China Watch Vol. 4, No. 8, April 2024
Digital Globalization Trends and China’s Role
Wang Dong
Abstract
Digital globalization is a particular form of globalization that is currently undergoing further rapid development. Specifically, it is characterized by the comprehensive integration of digital technologies into the economy, society, and so on, leading to a closer connection between the virtual and real worlds. Compared to the traditional forms of globalization, digital globalization is faster, deeper, broader, and more direct in its development. In the context of unprecedented changes, digital globalization interacts with re-globalization, so that the two mutually drive and assist each other. Digital globalization promotes competition and upgrading of digital technologies, facilitates the popularization of digital industries and the digital transformation of traditional industries, and enhances global digital capabilities. Digital globalization creates opportunities and platforms for China to lead re-globalization. It empowers China in three dimensions: digital technology, digital industry, and digital capability. In the future, China should make people the center, enhancing their digital benefits and aiming to build a better digital life; it should actively promote digital globalization, and drive the process of re-globalization towards openness, inclusiveness, universality, balance, and win-win outcomes.
Current Trends in the Development of Digital Globalization
Currently, the trend of rapid development in digital globalization is becoming increasingly evident. The British sociologist Anthony Giddens pointed out that the globalization trend will not reverse, and that every day it is being reinforced. Giddens referred to the COVID-19 pandemic as the “digidemic,” believing that “no major epidemic has ever spread so quickly,” and that “our responses have been largely digitized as well.” During the pandemic, online education, telemedicine, remote work, and other new ways of doing things became part of people’s daily lives. The digital economy, represented by e-commerce, is flourishing, driving the recovery and development of the global economy. According to the latest China Mobile Internet Development Report (2022), as of the end of 2021, there were a total of 4.9 billion Internet users worldwide, accounting for 63% of the global population. In 2021, mobile Internet access traffic reached 2.216 trillion gigabytes (GB), a year-on-year increase of 33.9%. Average monthly mobile Internet data usage per user (DOU) reached 13.36 GB per user per month. In just the year 2020, the world gained an additional 117 mobile users. Global Internet bandwidth increased by 35% in 2020, which was the largest growth since 2013. The United Nations Conference on Trade and Development (UNCTAD) predicts that global monthly data traffic will increase from 230 exabytes in 2020 to 780 exabytes by 2026.
While the process of globalization continues to develop and deepen, digital globalization is emerging at a specific historical stage defined by information and data.
Digital technology drives digital innovation, and digital innovation creates digital value. As a special form of globalization, digital globalization involves the integration and application of various forms of high-tech such as blockchain technology, the Internet, mobile Internet, big data, cloud computing, and artificial intelligence. Its goals are interconnectedness, mutual benefit, and mutual assistance, and its most significant impacts are that it is driving a rapid transformation of the international economic structure towards a digital economy; it is also changing the composition of global participants in globalization and the related international economic rules system. Globalization’s inherent characteristics—“fluidity,” “flattening,” “polarization,” and “fragmentation”—are all reflected in digital globalization. In digital globalization, digital technology is fully integrated into the economy, society, and other areas, making the connection between the virtual world and the real world even closer. Globalization, for which data and information flow function as carriers, then develops in a more rapid, thorough, extensive, and direct manner, which will involve more countries and more people in the process of digital globalization. Data flow is no longer only serving the purposes of communication but is also changing traditional transaction types. It has opened up new markets and consumer groups to trade, and its economic value is unquestionable. Digital globalization is faster and more extensive, but at the same time, it is more disruptive and revolutionary.
The unprecedented opportunities created by digital globalization are providing digital conveniences for human life, digital channels for commodity exchange, digital efficiency for production, digital transparency for national governance, and digital platforms for international exchanges. Similarly, the risks and challenges brought about by digital globalization are also unprecedented. Some scholars believe that the essence of digital globalization is “comprehensive transcendence of space and time.” This also means that the rules and regulations of digital globalization require “comprehensive real-time tracking.” However, the fluidity and variability of data itself make the governance of digital globalization even more challenging. The core economies of digital globalization are digital value chains (DVCs). For individuals, the application and operation of DVCs may potentially infringe on personal privacy, thereby reinforcing the monopoly position of certain enterprises. For nations, the allocation of digital resources and the sharing of digital governance will be key issues in the competitive arena of digital globalization. Currently, the digital divide still exists, and as digital globalization continues to progress, issues of digital unfairness, inequality, and imbalance will become major obstacles to the digital globalization’s development.
