Digitalization reshaping economy
Evolution creating more jobs, strengthening purchasing power and paving way for future of integration
China’s digital economy has been developing at a rapid pace in recent years, with experts noting that this has not only boosted job prospects and consumption, but has also acted as a stimulus for many real economy industries. Those experts also predict that Chinese society will continue becoming more intelligent in the future.
Although the evolution of digital technology is sweeping across the entire globe, the world’s eyes are especially fixated on China’s invaluable participation in the sector.
As stated by Alibaba Group Holding founder Jack Ma Yun at the 4th World Internet Conference on Tuesday, the evolution from a traditional economy to a digital economy is “inevitable.”
On Monday, a report published by leading consulting firm McKinsey & Company showed that China’s development in the digitalization sector has been world-leading, especially in areas like e-commerce and mobile payment. According to the report, mobile payment trading volume in China reached $790 billion in 2016, 11 times the amount in the US throughout that year.
Internet expert Xiang Ligang, also the chief executive of domestic telecom industry portal cctime.com, said that China’s digitalization progression is due to reasons including China’s gigantic market, Chinese people’s strong sense of innovation as well as strong encouragement from the government.
“The development speed [of China’s digital economy] has indeed been amazingly fast in the past decade,” he told the Global Times on Tuesday.
Driving consumption, jobs
Although China’s economy has been burdened with downward pressure in recent years, the digital sector’s bursting vitality has been the backbone of the country’s economic growth.
According to a report published by Forbes magazine in November, China’s digital economy has been equivalent to more than one-third of the country’s GDP. The report, however, did not specify what time period this refers to.
Furthermore, in the nottoo-distant future, the digital economy “will soon become the economy,” the report noted.
According to Xiang, the digital economy sector has created a lot of job opportunities.
“The Internet has made it cheaper for people to do business. For example, the rise of ecommerce websites has allowed people to sell goods without having to pay high rent. This has pushed up the number of online retailers in China,” he noted.
A middle-aged Shanghaibased online retailer surnamed Dai told the Global Times on Monday that with her age and with her being a laid-off worker from a bankrupt factory, it would be very hard for her to get a new job, but thanks to e-commerce, she has managed to make money again.
“I have persuaded many of my ex-colleagues to try this job [an e-commerce entrepreneur],” she said.
According to Xiang, apart from creating jobs, digitalization has also boosted consumption.
“With e-commerce and mobile payment, it’s easier for people to shop. And since it’s easier, they are more willing to shop,” Xiang said, adding that active consumption boosts industries, which in turn increases people’s purchasing power.
Online retail sales amounted to 5.15 trillion yuan ($778.6 billion) in 2016, up 26.2 percent year-on-year, data from the National Bureau of Statistics showed.
Accelerator for all industries
According to the Forbes report, the growth of China’s digital economy will soon outpace that of the traditional economy.
Li Yi, a research fellow at the Internet Research Center under the Shanghai Academy of Social Sciences, has nevertheless cautioned that it is incorrect to attribute China’s entire economic rebound to digitalization.
“I believe that the digital economy can’t flourish without support from the real economy,” he told the Global Times on Tuesday.
But Liu Dingding, an independent tech analyst, told the Global Times on Monday night that it’s not right to pit digitalization against the real economy.
“On the contrary, another important accomplishment of the digital economy in China is that it has penetrated into many segments of the domestic real economy and has acted as an accelerator,” Liu noted.
Liu cited the example of offline supermarkets. “A supermarket’s operation belongs to the real economy, but its runners can replenish their stock through online purchasing websites like Alibaba’s lst.1688.com. They can also shorten a person’s payment process by applying mobile payment options,” he said, adding that in the future, the real economy and digitalization will integrate into each other to a greater extent.
Li said that so far in China, the merging of digital technologies with the real industry has not been sufficient enough. “I think that compared with helping people have fun or shop, a greater mission of digitalization should be to enhance productivity and manufacturing efficiency, including through using digital technologies to develop anti-air disaster mechanisms.”
Future AI trend
The abovementioned experts all noted that there is further development potential for China’s digital economy, specifically in relation to the wider adoption of artificial intelligence (AI).
Xiang noted that Chinese society will become even more “intelligentized” in the coming decades through combining digital technologies like big data and intelligent interconnection.
“Our lives will be fundamentally changed. For example, in the future, all cars will be autonomous and will include technologies that guide drivers inside driving lines, thus minimizing accidents and traffic jams,” he noted, adding that digital technologies will soon be ubiquitous.