Digital economy set to play greater role


Your Present Location :Home > LATEST INSIGHTS

Digital economy set to play greater role


Source: China Daily    Published: 2017-12-4

Editor`s Note: With its theme of "Developing Digital Economy for Openness and Shared Benefits-Building a Community of Common Future in Cyberspace", the Fourth World Internet Forum in Wuzhen, Zhejiang province, has attracted worldwide attention. Three experts share their opinions on the issue with China Daily`s Wu Zheyu. Excerpts follow:

Jia Jinjing: Let ICT become the new driving force

The rapidly growing information and communications technology (ICT) has become an integral part of production and people`s day-to-day activities, as well as the driving force of global 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 entire economy, more convenient and created a huge space for the e-economy to develop amid new opportunities and challenges.

Making China a great cyber power 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.

Jia Jinjing is the Director of the Macro Research Department at Chongyang Institute for Financial Studies, Renmin University of China.

Chen Shuaihua: Nation`s e-commerce drive has a global impact

China has become the world`s largest B2C (business-to-consumer) e-commerce market, accounting for more than 40 percent of the world total, compared with just 1 percent about one decade ago. China is also among the top three countries in terms of attracting venture capital investment in key emerging digital technologies, such as virtual reality, autonomous vehicles, 3-D printing, robotics, drones and artificial intelligence.

China`s digital economy and internet-plus strategy have had a four-fold impact.

First, China`s new digital economy is part of the world`s gigantic new market in terms of selling products and services not only to Chinese consumers via B2C e-commerce, but also to Chinese companies via B2B (business-to-business) cross-border e-commerce. The latter is expected to grow even faster and become at least five times the size of cross-border B2C e-commerce by 2020.

Second, China`s rise as a digital leader of innovation has made it a driving force for further development 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 don`t have credit cards, and made it easier for small business owners to get preferential loans.

Fourth, Chinese regulators have lagged behind 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 of 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 cyber crimes.

China can and should be an active player in this field.

Cheng Shuaihua, director of International Center for Trade and Sustainable Development.

Yang Dong: Take measures to guard against potential risks

The rapid growth of financial technology, AI, big data, cloud computing, block-chain and search engines in recent years have enabled capital investors and providers to connect more closely and easily with other players, and given rise to new types of financial activities.

It has made it easier for small and micro-sized enterprises to get loans at lower interest rates, making financing more inclusive and mutually beneficial. But the problems and risks it has created also pose a new challenge to regulators.

The diverse forms of financial innovation are fine. Yet the unlawful acts these forms of innovation can cover because of their sophisticated nature are very difficult for regulators to detect. The risks include data security problems such as data fraud and leakage, 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`s 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.

Yang Dong, vice-dean of Law School, Renmin University of China.