China now a leading global force in digital economy: Experts

NEW YORK — China's digital transformation is likely to have an increasing influence on the worldwide digital landscape, considering the profound impact it is already having on its own economy, experts said here late Monday.

"China is already a global digital economy and it is going to have a greater impact on the global digital world," Jonathan Woetzel, senior partner at Mckinsey and director of the McKinsey Global Institute (MGI), told Xinhua in a recent interview.

China is now a major player in digital technology with enormous growth potential, according to a report by McKinsey Global Institute (MGI) released last week.

Many experts have said that China has become a leading global force in the digital economy, during that joint report launch by Asia Society and MGI.

The shift to a modern and more digitized economy worldwide has proven to be a transformative phenomenon in global business and consumer integration. Nowhere is this trend more evident than in China.

The report said China has 42 percent of global e-commerce, which processes 11 times more mobile payments than the United States, and is home to one-third of the world's unicorn companies (private startups valued at more than $1 billion).

"It is going to change China's industries, is going to disaggregate, disintermediate, and dematerialize up to 50 percent of revenues of all Chinese industries. So it will be a big change to all Chinese industries," Woetzel told Xinhua.

The report predicted that digital forces can potentially shift and create between 10 and 45 percent of industry revenues in China by 2030.

China is in the global top three for venture capital investment in virtual reality, autonomous vehicles, 3D printing, robotics, drones and artificial intelligence, according to the report.

Meanwhile, the report also said a large and young market that enables rapid commercialization of digital business models, a rich digital ecosystem expanding beyond a few giants, and the government allowing space for digital companies to experiment and being an investor in and consumer of digital technologies, are three key factors suggesting a huge upside for China.

China, one of the world's largest investors and adopters of digital technologies, is with a very large domestic market of consumers who are young and eager to embrace digital in all its forms.

"Three aggressive, giant internet companies with global reach - Baidu, Alibaba, and Tencent, or BAT as they are collectively known - are creating a multifaceted and multi-industry digital ecosystem that touches every aspect of consumers' lives," the report said.

It is therefore not surprising that China's rapidly growing "fintech" (financial technology) industry has established the biggest global market for digital payments, accounting for roughly half of the global total.

As digital forces shake the status quo and restructure value chains, an even more globally competitive Chinese economy, and dynamic firms can emerge, the report said.

"Even if you're not following Chinese innovation closely, Chinese innovators may come and knock on your door anywhere you are in the world and indeed lift the level of competition," Vijay Vaitheeswaran, an award-winning senior correspondent for The Economist, said at the event.