Digital economy assists China to reach moderately prosperous society
Editor's note: Michele Geraci is Former Undersecretary of State at Italy's Ministry of Economic Development. This is the third piece of our "Decoding China" series. The article reflects the author's opinions and not necessarily the views of CGTN.
China's digital economy is ranked second in the world, and the added value of the core industries of the digital economy accounts for 7.8 percent of the country's GDP, according to the "Digital China Development Report (2020)" released by the Cyberspace Administration of China at the main forum of the Fourth Digital China Construction Summit.
The above data show that China's new round of technological revolution and industrial transformation such as 5G, cloud computing, big data, and artificial intelligence is advancing, providing a reliable engine of growth so that the digital industry can enter new stages of development. At the same time, in the post-pandemic era, various new digital models, new business situations, and rapid growth have emerged and reinforced the trend, residents' digital consumption habits have been strengthened, and enterprises have become more conscious of digital transformation, which has injected new impetus into economic growth. In a way, the COVID-19 crisis has, as most crisis does, accelerated transformation in some of the most flexible industries, such as the digital one.
In terms of the digital economy, China is already at a relatively high position in the world, and digital has played a key role in helping China reach its goal of building a moderately prosperous society, a target that President Xi Jinping has recently announced has been reached already.
In the past 40 years or so, China's infrastructure has undergone massive changes. At the beginning of the 1980s, the size of the poor population in rural China was 770 million, but last year China reached the ambitious goal of lifting every single Chinese citizen out of poverty. An achievement that has no parallel in the history of mankind. This is nothing short of a true economic miracle.
Today, China's digital economy is showing a new economic momentum with new business models being trialed and tested, such as cross-border e-commerce and livestream e-commerce, adding new stability to China's comprehensive construction of a moderately prosperous society and contributing to develop the Silk Road e-commerce.
In China, major e-commerce platforms such as JD.com, Tmall, and Pinduoduo, have launched a series of live-streaming services to help farmers. And together with major players, we also see the emergence of many live-streaming services offered by new entrants that target towns and villages to help them promote their high-quality agricultural products. Xinxuan, for example, founded in 2017, is a start-up company in the live-streaming e-commerce industry. In less than a year, Xinxuan's national tour to help farmers do live-streaming sales has exceeded 600 million yuan. Its live-streaming channel managed to sell totally 9.4 million pieces of sea duck eggs in five minutes. Due to this sales record, the number of farmers who joined the platform has also grown from 500 to more than 2,000.
Only a few weeks ago, I visited Turpan in Xinjiang Uygur Autonomous Region, a city that has managed to develop agricultural products thanks to the 1,500 year-old karez irrigation system that brings water from the snow in the mountains to the otherwise dry valley. This has helped the city develop over the years. I have personally visited many small enterprises of only three or four individuals producing nan bread and local nuts, being aggregated together in a sort of common incubator sponsored by the local government and being able to use the live-streaming services and logistic to expand its market well beyond Xinjiang. The Turpan food industry is combining both old technology, the karez, on the production side, with modern technology, live-streaming, on the distribution side to maximize its potential. A successful business model for all.
The digital economy is becoming a new engine for global economic development. Although the European Union has made some progress in the development of the digital economy, from a global perspective the EU's performance in the digital economy is not adequate, especially in consumer markets such as social media and online shopping. It still lags behind China, the United States and other countries. In Europe, we have not yet seen business models that effectively promote agricultural development, but I intend to bring the China experience to my own country, Italy, and specifically Sicily, and here too combine the tradition and expertise of the farmers, usually older people, with the opportunities that new technology offers young people.
I trust there is still a lot of room for improvement in the construction of a digital economy in Europe. China's successful experience in the digital economy is worth learning from and adapting to our own system.
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