The Interaction between Digital Globalization and Re-globalization
We define “re-globalization” as the reform process of globalization led by emerging market countries such as China, as well as the pattern upgrade and expansion effects resulting from this reform. On January 17, 2017, President Xi Jinping, delivering the keynote speech in the opening ceremony of the World Economic Forum Annual Meeting, said, “Economic globalization is an objective requirement of social productivity development and an inevitable result of technological progress,” and that it “provides strong impetus for world economic growth and promotes the flow of goods and capital, advances in science and civilization, and interactions among peoples of all countries.” President Xi Jinping emphasized, “Faced with the opportunities and challenges brought about by economic globalization, the correct choice is to fully utilize all opportunities, cooperate to address all challenges, and guide economic globalization towards a path of vitality, inclusiveness, and sustainability.” The report of the CPC to the 20th National Congress pointed out, “China adheres to the correct direction of economic globalization, promotes trade and investment liberalization and facilitation, and advances bilateral, regional, and multilateral cooperation.” China explicitly “opposes protectionism, the ‘building of walls and setting up of barriers,’ ‘decoupling and disconnection,’ unilateral sanctions, and extreme pressure.”
Another important characteristic of re-globalization is digitalization. Matthew J. Slaughter, a professor at Dartmouth College, refers to the global economy as a “perpetual motion machine of data.” According to statistics from the United Nations Conference on Trade and Development (UNCTAD), in 2018, the proportion of information and communication technology (ICT) product trade to total global merchandise trade was 12.31%, while in 2021, it reached 13.16%. In 2022, e-commerce experienced rapid growth globally, with online retail as a share of total retail increasing from 16% in 2016 to 21%. During digital globalization’s collision with re-globalization, digital globalization will sustain, consolidate, and elevate the level of openness, inclusiveness, universality, balance, and the win-win nature of re-globalization by continuously creating more digital dividends. In this sense, digital globalization and re-globalization will drive and support each other.
The geopolitical narrative and the digital narrative—two seemingly conflicting global narratives—have fundamentally altered the patterns of globalization over the past half-century. Since 2018, this binary interactive mode has undergone further changes, with the changing dynamics of the relationship between the United States and China being a significant influencing factor. Joseph S. Nye, Jr. points out that a rule-less, uncontrolled digital order poses significant risks, not only negatively impacting the Internet itself, but also potentially leading to dangerous and catastrophic consequences across various domains such as the economy, society, and geopolitics. This is the most fundamental issue that needs to be addressed in discussions about war and peace in today’s world.
Currently, the digital economy has become an important component of the Chinese economy. It not only serves as a strategic support for accelerating the establishment of a new development pattern in China, but also endows China with digital advantages for leading re-globalization. In 2021, the scale of China’s digital economy reached approximately 45.5 trillion yuan, or 39.8% of GDP. Meanwhile, China actively promotes international cooperation, pushing forward globalization with concrete actions and driving global governance system reform with wisdom. In November 2022, in a congratulatory message to the World Internet Conference in Wuzhen, President Xi Jinping proposed “accelerating the construction of a community with a shared future in cyberspace.” He emphasized: “China is willing to work with countries around the world to embark together on a path of global digital development, characterized by the co-construction and sharing of digital resources, a digital economy bursting with vitality, precise and efficient digital governance, development of a thriving digital culture, strong guarantees of digital security, and mutually beneficial digital cooperation, thereby accelerating the construction of a community with a shared future in cyberspace, and contributing wisdom and strength toward the development of world peace and the advancement of human civilization.” Since the digital economy will be the mainstream trend of the future, China needs digital technologies with core and innovative advantages, efficient and long-lasting digital industries (digitalized industries and the upgrading of industrial digitalization), as well as competitive digital capabilities, including a sizeable digital talent pool, a citizenry with a certain level of digital literacy, and a certain level of life quality. Furthermore, digital globalization can create opportunities for China to absorb core advantages in the three areas of digital technology, digital industry, and digital capability.
Firstly, digital globalization drives competition and advancement in digital technology. In cyberspace, digital technology’s cross-border operation is convenient; it reasonably fosters integration and incurs no additional costs for usage. Therefore, cross-border data transactions and cross-border data integration are becoming increasingly common globally. The rapid application of digital technology vertically (over time) and horizontally (across markets) is promoting the growth of international trade and investment, continuously expanding the benefits created by digital globalization. Generally speaking, the term “digital globalization foundation” has two levels of meaning. On one level, it refers to digital infrastructure: the quantity of broadband Internet access and number of mobile phone base stations, for example. On another level, it relates to the concepts, theories, logic, and algorithms behind 5G, cloud computing, artificial intelligence, and so on. China’s digital technology foundation is relatively solid. As of April 2022, China had built 1.615 million 5G base stations, becoming the first country in the world to construct a 5G network at scale based on the standalone networking model, with end users accounting for over 80% worldwide. Furthermore, the scale of mobile phone users and narrowband IoT users in China continues to expand, while IPv6 has entered its “traffic enhancement” era, with a continuous growth in active users. Research indicates that digital technology significantly enhances regional innovation efficiency through the accumulation of human capital, knowledge spillovers, and optimized allocation of innovation factors. Therefore, as digital technology is being driven by digital globalization and by leveraging China’s solid digital technology foundation, it is being applied across various sectors of the national economy. Digital agriculture, digital industry, and so on are being deeply integrated with China’s real economy, becoming new engines driving economic development.
