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Win Digital Dividend with Digital Economy

Submit Time:11-01-2017 | Zoom In | Zoom Out

Author:Hu Angang and Wang Wei | Source:Guangming Net


Editor’s note 

Recently, the Third World Internet Conference published the Wuzhen Report on World Internet Development 2016, which pointed out that, in a period of time to come, developing countries will maintain an impressive momentum in the global development of Internet, and the digital dividends will gradually benefit the whole mankind; multilateral and multi-party participation will become the norm for Internet governance, and more and more international organizations will play their active roles in promoting the global Internet development and governance. In this background, it is an important subject for in-depth consideration how China will grasp the opportunity to effectively develop digital economy, obtain digital dividend to the maximum extent and do something in promoting global digital governance —— 

Digital popularization has laid the foundation 

In recent years, China has endeavored to become the participator and promotor of global digital revolution in the tide of digital era, not only successfully narrowed the digital gap with developed countries, the digital gap between cities and rural areas has also been substantially narrowed.  

China has achieved world-class results in digital popularization, which mainly reflected in: Large Scale: by June 2016, China had 710 million netizens, ranking No. 1 in the world, and there were over 1.3 billion mobile phone subscribers, including 656 million mobile netizens; high speed: by September 2016, China had 686 million 4G subscribers, accounting for half of the global total, the total number of broadband subscribers with access rate of 8Mbps and over exceeded 254 million, accounting for 87% of the total number of broadband subscribers, and there were 210 million optical fiber subscribers accounting for 72%; wide coverage: the total number of fixed broadband subscribers reached 292 million, covering all cities, towns and 93.5% administrative villages of the whole country, and the Internet popularization rate reached 51.7%, 3.1 percentage points higher than the global average level and 8.1 percentage points higher than the average level of Asia.  

Digital popularization has become the foundation for creating digital economy. Backed by the scale effect of gigantic country, China combined the advantage of the world largest Internet subscriber with the advantage of the world largest market, and created the world-class scale of digital economy. In 2015, the information industry scale of China reached 16.7 trillion yuan. China produced 90% computers and 85% mobile phones in the world. Enterprises such as Huawei, ZTE and Lenovo have already had the technical competence to contend against international giants, and enterprises such as Alibaba, Baidu, Tencent and Jingdong have ranked among the global top ten Internet operators in terms of market value; especially in the e-commerce field, the transaction amount over the whole network on Nov. 11 this year exceeded 180 billion yuan. In short, digital economy can span over space, integrate the producers, suppliers and consumers, speed up and promote the rational flow of production elements, and bring into maximum play the networked, large-scale and spillover effect of platforms.  

Obtain digital dividend with innovation mechanism 

Different from traditional economy, digital economy is an open market right from the start of its development, making it easier to realize a virtuous circulation of efficient market, intensive competition and ever-lasting innovation.  

What is the mechanism with which digital dividend can be obtained in digital economy? An answer was presented in the 2016 World Development Report of the World Bank: digital economy can promote information inclusion and increase the accessibility of trade, employment and public services by lowering the search cost and information barriers among individuals, enterprises and public sectors; digital economy can increase transaction efficiency with the benefit of the maturity, popularization and price reduction of digital technologies, and the ICT (information communication technology) capital can substitute the non-ICT capital in more and more production and consumption links, so as to raise the labor productivity, economy efficiency and return rate of human capital; and digital economy can promote mode innovation, give play to the scale economy effect of the high-frequency and massive transactions between supply and demand sides via platform economy, and reduce the marginal transaction cost basically to zero, so as to bring benefits to consumers.  

What “digital dividend” can we obtain? There are main three types: the dividend from economic growth. By connecting enterprises, digital economy raises production efficiency, drives up final consumption and expands scopes of trade. In 2015 in the whole country, the online retail amount accounted for 12.88% of the total amount retail sales of consumer goods, and the former grew by 33.3%, far exceeding that of the latter which was 10.7%. The dividend from employment. By connecting the public, digital economy promotes entrepreneurship and individual operations, creating many jobs directly and indirectly. In 2014 in the whole country, 10.037 million people set up online shops for direct entrepreneurship and employment, and 3.363 million people were employed in urban entities engaged in information transmission, computer service and software development. The dividend from government service. By connecting the government, digital economy has led to rapid spread of e-administration, and better public services have been provided. By July 2015, there were a total of 85890 governmental websites in the whole country; and by June 2015, there were a total of 284,000 verified microblog accounts on government affairs in the whole country.  

Build up a mutually associated digital policy system 

Digital economy can produce dividend as well as risks, including the trend of monopoly by large Internet enterprises, the increased inequality of vulnerable groups, and the formation of “information islands” among governmental departments, etc. This requires innovation of the five main policies, i.e. competition policy, industrial policy, innovation policy, green policy and open policy, to form a digital policy system mutually associated, promoting and supporting, and more specific, guiding and operable.  

The competition policy should give full play to the power of the market. For new technologies, new industries and new business forms, an attitude of active support, breaking monopoly, encouraging innovation and high tolerance should be adopted, to establish a relaxed and friendly policy environment, so as to continually release the potential capacity of the Internet in innovation, entrepreneurship and creating wealth. The industrial policy should emphasize on promoting synergic manufacturing, smart energy, inclusive finance, efficient logistics, e-commerce, convenient traffic, green ecology and artificial intelligence, continually inject the “Internet Plus” element, and speed up the integration of new and old production capacity and the conversion of new and old impetus. The innovation policy should guide and encourage the innovation impetus of main market players, for example, the outline of the 13th Five-Year Plan has clearly stated to construct the high-speed and large-capacity optical communication and transmission system, deploy the 4G mobile communication and the subsequent evolution technologies, upgrade the cloud computation’s solving capacity and supply capacity, and implement major scientific and technological projects for the national cyberspace security. By green policy, it means guiding digital economy to develop in the environmental protection, green and cyclic direction. The opening policy should think, arrange and promote the development of digital economy in the prerequisite of making better use of both domestic and overseas resources and opening more widely both domestic and overseas markets.  

Actively promote global digital governance 

China is already the biggest country of e-commerce and Internet economy in the world. By 2020, China will become not only the world biggest economic entity and the world largest market for imported goods and service, but also the biggest trade partner of 140 ~ 150 countries and cross-border e-commerce will become one of the main trade channels. The coming decade will still be a golden period for the development of digital economy in China, a strategic opportunity period for China to foster new motive force in economic growth and push forward new readjustment of industrial structure by using digital economy, and a period for merging and interwoven development of digital economy of China and global digital economy, during which China is narrowing and will continually narrow the digital gap, and keep on expanding digital dividend.  

China is an important initiator and leader of global digital governance. The Internet, as a unique common home of mankind, has no unified administrative organ, so it is necessary to promote all countries to realize a situation of seeking common ground while reserving differences and win-win cooperation in cyber governance, and jointly build a new order for Internet development in line with the wishes of multiple stake-holders. The new order will mainly promote global cooperation in three areas: the first is Internet governance in technical coordination and standard adjustment, the second is the global digital market for cross-border products and service exchange, and the third is global public products to promote poverty alleviation and sustainable development of the environment. As the biggest developing country in the world, China is an important bridge to link the developing countries and developed countries, and also as the biggest data country in the world, China has the responsibility and obligation to push ahead and participate in building a community of common destiny in cyberspace , so it should contribute not only digital products, technologies and market, but also digital institutional systems, culture and ideas, to make the Internet better serve the people of China and of the world.  

  (Authors’ work unit: Tsinghua University) 

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