Trade in digital services in China favors global growth
Written by José Nelson Bessa Maia, economist and PhD in international relations from the University of Brasília (UnB) and independent researcher on China-Brazil relations, China-Lusophone countries, and China-Latin America relations.
The China International Fair of Services (CIFTIS) 2022 opened in Beijing on August 31 and will close on September 5. Another opportunity for companies and investors around the world to learn more about China’s significant progress and innovation in this promising area of digital services. This year’s edition included a global summit on trade in services, exhibitions, forums, presentations of new products and technologies, business round tables, as well as other activities.
As President Xi Jinping told attendees at the event, China is currently committed to promoting high-quality development through market access in the services sector, facilitating openness in service trade with other countries, expanding digital platforms, and striving to establish a high-standard opening system for the sector.1
China is now the world’s second-largest digital economy and occupies a leading position in a variety of applications, including e-commerce, digital payments, and digital investment. The value of China’s digital economy will reach US$7.1 trillion in 2021, according to a white paper on the global digital economy published by the Chinese Academy of Information and Communication Technology. As a result, China accounts for more than 18% of the total value accumulated by the 47 major countries included in the white paper, ranking second only to the US.two
China’s dominance in 5G infrastructure strongly supports the country’s digital economy and gives Chinese entrepreneurs an advantage in developing new applications. China’s digital economy and the importance of electronic data and services also combine with its manufacturing activity to strengthen China’s central role in global value chains (GVCs), providing enormous scope for its companies to export digital services as inputs embedded in manufactured products.3
In recent years, the Chinese digital economy has developed rapidly and has become one of the levers in planning its development. The white paper shows that from 2012 to 2021, the average growth rate of China’s digital economy was 15.9%, and the share of the digital economy’s stock value in the country’s GDP increased from 20.9% to 39.8%. Considering this dynamic, in January 2022 the Chinese State Council announced a new plan for the development of the country’s digital economy, with the aim of increasing the share of the annual added value of this sector in GDP, from 7.8% in 2020 to 10% by 2025. ., the strengthening of technologies such as 6G and the construction of large data centers. The digital transformation of industries will reach a new level in China, as digital utilities become more inclusive and the management system of the digital economy is visibly improved.3
During the Covid-19 pandemic, the digital economy gained tremendous momentum worldwide against the paralysis imposed by containment measures, which made governments and companies realize the urgency and need to develop their digital sectors. Several countries and international bodies are now looking to facilitate digital transformation, taking initiatives to expand digital sectors, investing in digital infrastructure, adopting e-government platforms and launching technology parks and business incubators.4
In an effort to advance the digitization of services, China has not only made the digital economy the cornerstone of its own future, but has also introduced several activities to achieve this goal in a more global plan of international cooperation, such as the Digital Silk Road. (DSR) and the initiative Joint construction of a digital community with a common future. Through the DSR, a component of the Belt and Road Initiative (BRI), for example, China has helped drive digital development at regional and regional levels through its leadership in technological innovation and the international solidarity it achieves in its foreign relations. globally.5
Thus, Chinese companies contribute to the expansion of infrastructure construction in several countries, in Asia and Africa, to facilitate the collection, transport, storage and processing of large amounts of data in partner countries.6 This infrastructure includes e-commerce platforms, mobile payment systems, smart data centers, 5G networks, submarine cables, satellites, cloud storage, smart cities and artificial intelligence. No country in the world has done so much in international cooperation and partnership in the field of digital economy.
The digital economy is not only changing the face of the Chinese economy, but also creating business opportunities for domestic and foreign companies. China’s large domestic market has economies of scale that enable rapid commercialization of new digital technologies. Accounting for over 40% of global transaction value, China has the largest e-commerce market in the world. The size of China’s internet user base encourages continuous experimentation and allows digital actors to quickly achieve economies of scale.7
In short, the strength of China’s consumption of digital services goes beyond economies of scale, as today almost every aspect of people’s daily lives is inseparable from digital technology, including education, health, information services, entertainment, finance and e-commerce. Business opportunities continue to exist for overseas technology solution providers, particularly in areas such as industrial digital transformation, service delivery, sustainable development solutions and consumer products, among others. Foreign companies interested in investing in the Chinese market can thus explore new and innovative services that can be incorporated into the existing digital ecosystem.
References:
1 – Xi sends congratulatory letter to China International Services Fair. Xinhua Agency, 31.08.2022. Available at
2 – China’s digital economy reaches 7.1t USD: white paper. China Daily, 30/07/2022, available at:>.
3 – Joshua P. Meltzer. China’s Trade in Digital Services and Data Governance: How Should the United States Respond? Brookings, October 2020. Available at
4 – China Unveils Plan to Boost Digital Economy Between 2021 and 2025, Radio China International – CRI, 13/01/2022, available at < https://portuguese.cri.cn/news/china/407/20220113/728435.html >.
5 – Mordechai Chaziz. China-GCC Digital Economic Cooperation in the Age of Strategic Rivalry, 06/07/2022, Available at
6 – China vs. USA: The Battle for Digital Supremacy in Africa. Mail Guardian, 22/07/2022. Available at
7 – Yi Wu. Understanding China’s Digital Economy: Policies, Opportunities and Challenges, China Briefing, 11/08/2022, available at < https://www.china-briefing.com/news/understanding-chinas-digital-economy-policies-opportunities- i-izazovi/>.
