Digitalisation to reshape China’s economy, says IMF
The increasing adoption of digital technologies in China will boost productivity and reshape the economy, according to research by the International Monetary Fund (IMF).
China’s digitalisation has been rapidly developing, ranking uppermiddle globally, while the country’s e-commerce and fintech industries have become world-leading, Zhang Longmei, IMF deputy resident representative for China, told a forum in Beijing.
Mr Zhang attributed the success to a confluence of factors, including a large base of 700 million internet users and 282 million digital natives, a rich digital eco-system and government support in digital infrastructure. According to the research, the degree of China’s digitalisation varies across sectors, with the service sector ahead of the industrial and agricultural sectors in the digitalisation process. Mr Zhang expects the digitalisation of traditional sectors to be more rapid in the coming years.
Mr Zhang said that digitalisation will increase China’s total factor productivity and boost employment, adding that digitalisation in China will reduce the need for intermediaries by lowering information asymmetry and transaction costs, and lowering entry barriers in many sectors, especially traditional goods and service provision.
Xinhua