李三希：我国数字经济发展的主要特点和突出优势   2021-06-25

 

Li Sanxi
In recent years, thanks to the policy support and driving force of the market, China’s digital economy has achieved leapfrog development, expanded steadily in size and taken an increasing proportion of GDP, further consolidating the country’s status as a global digital economy power. The White Paper on the Development of China’s Digital Economy (2021) released by the China Academy of Information and Communications Technology shows that despite the combined impacts of the COVID-19 pandemic and global economic downturn, China’s digital economy maintained a high growth rate of 9.7% in 2020, more than 3.2 times of the nominal GDP growth rate during the same period. It reached RMB39.2 trillion, accounting for 38.6% of China’s GDP.
As a new driver and engine to promote economic recovery, the digital economy has become the most prominent new growth pole worldwide. Currently, it’s the core area that all countries focus on and strive to develop, witnessing increasingly fierce competition among countries. The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China proposed to “develop digital economy, promote digital industrialization and industrial digitization, facilitate deep integration of the digital and real economy, and create an digital industry cluster with international competitiveness”, which fully reflects China’s determination to vigorously develop digital economy. Based on this, it’s necessary to summarize and analyze the preliminary results in development of digital economy, objectively understand the unique advantages in its future development, and further enhance the competitiveness of China’s digital economy.
At this stage, China’s digital economy shows the following four characteristics in the development.
Steady digital industrialization
First, leapfrog development has been achieved in the construction of information infrastructure. Now, China has built the world’s largest optical fiber network and 4G network, giving more than 98% of administrative villages nationwide access to 4G and optical fiber. The transition to IPv6 protocol of fixed broadband mobile LTE has been fully completed. In terms of data infrastructure, in recent years, the construction of a new generation of cloud computing platforms and facilities has accelerated, and the architecture of an omni-directional large-capacity international transmission network has basically taken shape. These results can provide strong support and guarantee for emerging forms and integrated applications of the digital economy, and promote the high-quality development of digital industrialization.
Second, the formation of new forms and models of digital consumption has sped up. During the fight against the COVID-19 pandemic, digital technology and services have played an important role, showing broader application prospects and stronger momentum. Meanwhile, they have helped customers develop the habit of online consumption, and led to the earlier emergence of new heavyweight consumption models. Among them, various online services such as remote office, online education, smart medical care and e-government have seen explosive growth during the pandemic, highlighting the advantages of digital economy. In addition, with the support of emerging digital technologies such as 5G, new consumption models including digital media, smart home, etc. are entering the stage of rapid development.
Accelerated industrial digitization
First, the innovation of digital technology promotes industrial transformation and upgrading. In recent years, China has made great progress in the research and development of digital technology such as artificial intelligence, deep learning, big data and cloud computing. The new generation of information technology provides strong support for the development and growth of digital economy, and plays an important role in promoting industrial digitization and improving the industrial chain of digital economy. Currently, as manufacturing enterprises steadily enhance their digitization capabilities, and continuously become more intelligent and automated, the manufacturing industry is becoming the main arena for digital economy.
Second, significant progress has been made in the integrated development of digital economy. In recent years, integration of China’s digital and real economy has kept expanding and deepening. For example, the innovative development of the Industrial Internet has brought new business models such as intelligent manufacturing, customization, network collaboration and digital management, which have promoted the digital economy to reach more industries and scenarios of real economy.
Remarkable achievements in digital governance
In recent years, digital governance has received great attention from the state, with vigorous efforts and remarkable achievements in the construction of digital government. Currently, government agencies at all levels in China have significantly improved online services. E-government platforms such as “getting things done on mobile phone” and “access via one website” are being launched at a faster pace. The service capabilities of the integrated government service platform have been greatly enhanced, with cross-regional, cross-departmental and cross-level business management and rapid response capabilities improving continuously. As of December 2020, the number of e-government service users in China reached 843 million, accounting for 85.3% of the total netizens. According to the UN E-Government Survey 2020, China’s e-government development index rose to the 45th place worldwide from the 65th place in 2018, reaching a record high. Specifically, its online service index jumped to 9th place worldwide, which was rated “very high.”
With the accelerated integration of digital technology and traditional industries, China’s national governance system has moved faster towards a higher level. In terms of the way of governance, the digital economy is a strong impetus for the transformation from empirical fuzzy governance based on personal judgment to meticulous, targeted, data-driven digital standardized and normalized governance. Meanwhile, the integration of digital technologies such as big data and cloud computing with traditional public services has improved the situational awareness, scientific decision-making, risk prevention and emergency response capabilities of the governance system, and provided more equal access to digital public services.
