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Communications of the ACM

China Region special section: Hot topics

Innovations and Trends in China's Digital Economy

boy holding mobile phone, map of China background, illustration

Credit: Getty Images

China is both a global leader in e-commerce and the world's manufacturing powerhouse. And yet the development of an industrial Internet is far behind the booming consumer Internet, which creates a tremendous divide between consumer demand and the supply side. A distinctive feature of the recent surge of digital economy in China is the strong push from the rising consumer demand for quality products, which has a major impact on the industrial digitization.4

China has over 1.3 billion mobile Internet users, the largest online shopper population, the largest amount and highest ratio of mobile payment in the world.1 According to China Statistical Yearbook (CSY) 2020, 25% of the national retail took place online in 2019, amounting to $1.8 trillion,3,11 over 90% of which was via mobile payment.11 These forces have given rise to Internet giants such as Alibaba, Tencent,, and Xiaomi, which have not only shown leadership in global digital innovation8 but also created a digital ecosystem in China. For example, the digital economy based on the Alibaba ecosystem accounted for over 69 million jobs.12 As a result, the digital economy in China has been growing rapidly, at an annual rate of 16.6%13 between 2015 to 2020, the fastest in the world, and its size, ranked second in the world behind the U.S.,4 exceeded $6.07 trillion or 38.6% of the GDP in 2020.6


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