Source: QIUSHI

Building Up the Strength, Quality, and Size of China's Digital Economy 

XI JINPING 

In recent years, technologies associated with the Internet, big data, cloud computing, artificial intelligence (AI), and blockchain have seen accelerated innovation and gradual integration into all aspects of economic and social development. Countries around the world have rushed to produce development strategies for the digital economy and unveiled related incentive policies. The speed of the digital economy's development, the extent of its reach, and the level of its impact are unprecedented; and it is fast becoming a critical force that is reordering global production factors, reshaping global economic structures, and transforming global competition. 

I myself have been paying close attention to the development of digital technologies and the digital economy for a long time now. In 2000 when I was working in Fujian Province, I put forward the "Digital Fujian" initiative, and I also proposed the development of a "Digital Zhejiang" in 2003 when I worked in Zhejiang Province. Since our Party's 18th National Congress, I have emphasized the importance of developing the digital economy on many occasions. At the 36th group study session of the Political Bureau of the 18th Central Committee in 2016, I stressed the need to strengthen and expand China's digital economy to unlock new economic development potential. At the G20 Summit in Hangzhou in the same year, I put forward, for the first time, a proposal to develop the digital economy, which won widespread support among leaders and entrepreneurs at the Summit. At the second group study session of the Political Bureau of the 19th Central Committee in 2017, I stated that we needed to accelerate the development of a digital China, build a digital economy with data as a key factor, and boost integrated development of the real and digital economies. I noted that we needed to accelerate the development of new types of infrastructure like 5G mobile communications, AI, and the industrial Internet at the 2018 Central Economic Work Conference. In my congratulatory letter to the 2021 World Internet Conference (WIC) Wuzhen Summit, I stated that we needed to stimulate the vitality of the digital economy, enhance the efficiency of digital government, improve the environment for a digital society, set up frameworks for digital cooperation, build strong digital security shields, and let digital advancement benefit people of all countries.

President Xi learns about how equipment operates at the smart restaurant in the main media center during an inspection of preparations for the 2022 Beijing Winter Olympic and Paralympic Games, morning, January 4, 2022. PHOTO BY XINHUA REPORTER XIE HUANCHI 

Since our Party's 18th National Congress, the central leadership has given high priority to developing the digital economy and has elevated its development to a national strategy. At the Fifth Plenary Session of the 18th CPC Central Committee, we proposed to implement national strategies for cyber development and big data, and to expand the Internet economy, bolster integrated Internet and socio-economic development, and support all forms of Internet-based innovation. At our Party's 19th National Congress, we proposed to further integrate the Internet, big data, and AI with the real economy, and to build a digital China and a smart society. At the Fifth Plenary Session of the 19th CPC Central Committee, we proposed to develop a digital economy, to industrialize digital systems and digitalize industry, to achieve full integration between the digital and real economies, and to build internationally competitive digital industry clusters. We have published the Outline of the National Cyber Development Strategy and the Digital Economy Development Strategy, so as to plan the development of the digital economy at the national level. Over the past few years, China's digital economy has grown rapidly and has produced notable achievements. According to statistics from the 2021 Global Digital Economy Conference, China's digital economy has been the second-largest in the world for several years running. Since the outbreak of Covid-19 in particular, digital technologies and the digital economy have played an important role in the fight against the epidemic and the return to normal work and life routines.

On the afternoon of October 22, 2021, President Xi hosted a forum in Jinan, Shandong Province on ecological conservation and high-quality development in the Yellow River Basin and delivered an important speech. He is pictured here the day before the meeting inspecting automated drilling equipment during a visit to Shengli Oil Field in the city of Dongying near Laizhou Bay. PHOTO BY XINHUA REPORTER LI XUEREN 

We should, however, also be aware that when compared with the world's major digital players and powerhouses, China's digital economy, while large in size, is not yet strong enough, and though growing quickly, is not yet competitive enough. We must also recognize that while enjoying a spell of rapid growth, the shoots of some unhealthy and irregular trends have emerged in the digital economy. These problems have not only affected the sound growth of our digital economy, but have also run counter to our laws and regulations, posing a threat to our national economic and financial security. Therefore, these problems must be resolutely addressed. 

Generally speaking, developing the digital economy is greatly significant because it represents a strategic choice to seize the opportunities presented by the latest round of scientific and technological revolution and industrial transformation. 

I. Sound development of the digital economy will help us create a new development dynamic. 

The major tasks in creating a new development dynamic are to strengthen the economy's growth drivers and facilitate economic flows. Digital technology and the digital economy will create faster flows of resources and other production factors. They will accelerate integration between various market entities and facilitate organizational restructuring in market entities, and they will help realize cross-boundary development, break down the limitations of time and space, extend industry chains, and enhance positive interplay between domestic and international economic flows. 

II. Sound development of the digital economy will help modernize our economic system. 

As a new production factor, data will exert a major influence in the transformation of traditional production modes. The digital economy has a high level of innovation, a strong tendency to permeate other sectors, and an extensive reach. It is not only a new growth driver but a fulcrum of transformation and upgrading in traditional industry, and it has the potential to become an important engine of economic modernization. 

III. Sound development of the digital economy will help us develop new strengths for international competition. 

At present, digital technology and the digital economy represent not only a decisive opportunity in the scientific and technological revolution and industrial transformation, but also a major field of international competition. We must grasp the opportunities on offer and seize the initiative for future development. 

