OURS is the age of digitalization and the world is currently transitioning from an industrial to a digital economy which is way forwards for greater trans-regional connectivity, opening-up, modernization and qualitative life. According to various published reports, it accounts for around half of global GDP and growing at around 20 percent annually which clearly demonstrates its strategic importance, scope and utility at international levels achieving wonders in every sector of productivity, progress and human survival alike. Moreover, because of diversified but integrated policies by 2035, China will be at the global leader of digital development and its digital progress in certain aspects of economy, politics, culture, society and ecology will be more integrated, coordinated and sustained which will definitely further strengthen its macro-economy and its associated sectors in the days to come.
Furthermore, China’s digital economy ranks second in the world for many years which vividly reflect essential elements of diversification, innovation and modernization of its national economy becomes one of the key pillars of its socio-economic and industrial growth too. Addition it has become a major growth engine for the country marching toward further opening-up and modernization. According to the Chinese Cyberspace Administration report, the scale of China’s digital economy reached 50.2 trillion RMB (about US$7.25 trillion) in 2022, accounting for 41.5 percent of the GDP which shows signs of stability, sustainability and diversification in the Chinese economy.
Obviously, the building of Digital China provides informational technology and resources to drive modernization, promote high-quality development, and will become an important engine for Chinese modernization in the digital era. It seems that deep integration of the digital economy and the real economy will stimulate the transformation and upgrading of traditional industries, create new industries and new business forms and models, and become a new engine for strengthening economic development in China and around the globe. According to the report to the 20th National Congress of the Communist Party of China will accelerate the development of the digital economy and further integrate it with the real economy.
In the past five years, the digital economy has consistently been mentioned in the Chinese government’s annual work reports. During this year’s two sessions, the country unveiled a momentous development that it will set up a national data bureau. For achieving the desired goals of digitalization, China has also rolled out a plan for the overall layout of the country’s digital development in February 2023, pledging to make important progress in the construction of a digital China by 2025, with effective interconnectivity in digital infrastructure, a significantly improved digital economy, and major breakthroughs achieved in digital technology innovation.
Comparative study of the Chinese economic development reveals that policies such as dual circulation significantly support and encourage China’s progress towards a digital economy that will bring the necessary boost to productivity and demand. In this regard, the fast growth of digital economy in China is powered by the booming digital economy core industries, such as software, information technology and artificial intelligence (AI). China’s software business and information technology service have raked in revenue of 4.3 trillion RMB (about US$593.2 billion) and 2.84 trillion RMB, respectively.
Likewise, the AI industry, as a key industry of the digital economy, has recorded steady growth. the scale of China’s AI industry exceeded 500 billion RMB in 2022, up 15 percent year on year. The main driving forces behind the development of the Chinese digital economy are digital industrialization (telecommunications, information technology and internet industries) and industrial digitalization (up gradation of traditional industries, new technologies such as artificial intelligence, blockchain, and the Internet of Things).
It is reality that China’s digital infrastructure is the largest in the world in which advanced infrastructure facilities such as a 5G network and data centres are continuously playing its role. According to the Digital China Development Report (2021) released by the Cyberspace Administration of China (CAC), by the end of 2021 1.425 million 5G base stations had been built in China, accounting for more than 6060 percent of the world’s total; the number of 5G mobile phone users in China reached 360 million; the country’s internet penetration rate rose from 42.1 percent in 2012 to 73 percent in 2021; and the number of internet and mobile phone users reached 1 billion and 1.6 billion respectively showcasing the real strength of the Chinese digital economy which has already revolutionized the state, society and the system of growth.
In summary, the Chinese government has issued policy documents to promote the digitalisation of society and creating a new era of Digital China. It has also made continuous integrated efforts to widen and improve policies aimed at promoting the digital economy. In this regard, China’s 14th Five Year Plan period issued by the State Council in 2021 upheld that the digital economy is the country’s main economic pillar after agriculture and industry. According to it by 2025 its digital economy would be expanding on all fronts and would account for 10 percent of GDP.
China had signed Digital Silk Road cooperation memoranda of understanding with many countries, as well as established Silk Road E-commerce bilateral e commerce cooperation mechanisms with member’s countries. As a result, cross border e commerce import and export along the BRI routes sustained strong growth, reaching close to RMB2 trillion in 2021. Even digitalization and e-commerce have been key areas of mutual cooperation with Pakistan under the flagship project of CPEC in the country. Sincere efforts should be taken for the further strengthening of mutual cooperation in modernization and qualitative industrial growth in the CPEC Phase-II.
—The writer is Youth Ambassador, the Centre for South Asia & International Studies (CSAIS) Islamabad.
