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Economy

China's digital economy speeds up into high-quality development

January 20, 2022


Abstract : The State Council recently released the Plan to Facilitate the Development of the Digital Economy in the 14th Five-Year Plan Period,which is China's first state-level special plan for the digital economy.

BEIJING, Jan. 20 (Xinhua) -- The State Council, China's cabinet, recently released the Plan to Facilitate the Development of the Digital Economy in the 14th Five-Year Plan Period (hereinafter referred to as "the Plan"), which is China's first state-level special plan for the digital economy. According to some research institutes, the digital economy has become an important prime mover of China's economy, reported China Business Herald.

The Plan stipulates that by 2025 the added value of core businesses of the digital economy will account for 10 percent of the national GDP with an initially established system of data factor market, a new height of industrial digital transformation, significantly improved level of digital industrialization, more inclusive and impartial digital public service, and a perfected digital economy governance system.

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A photo taken on on Sept. 7, 2021 shows that a man experiences a 5G+VR racing cockpit at the China International Digital Economy Expo 2021 in Shijiazhuang, north China's Hebei Province. (Xinhua/Wang Xiao)

-- Ushering in a bright future of the digital economy

Digital economy is a broad-sense concept that any economic form directly or indirectly using data to guide resource functioning and promote productivity growth can be included in the scope of the digital economy.

Experts note that specifically, the digital economy includes four dimensions namely digital industrialization, industrial digitalization, digital governance and data value creation. By technology, it includes emerging ones like big data, cloud computing, Internet of Things, block chain, artificial intelligence and 5G communication, while by application, the "new retailing" and "new manufacturing" are both exemplary cases of digital economy.

It is noteworthy that the digital economy turns out to be a major economic form after the agricultural economy and industrial economy. According to an official with the National Development and Reform Commission (NDRC), during the 13th Five-Year Plan period, China implemented the strategy of developing digital economy and its guiding and leading role in socioeconomic development became increasingly prominent. During the COVID-19 pandemic, in particular, driven by the fast development of new business forms and models, the digital economy serves as a prime mover for sound and sustainable socioeconomic development.

Statistics show that in 2020 the added value of core businesses of the digital economy accounted for 7.8 percent of China's GDP. Thanks to the stable progress of industrial digital transformation, more enterprises are moving to the "cloud". Meanwhile, the thriving e-commerce and popularization of mobile payment spread the new production means and lifestyles such as online learning, teleconferencing, online shopping and live streaming, leading to swelling Internet platforms.

-- Vigorously improving the innovation ability

The Plan makes overall arrangement of China's digital economic development during the period of the 14th Five-Year Plan in eight aspects, namely optimizing and upgrading digital infrastructure, giving full play to the role of data factors, advancing industrial digital transformation, acceleratingdigital industrialization, uplifting the level of digital public service, improving the digital economy governance system, strengthening the digital economy security system, and expanding international cooperation on the digital economy.

Meanwhile, the Plan concentrates on the key sectors like incubation of data factor market and deeply promoting industrial digital transformation, and deployed 11 major projects including improvement of data quality, innovation and breakthrough of digital technology, incubation of new business form of the digital economy, new smart city and digital rural construction.

The Plan clearly requires targeting at the strategic avant-garde fields such as sensors, quantum information, network communication, integrated circuit, key software, big data, AI, blockchain and new materials to improve the supply level of basic hardware and software, core electronic components, key basic materials and production equipment with stronger self-sustained capability of critical products. In addition, China should advance the industrialized and scaled-up application of IT hardware and software products, expedite adaptation anditerative optimization, make the software industry bigger and stronger, and improve the technology innovation and supply capacity of critical hardware and software.

The NDRC will work with relevant authorities and local governments to establish an inter-ministerial coordination mechanism for digital economy development to strengthen the trend study and judgment, and solve major issues in a coordinated way. The commission will enhance capital support to the weakness of the digital economy, and remove the constraints and bottlenecks. Furthermore, it aims to improve the digital quality and skills of all people, strengthen the training of digitaltalents, carry out pilot operations to explore a batch of empirical practices and institutional results with better monitoring and assessment to boost the digital economy development.

-- Consummating the security governance system

Experts note that data resource is the paramount production factor of the digital economy so the most important three tasks in buildinga data factor market is better quality of data factors supply, quicker circulation of data factors and higher level of data factors development and utilization, for which the Plan has made pertinent arrangements.

The Plan indicates that during the 14th Five-Year Plan period, China will speed up the market-oriented circulation of data factors, of which an important task is to encourage market players to explore the data asset pricing mechanism, form a data asset catalog, and gradually improve the data pricing system. With respect to standard data transaction management, China will incubate standardized data trading platforms and market players, establish and improve the market operation systems like data asset evaluation, registration and settlement, transaction matchmaking and dispute settlement, and uplift the efficiency of data transactions. With respect to data utilization, consideration will be given to the characteristics of different types of data and the actual demand of application so as to establish a diversified mechanism of data development and utilization.

(Edited by Bao Nuomin with Xinhua Silk Road, baonuomin@xinhua.org)

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Keyword: B&R Weekly Digital Economy

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