Growth role of digital economy emphasized

Surge of related stocks highlights investors' optimism about sector's outlook

Related stocks surged on Thursday as the digital economy was highlighted in multiple local governments' plans for boosting growth in 2023.

Shares of nearly 10 companies, including China National Software and Service Co, surged by the daily limit of 10 percent on Thursday, showcasing investors' optimism toward the development of the digital economy in 2023.

China's digital economy is expected to surpass 60 trillion yuan ($8.84 trillion) by 2025, according to a forecast by the China Academy of Information and Communications Technology, a government think tank.

Shanghai and provinces such as Zhejiang, Fujian and Hebei have mapped out their tasks for economic development this year. They prioritized the development of the digital economy and called for efforts to make blueprints for future industries, such as the metaverse, an immersive virtual world facilitated by virtual reality and augmented reality.

Zhang Yunming, vice-minister of industry and information technology, recently called on telecommunications companies such as China Mobile, China Unicom and China Telecom to beef up the construction and application of new infrastructure, deepen efforts to promote an innovation-driven development strategy, and advance the integration of the digital and real economies.

By the end of 2022, more than 2.3 million 5G base stations had been built in China, and the country boasts a capability to connect over 500 million households with a gigabit optical network, data from the Ministry of Industry and Information Technology shows.

Moreover, the digital connections for the mobile internet of things in China reached 1.84 billion in 2022, making China the first major economy in the world to have more mobile IoT connections than the number of its mobile users, according to the ministry. The internet of things refers to a network of devices, vehicles and other objects that contain software or sensors allowing them to connect and exchange data.

China's mobile IoT connections account for 70 percent of the world's total and have covered the 45 major categories of the national economy, said Zhao Zhiguo, spokesman for the ministry.

Wang Zhiqin, vice-president of the China Academy of Information and Communications Technology, said China has built a good telecom infrastructure, which will lay a sound foundation for the high-quality development of China's digital economy.

Previously, China's digital economy was chiefly driven by consumer-oriented internet applications like e-commerce, but now business-oriented applications like industrial internet are playing a significantly bigger role. This shows that improvements have been made in the digital economic structure, Wang said.

The market size of China's digital economy reached 45.5 trillion yuan in 2021, the world's second-largest after only the United States, according to a report released by the Cyberspace Administration of China.

Vice-Premier Liu He said in a speech at the World Economic Forum's annual meeting in Davos, Switzerland, on Tuesday that China "must always make establishing a socialist market economy the direction of our reform. We must let the market play a decisive role in resources allocation, (and) let the government play a better role.

"Some people say China will go for the planned economy. That's by no means possible," Liu added.

The comments were in line with the tone-setting Central Economic Work Conference, which ended in December and emphasized that it is important to work "unswervingly" to consolidate and develop the public sector and to encourage, support and guide development of the private sector.

Xu Yan, vice-president of Tencent Holdings, said: "In recent years, we have deeply felt that the government has stepped up efforts to create a first-class business environment for private companies. Tencent will ratchet up efforts to drive the integration of the real and digital economies via innovation."

Xu said the company has invested 150 billion yuan in research and development over the past three years.