China has drawn worldwide attention in recent years for its rapid digitalisation, which happens to overlap with the three focul points of Digital India.
On 1 July 2015, India embarked on a master-plan named Digital India to transform itself to “digitally empowered society and knowledge economy,” with three things in focus. These were — digital infrastructure, digital governance and services and digital empowerment of citizens. Various policy and investment measures have been undertaken with notable accomplishments.
On the other side of the Himalayas — China, as a forerunner — has drawn worldwide attention in recent years for its rapid digitalisation, which happens to overlap with Digital India’s three focul points. While China can be inspiring to India’s ongoing efforts, its rapid digitalisation comes with both dividends and side effects.
The dividends are obvious: for instance, the applications seen with the rise of IT companies such as Alibaba, Tencent and Jingdong. In 2017, China’s digital economy contributed to 55% of the country’s GDP growth — ranking as no. 2 in the world — only second to the US. 11 million small and medium enterprises have sprung up in Alibaba’s e-commerce platform, creating 30 million jobs in the last decade. In terms of governance, China’s own social media company, Weibo, has become an indispensable component of Chinese political life where netzines can regularly and conveniently access government services — and engage to complain, request and make suggestions.
In 2017, China’s digital economy contributed to 55% of the country’s GDP growth — ranking as no. 2 in the world — only second to the US.In the ongoing anti-corruption movement, discipline commissions have responded to netizens complaints online. This has even resulted in the stepping down of ministers. Chinese daily life has revolutionised to an unimaginable convenience, owing to the booming digitalised public and private services.
The side effect, however, is normally shadowed from the discourse of successful digitalisation. One emerging issue is that of the digital divide arising out of societal inequality, commonly faced in developing countries. This is because digital dividends are not equally shared across urban and rural China, although rural China has been more digitalised in the past years.
Digital dividends are not equally shared across urban and rural China, although rural China has been more digitalised in the past years.The digital divide in China has emerged in few urban clusters like in Beijing and Shanghai — and in rural areas like in Tibet, Qianghai, Ningxia and Xinjiang.
As per the Tencent measurement, China’s digital Gini coefficient in 2018 was 0.59, marking a high level of digital inequality.
As a cornerstone of digitalisation, digital accessibility varies explicitly between urban clusters and rural areas. By December 2018, the Internet penetration rate in urban areas topped at 74.6%; while, in rural areas, it only rose to 38.4%. More strikingly, there are still 562 million people — mostly distributed in rural areas — who are left out of digital inclusion. For the people who have been left out, a survey reveals that there are two major reasons for the lack of digital knowledge: inadequate skills (54.0%), and low levels of education (33.4%).
Owing to digital applications, digitalisation of public and private services in urban China (including online transactions) has enabled urban residents to spare more time for economic activities. In contrast, many such services in rural China are still offline. Taking digital public service as an example, per the Tencent measurement, the digital public service index of the urbanised East China is 1.366, while rural West China is just 0.695.
Owing to digital applications, digitalisation of public and private services in urban China (including online transactions) has enabled urban residents to spare more time for economic activities.Beside the rural-urban divide, huge gaps exist within urban East China, where a few tier-1 urban clusters, on an average reach 7.2 — far above other regions. In addition, given the online services that help in accumulation of citizen-related Big Data, governments of Beijing, Shanghai and other tier-1 cities are able to realise meticulous administration that address public demands with precision and timeliness.
On one hand, while the digital divide is a manifestation of long-standing rural-urban inequality (because of differences in policy effectiveness and levels of industrialisation); on the other, there is an overall widening of rural-urban socio-economic gaps.
Addressing digital inequality is a key objective of the Chinese government. The very first policy paper of 2019 — issued by the Communist Party of China (CPC) and the State Council — proposed the ‘Digital Village strategy.’ Various policies have been set in motion such as e-commercialisation of villages, agricultural application of the Internet of Things, Big Data in agriculture-industrial chain, digitalised public service, together with government-led investments and construction in software and hardware infrastructure. Technology and intellectual support from IT companies and research institutes are also in the works.
