China led the formulation and release of the G20 Digital Economy Development
Three years into the COVID pandemic, the world economy, while facing mounting uncertainties and challenges, has undergone profound changes, with the digital evolution accelerated and the digital economy emerging as a new engine for economic recovery and growth.
The digital economy refers to a broad range of economic activities that include using digitized information and knowledge as the key factor of production, modern information networks as an important activity space, and the effective use of information and communication technology (ICT) as an important driver of productivity growth and economic structural optimization, according to the G20 Digital Economy Development and Cooperation Initiative agreed at 2016 G20 Hangzhou summit.
In 2021, the added value of the digital economy of 47 major countries around the world reached $US38.1 trillion, up 15.6 percent from a year earlier, accounting for 45 percent of their combined GDP, according to a white paper released by the China Academy of Information and Communications Technology (CAICT) in July 2022.
Among them, the G20 members, which represent more than 85 percent of the global GDP, 75 percent of the international trade and 60 percent of the world’s population, lead the world in the development of digital economy.
The U.S., with a digital economy worth $US15.3 trillion, ranked first in the world. China came second with its digital economy reaching $US7.1 trillion. The European Union took the third place with a value of $US6.3 trillion.
In terms of the digital economy’s share in GDP, Germany, Britain and the U.S. ranked among the top three, all exceeding 65 percent.
G20 consensus on digital economy
At the 2016 G20 Summit held in Hangzhou, China, as the rotating presidency, included digital economy as an important topic in the summit for the first time. The country also led the formulation and release of the G20 Digital Economy Development and Cooperation Initiative, which was the first digital economy policy document endorsed by the G20 leaders.
The document proposed seven guiding principles for the development of digital economy, namely innovation, partnership, synergy, flexibility, inclusion, open and enabling business environment, flow of information for economic growth, trust and security.
It also identified six key areas for cooperation in digital economy, including expanding broadband access and improving quality; promoting investment in the ICT sector; supporting entrepreneurship and promoting digital transformation; encouraging e-commerce cooperation; enhancing digital inclusion and promoting development of small and medium-sized enterprises.
China’s booming digital economy
China’s digital economy reached $US7.1 trillion in 2021, accounting for 39.8 percent of the country’s GDP, according to a white paper released by the CAICT.
From 2012 to 2021, the average growth rate of China’s digital economy was 15.9 percent, and the digital economy’s share in its GDP increased from 21.6 percent to 39.8 percent, the white paper showed.
The digital economy’s role as a stabilizer and an accelerator of China’s overall economy has become more prominent, said the white paper.
As of June 2022, China had 1.05 billion internet users, forming the world’s largest and most dynamic digital society.
The country has also built the world’s largest 5G networks, with 1.97 million 5G base stations by the end of July.
While China’s digital economy is booming and becoming an increasingly important growth engine for its economic development, the country is also offering more opportunities for international companies to grow in the Chinese market and witnessing active cooperation with G20 members in the field.
In June, German company Siemens set up its first Smart Infrastructure Digitalization Enablement Centre in China, exploring collaboration with domestic firms in smart infrastructure.
U.S. tech giant IBM, with its cloud-based services, has been actively cooperating with Chinese companies in their digital transformation.
China is also working with Brazil in protecting the Amazon rainforest ecosystem with digital technologies.
