context: Digital trade in the PRC hit C¥4 tn in 2020 and is projected to grow even more. Seeing the sector as a key trade growth driver and a potential area for rising frictions, more support for PRC digital trade can be expected. Beijing will also actively engage in global digital trade rules negotiations to effectively shape them in its favour.
Shen Yuliang 沈玉良 Shanghai Academy of Social Sciences International Trade office director shares his insights on PRC digital trade
- key characteristics
- PRC digital firms are leveraging the country's advantages in goods trade to embed digital tech into different stages of goods trade through various digital platforms
- extensive application of digital tech makes data an important component in bolstering value-added trade
- many PRC digital firms are involved in CBEC (cross-border e-commerce operations)
- by 2022, over 85 percent of them registered CBEC qualifications with the Ministry of Commerce
- CBEC now involves a host of digital services
- in digitalised trade in services, the PRC has also established influential digital platforms such as Didi and Ctrip in digital service subscriptions and timeshare leasing services
- PRC digital firms are key players in driving digital trade
- among the 70 global digital firms listed by the UN Conference on Trade and Development, 15 are from the PRC
- the PRC possesses certain advantages in digital infrastructure and the digitisation of frontier industries
- PRC telecom firms and Huawei have constructed multiple international submarine and land cables and accelerated the development of satellite infrastructure
- AI technology is widely applied in biopharmaceuticals, unmanned driving and the Internet of Things
- PRC cloud computing service firms have advantages in areas like software as a service and data as a service
- PRC digital firms are leveraging the country's advantages in goods trade to embed digital tech into different stages of goods trade through various digital platforms
- key advantages
- digital trade has solidified the PRC's comparative advantages in traditional goods trade and fostered a new mode of trade that combines CBEC with digitalised supply chain trade
- AI-powered digital tech has allowed the PRC to leapfrog with new advantages in trade
- this development model could offer an alternative path to other developing countries seeking to avoid the 'comparative advantage trap'
- weaknesses
- bottlenecks in digital technology and related hardware/software
- advanced processes restricted by some developed countries, which is affecting the quantity and quality of PRC digital trade.
- adjustments in trade policies by countries like the US may impact international supply chain layouts, affecting the PRC's advantages
- incomplete detailed regulations in industry-specific implementation for digital security and privacy protection laws
- PRC rules systems are yet to align with other major economies
- bottlenecks in digital technology and related hardware/software
- policy recommendations
- accelerate research and development of core digital tech
- target trends in next-generation digital tech
- attract top scientists globally and train influential data scientists
- conduct advanced research in areas like AI, quantum information science and bioinformatics
- overcome technical challenges in chips and foundational software to narrow the gap with developed countries in core digital tech fields
- support a multilateral trade system centered on the WTO
- participate in setting digital standards and rules in international organisations to transform the PRC's data advantages into digital trade advantages
- expedite the construction of a domestic digital trade legal system regarding data services, digitisation of goods trade and digitisation of service trade
- formulate specific domestic digital rules for segmented industries in line with international standards
- accelerate research and development of core digital tech