fok said that IDC expects the digital economy to account for 60 percent of global GDP by 2022 and 65 percent of China's.

As digital technologies continually penetrate various industries, growth is driven by digital products, operations and relationships. Global IT spend is expected to reach $7 trillion from 2019-2022, with China expected to account for over $1 trillion of that figure, according to IDC.

The first batch of 5G commercial licenses were issued on June 6 by the Ministry of Industry and Information Technology in China. IDC said the commercial use of 5G will make data collection and flow simpler and smoother.

Digital technologies such as next-generation network security, robotics, blockchain, artificial intelligence, internet of things, 3D printing and virtual reality depend on data, and 5G can address this need for data, said Zhong Zhenshan, IDC China vice-president of emerging technology research.

Quoting China Academy of Information and Communications Technology data, Zhong said that 5G's contribution to China's economy is expected to increase from 0.1 percent in 2020 to 5.8 percent in 2030.

In the next five to 10 years, with technologies maturing and more applications being developed, not only consumers but enterprises will benefit from an increasingly mature 5G network, Zhong said.

"China will become one of the most important, or say the biggest, 5G markets in the world. From the perspective of base stations, we expect the three major telecom operators in China will build around 80,000 5G base stations in 2019, so China's general 5G network deployment is very optimistic," Zhong said.

IDC forecast most 5G network connections will come from commercial use in later years and that the manufacturing sector will be the biggest beneficiary of 5G, said Zhong.

Wu Lianfeng, IDC China vice-president and chief research analyst, said as the 2.0 era of digital transformation is coming, the digital divide is expanding.

Scale is becoming more important and the speed of innovation based on platform and ecology is increasingly critical, Wu said.

Enterprises should build digital transformation roadmaps, develop original cloud-based digital products, change their organization structures and establish new key performance indicators, Wu said.