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The data revolution: how china can capture the digital trade opportunity at home and abroad

Thursday,Mar 21, 2019

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This research employs a broad definition of “digital trade” which covers the production, distribution, marketing, sale or delivery of goods and services – domestically and abroad – supported by cross-border data flows.

Although China has enjoyed historically high growth rates over the past decade, analysts anticipate that it will start to face a slowdown due to several broad socio-economic  shifts. These include the shift from an industry-based to a services-driven economy and an ageing population. To sustain China’s growth momentum into 2030 and beyond, China would need to hone competitive strategies beyond the low-cost advantage that has traditionally propelled its economic growth. Digital technologies are pertinent to this, by driving labour productivity and quality improvements. Understanding the role of digital trade ,both domestically and for exports, is therefore crucial for businesses and policymakers in China.

Though trade was once dominated by tangible goods, growth in global goods trade has flattened as global data flows have surged, with the amount of cross-border bandwidth having grown 45 times since 2005.This is projected to increase by an additional nine times over the next five years as flows of information, searches,communication, video, transactions, and intra-company traffic continue to rise.Digital trade is also supporting large productivity improvements in domestic sectors, which underpin the 4th industrial revolution. Yet, policymakers and business leaders are often in the dark on how to accurately measure the benefits digital trade can bring to an economy. Traditional economic measures fail to adequately measure the value of digital trade to exports and to the domestic economy. This creates the risk that the value of digital trade is not fully appreciated and taken into account when formulating policy and business decision-making.

This report aims to close the existing knowledge gap by quantifying the economic value of digital goods and services exports, as well as the value of digital trade in enabling productivity improvements in the domestic economy. It also summarises the perceived concerns governments may have in relation to digital trade and outlines recommendations for how the economic gains to digital trade may be realised while addressing these concerns.

From ,2019-03-21
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