More focus on data value
Currently, the Chinese government attaches great importance to the role of data in the development of digital economy. It has successively announced a series of policies to accelerate the establishment of a market-based allocation mechanism of data factors featuring “an efficient market, a well-functioning government, profits for enterprises and benefits for individuals”. On April 9, 2020, the CPC Central Committee and the State Council issued the Opinions on Improving the Systems and Mechanisms for Market-based Allocation of Factors of Production, which clearly proposed to accelerate the cultivation of the data factor market. This indicates that data are integrated into China’s economic value creation system together with other factors such as land, capital and technology, becoming basic and strategic resources and an important productive force in the era of digital economy. On January 31, 2021, the General Office of the CPC Central Committee and the State Council promulgated the Action Plan for Building a High-Standard Market System, which clearly proposed to accelerate the cultivation and development of the data factor market, and establish a basic system and standards for property rights, transaction and circulation, cross-border transmission and security of data resources to promote the development and utilization. It can be seen that the central government has attached great importance to and confirmed the economic value of data factors, laying a foundation for China’s digital economy to enter the fast track of development.
Under the policy guidance of the CPC Central Committee, local governments have introduced policies focusing on promoting the transaction and circulation of data, and paid much attention to the construction of local big data transaction platforms. For example, in 2015, the Global Big Data Exchange in Guiyang officially went into operation and completed the first batch of big data transactions. Since then, Beijing, Shanghai, and Shenzhen have successively established data trading centers such as Beijing International Big Data Exchange, Shanghai Data Exchange, and Shanghai Big Data Center, Guangdong-Hong Kong-Macao Greater Bay Area Big Data Center to make data transactions one after another relying on existing trading venues.
In terms of the development of digital economy, China has the following five outstanding advantages.
Currently, global competition in digital economy is becoming increasingly fierce, and China faces dual tasks and challenges of high-speed growth and high-quality development. However, we can’t ignore that China also has many advantages in the system, market, platform enterprises, industrial system, and human resources in developing digital economy.
System superiority
First, it helps promote the construction of new infrastructure in China. China’s institutional advantages enable the government to make remarkable achievements in the construction of digital infrastructure. Given the characteristics of new infrastructure construction including the large scale, wide range of industries, huge investment and high cost, it certainly needs the participation and support of enterprises and private capital. Thanks to its unique institutional advantage of concentrating resources to accomplish large undertakings, China can organize various capital forces to participate in new infrastructure construction, which lays a foundation for the development and improvement of the digital economic ecosystem, and has great practical and strategic significance.
Second, it’s conducive to the formation of a tolerant, loose policy and regulation system. Currently, the understanding of governments, enterprises and the public about the development of the digital economy has been further aligned. The top-down policy deployment from the central to local governments has created a sound policy environment for the development of digital economy, and promoted new industries, new forms and new models of digital economy to continuously unleash huge potential and strong momentum. The Chinese government has always taken a tolerant and loose regulatory attitude towards digital economy, and attached great importance to incorporating the development of digital economy into the national strategy. In recent years, policies such as Actions of “Migrating to Cloud, Using Digital Tools and Enabling Intelligence” and Digital Transformation Partnership Action (2020) have been launched successively, and highlighting China’s institutional advantages in developing digital economy.
Broad market space
First, the advantage of a large market. A typical feature of digital economy is network externalities. The larger the market size, the more conducive to generating massive data and developing digital economy. China’s 1.4 billion population has created a market with strong domestic demand. Besides, it has a large number of Internet users, reaching 989 million as of December 2020, with an Internet penetration rate of 70.4%. A strong domestic market is more conducive to fully playing the role of digital economy in reducing market transaction and coordination costs, while effectively improving market efficiency.
Second, the advantage of a huge consumer group. It has a huge number of digital consumers, and ranks among the top worldwide in the penetration rate of various digital applications. The huge consumer group makes it possible to meet consumers’ individual needs, prompts enterprises engaged in digital economy to constantly develop new scenarios and products to meet the special changing needs. Currently, an increasing number of Chinese Internet enterprises begin to adopt unique ecological strategies to achieve fully connect online and offline scenarios, enhance communication with consumers and provide more new products and services in a socialized manner.
Third, the advantage brought by consumption revolution. The current strong trend of consumption upgrade in China not only provides diverse application scenarios for the development of digital economy, but also helps reduce the trial-and-error cost of enterprise innovation and business startup. In fields relevant to the digital economy such as big data and artificial intelligence, digital economy can achieve rapid development relying on massive digital consumers. Moreover, there are still some industries that are relatively less mature in China, and the traditional industries can’t met people’s growing needs for a better life. In the future, digital economy will provide more creative solutions to directly address consumers’ pain points and achieve leapfrog development.
