Digital trade to drive China’s future growth
Digital trade drives future growth
China's digital trade, which has been driven by the country's technological breakthroughs and the rise of its e-commerce giants, is set to contribute more to the nation's economic growth and foreign trade in the future, industry analysts said.
According to a report jointly released by the Hinrich Foundation and Center for China Globalization (CCG) in March, digital trade currently supports up to 3.2 trillion yuan ($466 billion) of economic benefit in China, mainly through supporting the adoption of digital technologies in traditional sectors such as manufacturing and agriculture.
Its potential benefits will spread across all sectors of the Chinese economy in the following years, as by 2030, digital trade will contribute an estimated 37 trillion yuan in economic benefits to the Chinese economy, said the report.
Xu Hongcai, a Beijing-based economist, told the Global Times on Sunday that China's digital trade has developed quickly in the past years, both domestically and globally, greatly driven by the progress in sectors such as cloud computing, big data, mobile, social, artificial intelligence, blockchain, Internet of Things and augmented/virtual reality.
The development of China's digital trade has manifested in the rise of e-commerce and internet giants such as Alibaba Group and technological breakthroughs such as 5G, which will be the key technology for enterprises to achieve the next phase of digital transformation, Liu Dingding, an independent tech analyst, told the Global Times on Sunday.
Pushed by major e-commerce companies such as Alibaba, the CCG report said that China now accounts for more than 40 percent of the global value of e-commerce transactions. And the value of export virtual goods, including physical products enabled by the digital economy, is expected to grow by 207 percent by 2030, worth a total of 5 trillion yuan.
The fast development of digital trade also comes amid the progress in China's digital economy, which is expected to become the main driver of the country's economic growth in the future as China shifts toward a consumption-driven economy.
An industry insider told the Global Times on Sunday that "it's too hard to measure the exact impact of the digital trade and economy currently, but in the future, all industries will be digitalized - especially with the coming of the 5G era, it's inevitable."
Xu noted that challenges still remain. The biggest among them is the lack of a data management framework and a unified digital trade rule, though the country made major progress in this area by enacting a new e-commerce law at the beginning of this year.
The e-commerce law requires e-commerce operators to have business licenses valid for both China and the countries in which they make purchases, and operators should fulfill their tax obligations in accordance with the law.
Industry observers noted that China should play a greater part in improving global governance of the internet sphere and help pave the way to become a trailblazer in setting the rules of global digital trade.
China should also ensure rules governing intellectual property rights and raise its thresholds and customs duties on digital products to boost cross-border digital trade, the CCG report said.
On January 25, China and another 75 WTO members issued a Joint Statement on Electronic Commerce, confirming their intention to begin WTO negotiations on trade-related aspects of electronic commerce.
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