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Shaping an inclusive digital economy

By HANY BESADA | China Daily Global | Updated: 2024-03-05 08:25
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LI MIN/CHINA DAILY

China, with its technological prowess, can play a major role in leveraging South-South digital cooperation for sustainable growth

South-South cooperation represents a fundamental pillar in the modern architecture of international collaboration, reflecting the rising ability of the Global South to foster effective development strategies. Within this new paradigm, the burgeoning digital economy is a critical area where cooperative efforts can translate into significant strides toward inclusivity and balanced growth. China, with its rapid technological advancements and commitment to collaborative growth, stands central in discussions about leveraging South-South cooperation to build a more inclusive digital economy.

China's contribution to the digital economy, through South-South cooperation, becomes evident by examining the dramatic evolution within its borders. With over 989 million internet users as of 2021, China's digital economy generated approximately $5.4 trillion, accounting for 36.2 percent of its GDP, in 2020, according to the China Academy of Information and Communications Technology. These figures not only encapsulate China's internal success but also its potential as a blueprint for developing countries aiming to digitalize their economies.

The Belt and Road Initiative showcases China's commitment to strengthening digital infrastructure globally. Through the BRI, China has been instrumental in building fiber-optic networks, e-commerce platforms and smart cities in partner countries, thereby laying the groundwork for a more connected digital landscape. According to the World Bank, BRI-related projects have the potential to lift 7.6 million people from extreme poverty in partner countries, with digital economy initiatives playing a significant role.

Moreover, the role of China in helping other Global South countries navigate the complex terrain of the World Trade Organization rules on digital trade is significant. By promoting a common stance on digital trade policies and rules, China and its South-South cooperation partners can ensure a regulatory environment that supports the growth of their digital economies and protects their interests.

China's influence in the global digital ecosystem extends to human capital development, a component critical to economic inclusivity. Chinese firms and educational institutions are active in technological knowledge transfer and the provision of digital skills training in countries across Africa, Asia and Latin America. Huawei's "Seeds for the Future" program, for instance, has been instrumental in providing information and communications technology training to students worldwide, fostering the next generation of digital experts.

Investment in digital startups propels innovation and ensures a more diversified and inclusive digital economy. China leads as a venture capital investor in many emerging economies, with its investments constituting a large share of the total foreign direct investment in many of these countries. A report by the China-Africa Research Initiative at the Johns Hopkins University School of Advanced International Studies found that Chinese investments in Africa, including tech start-ups, have increased dramatically, encompassing areas such as fintech, e-commerce and logistics.

China continues to play a crucial role in shaping the digital landscape of developing countries. The establishment of the Global Development and South-South Cooperation Fund is a testament to China's dedication to supporting sustainable development in Global South countries using digital technology. Digital health initiatives during the COVID-19 pandemic exemplify China's role further, where Chinese tech giants provided support in the deployment of health information systems and telemedicine solutions in several countries, enhancing healthcare accessibility and resilience.

Furthermore, China's digital currency efforts, such as the pilot Digital Currency Electronic Payment system, provide insights into how digital financial services can foster financial inclusion. China's experience can guide other countries in the Global South in developing their digital currencies, minimizing transaction costs and enhancing unbanked populations' access to financial services. To further cement China's role in South-South cooperation within the digital economy, the country can consider creating more scalable and flexible models of collaboration, such as digital innovation hubs, co-development of open-source technologies, and cross-border incubation programs for tech startups.

The significance of environmental sustainability within the context of a digital economy should not be overlooked. China's push toward greener technology and standards, aligned with its 2060 climate-neutral goal, sends a powerful message on sustainable digital development practices — a crucial lesson for South-South cooperation.

However, data on South-South cooperation specific to the digital economy remains fragmented. Future coordinated efforts to systematically collect and analyze data will be pivotal to understanding and maximizing the benefits of such cooperation. Initiatives such as the Digital Development Partnership hosted by the World Bank aim to centralize knowledge sharing and capacity-building efforts in this vein.

As South-South cooperation continues to expand, the international community must strive to create an environment conducive to the dissemination and equitable use of digital technologies. China's role in this ecosystem will undoubtedly be nuanced, reflecting its own development trajectory and economic strategies. The onus lies with participating countries to navigate these waters strategically, ensuring that technological transfer underscores inclusive growth and sustainable economic empowerment.

China's participation in South-South cooperation signifies a promising doorway to bridging the digital divide and accelerating economic growth and development within the Global South. The digital economy, while posing certain challenges, remains a fertile ground for cooperative initiatives that can lead to shared prosperity and accelerated progress toward achieving the United Nations Sustainable Development Goals. As the landscape evolves, it will be important for China to remain cognizant of the broader implications of their policies and practices, to foster a transparent, fair and mutually beneficial model of South-South cooperation in the digital era.

In conclusion, South-South cooperation holds the promise of weaving a more inclusive digital tapestry for economies of the Global South, provided the pillars of sustainable growth, equity and mutual benefit are upheld. China, with its technological prowess and outreach, is poised to play a central role in this transformative process, provided that partnering nations ensure cooperation aligns with their developmental goals. By learning from China's digital economy journey and adapting strategies to local contexts, the Global South can leverage technological advancements to carve paths toward inclusive prosperity.

The author is a senior research fellow at the United Nations University-Institute for Natural Resources in Africa and a senior fellow at China Agriculture University's China Institute for South-South Cooperation in Agriculture. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.

 

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