China has maintained its position as the world's second largest digital economy, but the country also faces gaps and challenges in improving the sector's development quality, according to experts and members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) at a seminar.

In recognizing the enormous strides, it's also important to see that digital economy accounts for over 60 percent of GDP in the United States and only about 38 percent in China, said He Guili, deputy secretary-general of the Internet Society of China.

He called for efforts to ensure people's greater sense of gain amid the booming digital economy. Among the problems, digital transformation of transportation in some cities was narrowed down to smart administration and failed to address the public concerns, such as the use of road or car parking spaces.

He Baohong, director of the CAICT Cloud Computing and Big Data Research Institute, shared his concern for new needs and challenges in the rise of big data technology, such as the security vulnerability in privacy-preserving computation (PPC) technologies increasingly favored by the market.

He argued that blockchain technology is at a more mature stage and has been favored by metaverse environments and the decentralized web, web 3.0. Noting digital economy today is more like getting the traditional economic activities online, he called for the development of digital-born economy, which originates in a digital form and also connects with the real world.

To strengthen data security and protect privacy in PPC technologies, Wang Shuang, founder and chairman of Hangzhou-based firm Nvxclouds, called for improving the policy and regulation for data circulation and sharing, stepping up the standards setting and product certification systems, and establishing a unified regulatory platform in accordance with laws and regulations.  

In the view of Yuan Guoshu, a member of the Haidian District Committee of the China National Democratic Construction Association, Beijing municipality, and general manager of Guoshu Technology, China is at a disadvantage in attracting talent for digital economy when compared with the US, which relies on the international market and global talent pool.

To solve this problem, Yuan suggested the reform of basic and higher education to value scientific theory research and foster innovative talent. He called for commitment to opening-up policy, support for domestic enterprises in going global, and a change of the  immigration  policy in order to attract the world's top-notch talent to engage in innovation and entrepreneurship in China.

Li Zhenhua, dean of the Research Institute of the Ant Group, said the application of digital technologies has entered into a new stage with the balance between data development and security as well as privacy protection at its heart.

Considering the regulatory requirements and technical maturity, data will increasingly remain encrypted during computation and this means higher requirements of computing performance, reliability, cost, applicability and security, according to Li, who saw the reliable PPC as a development direction.

Xiao Gang, a member of the CPPCC National Committee and former chairman of the China Securities Regulatory Commission, acknowledged both the strengths and shortcomings of China’s digital economy, such as a large market contrasted with a limited amount of data available to access, share and use and a lack of core original technologies.

Among other problems to be addressed, he noted that development of the digital economy is slowing down, government and public data accounts for 70 to 80 percent of the overall data volume, and application is primarily in the finance industry.

Zhou Yanli, a member of the CPPCC National Committee, stressed the importance of supporting technological innovation, clarifying data ownership and promoting data trade in the high-quality economic development.

After the establishment of data trading platforms including the Beijing International Big Data Exchange, individuals just like enterprises should also be encouraged to become data traders so the data trading market will expand, said Zhou, also a former vice-chairman of the China Insurance Regulatory Commission. He also emphasized the need to strengthen the market supervision and protect consumers’ interests in response to the robust growth of the platform economy.

Zhang Zhanbin, a member of the CPPCC National Committee and head of the School of Marxism at the Party School of the CPC Central Committee, regarded the digital economy as a new battlefield of competition. Zhang called for utmost efforts to propel the development of digital economy and build up the competitiveness.

Despite articles in regional agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), there is no global consensus on digital trade rules so it’s time for China to step up the introduction of such rules and standards, said Sang Baichuan, dean of the Institute of International Economics, University of International Business and Economics. He also called for a clear understanding of the relationship between independent innovation and opening-up in digital technology, saying self-reliant technical innovation is not about closing the door to other countries.