【COVID-19】张军：疫情让中国数字化转型意外提速 - 2020-09-28

There is no doubt that China has paid a huge price to curb the spread of Covid-19 epidemic that first broke out in Wuhan. With the implementation of the overall lockdown policy, the large-scale population flow was stopped, and economic activities were suspended for almost two months. With the removal of the lockdown policy in the second quarter, part of the economy has recovered. However, it’s an obvious fact that it’s difficult for a large number of individual businesses that have collapsed due to the impact of the epidemic to resume economic activities, especially for those in the service sector. It is impossible to achieve full economic recovery.
However, this does not mean the beginning of long-term recession in China’s economy. On the contrary, it clearly shows China’s economic resilience. Since the outbreak of the epidemic, the application scenarios of digital economy have unstoppably taken the opportunity to reach more Chinese people. People buy grain, oil, vegetables and daily necessities on apps such as JD.com, Meituan-Dianping, Ele.me and Pinduoduo; governments, enterprises and educational institutions conduct online meetings, online teaching and collaborative office work through Bilibili, DingTalk, and WeChat; hundreds of millions of Chinese people display their health code on their mobile phones as permits to travel or go to public places. This is exactly the big change that is taking place in China’s economy. Although the epidemic has caused economic loss, it has unexpectedly accelerated process of economic digitization.
When people were isolated at home due to the epidemic, campuses and offices were closed. However, it was incredible for schools and educational institutions in China to adopt online teaching within only one month. This rapid transformation has spurred development of China’s online meetings and digital education platform on the supply side. Various online conferences, live stream teaching, telecommuting, online interviews, signing contracts, and exhibitions, and even online consultations have quietly become popular and developed into new economic forms.
If you want to travel all over China freely today, enter or exit airports and hotels, you need to show your “health code” on your mobile phone. It is a personal QR code generated based on personal big data, able to track your travel records in the past 14 days and show whether you have visited a heavily hit area. The health code was jointly developed by the Alibaba’s technical team in Hangzhou and the local government in February this year, but soon widely used across China. Moreover, it has a wide range of application scenarios, which can help governments, social organizations, enterprises, schools and service organizations in the management of epidemic prevention and control.
In the past six months, digital transformation has also accelerated in China’s healthcare industry due to the epidemic. Thanks to the developed express delivery services in urban and rural areas, it’s quite popular for Chinese households to buy medicine online.
Digital transformation is more welcomed to focus on diagnosis and treatment. The remote consultation platform based on 5G network played an important role in major hospitals in Wuhan which received and treated many Covid-19 patients. The video consultation with medical experts from Beijing greatly improved the effectiveness of diagnosis and treatment. But this was only the beginning of medical digitization. It can be predicted that with the popularization of 5G network in China, the penetration rate of digital diagnosis and treatment will be greatly increased and telemedicine and live streaming will be widely used. Given the regional imbalance in the allocations of medical resources, this is especially important to better meet people’s medical needs. Digital transformation of China’s financial sector is also beyond imagination. Big data, cloud computing, artificial intelligence, and distributed computing architecture technologies have empowered traditional commercial banks to create unprecedented application scenarios and recognition capability, and greatly improved their ability to provide financing services for small and micro businesses and households.
Apart from the continuous expansion of fintech companies, the digital transformation of China’s commercial banking industry is also quite amazing. Based on information from the big data service provider URORA, in March 2020, the mobile banking apps in China had 562 million users, ranking the third after short videos and comprehensive shopping malls in terms of the scale of customer base.
The research report White Paper on Development and Employment in China’s Digital Economy (2019) released by the China Academy of Information and Communications Technology (CAICT) showed that in the past few years China’s digital economy had achieved rapid expansion, much faster than the nominal GDP growth rate. In 2018, the value of China’s digital economy reached 31.3 trillion yuan (equivalent to 4.73 trillion US dollars), accounting for about 34.8% of GDP. Although the figure was only one-third of that of America, the growth trend of economic digitization in China could not be underestimated. In fact, about two-thirds of China’s GDP growth in these years was attributable to the expansion of digital economy. This trend is basically in line with the national economic accounting data updated by the National Bureau of Statistics.
As economic digitization and platformization have created extraordinary job opportunities in China, more and more young people hope to become independent professionals relying on digital platforms - this is new gig economy. Since the labor market has become more and more flexible, although China’s GDP growth has slowed in recent years, the unemployment rate in urban areas has not risen significantly, indicating that the expansion of digital economy has significantly improved the ability of the Chinese economy to create new jobs. According to CAICT, in 2018, there were 191 million jobs in digital economy, accounting for a quarter of the total employment that year, a year-on-year increase of 11.5%, much higher than the growth rate of national total employment in the same period.
In the past 10 years, despite that China still relatively lagged behind others in some key technology areas, a large number of Chinese technology companies were committed to the research and application of 5G, quantum communications, speech recognition, supercomputers and other cutting-edge technological fields, which undoubtedly promoted digital transformation of China’s economy. There is no doubt that China has gained a strong momentum of development in the fields of mobile payment, sharing economy, online shopping, robot manufacturing, etc., and become a new source of economic growth.
It now seems that, on a global scale, China is very likely to be the only country able to achieve economic growth this year, to which digital transformation of the economy has made great contributions. The Chinese government has clearly proposed to increase investment in “new infrastructure” in the next five years and accelerate the construction of new infrastructure such as 5G networks and data centers. These efforts will further promote the structural transformation of China’s economy.
(Zhang Jun: Dean and Professor of School of Economics, Fudan University)