Does Geopolitics Affect the Development of China’s 5G Industry?

Abstract

The field of sci-tech innovation, especially the field of emerging technologies, has become an important battlefield in today’s geopolitics. Given the unprecedented economic benefits and social changes that 5G technology can bring, 5G has become a major focus of great power competition. This paper uses the bootstrap-rolling-window-causality-test method to investigate the dynamic causal relationship between global geopolitical risk (GPR) and China’s 5G industry. The results show that there is a dynamic bidirectional Granger causality between GPR and China’s 5G industry with time-varying characteristics. At different times, GPR has impacted China’s 5G industry differently. In the early days of the United States’ sanctions against China, its sanctions stimulated China’s independent innovation capabilities, and GPR had a significant positive impact on China’s 5G industry. When the United States strengthens its 5G strategic containment of China, GPR significantly negatively impacts China’s 5G industry. During the period of relative stability in the international political situation, China’s 5G industry has a significant negative impact on GPR. It can be seen that the strategic suppression of China by the United States has affected the development of China’s 5G industry and related industries. These results mean that 5G is integrated into political affairs and becomes a force to defend national sovereignty and enhance geopolitical dominance.