The added value of the digital economy accounted for 39.6 per cent of Chinese GDP in 2021, which made it the world’s second largest after the United States, according to data from the China Academy of Information and Communications Technology, an affiliate of the Ministry of Industrial and Information Industry.

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The estimate, however, was far different to the one offered by the Chinese Academy of Social Sciences, a governmental think tank, which put the figure at 18 per cent.

“The government needs statistics that are reflective of the digital economy to formulate future strategy and policies on it … We cannot have different concepts of it, because then we won’t be able to assess its development,” said Xu, who is now a researcher at Peking University.

Beijing has placed more importance on development of the digital economy and innovation in core technologies than, say, establishing a digital service tax.

The bureau will be responsible for “coordinating and promoting the construction of data infrastructure, coordinating the integration, sharing, development and utilisation of data resources” across China’s economy and society.

But the announcement was short on detail and did not answer a number of important questions related to the development of the digital economy.

Li Lixing, a Peking University professor who spoke at the seminar, said digital platforms in China have created more flexibility in employment, but also provoked questions on how policy priorities and the welfare system should be geared when the job market is evolving.

“The internet has created a surge in job opportunities, especially since Covid hit. Jobs related to digital platforms have grown 30 per cent or more,” Li said, citing a report on employment trends last year that the centre co-published with Zhaopin.com, a recruitment platform.

The jobless rate for the 16-24 age group in February remained at an elevated level of 18.1 per cent, up from 16.7 per cent in December.

Li said if policies are focused on reducing tax for registered companies and employees – as they have been in the past – it may not be beneficial for people in flexible employment, which is a growing trend in the digital economy.

“The growing flexibility in employment also raises questions on how these people could be protected in the current welfare system,” Li said.

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It is estimated that China has about 200 million flexible jobs, such as food delivery, internet streaming and online sales.

These digital economy jobs created a dilemma for policymakers, he said, because they have to balance “high quality employment”, with its attendant good salaries and welfare, and “inclusive employment” that helps people with disabilities or those struggling to find jobs.

“At times like this when the economy is not doing so well, an inclusive employment market is especially important,” Li said.

In a speech delivered at the Boao Forum for Asia on Wednesday, Wang Jiangping, vice-minister of industry and information technology, said the regulator should first adopt a “tolerant approach” towards the digital economy as it was still developing and bring regulations up to speed later.

“To develop the digital economy, I think we need to take a cautious and tolerant approach at the beginning,” he said. “Let the bullets fly for a bit first when we don’t have clarity, which is also to say: let things take place as long as they are not unlawful.

“When we see where the problems are, like privacy issues … government regulations will need to catch up in formulating laws and oversight bodies.”

Xu Changneng, deputy governor of the People’s Bank of China, said at the Boao Forum on Friday that regulation should be improved to mitigate risks of irrational market investment.