Expand and Strengthen the Digital Economy

Expand and Strengthen the Digital Economy*

October 18, 2021

In recent years, innovation in technologies like the internet, big data, cloud computing, artificial intelligence and block-chain has been accelerating. It now permeates every field and the whole process of economic and social development. Countries are competing to formulate strategies and roll out incentive policies to develop the digital economy. Its unprecedented speed, coverage and influence have made it a vital force in reorganizing global factor resources, reshaping the global economic structure, and changing the landscape of global competition.

I have always attached importance to digital technology and the digital economy. When working in Fujian Province in the year 2000 I proposed building a Digital Fujian, and in 2003 during my tenure in Zhejiang Province, I again made a plan to build a Digital Zhejiang. Since the 18th CPC National Congress in 2012, I have emphasized on many occasions the importance of the digital economy. For example:

At the 36th group study session of the Political Bureau of the 18th CPC Central Committee in 2016, I emphasized the importance of expanding and strengthening our digital economy to open up new space for economic development.

At the 2016 G20 Summit in Hangzhou, I was the first to propose that we should develop the digital economy, which was widely welcomed by participating state leaders and entrepreneurs.

At the second group study session of the Political Bureau of the 19th CPC Central Committee in 2017, I said we must move faster to build a digital China, develop a data-driven digital economy, and integrate the digital economy with the real economy.

At the Central Conference on Economic Work in 2018, I emphasized the need to speed up the construction of the infrastructure for 5G, artificial intelligence, and the industrial internet.

In my congratulatory letter to the 2021 World Internet Conference Wuzhen Summit, I pointed out that for people of all countries to benefit from digitalization, we must stimulate the vitality of the digital economy, increase the efficiency of digital government, optimize the environment of the digital society, set up a digital cooperation model, and build a digital security shield.

Since the 18th CPC National Congress, the Central Committee has given high priority to developing the digital economy, making it a national strategy. The 18th CPC Central Committee decided at its Fifth Plenary Session in 2015 to implement the national big data strategy and the strategy of building China into a cyberpower, expand space for the cyber economy, integrate the development of the internet with economic and social progress, and support internet-based innovation.

The 19th CPC National Congress in 2017 proposed to further the integration of the internet, big data and artificial intelligence with the real economy, and build a digital China and a smart society. At its Fifth Plenary Session in 2020, the 19th CPC Central Committee emphasized once again the need to develop the digital economy, advance the digital industry and the digital transformation of traditional industries, fully integrate the digital economy with the real economy, and develop digital industry clusters with an international competitive edge.

We have unveiled the Outline for Implementing the National Cyber Development Strategy, and the Outline for the Digital Economy Development Strategy, promoting the digital economy at the national level.

Our digital economy has witnessed rapid growth and remarkable progress over the years. According to the data report from the 2021 Global Digital Economy Conference, China ranked second in the world in scale, a position it has maintained for several years. Digital technology and the digital economy have played an important role in the fight against Covid-19 and the resumption of normal work and life since the onset of the epidemic.

In the meantime, we must be aware that when compared with countries with stronger digital capacity, our digital economy is not competitive enough, despite its wide coverage and rapid growth. In addition, some unhealthy and unacceptable tendencies are emerging that require our attention. They must be resolutely addressed and reversed as they have violated laws and regulations, affected the sound development of our digital economy, and posed a threat to national economic and financial security.

All factors considered, developing the digital economy is of vital importance since it creates a strategic opportunity for a new revolution in science, technology and industry.

First, the sound growth of the digital economy helps to build a new development dynamic, which is designed mainly to inject momentum into growth and ensure a smooth economic flow. Digital technology and the digital economy can drive a rapid flow of resources and production factors and speed up the integration of various market entities, helping them rebuild organizational structures, realize development across different fields, break space-time limitations, and extend their industrial chains, which will boost domestic and international economic flows.

Second, the sound growth of the digital economy helps to build a modern economy. Data, a new type of production factor, exerts significant influence upon the transformation of traditional production models. Highly innovative, penetrable and extensive in coverage, the digital economy is not only a new growth driver, but also a pivot for transforming and upgrading traditional industries. It can become an important engine in building a modern economy.

Third, the sound growth of the digital economy gives China an edge in international competition. In this new era, digital technology and the digital economy are critical factors for the new revolution in science, technology and industry, and will be key to a new round of international competition. We must seize the opportunity and gain an edge in future development.

Looking forward, we should take into consideration both the domestic and international situation, and both development and security, with a view to achieving the overall goal of national rejuvenation against a backdrop of global change on a scale unseen in a century. We should fully exploit our advantages in massive data and the diverse scenarios where it is applicable, and further integrate digital technology with the real economy. We should empower traditional industries to transform and upgrade, foster new industries and business forms and models, and improve, expand, and strengthen our digital economy.

