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The Role of Digital Economy in Strengthening China’s Development

The digital economy is expected to play a bigger role in bolstering China’s high-quality development and accelerating digital transformation and upgrading traditional industries. Innovative digital technologies like big data, cloud computing and Artificial Intelligence are increasingly being integrated into all other sectors of economic and social development. This trend is injecting new impetus into global economic recovery as well.

By 2025, China will establish a market system for data elements and see the digital transformation of industries reach a new level. Moreover, digital public services will become more inclusive and a sound governance system for the digital economy will be established.

Facilitating the growth of the digital economy is of vital importance to cultivate new driving forces, boost high-quality and innovation-driven development and effectively address the unbalanced development in society. Technologies like big data, cloud computing, AI and the internet of things are evolving fast and finding a wide range of applications across industries and other economic sectors, speeding up their integration with the real economy

Long Haibo, Senior Researcher, Development Research Center, State Council

China also needs more efforts to make breakthroughs in core and basic technologies, expand the industrial application scenarios of leading technologies as well as strengthen the protection of data security and personal information. China’s digital economy was worth nearly $5.4 trillion in 2020, up 9.6% year-on-year, ranking second in the world.

Moreover, the plan details key tasks in eight areas, including optimising and upgrading digital infrastructure, pushing forward the digital shift of enterprises and expanding international cooperation on the digital economy. It stresses enhancing innovation of key technologies in strategic and forward-looking fields like quantum information, network communications, integrated circuits, key software, big data, Artificial Intelligence (AI), blockchain and new materials, as well as fostering new business forms and models.

The emerging digital technologies represented by 5G, big data and AI have played a critical role in enhancing operational efficiency, cutting costs and improving the core competitiveness of traditional industries amid economic downward pressure. China’s intensified efforts to develop the digital economy will inject fresh impetus into the country’s economic growth and speed up digital and intelligent upgrades in enterprises. The in-depth integration of digital technologies with the real economy will further reinforce China’s advantages in global supply chains.

The digital economy has become a major driver of economic recovery amid the COVID-19 pandemic and network security provides a good foundation for boosting the digital economy. internet-driven companies should collaborate with traditional industries, and leverage their advantages in technologies, talent and capital to support the latter’s digital transformation.

As reported by OpenGov Asia, China will further promote the development of a digital economy during the 14th Five-Year Plan (2021-25) period, according to a circular issued by the General Office of the State Council. By 2025, the digital economy should be in full expansion mode, with the added value of core industries in the digital economy accounting for 10% of GDP.

According to the plan, efforts will be made to accelerate the construction of the information network infrastructure, and a national-level integrated big data centre system coordinating computing power, algorithms, data, and application resources. High-quality data elements will be provided.

The plan also emphasised industrial digital transformation. To accelerate digital transformation and upgrading in enterprises, qualified large-scale enterprises will be encouraged to build integrated digital platforms. Efforts will also be made to deepen comprehensive digital transformation in key industries, including the all-around and full-chain digital transformation of traditional industries and higher digitisation level in the agricultural industry.

While data is an important factor in the digital economy, more effort should be made to bridge the digital divide to benefit more user groups. To be specific, we need to improve infrastructure construction and the sharing of computing power from leading companies to smaller ones

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