Digital trade a new engine for growth

People visit the Silk Road E-commerce Zone during the third Global Digital Trade Expo in Hangzhou, east China’s Zhejiang Province, Sept. 25, 2024. (Photo/Xinhua)

While China’s digital trade sector has made significant progress in 2023, it is fast becoming a new engine in the country’s drive to strengthen its position as a strong trading nation and injecting new momentum into global economic growth, officials and experts said.

China’s import and export of digitally-delivered services trade rose 8.5 percent year-on-year to 2.72 trillion yuan ($387.5 billion) in 2023, a record high, the Ministry of Commerce said on Thursday.

The import and export scale of the country’s cross-border e-commerce reached 2.37 trillion yuan last year, up 15.3 percent year-on-year, according to a report on China’s development of digital trade released by the ministry during the ongoing third Global Digital Trade Expo in Hangzhou, Zhejiang province.

Zhu Guangyao, an official with the ministry, said digital technologies such as big data, cloud computing, artificial intelligence and blockchain are increasingly integrating with various fields of social and economic development, and the booming digital trade sector has been shown strong resilience and profoundly impacted the models, structure and rules of global trade.

China boasts abundant data resources, a huge domestic market and rich application scenarios for digital technologies, all of which have laid a solid foundation for the development of digital trade, Zhu said.

The scale of digital trade of all countries worldwide rose from $6.02 trillion in 2021 to $7.13 trillion in 2023, with an average annual growth rate of 8.8 percent, said a report on global digital trade development.

The European Union, the United States and China ranked as the top three in regard to digital trade volume, maintaining a steady growth trend. The report was jointly released by the organizing committee of the Global Digital Trade Expo and the International Trade Center during the expo.

The report also noted that the digital transformation of international trade continued to accelerate between 2021 and 2023, with the proportion of digital trade in the overall scale of international trade increasing from 19.6 percent to 22.5 percent, with an average annual growth rate of 6.2 percent.

The scale of global digitally ordered trade exports also experienced steady growth, reaching $2.88 trillion in 2023, with the largest numbers recorded by China, the EU and the US.

In addition, the report highlighted that China is committed to building an open, innovative and shared digital economy ecosystem and providing institutional basic guarantees for cybersecurity, data security and personal information protection rights in the digital era.

Digital trade has become a transformative force that is reshaping the global economy, connecting the entire world and encompassing the seamless movement of goods, services and data across borders, driven by technological advancements, said Ashish Shah, director of country programs at the International Trade Center .

Shah highlighted that AI is quickly improving all parts of digital trade from supply chains to how businesses interact with customers, while the shift toward digital platforms, e-commerce, fintech, AI and data-driven trade opens new frontiers for businesses, particularly small and medium-sized enterprises, which now have the tools to engage with international markets.

“Governments, businesses, and international organizations must work together to create systems that encourage innovation, protect data privacy, and make sure the digital economy benefits everyone, especially SMEs in developing countries,” he added.

It is noteworthy that Chinese cross-border e-commerce platforms are ratcheting up resources to develop digital trade and help Chinese manufacturers and brands expand their presence in overseas markets. The move is expected to give a strong boost to the transformation of traditional industries by making use of digital and flexible supply chains.

For instance, fast-fashion online retailer Shein last year announced plans to extend its outreach to industrial belts in 500 cities in China. It hopes to facilitate the digital upgrade of more industrial chains, thereby helping them achieve on-demand supply in terms of production.

The company is accelerating steps to build a supply chain project in Guangzhou, Guangdong province, covering operations, warehousing, stocking, order-picking, distribution, logistics and delivery.