China’s grand digitalisation plan to give a shot in the arm to country’s battered internet sector, analysts say
- The ruling Communist Party has unveiled a new digitalisation plan, placing central importance on digital infrastructure and data resources
- The move is expected to provide relief for country’s Big Tech sector, which has been battered by a long regulatory crackdown
The Chinese government’s newly unveiled digitalisation plan is expected to deliver a shot in the arm to the country’s battered internet sector, analysts say.
The grand plan, issued by the ruling Communist Party and State Council on Monday, prioritises digital infrastructure and data resources, both of which are essential to creating a “digital China” by 2025.
Calling for an acceleration of new growth engines including 5G, Internet of Things (IoT) and supercomputing, the plan highlights the value of the country’s vast treasure trove of data, which policymakers added as a new production factor in April 2020, elevating it to the same category as land, capital and human labour.
The plan also states that China will continue to support healthy development of “platform” firms, and analysts at CMB International said on Tuesday that it will likely provide clearer guidance and policy support for the long-term growth of China’s internet firms.
The plan “further clarifies the strategic significance of constructing a ‘digital China’,” the analysts wrote in a research note. They added that leading companies such as Tencent Holdings, Alibaba Group Holding, Baidu and JD.com have “always been looking to make their tech infrastructure accessible and leverage their technology to help digitise the real economy and look for growth opportunities”. Alibaba owns the South China Morning Post.
Tencent shares fell 1.7 per cent in Hong Kong on Tuesday while Alibaba lost 3.2 per cent amid a broad pullback for tech shares.