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Xie Xuanli: Digital Transformation Powers High-Quality Growth

Apr 28-2024   



Digital transformation provides practical and workable solutions for green transition of the economy as well as boosts corporate efficiency, said Xie Xuanli of the NSD in her keynote speech for a seminar. She is PKU Boya Young Scholar, NSD Associate Research Fellow, and the Ministry of Education’s Changjiang Young Scholar.

 

In digital economy, China and the US are undisputable leaders, combining to account for 90% of the capitalization of the world’s 70 largest digital platforms. Prof. Xie said that China’s digital rise is closely associated with four major factors: a vast market and relatively high population density that provide the soil for the growth of digital business models; the existence of a great amount of unmet market demand; relatively loose regulation in the inception stage of internet platforms; and the tremendous innovative drive of entrepreneurs.

 

As part of national strategy, China’s digital economy aims to achieve high-quality growth by being innovative, efficient, fair, green, and open. Prof. Xie believed that innovation provides the foremost driving force for digital transformation. Surveys by her and her colleagues showed that 98% of Chinese firms have started digitalization in at least one business function, particularly customer service, sales, finance, and staff management. Despite challenges, business owners and senior executives responded that innovation is the top priority for their firms and digitalization offers a crucial avenue to achieve innovation. The digital economy allows traditional industries to turn their products into services, as evidenced by the changes brought about by bike sharing platforms. It also gives rise to eco-systems where firms, while serving the same group of customers, compete and cooperate with each other.

 

When it comes to the green transition of the economy, Prof. Xie said that China’s digital economy has been playing a conspicuous role in reducing carbon emission. Stepping up the input of digital productive factors and developing the digital service industry will further contribute to such reduction. The benefits of digitalization include optimization of industrial structure, optimization of energy structure, enhancement of resource efficiency, and facilitation of low carbon practices, said Prof. Xie.

 

Taking the financial industry as an example, Prof. Xie underlined efficiency gain through digitalization. So far, more than 80% of Chinese banks have set up digital finance or fintech departments, and 19 have established fintech subsidiaries. Digitalization has not only improved their business performance but also enabled them to better support the real economy. However, she also pointed to the need to stay vigilant about risks. For example, small and medium-sized banks might find their non-performing loan rate go up. Her surveys found that the lack of talents and the limit of thinking modes are the main constraints for digital transformation. To achieve sustainable and innovative development through digitalization, Prof. Xie said that the focus should be put on getting three things right: strategic direction, business strategy, and organization construction.

Xie Xuanli: Digital Transformation Powers High-Quality Growth

Apr 28-2024   



Digital transformation provides practical and workable solutions for green transition of the economy as well as boosts corporate efficiency, said Xie Xuanli of the NSD in her keynote speech for a seminar. She is PKU Boya Young Scholar, NSD Associate Research Fellow, and the Ministry of Education’s Changjiang Young Scholar.

 

In digital economy, China and the US are undisputable leaders, combining to account for 90% of the capitalization of the world’s 70 largest digital platforms. Prof. Xie said that China’s digital rise is closely associated with four major factors: a vast market and relatively high population density that provide the soil for the growth of digital business models; the existence of a great amount of unmet market demand; relatively loose regulation in the inception stage of internet platforms; and the tremendous innovative drive of entrepreneurs.

 

As part of national strategy, China’s digital economy aims to achieve high-quality growth by being innovative, efficient, fair, green, and open. Prof. Xie believed that innovation provides the foremost driving force for digital transformation. Surveys by her and her colleagues showed that 98% of Chinese firms have started digitalization in at least one business function, particularly customer service, sales, finance, and staff management. Despite challenges, business owners and senior executives responded that innovation is the top priority for their firms and digitalization offers a crucial avenue to achieve innovation. The digital economy allows traditional industries to turn their products into services, as evidenced by the changes brought about by bike sharing platforms. It also gives rise to eco-systems where firms, while serving the same group of customers, compete and cooperate with each other.

 

When it comes to the green transition of the economy, Prof. Xie said that China’s digital economy has been playing a conspicuous role in reducing carbon emission. Stepping up the input of digital productive factors and developing the digital service industry will further contribute to such reduction. The benefits of digitalization include optimization of industrial structure, optimization of energy structure, enhancement of resource efficiency, and facilitation of low carbon practices, said Prof. Xie.

 

Taking the financial industry as an example, Prof. Xie underlined efficiency gain through digitalization. So far, more than 80% of Chinese banks have set up digital finance or fintech departments, and 19 have established fintech subsidiaries. Digitalization has not only improved their business performance but also enabled them to better support the real economy. However, she also pointed to the need to stay vigilant about risks. For example, small and medium-sized banks might find their non-performing loan rate go up. Her surveys found that the lack of talents and the limit of thinking modes are the main constraints for digital transformation. To achieve sustainable and innovative development through digitalization, Prof. Xie said that the focus should be put on getting three things right: strategic direction, business strategy, and organization construction.