Understanding the digital economy in China: Characteristics, challenges, and prospects

AbstractThis paper explores the distinct characteristics of China’s digital economy during its rapid growth over the past decade and sheds light on the transformative impact that the digital economy has had on the Chinese society. The findings reveal that China’s digital economy has experienced remarkable expansion in recent decades, driven by the convenience and efficiency it has brought about. Notable achievements include the development of robust digital infrastructure, the emergence of innovative digital finance, and the rapid growth of central bank digital currency. Throughout this digitalisation process, the government has played a pivotal role in driving and regulating the digital economy. Recognising the significance of digital transformation, the government has actively engaged in shaping policies and providing regulatory frameworks to foster a conducive environment for digital advancements and market regulation.Keywords: Digital economydigital infrastructurecentral bank digital currencydigital governance Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 As presented in Figure 2, in 2021, the scale of the US’s digital economy was US$15.3181 trillion and that of Germany was US$2.8767 trillion.2 Available at: https://goingdigital.oecd.org/countries/chn.3 Available at: https://www.bea.gov/data/special-topics/digital-economy.4 Available at: https://www.mofa.go.jp/files/000185874.pdf.5 Available at: http://www.caict.ac.cn/english/research/whitepapers/202208/P020220819505049573088.pdf.6 Available at: https://goingdigital.oecd.org/en/indicator/33.7 See the official website of Alibaba Group, available at: https://ali-home.alibaba.com/document-1490858931906412544 for the year 2021.8 Available at: https://www.gov.cn/xinwen/2023-01/31/content_5739339.htm.9 See ‘China Computing Power Development Index White Paper’, available at: http://www.caict.ac.cn/kxyj/qwfb/bps/202211/P020221105727522653499.pdf.10 Also see ‘China Computing Power Development Index White Paper’.11 Available at: http://xw.cbimc.cn/2020-11/27/content_372523.htm.12 The CBIRC was established in April 2018 by a merger of China’s banking and insurance regulators, namely, the China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC). It was abolished in March 2023 as part of a plan to overhaul government agencies, and replaced by the National Administration of Financial Regulation.13 Available at: https://static.sse.com.cn/stock/information/c/202008/e731ee980f5247529ea824d20fcdb293.pdf.Additional informationFundingThis research is supported by the National Social Science Fund of China [Grant No. 20ZDA053] and the Youth Programme of National Natural Science Foundation of China [Grant No. 72101267].