Digital Economy Plays Central Role In Helping National Economy Stabilize And Recover

Recently, the National Bureau of Statistics released the report on the first quarter’s economic performance. According to preliminary estimates, China’s GDP in the first quarter reached 28499.7 billion yuan, with a year-on-year increase of 4.5% and a 2.2% increase compared to the fourth quarter of last year. As epidemic prevention rapidly and steadily transitions into a state of control, policies and measures to stabilize growth, employment and prices have been brought forward. As positive factors increase and accumulate, the national economy has stabilized and is off to a good start.

In 2023, Asia will become a beacon against the bleak background of the world economy, and global economic governance will enter an “Asia moment”. Together, China and India will account for about half of this year’s global economic growth, according to the IMF forecast.

According to macroeconomic data, China’s economy performed well in the first quarter. The trend of economic transformation and upgrading continues, new driving factors continue to grow, and the strong forces pushing the development of the digital economy continue to show. In the first quarter, the investment in high-tech industries increased by 16% year-on-year, and that in high-tech manufacturing increased by 15.2%, both significantly faster than the growth rate of all investment; with improved market circulation, online consumption continues to improve, and the online retail sales of physical goods have increased by 7.3% year-on-year, maintaining relatively rapid growth. At the same time, with the development of digitalization, smart technology and green energies, the demand for new infrastructure construction such as 5G, charging facilities and big data centers have expanded. Infrastructure investment in the first quarter has increased by 8.8% year-on-year, strengthening the momentum for future sustainable development.

More and more Asian countries are increasingly paying attention to digital technology innovation, digital economy development and digital economy governance, continuously strengthening cooperation between digital technology and the digital economy, and promoting the reform of the global innovation system, the global industrial system and the global economic governance system through digital technology innovation.

The 4.5% is a further growth on the basis of last year’s high base statistics. In segments, the service industry is the most dynamic in the economic sector, growing 5.4% year-on-year. The leading segment in the service sector is accommodation and catering, followed by information transmission, with a growth rate of up to 11.2%. In third is software and information technology services, with an increase of 6.9%. The digital economy is becoming the main force in the development of China’s service industry, and the digital industry is becoming a pillar industry.

With the further implementation of the national strategy of becoming a cyber-strong country and a digital China, the quality supply of information and communication has been increased significantly, and the integration with national economic and social development has been deepened. The innovative development of strategic emerging industries such as 5G, artificial intelligence, bio-manufacturing, and intelligent connected vehicles have driven industrial digitalization, and accelerated the penetration of digital technology into core stages of production. At present, China’s industrial web network, platform, security functional systems have been built, and the scale of core industries has exceeded 1.2 trillion yuan.

The digital economy is becoming an important pillar of economic growth, with core industries in the digital economy growing 14.1% year-on-year in March, 7.3 percentage points faster than the entirety of last year, according to data released by the State Administration of Taxation. In particular, the sales revenue of high-tech industries have increased by 15.6% year-on-year, 5.7 percentage points faster than last year; high-tech services such as the commercialization of scientific and technological findings and information service have increased by 45.5% and 19.8% year-on-year respectively; digital factor-driven industries and digital technology application industries have increased by 24.5% and 19.8% respectively.

Following the release of the first quarter macroeconomic data, several international banks and organizations raised their forecasts for China’s annual economic growth, with Citigroup and Societe Generale raising their forecasts for China’s annual growth to 6.1% and 6%, respectively. At the end of January, the IMF raised its forecast for global economic growth to 2.9% from 2.7% predicted last October, while raising its estimate for China’s economic growth to 5.2% from 4.4%.

The economic data for the second quarter is expected to be even more outstanding. The economy will have little problem achieving its economic targets for the year, and could even significantly exceed them with a little effort. China’s industrial structure is also changing, such as the decreasing importance of real estate and the increasing importance of the automotive and digital industries.

In the next stage, the internal driving force of China’s economic growth is gradually increasing, macro policies are proving effective, and the economy is expected to improve as a whole. With the rapid development of 5G, artificial intelligence and other technologies, new industries continue to emerge. In the first quarter, the added value of the equipment manufacturing industry has grown by 4.3%, and the intensity of industrial technology has steadily increased. At the same time, the conversion to green and low-carbon energy is accelerating, the demand for new products is expanding, traditional industries are being upgraded to save energy and reduce consumption, and their driving role is also being enhanced. The high-end, intelligent and green development of the industry will inject new impetus into China’s economic development.