Digital trade contributes significantly to China’s domestic economy, with its share to exports set to continue growing at a whopping 207 percent by 2030.
A report prepared by the Hinrich Foundation with analytical support from AlphaBeta, a strategy and economic advisory business, said that digital trade currently enables up to RMB 3.2 trillion of economic impact in China’s domestic economy, and is estimated to reach RMB 37 trillion after a decade.
It pointed out that potential benefits are spread across all sectors of Chinese economy, but particularly relevant in consumer and retail, manufacturing, infrastructure, and agriculture.
“Digital trade is currently the second largest export sector in China. Cross border e-commerce has enabled access to overseas markets for many Chinese firms, MSMEs (micro, small and medium enterprises) in particular,” the report said.
The report noted that over 80 percent of RMB 1.6-trillion (USD236 billion) export value of virtual goods and services enabled by the digital economy, such as e-commerce, is driven by digitally-enabled products, largely due to the impact of e-commerce.
By 2030, this digitally-enabled export value could grow by 207 percent from today’s levels, to become RMB 5 trillion (USD 726 billion), it added.
The report further said digital technologies are pertinent to China’s need to hone competitive strategies beyond the low-cost advantage that has traditionally propelled its economic growth to sustain its growth momentum into 2030 and beyond.
Digital technologies drive labor productivity and quality improvement, it said.
This, as analysts anticipate that China will start to face a slowdown due to several broad socio-economic shifts, including those from an industry-based to a services-driven economy and an ageing population.
“It is imperative that China embraces cross-border data flows in order to achieve the productivity improvements required in the country’s transition into a service-based economy, to unlock further growth in some of the fastest-growing areas of China’s economy such as its cross-border e-commerce exports and to sustain the growth of its traditional sectors such as manufacturing through facilitating “Industry 4.0″ technologies,” it added.