At last year's G20 Summit in Hangzhou, China passed a motion called “G20 Digital Economy Development and Cooperation Initiative”. 

As stated in the initiative, the digital economy is experiencing high growth, rapid innovation, and broad application in other economic sectors. 

It is an increasingly important driver of global economic growth and plays a significant role in accelerating economic development, enhancing productivity of existing industries, cultivating new markets and industries, and achieving inclusive, sustainable growth. 

G20 leaders recognized that the digital economy would have a significant impact on global growth, bringing both opportunities and challenges.

As defined by the Hangzhou G20 Initiative, the digital economy refers to “a broad range of economic activities that include using digitized information and knowledge as the key factor of production, modern information networks as an important activity space, and the effective use of information and communication technology (ICT) as an important driver of productivity growth and economic structural optimization”. 

The application of information and communication technology is effectively changing our lives more than ever before. 

The digital economy has generated social and economic transformation unimaginable in the past, and no one could talk about future prospects of growth without recognizing the increasing importance of the digital economy.

So important as it has become today, the digital economy’s share in GDP is supposed to be a key indicator of how digitally advanced a country is. 

In the US, the share of the digital economy in 2016 was reportedly 59.2 percent of GDP, while in China, the share was 30.1 percent, representing 11 trillion US dollars and 3.8 trillion respectively. 

The gap in the development of digital economies between the two largest economies is obvious. But the 5th IMF Statistical Forum is asking the question of how the digital economy should be measured in order to enable consistent statistical assessment of development across different countries. 

Indeed, the transformative impacts of the digital economy on our well-being and total production are so significant and profound that measuring its contributions is a justifiable effort.

While a systemic statistical framework needs to be developed to reflect the true impact of the digital economy on consumer welfare, employment, production, delivery of services, etc., countries such as the US, the UK, Germany, Japan and South Korea have all developed digital strategies, charting their routes of digital economy development. And China is not an exception.

In his report of 19th CPC National Congress, President Xi Jinping identified “digitalized China” as one of the characteristics of the country's future. 

Digitalization is going to be one of the main drivers and sources of innovation for continued economic growth in China.

China now boasts the world's largest number of 4G networks and fiber optic broadband users. The number of 4G users reached 930 million by August 2017, representing 67.2 percent of all mobile service users. 

Meanwhile, the number of users of fiber optic broadband reached 272 million in the country, taking the world's No. 1 spot in terms of the penetration rate.

The digital economy is now leading the transformation and upgrading of the traditional industries in China. Take the manufacturing industry for example. Industrial robots and 3D printing technology are being used in the Yangtze River and Pearl River Delta areas, strengthening their respective core role in China’s manufacturing industry. 

Broad application of big data, cloud computing and IoT in China have led to the emergence of a new model of business as well as new markets and industries, such as the sharing economy.

In 2016, China’s digital economy registered a growth rate of 16.6 percent, faster than the 6.7 percent GDP growth. A similar pattern of faster digital economy development than GDP is also observed in other countries, meaning the future development of the digital economy represents huge opportunities and growth potential.

Undeniably, there are challenges facing China, such as imbalanced development across different sectors, among different regions and between consumption and production areas. 

While efforts need to be made to address these imbalances, the government will also need to look into the issues of market order, rules and regulations, government supervision, etc. 

As an important part of China’s development strategy, the digital economy in China is believed to continue its pattern of growth, developing faster than GDP and injecting new growth momentum for quality development.

It is worth noting that China has also advocated international cooperation in digital economy development. In his keynote speech at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in Da Nang, Vietnam, President Xi Jinping called for the deepening of Internet and digital economy cooperation among APEC countries to lead the global innovative development as a part of the effort to implement the APEC Accord on Innovative Development, Economic Reform and Growth. 

China will embrace the digital future with the rest of the world as it rides the wave of the digital economy. 

(Li Yong is senior research fellow at China Association of International Trade (CAIT), deputy secretary general and vice chairman at CAIT, co-chairing at the Center for US/Europe Economic and Strategic Studies. He is also an executive councilor at China Society of WTO Studies (CWTO) and a member of the Advisory Committee for Foreign Economic and Trade Policies at CWTO. The article reflects the author’s opinion, not necessarily the view of CGTN.)