How years of R&D pro­duced shar­ing econ­omy

China Daily (Hong Kong) - - BUSINESS -

BEI­JING — This year marks the 200th an­niver­sary of the birth of bikes.

Ev­ery day, mil­lions of Chi­nese still ride them to work or go shop­ping.

How­ever, they no longer open bikes with keys, but by smart­phone apps. It is not only bikes. By scan­ning QR codes at sta­tions and restau­rants with a smart­phone or log­ging in to one of thou­sands of mini-sites on Ten­cent’s in­stant-mes­sag­ing app WeChat, users can ac­cess and rent ev­ery­thing from sports equip­ment and wash­ing ma­chines to um­brel­las and cars.

The shar­ing econ­omy, which is now re-shap­ing the lives of mil­lions, did not come out of nowhere. Be­hind it was years of tech­no­log­i­cal de­vel­op­ment and in­dus­trial up­grad­ing.

China’s shar­ing econ­omy wit­nessed a total trans­ac­tion vol­ume of 3.45 tril­lion yuan ($511 bil­lion) last year, more than dou­ble that of 2015, which in­volved more than 600 mil­lion Chi­nese, ac­cord­ing to a re­port re­leased by the State In­for­ma­tion Cen­ter in March.

To seek new growth driv­ers and ac­cel­er­ate eco­nomic trans­for­ma­tion, the gov­ern­ment has been ac­tively pur­su­ing mass en­trepreneur­ship and in­no­va­tion, in a new round of sci­en­tific and tech­no­log­i­cal rev­o­lu­tion.

Mass en­trepreneur­ship and in­no­va­tion were first un­veiled in the Gov­ern­ment Work Re­port in 2015. Two years on, in­no­va­tion is the buzz­word in China’s econ­omy.

“Mass en­trepreneur­ship and in­no­va­tion in China prompted the growth of shar­ing econ­omy, while the shar­ing econ­omy makes it eas­ier to start up new en­ter­prises,” said Xu Zhaoyuan, a re­searcher with the De­vel­op­ment Re­search Cen­ter of the State Coun­cil.

Ac­cord­ing to a re­port by China’s Min­istry of Sci­ence and Tech­nol­ogy and the Great Wall En­ter­prise In­sti­tute, China was home to 131 “uni­corns” — young, un­listed com­pa­nies with a mar­ket value of over $1 bil­lion — by the end of last year, in­clud­ing many lead­ers in the shar­ing econ­omy, such as bike-shar­ing giants Mo­bike and Ofo.

An or­di­nary bi­cy­cle with a Mo­bike logo in­te­grates sev­eral in­no­va­tive tech­nolo­gies: a smart lock with GPS, em­bed­ded in­ter­net-ofthings chips, and a sup­port­ing ar­ti­fi­cial in­tel­li­gence plat­form.

Ac­cord­ing to Sun Hao, CEO of a bike pro­ducer in Tian­jin, co­op­er­a­tion with the bike-shar­ing busi­ness has al­most dou­bled his com-

Mass en­trepreneur­ship and in­no­va­tion prompted the growth of shar­ing econ­omy.”

Xu Zhaoyuan, a re­searcher with the De­vel­op­ment Re­search Cen­ter of the State Coun­cil

pany’s pro­duc­tion vol­ume.

Now, ev­ery few min­utes, one shar­ing bike is de­liv­ered from our assem­bly line, said Sun, who ex­pects his com­pany to pro­duce more than 20 mil­lion bi­cy­cles this year.

The coun­try’s ro­bust eco­nomic ex­pan­sion was the strong­est force be­hind the lat­est shar­ing wave.

Af­ter more than 30 years of rapid growth, the Chi­nese econ­omy has en­tered a key stage of eco­nomic trans­for­ma­tion and re­struc­tur­ing, ac­cord­ing to Zhuang Jian, a se­nior econ­o­mist with the Asian De­vel­op­ment Bank.

With the econ­omy grow­ing, the num­ber of Chi­nese ne­ti­zens reached 730 mil­lion last year, of which over 690 mil­lion ac­cess the in­ter­net through mo­bile phones.

Ac­cord­ing to a guide­line on China’s In­for­ma­tion Strat­egy re­leased last year, the shar­ing econ­omy has be­come an im­por­tant part of China’s in­for­ma­tion strat­egy.

Yet, like all in­dus­tries wit­ness­ing break­neck growth, the shar­ing econ­omy is fac­ing chal­lenges such as ur­ban man­age­ment, mar­ket dis­or­der and trust is­sues be­tween users and ser­vice providers.

For ex­am­ple, hap­haz­ardly parked shared bikes have led to con­gested city side­walks, while the han­dling of bro­ken bikes is cre­at­ing headaches for ur­ban man­age­ment.

“The reg­u­la­tion of the shar­ing econ­omy should be tol­er­ant while pru­dent, as there is still much to be learnt about new busi­ness mod­els. We should avoid sim­ply ap­ply­ing tra­di­tional meth­ods in the shar­ing econ­omy,” Li said.

The shar­ing econ­omy will grow at an av­er­age an­nual rate of 40 per­cent over the next few years and will ac­count for more than 10 per­cent of the coun­try’s GDP by 2020, ac­cord­ing to the State In­for­ma­tion Cen­ter re­port.

Zhuang be­lieves that China’s shar­ing econ­omy will serve as an ex­am­ple for other coun­tries.

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