Digital economy generates new growth beyond GDP: economists
Economists and tech experts at this year's World Internet Conference in Wuzhen say years of stable economic growth have helped foster digital advancement in China while the digital economy has brought unprecedented new growth opportunities for the country.
Professor Soumitra Dutta of Cornell University in the U.S says the technological wave in China is a natural result of years of stable growth.
"The growth in China has been phenomenal. A lot of people don't fully realize that between 2004 and 2018, just in 14 years, the economy of China grew by a factor of 6. I mean six times growth of the economy over 14 years, very few countries can ever hope to achieve something like that. So the growth of China in economy certainly helps the growth of Chinese digital sector," says Dutta.
The 6th World Internet Conference is held in Wuzhen, Zhejiang Province, on October 20th, 2019. [Photo: Imagine China]
According a Forbes report, companies from China are among the top ranked on its new ranking of the world's top digital companies.
Mobile phone service provider China Mobile was the highest ranked among a group of companies from the region at No. 8, followed by Internet giants Alibaba and Tencent.
Professor Dutta says China's huge investments in education, infrastructure and technology provides a conducive environment for various businesses to grow.
"China leap frog with the internet disruption and internet revolution and the companies today you have like Tencent and Alibaba are companies that are essentially built on the internet disruption. That was possible because China has made the investment in education infrastructure and technology and technologies and so on," says Dutta.
Taylor Reynolds, the Technology Policy Director of the MIT Internet Policy Research Initiative, says China's leap in technological advancement can be attributed to its dedication to innovation.
"What's interesting to me is that for the fast short of 12 years, China has shot out to the lead part of that is because of scale that it plays a bigger role in the large market here. But I think there's something special here in China is about innovation. You've been innovating for thousands of years. The products paper, fireworks all came from China. I think it's built into the DNA the entrepreneurship here. I think China also plays a bigger role in standard organizations So they push technologies in a way that other countries don't, so it makes sure that China is the front," says Reynolds.
Data from the Ministry of Industry and Information Technology shows by the end of 2018, digital economy in China reached a scale of over 3 trillion yuan or 500 billion US dollars, making up a third of the country's total GDP growth for the same year.
The Chinese government has been trying to make use of the opportunities presented by rising tide of digital economy to shift its growth pattern from focusing on GDP to one that is more sustainable and puts more stress on quality.
From the beginning of this year, China has stepped up the deployment of 5G, the next generation of internet services as part of its strategy to generate more growth opportunities in the future.
Nobel laureate Michael Spence, an economics professor at New York University who won the Nobel Prize for economics in 2001, says China's efforts to increase the deployment of 5G and artificial intelligence will bode well for healthy growth in the future.
"5G is enabling internet of things and the internet of things has a direct, huge impact on things like energy efficiency so I think it's a smart direction and will has a big impact," says Spence.
He adds as the country gets richer it's able to build a sound ecosystem that helps foster entrepreneurship in the tech sector and help reduce costs in digital manufacturing.