A common theme here on ChinaFund.com is making it clear that the image of a country that’s dependent on the exports of low value-added products has nothing to do with 21st century China because:
- It’s no longer as dependent on exports, with over two thirds of its GDP being internal consumption-driven
- China is the global leader when it comes to many industries one can consider cutting edge rather than just dominant as far as unsophisticated goods are concerned, from solar and wind energy to industries that pertain to the Fourth Industrial Revolution (The Internet of Things): Artificial Intelligence, Robotics, 5G and even 6G connectivity
As an example, as everyone is busy talking about 5G and its implications when it comes to everyday use (dramatic implications at that, with 5G being orders of magnitude superior to 4G), China is actually well underway to the 6G dimension. According to the head of the 5G technology working group at China’s Ministry of Industry and Information Technology (Su Xin), 6G projects will start being developed in 2020 with the goal of entering the commercial use phase in 2030.Quite a remarkable feat in light of the fact that as Commissioner Jessica Rosenworcel (Federal Communications Commission) pointed out, 6G networks are poised to become 1,000 faster than 5G ones, with 5G ones themselves being superior to their 4G counterparts in a seemingly impressive manner.
The end result will be an “Internet of Everything” world… literally everything, with the overwhelming majority of devices individuals used being connected to the internet through huge bandwidth and low latency connections facilitated by 5G/6G networks.
To give you a sense of perspective as to which industries China is poised to become a leader in, just imagine that 5G will enable people to download a full movie in approximately eight seconds, whereas 6G will enable that same person to download a hundred movies in less than one second. The same way, machine-to-machine communication will become seamless, with autonomous devices being the norm, whether we’re talking about self-driving cars or smart homes.
From an investing perspective, those who are stuck with the idea that the best China can do is imitate Western technology will lose out on exposure to companies and industries that are poised for explosive growth. Just look at the industries currently experiencing the highest growth rate in China (click HERE) and it will become crystal-clear that a 20th century perspective on China and the nature of its economy is obsolete… to put it mildly.
Think of it as history’s way of enabling China to have its revenge, after the many losses it had to deal with as a result of not reaping the rewards of the First Industrial Revolution quickly enough (click HERE for a brief economic history of China for further clarification). The same cannot be said about China when it comes to the Fourth Industrial Revolution. Not only is it not being left behind, on the contrary: it’s becoming a global leader in pretty much any fields which have to do with what will most likely come to be known as the Internet of Everything.