Smartening up towards digital economy

By Jiang Xiaojuan

THE role and status of the digital economy will continue to be enhanced over the next five years
Over the past decade, China’s digital economy has developed rapidly. Research by the China Academy of Information and Communications Technology shows that the added value of the digital economy has increased from 9.5 trillion yuan ($1.4 trillion) in 2011 to 35.8 trillion yuan in 2019.New products, new services and new business models supported by digital technology have become major contributors to economic growth.
During the 14th Five-Year Plan (2021-25) period, the role and status of the digital economy will continue to be enhanced and it will be an important source of economic growth, an important way to improve total factor productivity and an important basis for maintaining and enhancing the stability and security of the global division of labor.
The core production links of enterprises are increasingly being digitized, and equipment and tools are being connected through sensors to obtain real-time production and operation information to improve production efficiency.
The links between sales chains and supply chains are also being digitized to improve the efficiency of resource allocation of the whole chain. For example, customization and low-cost manufacturing can be achieved through digitization, and customers can present their needs in real time and participate in the development and production process throughout.
Moreover, precision manufacturing can also reduce the consumption of raw materials and energy and reduce emissions in the production process, and so promote sustainable development.
Digitization will enhance the stability and security of the global division of labor. In times of crisis, when the original industrial chains are broken, digital platforms can intelligently match the supply and demand sides and quickly secure alternative supply sources and forge new links. Compared with the traditional offline single-point industrial chains, digital platforms can form multi-point connected industry network chains, which will greatly improve their stability and security.
The digital allocation of resources will also become an important means of social resource allocation. Internet banks use their own algorithms to control risks, which determine the direction for the allocation of financial resources to a large extent. And the internet of things can collect, identify and connect every machine, every tool and every employee to efficiently manage the production process.
What’s more, during the 14th Five-Year Plan period, the governance of the digital economy will be very different from that of the traditional economy, which means new opportunities and challenges.
Effective institutions and policies should be established to promote the development of the digital economy. Unlike consumption services, such as meal delivery and online shopping, many of the new digital consumption scenarios are in the public sector. The government should actively yet prudently promote the implementation of new applications and promote the development of highlevel digital infrastructure and encourage enterprises to take the lead in promoting research cooperation between enterprises and universities.
While safeguarding personal information and trade secrets, the government should also set unified standards for data openness and data quality, so that more institutions and individuals can mine and create new data value and generate economic and social benefits. Attention must be given to ensure that all residents can share the digital dividends.
Digital technology should be employed to regulate the economy and the market more effectively. In terms of economic regulation, digital technology and the analysis of data from different sources should be used to explore the real-time economic situation. For example, the information of migrant workers returning to their places of employment after the pandemic and the resumption of work and production in various regions can be learnt from different platforms. These numerical indicators are not only accurate in real time, but also mutually verifiable and highly reliable. In terms of market supervision, digital means can be employed to identify enterprises and products that need targeted supervision, and cross-comparisons can be made to identify abnormal phenomena and any violations of laws and regulations. At the same time, they can minimize interference in the normal business activities of enterprises abiding by regulations and laws.
The application of digital technology should be effectively supervised. The basic rules for digital technology in areas such as source codes and algorithms should be supervised. At present, big data and artificial intelligence are widely applied, machine learning capabilities are rapidly being enhanced, and data code and algorithms increasingly determine the knowledge and knowability of every citizen in terms of information, the availability and unavailability of resources, and even the activities of society.
The abuse of digital technology will lead to violations of the public interest and social values, such as discrimination caused by machine identification of income, geography, gender and other factors. A dynamic balance must be struck between the interests of all parties, such as promoting the development of the data industry, distributing data rights and interests and protecting personal privacy. At present, the prominent issues include effectively protecting individual privacy and clarifying the responsibilities of data platform enterprises, the construction of data rights, and the establishment of data governance rules.
At the same time, there should be prudent regulation of new types of business in the digital field. As a major country in the application of digital technology and one that has broad development prospects and strong international competitiveness in the digital industry, China should actively participate in the formulation of the global digital governance rules. To promote the formulation and application of global digital governance rules is a requirement of the country’s development. That means balancing our own development, security and win-win relations with the rest of the world.
– The Daily Mail-China Daily news exchange item