Eastern China’s Zhejiang province, home to the country’s largest e-commerce company Alibaba Group Holding, is planning to become a global digital trade hub as the country pins its future economic prospects on the digital world.
By 2025, the province expects value added from the digital economy to account for 60 per cent of its gross domestic product (GDP), up from 46.8 per cent in 2020, according to its 14th five-year plan published on the Zhejiang government’s official website on Tuesday.
The 28-page plan, part a much larger blueprint, would see overall digital trade – digitally-enabled transactions of goods and services delivered online and offline – of the province increase to 1 trillion yuan (US$154.7 billion), with total online retail sales increasing from 2.3 trillion yuan last year to 3.2 trillion yuan in 2025.
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The local government will also increase its investment in hi-tech research and development with the goal of having 80,000 digital economy-related patents, 737 new smart factories, and 12,000 digital economy-related hi-tech enterprises by the end of 2025.
Headquarters to South China Morning Post owner Alibaba, its affiliate Ant Group and entertainment giant NetEase, the digital economy has been Zhejiang has become known for its digital economy, making it a leader in related policy initiatives
In December, the province’s Communist Party leadership pledged to use Beijing’s antitrust probe as a chance to usher the platform economy and internet finance into a new stage of development, and promised better development of the internet economy.
In March, the province rolled out regulations dedicated to the development of the digital economy, the first in the country, as the central government seeks to create a viable market for data and establish rules around it, to ensure the smooth and secure circulation of data between public and private spheres of the economy.
The country’s 14th five-year plan, unveiled earlier this month, fast tracked the roll-out of two “fundamental” pieces of legislation, the Personal Information Protection Law (PIPL) and the Data Security Law. The PIPL, as its name suggests, will address personal privacy issues, while the Data Security Law will establish rules around the market for data and the basic regime of data security management, legal experts said.
China’s digital economy featured prominently in the country’s plan for the next five years, targeting added value in the digital economy to 10 per cent of (GDP) by 2025, up from 7.8 per cent in 2020. Beijing, the country’s capital, plans to see that increase to 70 per cent of the city’s GDP while Shanghai aims for 60 per cent, according to plans released by the cities in January.
In 2019, China’s digital economy was valued at 5.2 trillion yuan (US$803.4 billion), according to an estimate from the China Academy of Information and Communications Technology, under the Ministry of Industry and Information Technology (MIIT). At 40 per cent the size of that in the US, it was the second-largest digital economy in the world, accounting for 36 per cent of China’s gross national product.
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