Gao Zhigang: The Logic and Practice of Digital Economy Empowering High-Quality Development
The digital economy is a new economic form brought about by a new round of technological revolution and industrial transformation. It is accelerating its deep integration with various fields of the economy and society, becoming a vital engine driving high-quality development. General Secretary Xi Jinping attaches great importance to the development of the digital economy, having issued a series of important instructions and directives, emphasizing the need to "accelerate the development of the digital economy" and "vigorously develop the digital economy." The Resolution of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Advancing Chinese-path Modernization, adopted at the Third Plenary Session of the 20th CPC Central Committee, proposed improving the systems and mechanisms for promoting high-quality development, and included accelerating the construction of systems and mechanisms to promote the development of the digital economy as one of its components.
In recent years, China’s digital economy has experienced rapid growth, with its scale expanding from 11.2 trillion yuan in 2012 to 53.9 trillion yuan in 2023. By 2024, the added value of core digital economy industries is expected to account for approximately 10% of the Gross Domestic Product (GDP). Facing the global trend of accelerating digital, networked, and intelligent development, it is necessary to firmly seize the new opportunities presented by the digital economy, promote the deep integration of the real economy [1] and the digital economy, comprehensively empower the high-quality development of the economy and society, and inject powerful momentum into accelerating the realization of Chinese-path modernization.
Embodying the Intrinsic Requirements of the New Development Philosophy
High-quality development is development that can effectively satisfy the people’s ever-growing needs for a better life; it is development that embodies the New Development Philosophy [2]. The New Development Philosophy profoundly answers a series of theoretical and practical questions concerning the purpose, power, mode, and path of development; it serves as the "baton" and "traffic light" guiding high-quality development. The digital economy, with data as its key factor, relies on digital technological innovation to improve total factor productivity, promote industrial synergy, facilitate green and low-carbon transformation, and deepen opening-up and cooperation through global digital trade, thereby helping to realize the sharing of developmental fruits. It can be said that the digital economy, to a certain extent, embodies the intrinsic requirements of the New Development Philosophy.
The digital economy drives innovative development. In the era of the digital economy, data has become a new type of productive factor. Digital technology combines with traditional factors such as land, labor, and capital to constitute a new paradigm of digital economic development driven by data and application scenarios. This penetrates all links of production, distribution, circulation, and consumption, driving a transformation in the quality, efficiency, and momentum of economic development, and promoting the continuous conversion of innovative "potential energy" into economic "kinetic energy." At the same time, the digital economy serves the digital transformation of the primary, secondary, and tertiary industries [3]. Through the deep empowerment of these three industries by digital technology, it promotes their movement toward digitalization and intelligence, improving industrial efficiency and product added value while enhancing total factor productivity. Furthermore, the development of the digital economy—especially digital platforms serving as new carriers of economic activity—can reduce barriers to the flow of innovation factors across space and industries. By breaking through temporal and spatial constraints, it accelerates the clustering, integration, sharing, and openness of innovation resources, thereby promoting socio-economic development through the efficient utilization of innovation factors. From the perspective of innovation, the digital economy is not a simple superposition of technical tools; rather, by activating the "innovation gene" of the economic system, it provides a powerful impetus for high-quality development.
The digital economy promotes coordinated development. Regarding regional coordinated development, the digital economy provides an opportunity for late-developing regions and enterprises to "change lanes to overtake" [4]. First, the development of the digital economy has derived new models and formats such as the platform economy, gig economy, and sharing economy. Through the commodification of data factors, industrial digitalization, service platformization, and experiential immersion, it promotes the diversified development of regional industries. Utilizing industrial internet platforms and digital supply chain platforms, it achieves data interconnection, capacity sharing, and flexible synergy between upstream and downstream enterprises in the industrial chain, boosting the rationalization and advancement of the industrial structure, effectively improving product quality and production efficiency, and continuously strengthening regional industrial resilience. Second, by using digital technology to systematically reconstruct traditional value chains, enterprises achieve a reshaping of business processes, organizational structures, and business models. For example, some enterprises choose to set up R&D centers and headquarters in talent-dense first-tier cities, while placing data centers and storage servers in the central and western regions where costs are lower. Optimizing the spatial layout of industry to improve efficiency and competitiveness helps form an efficient and rational regional division of labor. Additionally, the continuous improvement of rural digital infrastructure has shortened the geographical distance between urban and rural areas. E-commerce live-streaming provides low-cost marketing channels and trading markets for characteristic products from counties and villages, helping to increase farmers' income and narrow the urban-rural income gap. Evidently, through its permeability and empowering nature, the digital economy is smoothing the flow, exchange, and clustering of resource factors, helping to form a regional economic layout characterized by distinct local features, complementary advantages, and coordinated development.