First, we will intensify efforts to make breakthroughs in core technologies in key fields. We should maximize our strengths in the socialist system, in the new framework of pooling nationwide effort and resources for major missions, and in the super big market. We will improve our R&D ability in basic digital technologies and achieve breakthroughs in core technologies. We must achieve a high level of independence and the capacity for self-improvement, and keep the development of the digital economy securely in our own hands.

Second, we will accelerate the construction of new infrastructure. We should make strategic plans and move faster to build a high-speed, ubiquitous and comprehensive digital information infrastructure that is smart and agile, green and low-carbon, and reliable and controllable, that integrates space with earth networks and cloud computing with communications net, and that focuses on the 5G network, the national system of integrated data centers, and the national industrial internet. This will help unclog the information arteries for economic and social development. We should go all out to scale up the industrialization and extensive application of the digital information technology. We will develop large software enterprises with international influence, support them in making breakthroughs in key software, help them expand and grow, and increase our capacity for technological innovation and supply capabilities in key software.

Third, we will integrate the digital economy with the real economy. We must follow the development trends of digitalization, networking and smart technology, and advance digital transformation of the manufacturing industry, service sector, and agriculture. We should transform traditional industries thoroughly with new internet technology, improve the total-factor productivity, and release the full potential of digital technology in amplifying and doubling economic growth. We should make further efforts to integrate the internet, big data, and artificial intelligence with industry, and develop single-product manufacturing champions and specialized manufacturers with new, unique and competitive products. This requires us to be practical and take a differentiated approach, rather than digitalize enterprises for the sake of digitalization.

Fourth, we will develop the digital industry in key fields. We must focus on strategic frontiers and leading technologies, and aim at major technological breakthroughs and development demands. We should increase the competitiveness of key links in industrial chains, improve the supply chain in major industries, and accelerate the upgrading of products and services. Attention should be given to key technologies such as integrated circuits, new display technology, communications devices, and intelligent hardware. We will reinforce our strengths and shore up weak points, develop a group of large enterprises with international competitiveness and leading enterprises capable of shaping their respective industry chains, and build independent and controllable industrial ecosystems. We need to boost cluster development and build world-class digital industry clusters.

Fifth, we will regulate the development of the digital economy. To this end we should put equal emphasis on both sound development and regulation, and make them mutually complementary. We must build a comprehensive, multilevel and all-dimensional supervisory system with improved market access and a mechanism for fair competition review and regulation in place. This will bring every step and every aspect of the operation under oversight, closing loopholes and improving efficiency in supervision. We must correct and regulate conduct and practices that undermine the people’s interests and hinder fair competition, and protect against platform monopolies and runaway expansion of capital. We must investigate and punish monopolistic conduct and unfair competition in accordance with the law. We should protect the legitimate rights and interests of platform employees and consumers, and strengthen tax supervision and inspection.

Sixth, we will strengthen governance of the digital economy. We must improve laws, regulations, policies, and the institutional framework, and modernize the governance system and capacity for the digital economy. We should rationalize the division of responsibilities between the department in charge and the department for supervision, and ensure their smooth cooperation. We should improve supervisory technologies and methods and bring every step in innovation, production, operation and investment under supervision and governance. We should clearly define the major responsibilities and obligations of platform enterprises, and build an industry self-discipline mechanism. Scrutiny by the public and the media and through public opinion should be integrated to create synergy. We should improve the national security system, with a focus on building capacity and mechanisms for pre-warning, and prevention and control of safety risks in the digital economy, to ensure that core technologies, important industries, essential facilities, strategic resources, major science and technology projects, and leading enterprises are secure and controllable. We should double our efforts in theoretical research in the digital economy.

Seventh, we will actively participate in international cooperation in the digital economy. We must follow up on developments and take timely action while actively participating in negotiations on the digital economy in international organizations. We will carry out bilateral and multilateral cooperation in governance of the digital economy, maintain and improve multilateral governance mechanisms, offer our proposals in a timely manner, and make our voice heard.

The digital economy bears on the overall development of the country. We must take into consideration our needs and possibilities in top-level design and in building the institutional framework. We must put more effort into research and assessment of the situation, and seize the initiative by grasping opportunities. Leading officials at all levels must improve their professional competence, thinking and capacity to develop the digital economy, and raise their security awareness so that they may help the digital economy better serve and integrate with the new development dynamic. We should also improve the digital literacy and skills of the general public and the nation as a whole, to lay a solid foundation for the development of our digital economy.

* Main part of the speech at the 34th group study session of the Political Bureau of the 19th CPC Central Committee.

(Not to be republished for any commercial or other purposes.)