Addressing digital inequality is a key objective of the Chinese government.The very first policy paper of 2019 — issued by the Communist Party of China (CPC) and the State Council — proposed the ‘Digital Village strategy.’With digital accessibility, the Chinese government is working towards connecting 30,000 villages with 4G network, and 3% villages with broadband Internet. Optimisation of existing Internet infrastructure is also ongoing.
Local governments and university-educated village chiefs have — on a voluntary basis — been tasked to train farmers in running agricultural e-commerce ventures that can eradicate market barriers of sale of agricultural products — and thereby provide the necessary digital literacy. A new phenomenon called ‘Taobao Village’ — which stands for villages profiting from Alibaba e-commerce platform — was even endorsed by the World Bank.
On the issue of digital application, Big Data generated from agricultural sensor systems is integrated into the rural areas to modernise agriculture.
As major developing economies, both India and China are facing enormous social inequities. With the two countries moving rapidly towards digitalisation, a new dimension of inequality — manifested by long-standing socio-economic gaps — can be seen developing across the urban and rural populations of the two countries. It is likely that the situation will continue for some time; given the immigration influx to urban areas and lack of digitalisation in the rural areas. It is both an expensive and difficult proposition because of structural, geographical and cultural constraints. Addressing social grievances among the rural population and low-income urban residents is possible to a greater impact only when there is effective digitalisation. India needs to pay attention to this ongoing scenario. Drawing applicable lessons from China’s fore-running practice can be beneficial.
Hao Nan is a research intern at Observer Research Foundation. He is also a Young Leader Fellow at the Pacific Forum (US), and master’s student at Lee Kuan Yew School of Public Policy, National University of Singapore.
Government Document
Central Committee of Communist Party of China and the State Council of China, Several Opinions on Prioritizing Development of Agriculture and Villages and Optimizing Three Rural Issues, 19 February 2019, China Central Government Website.
Guizhou Provincial Government, 2018 Guizhou Provincial Government Annual Report, 2018.
Research Report
China Internet Network Information Centre, Statistic Report on China Internet Development (the 42th edition), August 2018,
Tencent Research Institute, China Internet+ Index Report 2018.
Bert Hofman, The Taobao Villages as an Instrument for Poverty Reduction and Shared Prosperity, 29 October 2016.
Academic Paper
Longmei Zhang and Sally Chen, China’s Digital Economy: Opportunities and Risks, International Monetary Fund (IMF), Working Paper, WP/19/16, 17 January 2019.
Liu Jun, Zhang Lei, Yu Liping, Research on Digital Divide Assessment in China: Based on Perspective of Mobile Communication Tools, Statistics and Decision, Vol.5, 2019.
Zhang Yue, Zhao Jingfeng, The Spatial Pattern Evolution of China’s Inter-provincial Digital Division and Its Driving Force Analysis, Journal of Shaanxi Academy of Governance, 2018(04).
News Report
Xinhua, China Daily, Wuzhen shows glimpse of a digital future, 13 November 2018.
Zhu Lingqing, China Daily, Top 10 countries in internet development, 10 November 2018.
Zhang Hong, South China Morning Post, How Chinese reporters have turned to weibo to expose corruption, 30 July 2013.
China Economy Website, the Release of China Rural Internet Use Report 2017, 29 June 2018.
China.org.cn, Beijing to set up big data platform for urban management, 31 January 2019.
Chen Weiwei, China’s Urbanization Rate Has Reached 58.52%, Xinhua Net, 4 February 2018.
Wang Zheng, Han Xin, China has achieved 96% fibre-optical coverage of villages and 95% coverage of 4G network, China Central Government Website, 14 October 2018.
Digital Gini coefficient is coined by Tencent Research Institute and inspired by the Gini coefficient in economics.
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