China recognizes the development of next-generation 5G technology is just as important as other infrastructure projects, according to the CEO of the world’s second-largest maker of mobile network equipment.

Speaking at the Mobile World Congress in Barcelona Monday, Ericsson CEO Borje Ekholm told CNBC: “What I think is happening in China is that they are recognizing mobile infrastructure is actually a critical piece of national infrastructure.”

“When we talk about national infrastructure, we often discuss roads and railroads but as a matter of fact mobile infrastructure is equally as important,” he added.

Ekholm also urged other countries to realize the potential of mobile infrastructure investments. He described such projects as the “basis” to further innovations.

The Swedish telecommunications company announced Monday that it had signed a memorandum of understanding with China Mobile over the weekend. The new pact sees Ericsson join forces with the world’s biggest network operator, as they plan to cover the internet of things testing and field trials, with a particular focus on factory automation.

Ericsson’s CEO said the mobile telecom equipment maker had several contracts with network operators for commercial deployment of next-generation 5G networks launching later in 2018.

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