China’s digital economy grew by 9.7 per cent last year. This segment of the economy includes electronics manufacturing, telecommunications, internet and software services, as well as the value-added from the application of digital technologies in traditional businesses. Photo: Xinhua
China’s digital economy made up nearly 40 per cent of the country’s gross domestic product in 2020, as consumers and businesses moved many of their daily activities online amid the disruptions caused by the coronavirus pandemic.
That segment of China’s economy amounted to 39.2 trillion yuan (US$6 trillion) last year, an increase of 3.3 trillion yuan from 2019, according to the white paper Digital Economy Development in China (2021), published by the China Academy of Information and Communication Technology (CAICT), a think tank affiliated with the Ministry of Industry and Information Technology.
It accounted for 38.6 per cent of China’s GDP last year, up 2.4 percentage points from 2019, according to the white paper, which was presented on Sunday during the fourth Digital China Summit held in Fuzhou, capital of southeastern Fujian province.
The digital economy grew by 9.7 per cent last year, more than triple the growth rate of the country’s GDP in the same period, according to the white paper. CAICT said this segment of the economy includes electronics manufacturing, telecommunications, internet and software services, as well as the so-called value-added from the application of digital technologies in traditional businesses.
A robot from the Xiamen International Bank is seen at the digital achievements exhibition during the fourth Digital China Summit held in Fuzhou, capital of southeastern Fujian Province, on April 25, 2021. The two-day summit, which kicked off on Sunday, exhibited breakthroughs and innovations in China’s digital economy. Photo: Xinhua
The data reinforces the role played by China’s digital economy when the coronavirus outbreak started disrupting normal life in China early last year. The technology sector rushed to the fore on many fronts as a literal lifesaver: robots in hospitals, health code apps, online education and remote working all played crucial roles in keeping the country operational even as most of the population was trapped in self-isolation.
China avoided a recession after its economy grew by 3.2 per cent in the second quarter last year, the first major economy to show a recovery from the damage caused by the pandemic. That buttressed expectations of continued growth in the nation’s digital economy.
“The 14th five-year plan marks a period of major strategic opportunities for China’s social and economic development,” said Wang Zhiqin, deputy head of CAICT, at a press conference on the sidelines of the Digital China Summit on Sunday. “At this stage, it is necessary to further accelerate the development of digitalisation.”
The CAICT white paper estimated that the digital economy accounted for 8.9 per cent, 21 per cent, and 40.7 per cent, respectively, of China’s agriculture, manufacturing and services industries last year. It also indicated that 13 provinces, municipalities and autonomous regions reached a digital economy scale of more than 1 trillion yuan last year.
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China’s economy accelerated at end of 2020, but virus-hit annual growth lowest in 45 years
China’s economy accelerated at end of 2020, but virus-hit annual growth lowest in 45 years
The penetration of China’s digital economy is highly visible from payments to retail. For example, China had about 60 million people engaged in selling goods and services via Tencent Holdings’ super app WeChat in 2019, according to data from market analytics firm iResearch.
The United States’ digital economy, by comparison, reached US$1.8 trillion in 2018, accounting for 9 per cent of the country’s GDP of US$20.6 trillion in the same period, according to the latest data released by the US Bureau of Economic Analysis in August last year. That segment of the US economy covers information and communications technology goods and services, e-commerce and “priced digital services”, which is close to China’s definition of value-added from digital industries.
Still, the US holds the top spot globally in terms of employing digital technologies, according to the 2020 IMD World Digital Competitiveness Ranking, an analysis of how 63 economies employ these technologies for economic and social transformation. The US was followed by Singapore, Denmark, Sweden and Hong Kong. China jumped six spots to rank 16th ahead of Austria and Germany, but behind Australia.
