Double 11 shows digital economy a strong driver

Singles’ Day (Nov 11) is that time of the year when people, especially singles, loosen their purse strings for online shopping. What started as an experiment in 2009 has turned into the world’s biggest single-day shopping gala. The date was chosen for the shopping gala because Nov 11, written as 11.11, looks like unitary figures representing singles. The success of the shopping gala owes almost everything to the internet, in other words, digital technology.

After years of exponential development, the digital economy has become one of the dominant economic forces in China. Accordingly, the country has decided to make the digital economy a driver of development, and promote digital industrialization and digital transformation of the industry.

The report to the 20th National Congress of the Communist Party of China, which concluded on Oct 22, said China will accelerate the development of the digital economy, further integrate it with the real economy and build internationally competitive digital industry clusters.

China has made the digital economy a critical part of its national development policy. A plan issued by the State Council, China’s Cabinet, in January to facilitate the development of the digital economy during the 14th Five-Year Plan (2021-25) period provides a detailed road map and incentives to shore up the sector. According to the plan, China aims to raise the proportion of the added value of core digital economy industries in its GDP to 10 percent by 2025, up from 7.8 percent in 2020.

The National Development and Reform Commission, China’s top economic planning body, said recently that it will introduce more policies to boost the digital economy. It also said that more favorable conditions will be created to allow the digital economy to play a bigger role in high-quality development with the regulation of the industry becoming more transparent and law-based.

In fact, the government has been promoting the healthy development of the digital economy by implementing a series of policy measures in related fields, fostering a large number of world-class digital enterprises and helping develop new forms of businesses. As a result, digital technology has penetrated into production, logistics, retail, entertainment, and many other fields.

According to a white paper, titled “Jointly Build a Community with a Shared Future in Cyberspace”, the value of the digital economy had reached 45.5 trillion yuan ($6.28 trillion) by 2021, accounting for 39.8 percent of GDP and becoming a major growth engine. China’s digital economy has ranked second worldwide for many years.

Also, China has participated in the governance of the digital economy, both at the regional and international levels, advancing initiatives and implementing proposals in the interest of all parties, the white paper said.

In particular, the digital economy’s power can be seen in China’s e-commerce industry. China is the world’s largest e-commerce market, generating almost half of the world’s online transactions. The best example of China’s e-commerce development is the Singles’ Day shopping festival.

With e-commerce being the fastest growing retail channel, China has become the world’s largest retail market, and Singles’ Day is the most important day for retail. In more ways than one, Singles’ Day demonstrates the vitality of China’s consumer market and the resilience of the manufacturing industry, although consumers have become more rational and are paying more attention to the value of the goods they buy because of the COVID-19 pandemic.

Hence, e-commerce platforms should improve the supply chains, and optimize their business models to suit shoppers’ demands and buying habits, as well as boost their competitiveness through the use of advanced technology. While e-commerce has met individuals’ demand, leading to a long-tail market, digital trade has given China added advantages in exports, expanding the depth and breadth of international trade.

Apart from promoting consumption, the digital economy has led to investment growth with nearly 100 billion yuan invested in digital industries, including for the rapid construction of 5G and other information and communications technology infrastructure.

However, China still needs to overcome some challenges to ensure the healthy development of the digital economy. For example, the country must make core technological breakthroughs, build new types of infrastructure, increase the digitalization of traditional industries and accelerate the integration of digital technology with the real economy.

Besides, it is also important to safeguard cyberspace security to promote the healthy development of the digital economy.

Furthermore, a new generation of ICT is expected to emerge from the growing cooperation between Chinese and international companies. This will lead to the rapid integration of various industries, thereby boosting the digital transformation of enterprises and industries.

The author is a writer with China Daily.