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China Boosts Digitalisation in Financial Services Sector

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China will promote the process of digitalisation in banking and insurance to heighten high-quality development of the sectors, the country’s banking and insurance regulator has said. Banking and insurance institutions should implement supportive digital development plans to better serve the real economy, according to a guideline recently issued by the China Banking and Insurance Regulatory Commission.

Digital transformation of business management, industrial and personal financial services, and the financial market should be strengthened. Meanwhile, more should be done to improve the data governance system as well as management, quality control, and application of data. The guideline also said that institutions should tighten management against risks, enhance data security and improve privacy protection.

China’s latest plan to grow its digital economy will empower national digital transformation, shore up innovation and enable the government to offer more equitable public services. The State Council, China’s Cabinet, unveiled the first five-year plan on the digital economy on Jan 12, highlighting the sector’s role in reshaping the global economic structure and international competition, and rolling out targets for its development through 2025.

The plan laid out measures for upgrading national infrastructure, bolstering the role of data as a production element and promoting the digital transformation of industries. By 2025, the added value of core digital economy industries is expected to account for 10% of GDP, up from 7.8% in 2020.

The plan also pledged to further open up China’s service sector, explore measures to widen market access for new business models in the digital economy and promote globalized development for emerging services such as data storage and cloud computing.

The plan has set a target of increasing China’s gigabit broadband users from 6.4 million in 2020 to 60 million in 2025 and promoting more commercial and large-scale use of 5G. According to the National Development and Reform Commission, China has developed the world’s largest optical fibre network and has the largest number of internet users, a total of 1.01 billion as of last June.

It also leads the world in the development of 5G, with a total of 1.39 million base stations and 497 million 5G device users as of last November, and it has been the world’s largest online retail market for eight consecutive years, with online sales volume hitting 6.1 trillion yuan ($961 billion) in the first half of last year, up 23.2% year-on-year.

A key focus of the initiative is to shore up innovation capacity in key technologies, as the country seeks to boost the research and development of sensors, quantum information, telecommunications, integrated circuits, key software, big data and Artificial Intelligence (AI).

China will continue to promote the healthy growth of the platform economy, encouraging companies to step up the integration and sharing of data, products and content and expand services such as online healthcare. New growth areas in the sector, such as smart sales, unmanned deliveries and smart manufacturing, will also be promoted.

As reported by OpenGov Asia, stronger tech innovation capabilities are facilitating industrial growth in China, which will help further the high-quality development of the nation’s sprawling manufacturing sector. The remark came after China’s industrial output increased 9.6% on a yearly basis in 2021, 1.5 percentage points higher than GDP growth, according to the National Bureau of Statistics.

More capital is going to the high-tech sector, which will also fuel the in-depth integration of the digital and real economies, and facilitate the high-quality development of manufacturing in China. Last year, investment in high-tech industries increased by 17.1%, 12.2 percentage points faster than total investment. Among the total, investment in high-tech manufacturing and high-tech service industries increased 22.2% and 7.9% year-on-year, respectively.

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