China 2021 - Supertrends not to miss
By Line Heidenheim Juul
2020 threw most of us plenty of surprises, and the positive spin has been the inevitable innovation and digitalization that has proliferated in many companies. But what is then next and how will the development in China affect the rest of the world? Covid-19 is basically under control, the economy is on the right track, society is by and large back to normal, and the technological development has not been paused. The upcoming five-year plan will soon reveal more on the stops along the way, but take a look at the few things we know for now.
No. 1: 5G development can empower economic growth
5G technology can be a driver for economic growth, and in a post pandemic world where many economies have been taken hostage, this matter. While most media stories about China have been focused on the tech- ban in the USA with TikTok at the center of attention, it is important to remember that for some technologies, China is already independent and ahead – even of the US. We wrote a short about China’s lead in 5G technology earlier this year, and to get the extended version, click on over to that here.
For the quick conclusion: China is leading in 5G technology and already diving into 6G with Huawei leading the charge. What does that mean for us and them? 5G will fuel speed, connectivity, and efficiency of the technologies of tomorrow like Internet of Things (IoT), robotics, augmented- and virtual reality (AR/VR) and artificial intelligence (AI). That most likely will mean that countries on the forefront of 5G technology will see increased growth and faster transition to a fourth stage of industrial revolution. Concretely, 5G can power autonomous vehicles needing faster response time, industrial robotics in need of increased connectivity between machines and better efficiency and it can open new doors for medical professionals doing remote surgeries to mention a few examples.
No. 2: China’s Digital Currency has the potential to disrupt globally
China is launching a digital currency and has already started rolling out the test phase - so what? We all have mobile payments and a little crypto currency. No, this is vastly different. The central bank, People’s Bank of China, has built its own centrally controlled digital yuan (DCEP), which has the potential to challenge the global banking Swift system and be a gamechanger for corporates trading in and with China. It may be possible that corporates can move money flows in and out of China more freely, and that is indeed a massive change. Some experts have discussed the possibility that the digital currency will strengthen the Renminbi (yuan or official currency) as an alternative to the US dollar in international payments, but many agree that though it will bolster the Renminbi´s international position a takeover of the US dollars role is far ahead in the future if at all.
The digital currency is based on near-field-communication tech, and there will not be a need for a digital wallet, nor to be online. The currency has been carefully tested out during 2020, with USD 3 million of digital cash being handed out for free to citizens in f. x. Shenzhen and Suzhou. The experiment is widely considered successful for now, as the first 20.000 transactions have already been made on e-commerce giant, JD.com. Many speculate that the digital currency will be in full circulation just in time for the Winter Olympics of 2022. The central bank will be able to trace the data, but marketers or third-party platforms will not. Will this not disrupt the mobile payment platforms? No, experts and the central banks says it can end up being an advantage for those sitting on 95% of the mobile payment market, Tencent and Ant Financial (Alibaba). How does it compare to Facebooks Libra or regular cash even? We put together an elaboration here.
Finding your self in need to understand this better? Fear not, join us in February, when China Experience is launching an event inviting experts to explain and discuss the digital currency and its global implications. Sign up to the newsletter here, to get the invitation to your inbox directly.
No. 3: Quantum Computing development accelerating
The race between the US and China in tech is being battled on several fronts, and one of them is quantum computing. This month China claimed to have built a quantum computer that is 100 trillion times faster than the world’s supercomputer. This technology will have the power to increase processing speed and power of computers to simulate large systems and drive advances in physics, chemistry, and other fields. However, the technology is still in its early stages, but has become a platform in which China competes with the US. Google already announced last year to have reached quantum supremacy with their newest computer being able to perform computations in 200 seconds that would normally take currently fastest supercomputer 10.000 years to process. According to Xinhua, the Chinese researchers behind the announcement in December claim their prototype is 10 billion times faster than Google’s. Looking ahead, the Chinese government has said it will build a 10 billion USD national laboratory for quantum information sciences, while the Trump administration has allocated 1 billion USD to fund research into the field of artificial intelligence and quantum information. While quantum computing and the power companies and governments can harness from this is years away, this is just yet another example of the reason to follow the tech- development in China that has global implications.
No. 4: Sustainability and industries around it to become central
This year Chinese president Xi Jinping announced that China will become Co2-neutral by 2060. This is a very ambitious goal, seeing as China is still the world’s biggest emitters of Co2. However, it does send the signal that more resources and greater efforts will be allocated to sustainability and green initiatives. Focus on sustainability -not only environmental – was further backed up and focused on in the communiqué on the upcoming five-year plan, which is expected to be released in March 2021. The government is known for its ability to drive innovation by stimulating industries and subsidizing users. An example of this is the drive to increase renewable-energy vehicles (EV´s). While China has the most amount of EV’s on the streets in the world, it is the goal to go from 4 million now to 325 million EV’s by 2050. For the past 10 years the government has helped drive this industry by pouring resources, support, and subsidies in it, and demanding that foreign producers of cars in China use Chinese lithium batteries. Now China is sitting on half the worlds production of these. China’s large-scale investments and government support in clean tech has already proven its ability to drive down costs worldwide – as it happened with solar panels, where Chinese companies suddenly dominated, supported by the government.
The move to a more sustainable and green China is overall good news for the environment and offer challenges and opportunity for companies who can offer investments or sustainable solutions in one of the world’s largest markets.
Curious for more on sustainability? We will be publishing a white paper on this topic in the first quarter of 2021, link up with us on LinkedIn to make sure you see the announcement of this.
No 5: Health, happiness, and UV-cleaning
Health and happiness is a strong focus area in China for both investors and tech giants alike. The entire development on health tech is worth its own independent blog, but head over here to read how big tech helped battled Covid-19. For the future perspective, consider UV-cleaning. At the peak of the outbreak countries were struggling for the right equipment in order to prevent and sanitize every surface possible. One method, that has been employed in China is UV light cleaning. Autonomous UV robot systems are being trialed in several hospitals. In Shanghai, a trolley with UV light cleaning capacity can clean a public bus and cut cleaning time from 40 minutes to merely 5 minutes, according to Forbes. This is a highly effective way of eradicating the virus and germs, and could be the future of cleaning toilets, hospitals, airports, and other public outlets with masses of people passing through. Airlines like Boeing has already successfully applied for a patent on self-cleaning lavatory where UV light is supposedly able to clean 99.9% of bathroom germs after use. Methods like these have also been adopted in both Korea and Japan.
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