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“The 14th Five-Year Plan for Digital Economy Development” (hereinafter referred to as the Plan) is an important part of China’s 14th Five-Year Plan for National Economic and Social Development and China’s first national plan for the digital economy. Guided by Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era and based on an in-depth analysis of the development environment for China’s digital economy, the Plan clearly sets the basic principles and goals for the development of China’s digital economy in the future, defines tasks and safeguard measures on many fronts from data infrastructure, data elements, industry digitization, and digital industrialization, to public services, governance systems, security systems, and international cooperation, to ensure the smooth realization of development goals.

With the change of global political and economic situation and the rapid development of digital technology, the digital economy has become a new driving force for national economic development. The support of the digital economy to the national economy has been particularly significant during the COVID-19 pandemic. While brick and mortar enterprises have been greatly impacted, the digital economy has sprung up, and a number of new business forms and models such as telecommuting, teleteaching and telemedicine have emerged to promote economic recovery and development. The CPC Central Committee and the State Council have always attached great importance to the development of the digital economy. The report of the 19th National Congress of the CPC points out that “China’s economy has shifted from a stage of high-speed growth to a stage of high-quality development and is in a crucial period of transforming the growth model, optimizing the economic structure and transforming the drivers of growth.” The digital economy is playing increasingly important roles in this critical period. “Suggestions of the CPC Central Committee on Formulating the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035” also proposes to “develop the digital economy, promote digital industrialization and industrial digitization, promote the deep integration of digital technology and the real economy, and build digital industrial clusters with international competitiveness”. The introduction of the Plan is an important measure to accelerate the high-quality rapid development of China’s digital economy, with very distinctive characteristics of the times.

The digital economy will provide strong support for the high-quality development of China’s economy

The Plan first points out that the digital economy is a major economic form after the agricultural economy and the industrial economy, which is a clear positioning of the digital economy. The digital economy will play important roles in China’s transition from high-speed growth to high-quality development.

First, the digital economy will drive innovation. Data elements play a catalytic role, transforming traditional economic drivers into innovation-driven ones. The development of the digital economy can fully release the value of data elements and promote the innovative development of data production, distribution, circulation and consumption. Encouraging market forces to explore the value of data will strongly promote the new digital business model, collaborative innovation mechanism and industrial ecology in line with China’s national conditions. Innovation will become the core driving force for economic growth, and the pie of the digital economy will also grow bigger.

Second, the digital economy will reduce costs and increase efficiency. Industrial digitalization can accelerate the wide application of digital technology in traditional industries, transforming and upgrading the whole chain of traditional industries. Data elements can release great value after being integrated with labor, capital, land, resources, environment and other traditional production factors, which will continuously improve the total factor productivity, make traditional industries high-end, intelligent and green, continuously enhancing the competitiveness of traditional industries, and achieving the goal of reducing costs and increasing efficiency.

Third, the digital economy will help green low-carbon development. In the field of production, especially energy, electric power, chemicals, manufacturing, transportation and other industries, by releasing the potential value of industry big data, the misallocation of market resources can be reduced, coupled with industrial digitalization and digital industrialization, cost reduction, efficiency increase, and energy consumption reduction can be effectively achieved, thus reducing carbon emissions. In the field of consumption, the high efficiency of the digital economy can greatly reduce intermediate links and consumption cycles, thus achieving energy conservation. Therefore, the development of the digital economy can provide strong support for achieving carbon peaking and carbon neutrality from both the supply side and the consumption side.

Fourth, the digital economy will facilitate common prosperity. An important factor affecting common prosperity is the unbalanced development between regions. In the past, it was difficult for remote and backward regions to get market information and respond timely. With the development of the digital economy, backward regions no longer subject to transportation, climate, geography and other factors can get all kinds of market information, data and technology conducive to local development timelier and more accurately. With the help of the digital technology, local agricultural products and tourism services will also reach the national and even global market, thus accelerating the pace of realizing common prosperity.

The enhancement of the digital foundation and digital capabilities provides a good environment for the rapid growth of the digital economy

The internal and external environment for China’s digital economy development is undergoing profound changes. Strengthening, optimizing and expanding the digital economy have become a strategic choice to seize the new opportunities in the new round of scientific and technological revolution and industrial transformation. Digital technology is bringing profound changes to an increasing number of industries, becoming a driving force for economic development.

