Introduction to China’s 5G Market

4 min read.

5G, or the 5th generation mobile network, is the newest global wireless standard after 1G, 2G, 3G and 4G networks. 5G features a new type of network that is able to virtually connect everyone and everything together, including machines, objects and devices. It is also meant to deliver information at a much higher speed and in a more efficient manner, while providing users with a more uniform user experience.

China is ramping up and diversifying its use of 5G
Credit: Visual China Group

Since the earliest stages of 5G development, China has cemented its position as a global 5G leader. Approximately 20 percent of global 5G connections in 2020 are attributed to China, whereas by 2025, China is forecasted to become the largest consumer market for 5G in the world with over 800 million 5G connections, according to GSMA, an industry organization representing the interests of mobile network operators worldwide. Meanwhile, the country also currently has the most 5G standard-essential patents, comprising one-third of the global total.

In an interview between Yang Yong, the president and CEO of Datang Network and China Global Television Network (CGTN), Yang mentioned that “[t]he arrival of 5G in China meant the country went from being a follower, running in parallel, to now leading in telecommunications.” He also told CGTN that in the future, “5G will be a major growth driver for China”. Indeed, China’s telecom operators have already begun to forge ahead with 5G applications, utilizing them in various industries like industrial manufacturing, education, healthcare and more.

Two Front-runners in China’s 5G Market

Huawei is considered to be one of the biggest developers of 5G equipment, and its technology is also considered to be the most advanced. By October 2019, China Daily reported Huawei to have signed over 60 5G commercial deals with global leading operators, and sent 400,000 5G Massive MIMO (multiple-input, multiple-output) AAU worldwide. China Daily also reported it to hold nearly half the networking contracts provided by China Mobile’s, the country’s largest mobile internet provider. However, the company’s rapid growth has been deemed as a threat to major economies like the United States (US), whose administration has heavily restricted Huawei’s access to US technology and banned US companies from using Huawei’s equipment altogether.

ZTE is also a major provider and developer of 5G in China. According to China Daily, as of November 2019, ZTE has reportedly signed 35 5G commercial deals. . The company is also currently cooperating with major operators like Telefónica, Orange and WindTre. Together with Huawei, the two companies have more complete 5G industrial chains that boast wider coverage than European companies like Ericsson. Moreover, Huawei and ZTE have also been leaders in launching many terminal products, including 5G mobile phones and 5G CPE. Like Huawei, ZTE has also signed a tender with China Mobile to help roll out its 5G network for users.

The Future of China’s 5G Market, Post COVID-19

2020 was supposed to be the year 5G became mainstream. However, the COVID-19 pandemic has severely impacted many businesses globally, causing many to slow their operations and some to shut their doors. This includes many corporations in the 5G sector as well. Despite this tremendous setback on the global 5G race, China has persisted in trudging forward. Although it was the first country to be hit by the novel coronavirus, it has since made remarkable progress in economic recovery. In networker equipment maker Ericsson’s latest report mobility report, China is estimated to experience an increase in 5G subscriptions in the near future, while the numbers are reversed for North America and Western Europe. The company also said that a majority of all 5G subscriptions this year will come from China.

Taking on a leading role in the race of 5G development has become an important strategy in enabling China to increase its global power. In March 2020, the Chinese government introduced its “New Infrastructure” campaign, a nationwide economic recovery scheme. 5G development was identified to be one of the country’s top priorities in its next-generation development, where it will likely receive huge sums of investments and instrumental support from the government. In fact, domestic implementations of 5G have already been ramped up in recent months, with 5G applications being utilized in medical care, public security, education, manufacturing and several logistic sectors. China Briefing reported that more than 100 hospitals have also begun using 5G systems for telemedicine consultations, demonstrating the potential of the 5G market in China’s economy in its post-pandemic recovery, and possibly in the long run.