The digital economy supports green development. Promoting the green transformation of development modes means breaking the path dependency on traditional development modes characterized by high energy consumption and high emissions. Alongside the rapid development of the digital economy, the use of the industrial internet, artificial intelligence, and digital twin technology enables deep monitoring and real-time data analysis of the entire process of R&D, design, production, and operation in industries such as manufacturing. This facilitates the dynamic optimization and intelligent regulation of production parameters, reduces energy and material waste, and significantly improves energy and resource utilization efficiency. This not only reduces waste and pollutant emissions at the end-of-pipe but achieves emission reductions from the source of production. Furthermore, the digital economy can empower regional and urban environmental protection work. By utilizing Internet of Things (IoT) sensors, satellite remote sensing, drones, big data, and blockchain, an integrated "sky-earth-sea" ecological environment monitoring network can be constructed. This achieves all-weather, all-territory real-time monitoring of ecological factors such as the atmosphere, water, soil, and forests, accurately identifying environmental pollution events and resolving damage to the ecological environment in a timely and efficient manner. In short, through data-driven and technology-enabled processes, the digital economy systematically optimizes and reshapes the production modes of economy and society across all links—source prevention, process control, and end-of-pipe governance—achieving a win-win for both economic development and environmental protection.
The digital economy advances open development. On one hand, it promotes trade digitalization. Enterprises use big data analysis to accurately understand overseas market demands and consumer preferences, reducing information asymmetry and transforming potential demand into actual demand. Digital technologies such as big data, IoT, and blockchain effectively improve the efficiency of cross-border payments and customs clearance, significantly lowering the threshold for "buying from the world and selling to the world." On the other hand, it facilitates precision in investment. Enterprises use big data analysis to predict global industrial dynamics, market potential, and risks, effectively guiding the orderly flow of capital and making cross-border investment more accurate and efficient. Consequently, the digital economy can optimize global resource allocation and construct new operating models for global trade and investment by reducing transaction costs and eliminating information asymmetry.
The digital economy assists shared development. The digital economy helps solve problems of regional disparities and unequal resource distribution, promoting equality of opportunity in fields such as education, healthcare, and employment. For example, new models and formats such as telemedicine and online education can bring high-quality educational and medical resources to more people, compensating to a certain extent for the lack of public service resources in underdeveloped areas. In terms of employment, the job-creation effect of the digital economy promotes the development of flexible employment and new forms of employment, deriving demand for new occupations and creating additional jobs. In short, by breaking geographical restrictions and promoting the equalization of basic public services, the digital economy allows more people to enjoy the dividends of technological progress, contributing to the promotion of common prosperity.
Implementation Paths for Empowering Economic Development
The digital economy aligns with the requirements of the New Development Philosophy and, in practice, empowers high-quality economic development by promoting industrial structural upgrading and optimizing factor allocation.
From the perspective of industrial structural upgrading, the digital economy plays a vital role in promoting the advancement of industrial structures, driving the industrial value chain from the low end toward the medium-to-high end. Specifically, relying on innovations and applications of digital technologies such as big data, IoT, 5G, and artificial intelligence, the digital economy—through the functions of "empowerment, transformation, substitution, and fusion"—breaks down industrial boundaries from both the supply and demand sides. This accelerates the mutual penetration and fusion of related industries, promotes the extension of industrial chains, gives birth to new industries and formats, and drives the upgrading of industrial structures toward high-technology and high-added-value directions, promoting the steady development of intelligent, integrated, and green industries. This process is also a shift from traditional factor-driven development to innovation-driven development, helping to realize the advancement of the industrial structure. Such advancement enhances total factor productivity by improving factor allocation efficiency, promoting technological innovation spillovers, driving green transformation, and strengthening economic resilience, thereby laying a solid foundation for high-quality economic development. Meanwhile, the advancement of the industrial structure will force traditional industries to accelerate their transformation and upgrading to better adapt to and lead new trends in consumption upgrades, thereby providing higher-quality and more diverse products and services, promoting a higher-level dynamic balance between supply and demand.
