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Despite severe headwinds, China is pursuing its economic ascension and 5G aspiration

April 2022

LightCounting releases its China Wireless Infrastructure & Macroeconomics Update FY21

The report provides an update on the 5G developments in China, including macroeconomics, geopolitics, and technology. Neither COVID-19 nor 5Geopolitics seems to derail China’s ascension so far, despite the loss of access to key chipsets and the fresh massive COVID-19 lockdowns. Our full year 2021 analysis found that China’s economy grew 8.1% in 2021 driven by domestic consumer spending and robust exports of goods. In the U.S., the GDP grew 5.7% after a COVID-19-induced 3.4% contraction in 2020. This suggests China remains on track to surpass the U.S. as the world’s largest economy in the 2026-2028 timeframe because COVID-19 reset the GDP race between the U.S. and China by giving China a boost.

“Without a solid expansive telecom infrastructure, this economic ascension would have never happened; as 5G is the key enabler of China’s digital economy, 5G rollouts have remained stable so far. However, 2022 has started with significant headwinds that are slowing China’s economy and compromising its 5.5% planned annual GDP growth: government crackdowns on various industries starting with tech, finance and tutoring companies and tighter control over property developers.” said Stéphane Téral, Chief Analyst at LightCounting Market Research.

Since the major telecom restructuring of 2009, 3 major service providers (i.e., China Mobile, China Unicom and China Telecom) have emerged with a combined 2G/3G/4G/5G BTS footprint of 9.96M (vs. 9.31M in 2020) at the end of December 2021, a combined total of 1.42M (vs. 770K in 2020) 5G BTS as of December 31, 2021, and more than 1.6B mobile subscriptions, including 549,728 5G subscribers at the end of December 2021 and thousands of 5G verticals.

Our major findings in the report are:

  • China is isolated and self-reliant and divides the world into 2 spheres of influence: East vs. West, defined as geopolitical rather than geographic labels. In the East, China is the only country rising while the West is growing slowly but is much bigger in terms of GDP and boasts a gigantic wealth and R&D budget.
  • 5G, and soon 6G, remains at the center of China’s economy shift from industry to services. The government said that over 10,000 5G application cases have covered 22 industries and related fields of the national economy, including agriculture, steel, electric power, and mining.
  • China’s RAN market declined 12% YoY, dragged by 4G LTE but Huawei and ZTE increased their share at the expense of Ericsson and Nokia; they now command a combined market share greater than 80% for 2021.
  • This year, we expect the same level of 5G activity as last year and 2020.
  • In the mid- and long-term, our model shows lumpiness and bumpiness through 2026, which we predict will be the year China kicks off 6G.

About the report:

LightCounting’s China Wireless Infrastructure and Macroeconomics report focuses on 5G developments in China, including macroeconomics, geopolitics, and technology. The publication date is scheduled a few weeks after the 4 services providers (China Broadcasting Network, China Mobile, China Telecom, China Unicom) provide their annual reports so that we can gather many details about 2021 and provide a 2022 outlook and a 5-year forecast. This report also includes RAN vendor market shares and analysis.

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