The internet-based economy was China’s biggest growth driver among new economic engines last year, official data showed, highlighting Beijing’s push for the digital economy to drive the post-Covid recovery. The New Kinetic Energy Index of China’s Economic Development, which reflects economic momentum by measuring the trend of new industries and business models, stood at 766.8 in 2022 – compared to a base of 100 in 2014 – after increasing by 28.4% from the previous year, the National Bureau of Statistics (NBS) said. The subindex for the network economy, which measures the number of internet users, the amount of internet traffic, as well as e-commerce transactions, increased by 39.6% compared to 2021 to 2,739, accounting for 91.6% of the overall growth.
According to a report released in April by the China Academy of Information and Communications Technology, the value of China’s digital economy reached CNY50.2 trillion last year, accounting for 41.5% of the national economic output and ranking second globally only after the United States. As of the end of 2022, the number of mobile internet users in China had reached 1.46 billion, an increase of 3% from 2021. Mobile internet traffic increased by 18.1% year-on-year to 261.76 billion gigabytes, according to the NBS. The transaction volume of China’s e-commerce platforms in 2022 stood at CNY43.8 trillion, representing a year-on-year increase of 3.5%, while 80.7% of traditional offline consumption could now potentially be replaced by online shopping.
Beijing has made frequent pledges to bolster the digital economy to drive China’s post-pandemic economic rebound. Premier Li Qiang said China would “strengthen, optimize and expand” the digital economy to empower high-quality development. The digital economy enjoys a broad development space thanks to China’s massive market, abundant data resources and rich application scenarios, Li said during a State Council study session. “It is necessary to seize the opportunities of the new round of technological revolution and industrial transformation, promote the deep integration of digital technology and the real economy,” he added. The Premier said China should firmly promote independent innovation to seek breakthroughs in key core technologies, and give full support to the leading role of big tech firms, while enhancing cooperation between large and small enterprises.
Beijing recently removed its years-long curbs on the country's tech companies which had undergone heavy restructuring and received hefty fines amid regulatory crackdowns. It is hoped they can fuel growth and create jobs as traditional engines, including the property and export sectors, struggle. Li added that developing the digital economy requires a conducive environment, and an inclusive and prudent approach should be taken towards regulation. China had 254 large digital platform companies as of 2022, the South China Morning Post reports.
