5G will drive China's digital economy: Consultant

5G technology will become the new growth engine for China's digital economy, providing a solid foundation for the country's artificial intelligence (AI) development, according to market consultancy IDC.

The fifth-generation mobile network will play an increasingly important role in driving China's economic growth, with its contribution expected to increase from 0.1 percent in 2020 to 5.8 percent by 2030, it said.

The digital economy will be the core in the future and China is working actively on that, Kitty Fok, managing director of IDC China, said on Tuesday at IDC Directions 2019 in Shenzhen.

By 2022, the digital economy is expected to take up 60 percent of the world's economy. The percentage for China is projected to be even higher, 65 percent.

Artificial intelligence is an important part of the digital economy and 5G offers strong support for its commercial application, said Zhong Zhenshan, vice-president of enterprise research at IDC.

While 5G's super-fast speed and low latency characteristics can support such applications as intelligent manufacturing and autonomous driving, it also can provide more data for AI development, he said.

At the present time, 20 percent of users say the lack of effective data is the major challenge they face in developing AI models.

The commercialization of 5G technology will make data collection and flow much easier, thereby promoting AI development, he said.

According to IDC, the global AI market reached $24 billion in 2018, with China accounting for 9.2 percent.

"In the current stage, most of China's 5G spending is on hardware, as it needs to build infrastructure. In the next 10 years, 5G's contribution to the country's GDP will come more from the application side," Zhong added.