How is digitalisation taking China closer to its goal of a stronger and efficient economy?

That Chinese businesses are improving their efficiency to move products and services up on the value chain is a long-discussed topic when assessing the growth potential of the world’s second-largest economy.

Once dominating the world’s markets of shoes, clothes, leather bags and even cigarette lighters, the mainland’s export-oriented manufacturers, most of which are mom-and-pop shops, were notoriously known as the champions of low-value exports as they took advantage of inexpensive labour and land costs.

“Efficiency is tangible now,” said Han Haifeng, chief executive of manufacturer Shanghai New Century Packaging. “Increased wage payouts to workers and higher land costs force us to improve it. Otherwise, we will be unable to keep the businesses running any longer.”

China’s economy, despite a slow down in its pace of growth since the global financial crisis of 2008, has seemed to have found a magic bullet – digitalisation – buoyed by the country’s booming development of e-commerce.

China has a 42 per cent share of global e-commerce transactions, processing 11 times more mobile payments than the United States, according to global consultancy McKinsey.

The mainland is also home to one-third of the world’s unicorns, or technology start-ups valued at more than US$1 billion.