The next two to three years are critical for China's ambitions to become a global leader in 5G, according to a leading think tank.

The state-backed China Academy of Information and Communications Technology (CAICT) says despite the huge buildout and takeup, China's 5G is still immature.

In a new white paper on China's 5G outlook, CAICT said the key to 5G was its ability to expand the industrial Internet.

It said the industrial Internet would ultimately be driven by network capabilities, terminals and system products.

But it warned that the 5G rollout was still far from complete, while supporting industries for 5G applications were immature and "the cross-industry ecosystem," essential for the convergent nature of 5G, was yet to be established.

However, it concluded that "overall, China's 5G commercial development is still in a favourable period over the next two to three years."

Companies' willingness to invest remained high, supportive government policies were paying dividends and enterprise acceptance of 5G would gradually increase, it said.

"We must fully grasp this period of opportunity to accelerate 5G network construction and applications," the white paper said.

With innovation and industry development driving 5G technology and services, China could "truly become a leader in new-type infrastructure," making new technologies such as AI, big data and cloud computing widely available.

The paper said China's 5G rollout had been spurred on by the national "new infrastructure" strategy unveiled last April.

The three operators invested an estimated 210 billion yuan (US$32.5 billion), or around 53% of total capital expenditure, on 5G in 2020.

5G was driving investment in new cloud and data center infrastructure as well, the report said.

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Besides the three telcos, who had massively expanded their cloud deployments, Alibaba is investing RMB200 billion ($30.9 billion) over the next three years and Tencent RMB500 billion ($77.3 billion) over the next five years.

Chinese enterprise spending on cloud and data centers last year totaled approximately RMB180 billion ($27.8 billion) and is expected increase to around RMB2 trillion ($309.3 billion) over the next five years.

The paper estimated that 5G drove RMB811 billion ($125.4 billion) in direct economic output and economic added value of RMB190 billion ($29.4 billion) in 2020.

By end 2020, Chinese operators had connected more than 200 million users to a network of more than 700,000 basestations, nearly five times bigger than South Korea's rollout.

The MIIT expects another 600,000 5G basestations to be built in 2021.

Around 144 million 5G devices were shipped last year, accounting for 51.4% of all phones sold.

— Robert Clark, contributing editor, special to Light Reading