Keeping in mind the larger strategic picture of national rejuvenation and the once-in-a-century changes occurring in the world, and giving full consideration to our domestic and international imperatives and our development and security needs, we should give full rein to China's vast data troves and rich range of fields of application in order to firmly embed digital technology in the real economy, enable the upgrading and transformation of traditional industry, foster new industries, new business forms and new business models, and build up the strength, quality and size of China's digital economy. 

First, we should intensify research on key technologies. 

We need to focus on the key task of independently driven innovation in core digital technologies, and fully leverage the advantages of our socialist system, the new nationwide system for mobilizing resources, and China's vast market. We should enhance our basic capacity for digital technology R&D, develop key technological breakthroughs, build our country's capability and self-reliance in science and technology, and make sure that we keep the initiative to develop the digital economy firmly in our hands. 

Second, we should accelerate the development of new infrastructure. 

We need to improve strategic planning to accelerate the development of high-speed and ubiquitous, smart and low-carbon, secure and controllable digital information infrastructure based on integrated space-terrestrial networks and cloud-network integration, with the 5G network, the nationwide system of integrated data centers, and the national industrial Internet serving as key pillars. This will enable us to get the "informational arteries" of economic and social development flowing. We should also promote industrial and large-scale applications of software, develop large software enterprises with international influence, and work to make key software breakthroughs, to turn our software industry stronger and larger and grow our innovation and supply capacities for key software technology. 

Third, we should promote integration of the digital and real economies. 

We should embrace digital, networking, and smart-technology trends to drive digitalization in manufacturing, services, and agriculture and harness the latest Internet technologies to effect a root-and-branch transformation of traditional industry, so as to boost total factor productivity and fully tap the potential for amplification, layering, and exponential growth offered by digital technologies. We must achieve full integration of the Internet, big data, and AI with industry, develop a group of specialized and sophisticated technology enterprises producing unique and novel products, and cultivate single-product enterprise champions in manufacturing. Of course, we must also keep our feet firmly on the ground and develop enterprises based on their specific conditions—digitalization should not be undertaken just for its own sake. 

Fourth, we should promote the development of digital industries in key areas. 

Focusing on strategic frontiers and key arenas of competition, and keeping in mind the need to make major technological breakthroughs and meet major development needs, we should boost the competitiveness of key links in the industrial chain, improve supply chain systems in key industries, and accelerate the upgrading of products and services. With a focus on integrated circuits, new display technologies, communication devices, and intelligent hardware, we should address weaknesses and cultivate strengths, and foster internationally competitive enterprises and enterprises with the leverage to guide whole industrial chains, in order to develop a well-controlled industrial ecology. We should also make efforts to build world-class digital industry clusters. 

President Xi chats with locals at a smart farm producing wood ear mushrooms in Jinmi Village, Zhashui County, April 20, 2020, during a visit to Shaanxi Province from April 20 to 23. PHOTO BY XINHUA REPORTER JU PENG 

Fifth, we should regulate the development of the digital economy.

To ensure sound digital economy development, we must put equal emphasis on development and regulation and ensure that each facilitates the other. We should improve the systems for market access, fair competition review, and fair competition regulation, and develop a comprehensive, tiered, and multifaceted regulatory system to provide oversight at all stages from beginning to end. We need to close loopholes and enhance the efficacy of regulation. We should redress conduct and methods that hurt the people's interests and impede fair competition, guard against platform monopolies and unregulated expansion of capital, and crack down on monopolistic practices and unfair competition in accordance with the law. We must protect the legitimate rights and interests of personnel employed by platforms and consumers on platforms, and strengthen tax regulation and inspection. 

Sixth, we should improve the governance system for the digital economy. 

We should improve relevant laws, regulations, policies, and mechanisms, and modernize our system and capacity for governing the digital economy. The respective duties of competent agencies and regulators should be refined to facilitate a division of labor and mutual cooperation. We should improve regulatory technologies and tools, and ensure regulation and governance throughout the processes of innovation, production, operation, and investment. We must clearly define the responsibilities and obligations of platform enterprises, and develop systems for industry self-regulation. Social oversight, media oversight, and public oversight should also be brought into play in order to generate synergies. We should improve national security systems with a focus on strengthening early-warning, prevention, and control mechanisms for security risks in the digital economy and promoting capacity-building in this regard. We must ensure key areas including core technologies, important industries, key infrastructure, strategic resources, major science and technology projects, and leading enterprises are secure and well-controlled. Steps should also be taken to strengthen theoretical research on the digital economy. 

Seventh, we should actively participate in international cooperation in the digital economy sphere. 

We must be proactive and observant in this regard; we should actively participate in negotiations within international organizations concerning the digital economy, carry out bilateral and multilateral cooperation on digital economy governance, and safeguard and improve the multilateral governance system for the digital economy by voicing our opinions and presenting our solutions. 

The digital economy has a bearing on the overall development of China. We must develop a top-level design and relevant systems and mechanisms based on our development needs and potential. We must strengthen situational analysis to ensure that we seize opportunities and gain the initiative. Officials at all levels should improve their capacity for digital-economy thinking as well as professional competence to better develop the digital economy, enhance security awareness, and see that the digital economy serves, and is integrated into, the new development dynamic. We should also enhance the ability of our entire population and society to adapt to digitalization in order to solidify a sound social foundation for digital economy development. 

This was an excerpt of a speech delivered by General Secretary Xi Jinping at the 34th group study session of the Political Bureau of the 19th CPC Central Committee on October 18, 2021. 

(Originally appeared in Qiushi Journal, Chinese edition, No. 2, 2022)