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China’s Digital Economy Landscape

The number of internet users in China has virtually tripled since the early 2000s, growing from 298 million in 2008 to 988.99 million in 2020 with 98% of Chinese internet users are mobile. While COVID-19 has accelerated digital transformation throughout many parts of the world, China’s digital economy and the e-commerce industry, in particular, has seen significant growth.

The growth is because Chinese people turn to mobile apps and spend more time online. Amid COVID-19 safety measures, people tend to use technology for various aspects of everyday life from browsing the news online to using apps for ordering food and groceries.

The entrepreneur-driven China is prepared to reshape and inspire some elements of technology across the world. Big and colourful personalities and social elements, as well as an understanding of the local culture, play a big part in Chinese applications.

Besides the e-commerce industry, other growing trends in China’s digital economy include 5G, big data, Artificial Intelligence (AI), live streaming, blockchain, and a dual circulation economy which refers to a greater focus on the domestic market and native innovation and less reliance on China’s export-oriented development strategy.

China makes use of these technologies in unique ways. Big data helped produce hit television shows, capture fugitive criminals, and even contributes to their social credit rating system which could determine whether a person pays a deposit when renting something. 5G technology also supported China’s fight against the COVID-19 pandemic, enabling doctors in Beijing to establish real-time communications with those in Wuhan, the epicentre of the virus outbreak.

According to an article, The digital economy will become a key ingredient of China’s national strategy during the 14th five-year plan period (2021-25). Beijing is eyeing to have the digital economy, largely synonymous with the enhancement of traditional industries through digital tools, account for around 10% of its newly added economic output by 2025.

Based on the latest blueprint, China will give digitalisation full play, leveraging the troves of data and the wealth of application scenarios to enhance its merger with the real economy, enable the upgrade and transformation of traditional industries and foster new industries and new business models.

An economist said that China regards the transformation and upgrading of the digital economy as a key window of opportunity in the next 10 years, and that the digital economy will become the core component fuelling economic transformation.

China’s plan highlighted high-end chips, operating systems, AI algorithms and sensors as among key technological areas to be sharpened, while research and development of basic theories, basic algorithms and equipment materials should be advanced.

New infrastructure mostly involving 5G, data centres and basic software, will have enhanced investment through innovative vehicles such as public-private partnerships. The document also recognised AI, big data, blockchain, cloud computing and cybersecurity as emerging digital industries to be fostered, and called for the betterment of telecom equipment, core electronic components and key software.

As reported by OpenGov Asia,  the COVID‑19 pandemic has also accelerated the progress of financial technology (fintech) in China. Since China’s efforts to reform and its policy of opening-up began, technology has played an essential role in its financial sector. fintech, which has been actively applied to improve financial services and supervision, has played a significant role in the development of China’s financial sector.

With the advent of the internet and mobile banking, fintech in China with fintech has made a huge leap forward. In the past few years, the Chinese government has laid the groundwork to allow for the networking of financial services. These foundations and the experience gained in the realm of innovative mobile finance have grounded China’s financial sector. China’s regulatory departments have always valued the application of science and technology in the financial sector, and see fintech as an important component in the construction of related infrastructures

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