Free and orderly data flow across borders in accordance with the law can enhance Shanghai’s advantages in openness - 2024-11-09
Openness is a distinctive mark of Chinese-style modernization. It shows that China will continue to accelerate opening up and the Chinese economy will be more comprehensively and deeply integrated into the global economy. An important trend in global economic development is the continuous expansion of digital economy. Data is rapidly penetrating into all walks of life and fields. Promoting free and orderly data flow across borders in accordance with the law will undoubtedly become a new engine for China’s opening up.
Cross-border data flow has become increasingly important in the global economy, which is manifested in three aspects. First, it can drive economic growth. As a new factor of production, data has a strong potential to drive global economic growth. McKinsey’s research shows that the average effect coefficient of data flow on economic growth is 0.02. The Organization for Economic Cooperation and Development (OECD) estimates that data flow has significantly improved the profit levels of various industries, with an average profit growth promotion rate of 10%. In data-intensive industries such as finance, the figure is even as high as 32%. It is worth emphasizing that data is a non-competitive factor of production. Its role in promoting economic growth has significant increasing returns to scale. Second, cross-border data flow can help reshape the global value chain. Data flow is redefining the global industrial division of labor. In the past, global industrial division of labor was based on the advantage of labor cost. The rise of automation and unmanned technology driven by data will redefine the logical basis of industrial division of labor. Data and digital technology have become the key to measuring competitive advantages. As the cross-border data flow increases, the mid- to high-end links of the global industrial chain may gradually shift to regions with data processing capabilities and the traditional global value chain will be reshaped. Third, cross-border data flow has knowledge spillovers. The flow of data is accompanied by the rapid dissemination of information, providing support for widespread knowledge sharing. Knowledge-driven innovation is the source of global economic growth. Data is an input factor in knowledge creation and contains multi-dimensional value. Different economic entities understand and apply data in different ways. Therefore, data flow can inspire various entities to create knowledge and ideas, thus driving continuous innovation.
As the frontier of China’s opening up to the outside world, Shanghai can enhance its open advantages in the era of digital economy by promoting free and orderly data flow across borders in accordance with the law. There are three key points.
First, Shanghai will promote free and orderly data flow across borders in accordance with the law to improve the abilities of “five centers” and enhance its competitiveness among global cities. Data is a new production factor for economic development. As one of the global economic hubs, Shanghai can help break down information barriers, accelerate resource docking with the global market, drive the efficient flow of trade, investment and technology, and further strengthen advantages through the smooth data flow across borders. Firstly, cross-border data flow can be used to enhance Shanghai’s connectivity with the international market, improve economic vitality and efficiency, and consolidate Shanghai’s position as an important node for global information flow and resource sharing. Secondly, cross-border data flow can be used to provide more accurate and intelligent financial services, optimize financial products and service models, improve the efficiency of financial compliance management, and make capital flows safer and more efficient. Thirdly, cross-border data flow can be used to make trade more flexible, simplify trade processes, reduce trade cost, and enhance Shanghai’s global competitiveness in digital trade. Fourthly, cross-border data flow can be used to strengthen the system connection between Shanghai and global ports, improve the accessibility of logistics scheduling and tracking, speed up customs clearance and sorting, and increase port operation efficiency. Fifthly, cross-border data flow can be used to enhance Shanghai’s ability to obtain global innovation resources, accelerate the research, development and application of cutting-edge technologies, improve the innovation level, and enhance its position in the global innovation landscape.
Second, Shanghai will promote free and orderly data flow across borders in accordance with the law to accelerate the establishment of Shanghai’s modern industrial system and enhance its competitiveness in the global industry. Data is a key factor in driving the establishment of a modern industrial system. As one of the global industrial clusters, Shanghai will accelerate the intelligent, green, and integrated transformation and development of industries through smooth data flow across borders, promote the development of emerging industries, and improve its modern industrial system. Firstly, cross-border data flow can be used to stimulate the “adhesive” function of data. Shanghai will accelerate deep integration of Shanghai’s advanced manufacturing and modern service industries, promote the digitization and green transformation of industries, and facilitate sustainable development. Secondly, cross-border data flow can be used to stimulate the “fuel” function of data. Shanghai will use global data on a larger scale to improve the innovative design of integrated circuits, shorten the research and development cycle of biomedicine, increase the accuracy of artificial intelligence algorithms, and help accelerate the development of key industries such as electronic information, life health, and automobiles. Thirdly, cross-border data flow can be used to stimulate the “catalyst” function of data. Shanghai will promote the sharing of global data resources, provide a fulcrum for the expansion of the market space of new track industries, and offer support for seizing the commanding heights of future industries.
Third, Shanghai will promote free and orderly data flow across borders in accordance with the law to enhance international cooperation and regional coordination capabilities and promote the smooth operation of the dual economic cycles. Data is the core element of global connection. As one of the cities with deep global connections, Shanghai can promote the smooth operation of the economic cycle through the cross-border data flow. Firstly, cross-border data flow can be used to enhance trade liberalization and investment facilitation of the free trade zone and improve the convenience and efficiency of cross-border trade. Improved data supervision and cross-border data sharing mechanisms can provide a more efficient and convenient business environment for global enterprises and reduce international trade costs.
Secondly, cross-border data flow can be used to accelerate the construction of the “Eastern Hub International Business Cooperation Zone”, improve the interconnection between Shanghai and the Asia-Pacific and global economies, optimize cross-border corporate exchanges and capital flows, and enhance Shanghai’s competitiveness in the field of international business. Thirdly, cross-border data flow can be used to promote the integration of the Yangtze River Delta into the global value chain, optimize resource allocation, and drive coordinated regional development.
The author is Guo Jiatang, assistant researcher at Institute of Applied Economy, Shanghai Academy of Social Sciences.
Source: Touch Shanghai
Application Status
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