We all know now that what happens in China affects us all – not even the Nordics are immune to their power, influence and economic & social development. This week’s announcement of a digital money issued directly by the Chinese central bank is a huge turning point in data management, for better or for worse… what you buy and sell is seen by a very big brother and not just your bank. Coins and notes provide allow discrete payments but not digital money…
The following short paper on Digital Policy for the Five Year Plan (FYP) shows the important hat the Chinese government is placing on this sector. The paper is the third of a series of five parts about China’s latest 5-year plan that were written and originally published by four independent experts – Dr. Nannan Lundin, Linnea Yang, Jessica Zhang and Matilde Eng, all of whom work at the Swedish Embassy in Beijing. There are five parts to this series are the Big Picture, Innovation China, Digital China, Carbon Neutral China and TheWay Forward.
The digital economy has played an important role for the Chinese economy over the past few years, not least as a key enabler for Covid-19 recovery and as a driver for innovation. The ambition of further enhancing and developing a digital China is defined by, among many other aspects, a new target in the 14th FYP, i.e. that the digital economy’s share of GDP reaches 10% in 2025, from the current level of 7,8% in 2020.
In our “graphic interpretation” of Accelerating Digital Transformation and Building a Digital China PartV from the14th FYP (in the figure below), we see both the breadth and the depth of the future digital China, which implies:
- A deeper integration of digital technologies and the real economy, i.e. to accelerate traditional industry upgrading and to create new industries and new business models.
- A broader societal perspective to strengthen inclusiveness, empower individuals and improve life.
- A balanced transformation where the development of regulatory frameworks and ecosystems needs to go hand-in-hand with market dynamics and technology development.
The development of China’s digital economy is, in many ways, a development of a new economy. For instance, the new infrastructure investments as basis for China’s future digital transformation will also be new drivers for both innovation and growth. Data as a new production factor, together with land, labour and capital, will require a new legal and regulatory basis as well as new governance and value-basis. By looking at the prioritised application scenarios listed in the 14th FYP, i.e. transport, energy, manufacturing, agriculture, education, healthcare, home services and government, we see the real and systemwide potential of the digital transformation, i.e. an enabler and a bridge to bring together China’s supply-side and demand-side structural reforms and modernisation.