Coronavirus supercharges China digitalisation as stay-at-home economy thrives

Online sales, teleconferencing and entertainment making major strides amid social distancing to contain the coronavirus

But forced digitalisation is also increasing the technological divide between companies, industries and regions

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JD Health doctors conduct online consultations with patients the Beijing headquarters of Chinese e-commerce giant JD.com. Photo: AP

Published: 8:15pm, 6 Apr 2020Updated: 10:43pm, 6 Apr 2020

China’s months-long effort to contain the coronavirus pandemic is boosting the digitalisation of the world’s second largest economy, with online sales, teleconferencing and entertainment thriving amid efforts to reduce unnecessary human contact.

As large parts of China’s economy have gone into lockdown over the past two months, traditional service sector businesses – from restaurants to private education institutions – have been forced to embrace the digital world to survive.

The outbreak has given new momentum to China’s digital economy, which has grown at an annual rate of more than 20 per cent in recent years and accounts for about a third of gross domestic product and quarter of the national workforce.

At the same time, the pandemic is also widening the gap between companies, industries and regions that are “tech-savvy” and those that are not.

While retailers and tourism agencies are struggling to stay afloat, internet giants like Bytedance and Tencent are thriving from growing demand for games and online entertainment that can be accessed at home.

“Overall, the pandemic has weakened the country’s growth momentum, but it did provide a rare opportunity for the digital economy,” said Liu Xuezhi, a senior researcher with the Bank of Communications.

In the first two months of the year, online retail sales rose 3 per cent from a year earlier to 1.12 trillion yuan (US$157.8 billion). Overall national retail sales, meanwhile, fell 20.5 per cent as bricks and mortar shopping malls, supermarkets and pedestrian zones were shut to contain the virus.

Online sales rose to a record 21.5 per cent of all national sales, 2 percentage points higher than at the end of last year.