The digital economy gets some Chinese characteristics
Online, connected and integrated — economic sectors, several industries and emerging fields are now actively riding the technology wave
the capital of Fujian province, has unveiled a D-ID system — a chipbased D-ID that enables residents to establish or authenticate their identity through a unique smartphone-based QR code that can be scanned.
“China has arrived at a turning point in the ‘new era’ where citizens not only live in a physical world but have a digital life. Everyone can be a ‘digital citizen’,” says Wang Jing, CEO of Newland Hi-Tech Group Co Ltd, a Chinese wireless telecommunication technology company that developed the Fuzhou D-ID system.
“Unlike the common QR code, advanced technologies have been applied to this system to ensure it can’t be copied or tampered with. The system has been divided into several zones, and all data is encrypted for privacy and security. Only certain terminals (works tations) at administrative authorities can read the data,” she says.
D-ID is just one shining example of how the digital economy is adding value to the real economy in China.
“Digital economy is driven by deep integration of the next generation of information and telecom technologies with the real economy. It’s not only an important part of building a ‘smart society’, but a key driver of a digitalized, internet-enabled and artificial intelligence-powered society,” says Chen Zhaoxiong, vice-minister of industry and information technology.
Small wonder that China has made the development of the digital economy a top priority. The government has launched many initiatives in the past few years toward that end. These include Internet Plus, Made in China 2025, further promotion of deep integration of the internet, cloud computing, big data and AI with the real economy, and building the country into a cyber-power.
The strong impetus has led to a boom in China’s digital economy.
Latest data from the China Academy of Information and Communications Technology show that the scale of the country’s digital economy hit 27.2 trillion yuan ($4.31 trillion; 3.67 trillion euros; £3.22 trillion) last year, accounting for almost 33 percent of the nation’s GDP (which was 82 trillion yuan in 2017, up by 6.9 percent year-on-year).
The ongoing process is seeing major internet players striving to reshape people’s livelihoods. They are revamping the physical consumption experience and innovating the manufacturing sector using novel technologies.
For instance, Meituan-Dianping, China’s largest provider of on-demand online services spanning food delivery, hotel bookings, travel and entertainment ticketing, is integrating big data, artificial intelligence and cloud computing. This integrated platform offers people all-in-one life experiences.
People can find nearby restaurants, reserve hotels, order take-out or book a film ticket, all with a tap on a smartphone screen. The company also entered the ride-hailing sector recently to link dining with transportation, enabling users to directly book a taxi to where they have reserved a restaurant table for lunch or dinner.
“The ultimate test for digital economy’s effectiveness is whether or not it is serving ordinary people’s life needs. We hope to serve a total of 1 billion people each day through technological innovations. We would like to help people to ‘eat better, live better’,” says Wang Xing, chairman and CEO of Meituan-Dianping.
With 320 million active users of its platforms and more than 4 million merchants listed on it, the Beijingbased company says it will begin trial operations of its driverless delivery vehicles this year. It will also promote the service on a large scale in 2019 to make the dream of 24-hour delivery a reality.
Besides the services sector, the manufacturing sector has been benefiting from the rise of the D-economy as well.
New technologies and initiatives such as Made in China 2025 have helped upgrade China’s manufacturing sector.
Major cloud operators including China Aerospace Science and Industry Corp and Sany Heavy Industry Co Ltd are building industrial internet platforms. The larger goal is to set up a network of combined, advanced machines with internet-connected sensors and big-data analytics. Such a network will help companies to bolster the productivity, efficiency and reliability of industrial production.
China Aerospace Science and Industry Corp, for instance, has offered enterprises cloud-based technology and products on its industrial internet platform since 2015. Earlier data showed that its platform had attracted almost 800,000 registered enterprises, including more than 3,000 foreign companies.
The digital economy has brought in its wake not just huge opportunities, but challenges and potential risks as well.
“In recent years, underhand data transactions have been rampant. An array of problems including data leakage, cyber-attacks and safety leaks such as Meltdown and Spectre have occurred, which have brought new challenges,” says Zhang Wang, deputy director of the Cyberspace Administration of China.
Faced with such challenges, the country is expected to accelerate steps toward legislation for promotion and regulation of the digital economy, to create a fair, orderly, innovative and fair market environment, Zhang says.
He adds that China should strengthen the information safety of key infrastructure, personal data and intellectual property. Accelerated efforts are also needed to introduce related policies on data commercialization and standards on internet technologies, he says.
“In the future, we need to insist on opening-up to bolster cooperation and promote globalization of our enterprises in the information and communications technology sector,” Zhang says.