Leading platform enterprises
First, the advantage of strong market players. In recent years, China has cultivated a large batch of world-leading digital platform enterprises in the core fields of digital economy such as e-commerce, mobile payment and sharing economy. Led by these leading enterprises, a number of small and medium-sized enterprises have gathered together. Meanwhile, under the joint efforts of the market and governments, based on many factors such as talents, finance, new infrastructure and system, a large digital industrial ecology has taken shape, which exerts a positive influence on the transformation and upgrading of traditional industries. In addition, leading enterprises worldwide can give full play to their advantages in international discourse power, deepen international economic and trade cooperation and technological exchanges, and lay a good foundation of rules to help more Chinese enterprises in digital economy “go global” by participating in the formulation of international rules in the fields of e-commerce, mobile payment, digital contents, etc.
Second, the advantage of coordination and resource allocation. In the era of digital economy, China’s Internet platform is gradually becoming a basic economic organization for resource coordination and allocation, as well as an important accelerator for economic development. Many platform enterprises strive to promote digital transformation of the entire society by establishing an ecosystem of join efforts for win-win results, facilitate efficient gathering of more resources by providing affordable, world-class digital infrastructure for small, medium and micro enterprises. With these efforts, the information cost of the entire society fall sharply, making it possible for a wider range of collaboration and cooperation. On one hand, digital economy can rely on the organization of the platform to reduce information asymmetry and avoid waste caused by excessive input of production factors or production factors left unused. On the other hand, the Internet platform can remove the time and space constraints of various production factors via technological and model innovations, and expand the resource supply of production factors.
A complete industrial system
First, the industrial advantage. China has become a manufacturing power. It’s the only country that covers all the categories in the United Nations industry classification with the most complete industrial system worldwide. Based on the rapid development of the industrial Internet now, this will bring more dividends to the development of digital economy. For example, the advantage of a complete industrial chain can be used to build a complete supply chain system to provide convenience and cost advantages for the iterations and application experiments of digital technology in various industries.
Second, the technological advantage. The continuous iteration of information technology has added new impetus to the development of digital economy. In recent years, China has make continuous breakthroughs in the fields with technological advantages of information such as 5G, artificial intelligence, quantum computing, Internet of Things, blockchain and big data. It has accelerated industrialized application, thus providing strong support for the vigorous development of digital economy. Meanwhile, breakthroughs in digital technology and integrated development have quickly become enablers, and the “innovation dividends” have been released continuously. These results have effectively penetrated into and supplemented the traditional economy, and facilitated its transformation and upgrading.
Third, the latecomer advantage. Generally speaking, the digital transformation of China’s industries is still in its infancy, and the digitization of traditional industries remains to be improved. Meanwhile, unbalanced development of digital economy in different regions has become an increasingly prominent problem, and the digital needs of many people living in remote and backward areas and rural areas haven’t been satisfied. China has huge potential in digital development, which is conducive to accelerating the cultivation of new growth points of digital economy and building new momentum for its development. Besides, there are some defects in the construction of the economic system, leading to a gap compared with the international advanced level. However, this gives China a late-comer advantage in the development of digital economy without any historical burden. A typical example is the rapid rise of mobile payment in China. It’s precisely because China does not have developed and convenient credit card payment system like those in Europe and the United States that mobile payment has suddenly emerged in China. There is no need for China to follow Western countries’ development path of digitization, networking and intelligence. It can fully leverage the late-comer advantage, achieve parallel development by leaps and bounds, promote industrial technological revolution, and create a new model of Chinese “intelligent manufacturing.”
Abundant human resources
First, continuous improvement in the quality of talents. With further implementation of the strategy of strengthening the nation through human resource development, China’s education system has been optimized day by day, and positive progress has been made in building teams of scientific and technological innovation talents. As talent advantages continue to accumulate in recent years, the “labor dividend” has gradually become the “engineer dividend”, providing abundant intellectual capital for the high-quality development of digital economy. Moreover, the overall quality of talents has been improved, the scale of talents had been expanded, the flow of talents has been accelerated, the composition of talent teams have become more diversified, and the government has further improved the service, support and management of all kinds of talents. All these factors can provide a strong guarantee for the development of digital economy.
Second, gradually becoming more attractive to talents. Currently, digital economy accounts for nearly 40% of China’s GDP, with the growth rate far exceeding that of GDP. It plays a vital role in the national economy, and is becoming a new engine for economic growth and employment. Meanwhile, China is also actively creating a favorable external environment for the growth of talents, and providing preferential and convenient conditions in research funding, individual income tax, visa, household registration,and children’s education. In terms of the global trend of talent flow, the number of international talents working in China is increasing, which lays a foundation for enhancing the international competitiveness of China’s digital economy.
(Author: Li Sanxi, Professor of Renmin University of China, Distinguished Young Scholar of Yangtze River Scholar Program by Ministry of Education)
 

 

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