Dig­i­tal econ­omy set to play greater role

China Daily (Latin America Weekly) - - Views - The au­thor is the founder of Dif­fer­ence Group and has served as re­search di­rec­tor at the In­dia, China and Amer­ica In­sti­tute (USA) and vis­it­ing fel­low at the Shang­hai In­sti­tutes for In­ter­na­tional Stud­ies (China) and the EU Cen­tre (Sin­ga­pore). With its them

Ed­i­tor's note: op­ment of global in­no­va­tion net­works. It is now lead­ing the march for co-cre­ation of new core tech­nolo­gies and new busi­ness mod­els, which in turn will cre­ate new op­por­tu­ni­ties for re­searchers, en­ter­prises and gov­ern­ments around the world. As Steve Jobs, co-founder and for­mer CEO of Ap­ple, said, “In­no­va­tion dis­tin­guishes between a leader and a fol­lower”.

Third, start­ing as a low mid­dle-in­come coun­try, China’s ex­pe­ri­ences might be rel­e­vant and use­ful for other de­vel­op­ing coun­tries that plan to get onto the fast track to dig­i­tal econ­omy. For ex­am­ple, China has cre­ated the space for new e-pay­ment meth­ods for those who do not have credit cards, and made it eas­ier for small busi­ness own­ers to get pref­er­en­tial loans.

Fourth, Chi­nese reg­u­la­tors have lagged some ad­vanced coun­tries in mak­ing rules which in a way helped new busi­nesses to grow. But to­day it has be­come nec­es­sary to set rules and reg­u­late co­op­er­a­tion both at home and at the in­ter­na­tional level. For in­stance, with many big com­pa­nies hold­ing mo­nop­oly po­si­tions in the dig­i­tal mar­ket, reg­u­la­tors need to dis­cuss and de­cide how to pre­vent un­fair com­pe­ti­tion and com­pro­mis­ing public ob­jec­tives. And with the un­think­able rate of growth in data on­line and cross-bor­der data flows, we need more in-depth stud­ies and co­op­er­a­tion on data se­cu­rity, pri­vacy pro­tec­tion and the fight against cy­ber­crimes.

China can and should be an ac­tive player in this field. se­cu­rity prob­lems such as data fraud and leak­age, and credit risks brought about by in­for­ma­tion asym­me­try ow­ing to in­suf­fi­cient in­for­ma­tion dis­clo­sure by busi­ness own­ers.

Fi­nan­cial tech­nol­ogy should help solve the prob­lem of in­for­ma­tion asym­me­try by pro­vid­ing de­tailed in­for­ma­tion on ev­ery as­pect of busi­ness that will help de­ter­mine the prices of fi­nan­cial as­sets and re­flect the credit risks. That is why the im­por­tance of trace­abil­ity in such in­for­ma­tion is greater than the pure sta­tis­tics of big data.

Many P2P (peer-to-peer) plat­form own­ers can­not be held ac­count­able even af­ter break­ing the law be­cause the in­for­ma­tion they dis­close to start their busi­nesses is not suf­fi­cient enough to bring them to jus­tice. If the reg­u­la­tors can­not find the loop­holes and plug them in the early stages, in­vestors may con­tinue to in­cur losses, soil­ing the rep­u­ta­tion of the in­dus­try.

Be­sides, many tra­di­tional fi­nan­cial risks have es­ca­lated be­cause of the de­vel­op­ment of new tech­nolo­gies, which the reg­u­la­tors need to curb through tar­geted mea­sures. de­vel­op­ment and eco­nomic plan­ning.

The changes are re­flected in three as­pects. First, ICT has changed the na­ture of com­mer­cial ac­tiv­i­ties. The con­sump­tion pat­tern and en­ter­prises’ op­er­a­tion mode have fun­da­men­tally changed, and now the ef­fec­tive com­bi­na­tion of the e-econ­omy and the real econ­omy will lead to more rev­o­lu­tion­ary in­no­va­tions that will have a greater im­pact on peo­ple’s life­styles.

Sec­ond, the change in the in­dus­trial man­u­fac­tur­ing pat­tern over the past three decades, es­pe­cially out­sourc­ing by big en­ter­prises, has re­shaped the in­ter­na­tional in­dus­trial or­der, and China has be­come a hub of this change. And new com­bi­na­tions of ICT and in­dus­tri­al­iza­tion such as the “Made in China 2025” strat­egy and In­dus­try 4.0 will make the in­dus­trial sec­tor even more in­tel­li­gent.

Third, the change in the fi­nan­cial sys­tem, thanks to ICT’s de­vel­op­ment, has made trade in the fi­nan­cial in­dus­try, even the en­tireecon­omy,more­con­ve­nient and cre­ated a huge space for the e-econ­omy to de­velop amid new op­por­tu­ni­ties and chal­lenges.

Mak­ing China a great cy­ber­power has al­ready been made a na­tional strat­egy. Its aim is to broaden the cov­er­age of net­work in­fra­struc­ture, fa­cil­i­tate com­pre­hen­sive de­vel­op­ment of the e-econ­omy and safe­guard the in­ter­net. And these ef­forts will def­i­nitely fuel the trans­for­ma­tion and up­grad­ing of the Chi­nese econ­omy.


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