Navigating China’s Digital Economy Policy Landscape: A Review of Key Initiatives
In the age of the digital economy, China stands at the forefront of innovation and transformation. The “Five-sphere Integrated Plan,” a strategic roadmap for building a digital China, has paved the way for a holistic approach to digitalization, encompassing the digital economy, digital society, digital governance, and digital ecology. As of 2021, China’s digital economy had surged to a staggering RMB 45.5 trillion, accounting for 39.8% of the nation’s GDP. This demonstrates the growing prominence of the digital economy in driving economic growth. In this article, we delve into the policies that have shaped China’s digital economy over the past year, as outlined in the AmCham China 2023 Social Impact Report.
“Action Plan for the Integration and Development of Virtual Reality and Industrial Applications (2022-2026)”
Policy Highlights: On November 1, 2022, a consortium of government bodies, including the Ministry of Industry and Information Technology, Ministry of Education, Ministry of Culture and Tourism, National Radio and Television Administration, and General Administration of Sport, unveiled the “Action Plan for the Integration and Development of Virtual Reality and Industrial Applications (2022-2026).” This visionary plan sets ambitious goals, aiming to achieve key breakthroughs in three-dimensional technologies, immersive audio-visual technology, and human-friendly virtual reality terminal products by 2026. It envisions widespread applications of virtual reality across critical economic and social sectors, fostering an ecosystem where technology, products, services, and applications thrive collectively. The plan identifies five key tasks, including enhancing the integration of virtual reality with emerging technologies like 5G and AI, improving the entire industry chain, accelerating multi-industry applications, establishing industrial service platforms, and developing comprehensive virtual reality standards.
“Jointly Build a Community with a Shared Future in Cyberspace” White Paper
Policy Highlights: Released on November 7, 2022, the “Jointly Build a Community with a Shared Future in Cyberspace” white paper by the State Council Information Office lays out China’s vision for internet development and governance in the new era. It highlights China’s achievements in fostering a cyberspace community and outlines international cooperation prospects. The paper emphasizes seven key areas of development, including a flourishing digital economy, enhanced digital technology, a robust cyberspace rule of law system, diverse online content, a cleaner cyberspace environment, standardized internet platform operations, and robust cyberspace security. China’s contributions to global cyberspace development, especially in digital economy cooperation, cybersecurity, and inclusive global development, are showcased.
“Guideline for Digital Transformation of Small and Medium-sized Enterprises”
Policy Highlights: On November 8, 2022, the Ministry of Industry and Information Technology released the “Guideline for Digital Transformation of Small and Medium-sized Enterprises (SMEs).” This guideline targets SMEs, digital transformation service providers, and local authorities, aiming to facilitate scientific and efficient digital transformation. It advocates for the enhancement of enterprise transformation capabilities, including digital assessments, digitization of management and services, and integration with industrial Internet platforms. The guideline promotes a symbiotic relationship between large enterprises building platforms and SMEs benefiting from them. Government support for transformation policies, funds, services, and talent is emphasized, along with the optimization of the external environment for SME digital transformation.
“Approval of the State Council of the Establishment of Integrated Pilot Zones for Cross-border E-commerce in 33 Cities and Areas, including Langfang”
Policy Highlights: On November 24, 2022, the State Council approved the establishment of “Integrated Pilot Zones for Cross-border E-commerce” in 33 cities, including Langfang, marking the seventh such set of zones in China. These zones are strategically located in cities with strong foreign trade foundations, especially in central and western regions and border areas. The expansion of these zones aims to accelerate global reform and innovation, promoting the integration of industrial and trade digitization, trade facilitation, regulatory innovation, and alignment with international rules. By doing so, they bolster China’s foreign trade development, fortifying its position as a global trade powerhouse.
“Administrative Measures on Data Security in the Industry and Information Technology Sectors (for Trial Implementation)”
Policy Highlights: Released on December 8, 2022, the “Administrative Measures on Data Security in the Industry and Information Technology Sectors (for Trial Implementation)” represent a foundational document for data security management in the industry and information technology sector. These measures define data and data processors, categorize data, and establish mechanisms for data security monitoring, early warning, and reporting. The measures require annual data security risk assessments for important data and core data processors, along with rectification of identified risks. They also emphasize compliance with the national data categorization and classification system, specifying responsibilities for data identification, security work systems, monitoring, and reporting. The measures extend to wireless data and personal information protection, enhancing data security management.
“Guiding Opinions of Sixteen Departments Including the Ministry of Industry and Information Technology on Promoting the Development of the Data Security Industry”
Policy Highlights: On January 13, 2023, sixteen departments, including the Ministry of Industry and Information Technology and the Cyberspace Administration of China, issued “Guiding Opinions on Promoting the Development of the Data Security Industry.” These opinions aim to drive the data security industry’s growth, targeting a scale exceeding RMB 150 billion by 2025. They lay out a comprehensive plan, encompassing key laboratories, application demonstration scenarios, industrial parks, and innovation zones. By 2035, China aspires to achieve world-leading status in core data security technologies, product development, and professional services. The opinions delineate seven pivotal tasks, spanning industry innovation, service expansion, standards system development, technology adoption, ecological prosperity, talent supply, and international collaboration. Recognizing data’s crucial role in economic development, these opinions underpin China’s digital economy and national security.
“Circular on Measures to Serve the Construction of a New Development Pattern and Promote High-quality Development of Border (Cross-border) Economic Cooperation Zones”
Policy Highlights: Released on February 10, 2023, the “Circular on Measures to Serve the Construction of a New Development Pattern and Promote High-quality Development of Border (Cross-border) Economic Cooperation Zones” targets eight provincial governments, including Inner Mongolia Autonomous Region, Liaoning Province, Jilin Province, Heilongjiang Province, Guangxi Zhuang Autonomous Region, Yunnan Province, Tibet Autonomous Region, and Xinjiang Uyghur Autonomous Region. The circular seeks to deepen cooperation with neighboring countries, bolster “One Belt and One Road” initiatives, boost socioeconomic development in border areas, and facilitate the high-quality development of cross-border economic cooperation zones. By attracting foreign investment and technology, these measures support China’s efforts in stabilizing foreign trade and investment.
“Plan for the Overall Layout of Building a Digital China”
Policy Highlights: On February 27, 2023, the CPC Central Committee and State Council unveiled the “Plan for the Overall Layout of Building a Digital China.” This comprehensive plan outlines China’s digitalization strategy, guided by the “2522” framework that emphasizes digital infrastructure, data resources, integration with the “Five-sphere Integrated Plan,” digital technology innovation, and digital security. The plan outlines several initiatives to empower the digital economy, digital government, digital culture, digital society, and digital ecology. Notably, it calls for the deep integration of digital technology in key sectors such as agriculture, industry, and finance, underscoring the importance of digitalization across the entire industry chain.
As China strides forward in the era of the digital economy, its policies and initiatives reflect a commitment to fostering innovation, enhancing cybersecurity, and promoting economic growth. From virtual reality integration to data security management and the expansion of cross-border e-commerce zones, these policies provide a roadmap for businesses and stakeholders to navigate and capitalize on the opportunities presented by China’s digital transformation. By embracing these policies, China continues to position itself as a global leader in the digital economy, setting a course for sustained growth and international cooperation in the years ahead.