Secondly, digital globalization drives the popularization of digital industries as well as the digitalization of traditional industries. Within the context of digital globalization, digital technologies and elements achieve cross-border integration, which promotes industrialization via data technologies and data elements, as well as the digitalization of traditional industries. Digital industrialization will break the boundaries of the three traditional industrial sectors, promote changes in industries in terms of form, organization, resource allocation, and function, achieve commercial digitalization, financial digitalization, and so on. Digitalized industries will integrate online and offline operations, fully leverage the substantial participation of digital platforms in the real economy to create value, foster new industries, new formats, and new models, and cultivate new ecologically inclusive types of physical enterprise. Meanwhile, digital technologies such as artificial intelligence, big data, and 5G will transform and upgrade entire industrial chains in traditional sectors, which will increasingly reflect the rapid, disruptive characteristics of digital globalization and gradually achieve digitalization. Digital globalization will bring fundamental impetus from within to transform China’s industrialization and traditional industries, particularly elements such as management modes, organizational structures, business philosophies, and governance methods, which will greatly enhance production capacity and operational efficiency.
Finally, digital globalization contributes to the enhancement of global digital capabilities. Digital globalization facilitates the flow of digital talents, and digital talents are the key elements to ensure the sustainable development of digital globalization. Talented personnel with professional digital skills who are engaged in digital product development and provision, together with people with composite talents that complement them, will achieve integration and mobility across borders and sectors. Digital practitioners will emerge in primary, secondary, and tertiary industries, and various aspects of society such as production, circulation, distribution, and consumption will also create new digital professions. In the various sectors of China’s national economy, they will all become active digital professional fields, and the benefits and efficiency thereby generated will further drive the rapid development of China’s digital economy. Digital globalization will propel China into becoming a highland for digital talents, which will further concentrate its native driving force for the development of the digital economy. Digital globalization not only provides a stage for digital talents, but also helps to enhance the digital literacy of people in various countries. This literacy is not only a core competency for their future national development but will also be a tangible reflection of the population’s overall standards. The global, widespread application of digital technology will be able to drive that technology’s comprehensive integration into people’s social interactions and daily lives.
It will promote innovation in areas like business management and public services; it will construct a vision in which “global villagers” can enjoy digital life and share digital well-being. It will ensure that countries and economies once on globalization’s periphery will be able to share globalization’s dividends and not miss out on the immense wealth that data flow can create. This inclusive sharing and fair globalization is precisely the China-led process of re-globalization.
China’s Vision and Responsibility in Digital Globalization
As digital globalization surges around the world like a great tide, China is taking action to contribute Chinese wisdom and strength to the world. The Fourteenth Five-year Plan for National Economic and Social Development and Long-range Objectives Through the Year 2035 includes a section entitled “Accelerating Digital Development and Building Digital China.” It elaborates on China’s vision for digital development with respect to the economy, society, government, and ecology. China’s advocacy for digital globalization entails a unified and standardized rules system, as well as an open, healthy, and secure digital ecosystem. The comprehensive development of a digital economy, society, and government is fundamentally aimed at serving the people. China’s vision of digital globalization always places the people at the center—“the people” is its core attribute—and its fundamental goal is to build a better digital life.
China’s concept and plan for digital development provide the international community with feasible options and pathways for the development of digital globalization. As a particular form of globalization, digital globalization is not a zero-sum game. The global economic community should actively participate in the governance of digital globalization and accumulate competitive advantages in digital globalization.
In the digital globalization era, both opportunities and challenges will exist for China-led re-globalization. Particularly in the face of pressures from the United States, including in high-tech sectors such as the digital industry, China should strengthen basic research in digital technology and actively establish a systematic narrative framework for digital discourse. On one hand, as we face the new “digital globalization” concept within the global system of knowledge, we must continuously strengthen the theoretical research on digital globalization and explore theoretical innovations related to globalization. We should focus on building China’s independent knowledge system in digital globalization, strive to form a Chinese-style narrative framework for digital strategies, master and enhance China’s powers in the discourse, definition, and influence in digital globalization. On the other hand, while we face the tide of digital globalization, China should stand at the commanding heights of global development, focus on the overall situation of digital globalization, and maximize the development potential of digital technology. Through a high level of opening up, China should promote digital industrialization and industrial digitalization, continuously enhance its digital capabilities, accumulate advantages in digital globalization, make innovations on institutions, norms, and rules for the development of digital globalization, advance reforms and improvements in digital global governance, and together create a beautiful digital future for humanity.
The author, Wang Dong, is a Professor of the School of International Relations, Peking University, and Executive Director of the Peking University Center for Sino-Foreign Cultural Exchange. This article was published in the second February 2023 issue of Renmin luntan: xueshu qianyan (Frontiers).
Translated by Thomas E. Smith