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Prof. Huang Yiping: Digital Economy Unlocks Structural Opportunities

Feb 22-2024   



The digital economy can provide ‘structural opportunities’ to drive the long-term growth of the Chinese economy, more so than coping with ‘cyclical targets’ of short-term recovery, said Prof. Huang Yiping in an interview. He is PKU Bo Ya Distinguished Professor, Dean of the NSD, and Director of PKU Institute of Digital Finance (IDF).

 

As China transits from a middle-income country to a high-income one, Prof. Huang said that the structural significance of the digital economy can be captured by some questions that bear on long-term economic development: Will China’s economic structure and industrial transition and upgrading be able to keep up? What is the role of the digital economy therein? Amid population aging, can digital technology applications such as AI and robots solve or alleviate labor supply shortage?

 

The government has enlisted data as a new productive factor, which Prof. Huang commended as ‘pioneering’. Whereas export, investment, and real estate are seeing declining roles in economic development, harnessing data will help improve efficiency throughout the production process, he said. China stands at the forefront of global digital economy, and it can do even better by enhancing the usage rate of its immense data.

 

For the digital economy to aid short-term economic recovery, Prof. Huang stressed the crucial role of instilling confidence in the digital economy by shoring up policy sustainability and ameliorating the fundamentals of the economy. He also pointed out that macro-economic measures as well as monetary and fiscal policies, such as increasing government investment, can beef up consumption and gradually lead to a virtuous cycle. He suggested more investment in digital infrastructure, including projects for digital technology innovation and even ones that faciliate people’s daily life.

 

Prof. Huang believed that both the government and the market are needed to develop the economy. The government safeguards market order, invests in infrastructure, and supports innovative undertakings by public research institutes and universities. Marketized reforms, on the other hand, have given rise to successful private firms in the digital economy.

 

To seize the structural opportunities unlocked by the digital economy, entrepreneurs should seek out a pathway that is most aligned with the conditions of their firms, suggested Prof. Huang. Those with a large scale, namely a large business volume, a big quantity of clients, and reams of data, tend to reap more rewards from digitalization. Small and medium-sized enterprises, he said, need to sort out their pain points and leverage appropriate digital technology to raise operational efficiency.

 

Prof. Huang Yiping: Digital Economy Unlocks Structural Opportunities

Feb 22-2024   



The digital economy can provide ‘structural opportunities’ to drive the long-term growth of the Chinese economy, more so than coping with ‘cyclical targets’ of short-term recovery, said Prof. Huang Yiping in an interview. He is PKU Bo Ya Distinguished Professor, Dean of the NSD, and Director of PKU Institute of Digital Finance (IDF).

 

As China transits from a middle-income country to a high-income one, Prof. Huang said that the structural significance of the digital economy can be captured by some questions that bear on long-term economic development: Will China’s economic structure and industrial transition and upgrading be able to keep up? What is the role of the digital economy therein? Amid population aging, can digital technology applications such as AI and robots solve or alleviate labor supply shortage?

 

The government has enlisted data as a new productive factor, which Prof. Huang commended as ‘pioneering’. Whereas export, investment, and real estate are seeing declining roles in economic development, harnessing data will help improve efficiency throughout the production process, he said. China stands at the forefront of global digital economy, and it can do even better by enhancing the usage rate of its immense data.

 

For the digital economy to aid short-term economic recovery, Prof. Huang stressed the crucial role of instilling confidence in the digital economy by shoring up policy sustainability and ameliorating the fundamentals of the economy. He also pointed out that macro-economic measures as well as monetary and fiscal policies, such as increasing government investment, can beef up consumption and gradually lead to a virtuous cycle. He suggested more investment in digital infrastructure, including projects for digital technology innovation and even ones that faciliate people’s daily life.

 

Prof. Huang believed that both the government and the market are needed to develop the economy. The government safeguards market order, invests in infrastructure, and supports innovative undertakings by public research institutes and universities. Marketized reforms, on the other hand, have given rise to successful private firms in the digital economy.

 

To seize the structural opportunities unlocked by the digital economy, entrepreneurs should seek out a pathway that is most aligned with the conditions of their firms, suggested Prof. Huang. Those with a large scale, namely a large business volume, a big quantity of clients, and reams of data, tend to reap more rewards from digitalization. Small and medium-sized enterprises, he said, need to sort out their pain points and leverage appropriate digital technology to raise operational efficiency.