The digital economy has been called the third great economic revolution after the agriculture and industrial revolutions and believed to be a stabilizer amid.
The devastating global pandemic a white paper released by China academy of information and communications technology shows that China’s digital economy increased by 9.6 to 5.4 trillion dollars last year second only to the U.S which hit 13.6 trillion.
The digital economy broadly refers to any number of sectors and ways of living that happen primarily in virtual spaces and not in face-to-face interaction as digital becomes a broader and broader concept it gets harder to pin down some of it is the very large technology companies some of it is buying something online and not in a store and some of it is using computers to move your money around instead of exchanging pieces of paper.
The report released by China academy of information and communications technology shows us the white paper is giving an outline of the current status of digital economy not just in hina but also with a cross-country comparison so the paper pointed out that the Digital Economy has been an important pillar for the post-pandemic economic recovery and also in China it has been quite important to see that there are some transformational changes in the industrial supply chains and also in consumer behavior.
In the future the Digital Economy is supposedly to become a lot larger and way more important than what we’re seeing now because it is not just artificial intelligence it’s not just industrial robots but also anything related to data.
Comparison for example in the year 2020 the U.S digital economy continued to lead the world with 13.6 trillion dollars and then it was followed by China with 5.4 germany japan both at about 2.5 trillion dollars in U.K at 1.8 trillion dollars.
All countries have realized that the digital economy is set to grow much further from here at an accelerated speed and already since the pandemic last year we’ve seen increasing usage and application of all sorts of computer software and digit and digital technology into people’s daily life. To be surprised to see as the pandemic is still lingering more and more people in more countries realize the importance of having a comprehensive digital strategy.
Going forward as for China the digital economy is already more than 40 percent of GDP in the U.S it is higher indeed but it’s a reflection of the U.S
Started earlier the u.s started 40 years ago.
The digital economy in some countries like in Pakistan is still very young and it has a lot more scope to grow.
When we look at China’s economic transition there are some interesting features now because in economics we always talk about the story about fox and hedgehog because a fox need to know a lot of things to survive but for hedgehog it only needs to know one thing to survive and for many of the companies in Chinese digital world it actually only needs to notice one thing how to scale up and drive down costs and take advantage of China’s vast consumer demand so when we compare that with the western world it’s quite different because in the U.S and particularly in Europe companies in digital world have to invest heavily in research and development and they have to provide a much higher value added services so that the profit margin is also quite high.
But for Pakistan as long as Pakistan is still at this stage that middle class expanding rapidly and the consumer wealth is surging then many of those digital companies will actually have a pretty comfortable time that’s why we see company like Mobile Phone Companies can actually thrive in Pakistan it doesn’t have a complicated technology or strategy it’s just only taking advantage of this vast market so in the future maybe 20 years from now we’ll see a more similar model in the China and in Pakistan.
The contributing factors to the China’s rapid a a growth of digital economy for example in 2020 over 2019 is a growth of 9.6 percent china is really doing a lot with its domestic market to improve use of digital services make them more available to a wider segment of the population and use them to boost growth and help people do what they need to do more generally the challenge will be how that interacts with the international economy globally cross-border.
Transactions come with different sets of concerns than domestic transactions particularly for countries that have different standards on privacy on intellectual property and on the way they interact with the international financial system if we look at this last year and this year these two years if there’s anything different from the regular years obviously it’s a it’s the pandemic somehow the pandemic helped people realize like digital economy is resilient can somehow help us overcome the disruptions created by the Covid19.
The nation needs some regulation for every nation like to behave in a certain way but when it comes to the personal protection and protection of your own information data it appears to be like there’s a need of a literacy education everybody needs to be enhanced in terms of their knowledge how to protect yourself when you go online not only in like in China but in every country there’s such kind of awareness needed.
Late last year the Central Bank has been rolling out our trial sites for the digital currency and by now have more than one and a half million sites around the. Now China And as well Pakistan are ready probably it’s really a matter of timing whether this year or early next year but obviously digital economy is ready to be used now being tested Hong kong.
China is also the largest trading partner of about 130 countries and regions and have the belt and road initiative a lot of countries are getting connected is it possible like the digital u.n the digital rnb gradually somehow will be introduced and being accepted by other economies.