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China tackles the challenges of fostering a booming digital economy

Editor: Zhang Jianfeng 丨Chinaplus

10-23-2019 09:37 BJT

The 2019 China Internet Development Report, which was released at this week's World Internet Conference in Wuzhen in eastern China's Zhejiang Province, says China's digital economy grew last year by more than 20 percent to surpass 30 trillion yuan (around 4.4 trillion U.S. dollars). The fast development of the digital economy, which now accounts for more than one-third of the country's GDP, has profoundly changed how the country is growing economically.

China's digital industrialization has helped to facilitate the fast development of the country's information and communications sector in areas such as electronics manufacturing, telecommunications, and software development, turning China into a tech powerhouse. This is evident in China's position as the world leader in the research and development of 5G mobile technology, and the fact that the country is home to three of the world's top 10 Internet companies in terms of market value. Driven by growth in areas such as online shopping, the sharing economy, and livestreaming, the digital economy has also created great opportunities in the country's job market, with 191 million employed in the sector last year - nearly a quarter of the country’s total employment.

A strong digital economy is the key to global competitiveness. This is why the United States introduced its Federal Cloud Computing Strategy and Big Data Research and Development Initiative, why Germany has its Digital Strategy 2025, and why Britain has released a Magna Carta for the digital age. China also needs to increase its capacity for high-tech innovation if it is to meet the challenges brought about by its declining share in the world's labor-intensive manufacturing sector. These challenges are a natural outcome of the country's transition towards higher-quality development, although they are made more acute by the increasing pressures caused by the rising global tide of protectionism and unilateralism.

China's huge population gives it unparalleled market potential and unique opportunities for the development of the digital economy. But the rapid growth of the digital economy will affect some traditional sectors, and raise the risk of structural unemployment. That's why further effort is needed to cultivate new facets of the digital economy and to accelerate the digitalization of the existing sectors of the economy. Tackling both of these challenges at the same time will provide China with the ongoing momentum that's needed to promote higher-quality development in a stable and balanced way.


 

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