The digital foundation is embodied in infrastructure, data resources and policy environment, which are the foundation and prerequisites for the development of the digital economy. Digital talents, digital innovation and digital security are important manifestations of digital capabilities, escorting the development of the digital economy. They are also indispensable conditions for the development of the digital economy. At present, China’s digital infrastructure construction has achieved remarkable results. The deep integration of new technologies such as big data, artificial intelligence, cloud computing, 5G, the Internet of Things, quantum information and blockchain with the real economy has improved the efficiency of resource allocation and the amount of value creation, increased adaptability and flexibility to changes in demand, and contributed to solid progress in supply-side structural reform.

On the other hand, digital payment, smart city, digital mall, digital government and other application scenarios are increasingly familiar to the public. Some of the new digital technologies, industries, models and forms of business born with them have been widely applied and accepted by the masses, forming market forces that cannot be ignored. Therefore, from both the supply side and the demand side, we can see the inevitability of the rapid growth of China’s digital economy.

High-speed growth and high-quality development should be coordinated and carried out in parallel

According to the Plan, China will become a digital economy power with important international competitiveness and influence by 2025. All indicators will basically maintain high growth expectations. The number of gigabit fiber users will increase from 6.4 million to 60 million. The penetration rate of industrial Internet platform applications will increase from 14.7% to 45%. Total online retail sales will grow from 11.76 trillion to 17 trillion. The number of real-name users of online government services will increase from 400 million to 800 million. The realization of these goals requires the joint efforts of all sectors of society. Relevant government departments need to formulate more guiding measures; operators need to step up infrastructure construction; leading enterprises need to accelerate digital transformation and new platform construction. More importantly, the construction of relevant infrastructure and public services should provide strong support for the digital economy’s extensive penetration and deep integration into all walks of life, so as to ensure the further realization of the value of the digital economy.

The Plan puts forward not only the goal of high-speed growth, but also clear quality requirements. In data resource quality, data service providers, data resource standardization and other aspects, the construction of data quality improvement projects is proposed. While accelerating the development of standards in the fields of data assets, services and security, China will continue to improve the construction, management and services of national basic databases, and support social service agencies in collecting, sorting and analyzing all kinds of data in accordance with the law to ensure high-quality development.

The coordinated development of the digital economy should balance the relationship between establishing data regulation and developing digital capabilities. If data regulation is too strict and restrictive, they will limit the long-term development of digital capabilities. If data regulation is less restrictive, they will cause problems such as insufficient digital governance capabilities. Therefore, from the perspective of coordinated development, the Plan puts forward corresponding planning and guarantee means in digital regulation, talent, technology and other aspects, which will promote the balance between open use of data and privacy security, scientific and technological innovation and fair service, to contribute to the high-speed and high-quality development of China’s digital economy.

China will constantly improve the digital economy governance system

The deep integration of the digital economy and the real economy involves all levels and aspects of the economic system, and all links of the digital economy governance system must be coordinated. The Plan presents a coordinated development model led by the government and participated by the market. At present, relevant government departments and enterprises have begun to jointly promote the implementation of service guarantee measures such as data regulation, information sharing, open resources, capability support and targeted financial support.

First, we must insist on fair competition, security and order. We shall improve the laws and regulations, supervision and control means, to build a good foundation for the development of the digital economy.

Second, we must ensure that all participants carry out digital economic activities in accordance with laws and regulations and standardize data transaction management. We shall improve access mechanisms, filing systems and accountability mechanisms, crack down on fraudulent transactions, and guard against and defuse security risks in transactions.

Third, we must establish and improve market-based mechanisms, speed up market-based circulation of data elements, and innovate mechanisms for the development and utilization of data elements. Market forces shall be encouraged to exploit the value of commercial data based on practical application requirements. By 2025, a market system for data elements shall be established, and pilot projects to foster data element markets shall be completed, including conducting experiments on data rights confirmation and pricing services, promoting the application of digital technology in data circulation, fostering and developing data trading platforms.

Fourth, we must effectively expand international cooperation in the field of digital economy, build consensus on development, and actively participate in the formulation of international digital rules. Efforts should be made to expand digital economy trade with other countries, especially countries along the “Digital Silk Road”, actively participate in the construction of global digital ecology, and build a development pattern of mutual promotion between domestic and international circulations in the field of digital economy.

The 14th Five-Year Plan period is the first five years after China achieves the first centenary goal and starts the new journey of building a modern socialist country in an all-round way. The digital economy will become a powerful booster for China’s new journey of development, releasing a steady stream of new momentum. In general, the Plan thoroughly implements the deployment in the “Outline of the 14th Five-Year Plan for National Economic and Social Development”, emphasizing the role of the digital economy in promoting social and economic development. Its basic ideas are in line with the law of economic development; its policies are targeted; and its measures are practical.

Source: National Development and Reform Commission