From the perspective of factor allocation, the digital economy has expanded the breadth and depth of the application of productive factors. Through the penetration and synergy of data factors, it has profoundly changed traditional factor allocation models and improved allocation efficiency. The key to optimizing factor allocation lies in accurately investing resource factors such as labor, capital, and technology into key areas to maximize the efficiency of factor utilization and achieve the optimal balance between input and output. On one hand, digital platforms can accurately match supply and demand, guiding the efficient flow of labor, capital, and technology across time and space. On the other hand, mechanisms such as algorithmic recommendations can quickly identify areas of factor mismatch, driving the transfer of existing factors to high-productivity sectors and forming a "data-driven + algorithm-optimized" allocation model. For example, digital finance, relying on digital technologies like big data, the internet, and cloud computing along with digital financial service platforms, can promote the rational allocation of financial resources on both the supply and demand sides, preventing mismatches caused by information asymmetry and improving resource utilization efficiency. Therefore, by optimizing factor allocation, the digital economy forms a virtuous cycle of "precise matching – efficiency improvement – value multiplication," providing strong support for promoting high-quality economic development.
Strengthening, Optimizing, and Expanding the Digital Economy
At present, the new formats and models birthed by digital technology are extensively penetrating every field and process of the economy and society, and their role in leading and supporting high-quality development is increasingly prominent. However, it must also be seen that the problems of China's digital economy development being "large but not strong" and "fast but not optimal" remain unresolved. This is prominently manifested in the imperfection of the digital economy governance system, insufficient innovation in key core technologies, and a relatively low degree of "integrated development of the digital and real economies" (实数融合). In the future, it remains necessary to grasp the new opportunities of the new round of technological revolution and industrial transformation, continuously strengthening, optimizing, and expanding the digital economy to further empower high-quality development.
Strengthen top-level design and the construction of systems and mechanisms. Coordinate planning around the construction of a Digital China, clarifying development priorities, spatial layouts, and timetables/roadmaps. While accelerating the digital and intelligent upgrading of traditional infrastructure, proactively deploy new types of infrastructure represented by 5G, gigabit optical networks, big data centers, IoT, and the industrial internet, and enhance the capability to tackle key core technologies. Establish cross-departmental and cross-regional collaborative governance mechanisms, break down "data silos" and policy barriers, and promote the integration, openness, and sharing of data resources. Accelerate data legislation; define rules for data ownership, circulation, transactions, and security; explore cross-border data flow rules compatible with digital service trade; establish and improve market rules for data factors; and expand application scenarios for the digital economy. Strengthen the cultivation of digital-skilled talent, improve the digital literacy and skills of the entire population, and form a collective force to promote the development of the digital economy.
Advance breakthroughs in key core digital technologies. Build a self-reliant and strong system for digital technology innovation, further clarify the main directions for digital technology innovation, and formulate plans for breakthroughs in key core digital technologies. Provide guidance on future development directions and policy support for technical innovation subjects such as enterprises, scientific research institutions, and universities, and increase resource allocation and financial support for leading enterprises in the digital economy. Strengthen supervision and management over fiscal support, financial support, talent cultivation, intellectual property protection, the transformation of scientific and technological achievements, and the optimization of the environment for innovation and entrepreneurship. Establish examination and protection mechanisms for intellectual property in new technologies, formats, and models in the digital field to better mobilize the enthusiasm of innovation subjects and fully stimulate innovative and creative vitality.
Accelerate the pace of digital industrialization and industrial digitalization. On one hand, vigorously promote digital industrialization. Focus on fields such as integrated circuits and advanced computing to accelerate the construction of digital industry clusters with international competitiveness. Centered on frontier directions such as quantum information, next-generation artificial intelligence, and 6G, strengthen basic research and breakthroughs in key technologies, promote the deep fusion of innovation and industrial chains, actively layout and cultivate future industries, and shape new advantages in the next round of industrial competition. On the other hand, deeply advance industrial digitalization. Rely on digital technologies such as AI, big data, and IoT to carry out full-chain digital transformation of the primary, secondary, and tertiary industries, guiding digital technology to continue exerting its force in fields such as intelligent manufacturing, smart agriculture, and digital finance. By creating a group of benchmark enterprises for digital transformation, typical application scenarios, and industry solutions, drive the overall digitalization of the upstream and downstream of the industrial chain, comprehensively enhancing the production efficiency, innovation capacity, and core competitiveness of traditional industries, and providing solid support for promoting high-quality economic development and constructing a modern industrial system.