The digital economy is usually defined as economic growth that has been driven by innovation of information technologies. So the digital economy could be shown in the information industry and digital industry development that are brought by technology innovation in basic telecommunication services, software services and Internet technologies. To a larger extent, the development of the information industry and digital industry also brings new growth modes for other sectors, including agriculture, industry and services.
The digital economy is large and the key to global growth. By the end of November, seven of the world’s top 10 listed companies with the highest market value belonged to the digital economy. Tencent and Alibaba, two representatives of China’s rapid growth in the digital economy, were among the top 10.
From a global perspective, China, as the second-largest country in terms of the size of its digital economy, has been growing rapidly in this sector. In the past 20 years, China’s digital economy has grown by 25.1 percent annually — about three times the growth rates of the United States, Japan and the United Kingdom.
After 20 years’ development, China has become the global leader in many sectors of the digital economy and has rich innovation experience. In 2015, Chinese online retailers’ trade value was less than 1 percent of that of the whole world. But now China’s online retailers’ trade value accounts for about 42.4 percent of the global total. In the mobile payment sector, China in 2016 surpassed $790 billion, which is about 11 times that of the US. In the financial technology sector, Chinese investors’ total investment volume exceeds $7.1 billion, compared with the US’ $5.4 billion.
The development of the digital economy has also gradually changed our lifestyles. During the Singles Day (Nov 11) e-commerce event in 2017, online sales revenue topped 250 billion yuan ($39 billion), and about 91 percent was paid through mobile phones. Behind these huge figures are the development and innovation in payment technology. Chinese technology companies have used strong technology innovation and data processing abilities to push forward the development of the digital economy. A big group of Chinese technology companies, including Alibaba, Tencent, Huawei and Xiaomi, also went abroad.
Undoubtedly, in the digital economy and related areas, China has great opportunities and exciting prospects, due to such factors as the big Chinese market, technological progress, rich capital from China and overseas, and the ecosystem for innovation in recent years.
In the future, data will become the most important resource, and China’s large population and market will also present advantages in data resources. Moreover, an increasing number of new scenarios for the digital economy will emerge, with digital retailing, digital social networking and digital finance more profoundly affecting lifestyles and social progress, and China will definitely play a leading role in this sector.
While helping countries and regions involved in the Belt and Road Initiative to realize digital transition, the training of digital skills and construction of infrastructure are of equal importance. Only when digital skills of people in these countries and regions have increased will smartphones and other digital devices be able to function there. The Belt and Road Initiative is a China-led drive to boost trade and connectivity between Asia, Europe and Africa along the ancient Silk Road routes.
Although the infrastructure of India is relatively poor, the payment software Paytm nonetheless has rapidly gained more than 200 million users. Kenya’s infrastructure is also bad, but it has advanced technology in the mobile payment sector. Experience shows that digital finance is very likely to be developed in the less-developed regions and will develop on a large scale once the opportunities arise.
The digital economy has led us into a new age, and China’s experiences in the digital economy sector show that the digital economy can change our lives and offer opportunities for less-developed countries to overtake other countries in this field. In the future, China will definitely innovate more in this sector, and fintech enterprises and digital economy companies should seize the opportunities and take the challenges to make breakthroughs.
Ben Shenglin is executive director of the International Monetary Institute and founding dean of the Zhejiang University Academy of Internet Finance. Chen Xueru is a PhD student at the School of Management of Zhejiang University. The views do not necessarily reflect those of China Daily.