Promoting data-driven governance
Digital economy key for growth, productivity and the global division of labor
Over the past decade, China’s digital economy has developed rapidly. Research by the China Academy of Information and Communications Technology shows that the added value of the digital economy has increased from 9.5 trillion yuan ($1.4 trillion) in 2011 to 35.8 trillion yuan in 2019. New products, services and business models supported by digital technology have become major contributors to economic growth.
During the 14th Five-Year Plan (2021-25) period, the role and status of the digital economy will continue to be enhanced. It will be an important source of economic growth, way to improve total factor productivity and the basis for maintaining and enhancing the stability and security of the global division of labor.
The core production links of enterprises are increasingly being digitized, and equipment and tools are being connected to obtain realtime production and operation information to improve efficiency.
The links between supply and sales chains are also being digitized to improve the efficiency of resource allocation of the whole chain. Customization and low-cost manufacturing can be achieved through digitization, and customers can present their needs in real time and participate in the development and production process throughout.
Precision manufacturing can also reduce raw material and energy consumption and emissions during the production process, and so promote sustainable development.
Digitization will enhance the stability and security of the global division of labor. When the original industrial chains are broken amid crises, digital platforms can intelligently match the supply and demand sides, quickly secure alternative supply sources and forge new links. Compared with traditional offline single-point industrial chains, digital platforms can form multi-point connected industry network chains, greatly improving their stability and security.
The digital allocation of resources will also become an important means of social resource allocation. Internet banks use their own algorithms to control risks, which largely determine the direction for the allocation of financial resources. The internet of things can collect, identify and connect every machine, tool and employee to efficiently manage the production process.
Moreover, during the 14th FiveYear Plan period, the governance of the digital economy will be very different from that of the traditional economy — hence, new opportunities and challenges.
Effective institutions and policies should be established to promote the development of the digital economy. Unlike consumption services, such as meal delivery and online shopping, many new digital consumption scenarios are in the public sector. The government should actively promote the implementation of new applications and promote the development of high-level digital infrastructure and encourage enterprises to take the lead in promoting research ties between enterprises and universities.
While safeguarding personal information and trade secrets, the government should also set unified standards for data openness and data quality, so that more institutions and individuals can mine and create new data value and generate economic and social benefits.
Digital technology should be employed to regulate the economy and the market more effectively.
In terms of economic regulation, digital technology and the analysis of data from different sources should be used to explore the real-time economic situation.
For example, information about migrant workers returning to their places of employment post-pandemic and the resumption of work and production in various regions can be learned from different platforms. These numerical indicators are not only accurate in real time, but also mutually verifiable and highly reliable.
In terms of market supervision, digital means can be employed to identify enterprises and products that need targeted supervision, and cross-comparisons can be made to identify abnormal phenomena and any violations of laws and regulations. Concurrently, they can minimize interference in the normal business activities of enterprises.
Digital technology — its application and the basic rules in such areas as source codes and algorithms — should be effectively supervised. At present, big data and artificial intelligence are widely applied, machine learning capabilities are rapidly being enhanced, and data code and algorithms increasingly determine the knowledge and knowability of every citizen in terms of information, resource availability, and even society’s activities.
The abuse of digital technology will lead to violations of the public interest and social values, such as discrimination caused by machine identification of income, geography, gender and other factors. A dynamic balance must be struck between the interests of all parties, such as promoting the development of the data industry, distributing data rights and interests and protecting personal privacy. At present, the prominent issues include effectively protecting individual privacy and clarifying the responsibilities of data platform enterprises, the construction of data rights, and the establishment of data governance rules.
At the same time, there should be prudent regulation of new types of business in the digital field. As a major country in the application of digital technology and one that has broad development prospects and strong international competitiveness in the digital industry, China should actively participate in the formulation of global rules for digital governance. To promote their formulation and application is a requirement of the country’s development. That means balancing our own development, security and win-win relations with the rest of the world.
The author is a professor and the dean of the School of Public Administration at Tsinghua University. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.