China to pursue digital trade expansion under new five-year plan as cross-border data flow restrictions remain in place

China is seeking to step up development of digital trade, a segment that is shaping into an integral part of the economy, amid questions that this effort might be impeded by the country’s restrictions on cross-border data flows.

That plan was set out by the Ministry of Commerce (Mofcom) under its 14th five-year plan for trade in services, which was published on Tuesday. The agency pledged to support the trade of digital products, to foster a good environment for digital products to go overseas, and to explore the trading of data. It will also push for traditional trade in services to digitalise.

This marks the first time digital trade was included in Mofcom’s five-year plan. The agency has also committed to foster the development of “digital service trade”, which includes professional services, social media platforms and search engines.

Digital trade, according to the Organisation for Economic Cooperation and Development (OECD), refers to “digitally enabled transactions of trade in goods and services that can either be digitally or physically delivered”. Buying a book through an online marketplace and renting a flat through a matching application are examples of digital trade, the OECD said.

Developing digital trade and engaging in international cooperation in this field will help China move forward with its demand-side reforms and dual circulation strategy, as well as help with its post-pandemic economic recovery, Vice-Commerce Minister Wang Bingnan said at a recent industry summit, according to a report by state-run newspaper People’s Daily.