A Digital China Has Come: Under the Wave of Digital Economy

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“Digital China” is one of the top economic priorities of the country since it was enshrined in the country’s 2016–2020 five-year economic plan. By virtue of the leading e-commerce technologies and solutions, China’s digital economy reached $3.4 trillion in 2016, ranking second globally.

Over the past decade, China has become a trailblazer of digital economy in various areas. Take the example of e-commerce, China accounted for less than 1% value of worldwide transactions a decade ago, but that figure now surges to over 40%; the cross-border e-commerce side, the market size is expected to reach $1.4 trillion in 2018. In terms of the mobile payment, the value surpassed $790 billion in 2016 equal to 11 times of the United States.

622 - A Digital China Has Come: Under the Wave of Digital Economy

Figure 1. China’s Retail E-commerce Transaction Value and Mobile Payment Value of 2016.

China’s economy is undergoing another wave of digital transformation, which aims at improving industrial productivity via more-efficient utilization of the existing, aging workforce and capital stock.

Plans for 2018

According to the Notice on the Organization and Implementation of the Internet Plus Action, the Creation and Development of Artificial Intelligence and the Major Pilot Projects of Digital Economy in 2018 published in October 2017, eligible pilot projects can receive financial support and other forms benefits.

The Notice clearly clarified the procedure and requirement of the application specifically for the digital transformation projects.

6221 - A Digital China Has Come: Under the Wave of Digital Economy

Internet Plus

Proposed by premier Li Keqiang in 2015, Internet Plus can be defined as a concept to integrate the mobile internet, cloud computing and big data for traditional industries. The strategy is committed to promoting the development of e-commerce, industrial networks and internet banking, which paved the way for cross-border e-commerce and mobile payments. It takes less than three years that makes China light years ahead in online payment, some cities like Hangzhou, Shanghai, Beijing almost realized “Cash Free” in citizens’ daily life.

AI Initiative

The Three-Year Action Plan to Promote the Development of New-Generation Artificial Intelligence Industry (2018-2020) released in December 2017 called for China to achieve “major breakthroughs in landmark AI products” and “establish international competitive advantage” by 2020.

Moving back to the Notice, AI investments into the following project areas are eligible for incentives:

  • Application of core AI technology (e.g. deep learning semiconductors), applications, and open-source platforms;
  • AI-based public service and infrastructure platform projects (e.g. facial-recognition systems, voice-recognition systems);
  • Intelligent unmanned system applications;
  • Intelligent robotics development and application projects (e.g. high-end service robots).

Digital Economy Initiative

Digital economy enables more industries, products and services to integrate digital computing technologies.

One of the featured digitalized industries is e-commerce, where China has outperformed than other countries in the whole world. When e-commerce giants like Alibaba and JD.com are sharing the domestic e-commerce retail market, JumoreGlobal.com is leading the way of cross-border e-commerce commodity transactions.

The Notice concludes the project areas that qualified for incentives:

  • Government information consolidation and sharing application projects;
  • Big data applications in healthcare, transportation, education, finance, logistics, environmental protection, and location information;
  • Digital economy public infrastructure, including e-governance platforms and e-commerce credit systems;
  • China-ASEAN digital hub pilot projects;
  • OBOR digital cooperation projects.

Digital economy will be the buzzword of China in 2018 undoubtedly, while Chinese citizens have embraced digital technologies in almost every corner of their lives; manufacturers must explore more advanced solutions to keep the pace of the increased market demands.

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