Building a Digital China
Reflections and analysis on China's newest plan for digital development
On February 27, China’s Central Committee and State Council issued its “Plan for the Overall Layout of Building a Digital China.” That same day, the central government published a summary of the plan on its website.
(DigiChina recently published a full English translation of this summary. Obligatory disclosure: I contributed to it. )
“Building a Digital China is an important engine for advancing Chinese-style modernization in a digital era; it is a powerful support in the construction of China’s new competitive advantage.”
The Plan crystallizes the central government’s thinking on the “Digital China” concept, which has gradually developed following its emergence in the 13th Five-Year Plan back in 2016. If you’re looking for a roadmap for China’s upcoming digital development, this is the policy document to focus on. To quote the government summary, “Building a Digital China is an important engine for advancing Chinese-style modernization in a digital era; it is a powerful support in the construction of China’s new competitive advantage.”
In this article, we’ll delve into…
The Plan’s key points
The background of the “Digital China” concept
Reactions to the Plan, ranging from market responses to third-party analysis
The Digital China Plan: Quick Summary
First, a disclaimer. The Plan does not propose a radical shift in China’s digital development. Rather, it provides a framework for contextualizing the roles of digital infrastructure, the data economy, and other policy buzzwords from recent years. The Plan clarifies the ideological framing around China’s national digitalization project, and it pairs this framing with concrete targets.
Specifically, the Plan establishes two clear landmarks for the construction of a Digital China.
2025: Digital Infrastructure & Data
First, the Plan specifies that the foundation for a Digital China should be completed by 2025. Among other things, this encompasses the work of building an interconnected and efficient digital infrastructure, expanding data resources, and increasing government digitalization.
According to the plan, building this foundation consists of two key aspects: “opening up the main arteries of digital infrastructure” and “unclogging the circulation of data resources.”
Digital infrastructure work includes coordinated 5G and gigabit fiber optic internet expansion, IoT, and boosting the work being done for the current Eastern Data Western Computing project.On the data side, priorities include establishing a system for national data administration and promoting the use of combined public data resources.
If this week is any indication, we can expect to see some concrete policies coming out of the principles outlined in the Plan. Remember that line about national data administration? China has already announced its intention to create a government agency to handle that.
To quote the Wall Street Journal in the article linked above:
China is set to create a new government agency to centralize the management of the country’s vast stores of data, as Beijing seeks to address data-security practices by businesses and streamline its regulatory structure.
…The plan would bring a more streamlined approach to data governance, establishing a single go-to regulator on data-related issues as businesses deal with an increasing number of rules and laws surrounding data.
2035: Global Digitalization Leader
The Plan’s second milestone is 2035. By this year, the Plan projects that China will be a world leader in digitalization. This assumes, of course, that the other goals outlined in the Plan have come to fruition.
In addition to creating the infrastructure for a Digital China, as discussed above, the Plan stresses the importance of empowering economic and social development, strengthening the “crucial abilities” of a Digital China (namely, a self-sufficient system of tech innovation and trustworthy data security barriers), and building an environment more conducive to digitalization.
The Plan underscores the necessity of implementing these efforts in a comprehensive and measured manner. (Hence the reason the Plan was drawn up in the first place!) Again, expect to see the key points of this document to be fleshed out through concrete policies over the coming years.
The 2522 Framework
According to the Plan, the Digital China initiative will proceed according to the “2522” framework. The framework consists of four points — one for each number — providing a neat summary of the themes discussed above:
2 foundations — digital infrastructure and digital resource systems.
5 integrations— integrating technology with China's "five-sphere integrated plan" of coordinated development of its economy, politics, culture, society, and ecological civilization.
2 great abilities — technological innovation and data security.
2 environments — domestic and international digital development.
A Few Historical Notes on “Digital China”
The concept of a “Digital China” did not emerge overnight. For one thing, it was a highlight of 2016’s 13th Five-Year Plan, which stressed the importance of “accelerating the building of a Digital China.”
Digging even further back, we find the Digital China Institute at Peking University (北京大学数字中国研究院). Established in 2004 under the direction of a whole host of government entities, including the National Development and Reform Commission (NDRC) and Commission for Science, Technology, and Industry for National Defense (COSTIND), the institute has specialized in various projects related to the Digital China initiative.
The Digital China concept can also be linked to the “Digital Fujian” program that began under Xi Jinping’s eye back in 2000, when he was still governor of the province. According to China National Radio, Xi headed the leading small group (LSG) for the Digital Fujian initiative, which designed comprehensive plans for developing Fujian through digitalization, visualization, and the implementation of networking and smart technologies.
The Digital Fujian program has continued to make progress over the last two decades. According to a 2022 People’s Daily article published on the central government website, Fujian “has built a model for a Digital China” and has been particularly effective at achieving digitalization at the government level. Fittingly, Fujian has hosted the Digital China Summit — a government-held event dedicated to exploring the Digital China concept — since its inception in 2018.
Ripples and Reactions
How have markets, businesses, and other entities reacted to the announcement of the plan?
On March 1, China Unicom, China Telecom, and China Mobile all either attained or approached historic highs on the Shanghai Stock Exchange. Presumably, this is linked to the Plan’s call to strengthen China’s digital infrastructure.
IDC: 4 Effects on the ICT Market
The International Data Corporation (IDC) published its initial analysis of the Plan. They predict that this will have four major effects on China’s ICT market:
The plan will make the value of digital technology even more apparent, boosting the ICT industry’s confidence in development.
There are now unprecedented commercial opportunities in digital infrastructure. This will continue to be good news for big data and AI enterprises.
The topic of digital sovereignty will continue to grow deeper and more detailed. The digital security market will continue to grow quickly.
The Plan will promote mutual benefits in international cooperation, which bodes well for the global arrangement of China’s ICT enterprises.
Good News for Digital Security
Zhou Hongyi, co-founder, chairman, and CEO of Qihoo 360 and CPPCC member, spoke to Time Finance about the effects of China’s national digitalization strategy.
As a key figure in digital security, Zhou stated that this is the first time that building trustworthy and controllable digital security barriers has been included among Digital China’s “key capabilities,” pointing to this as an extremely positive sign for the digital security industry.
Self-Sufficiency in the Age of ChatGPT
The Plan’s stated emphasis on self-sufficiency in technological innovation echoes the Chinese government’s repeated assertion of the need for “self-reliance” (自立自强) in science and technology.
Just a few days before the release of the Digital China plan, China’s Minister of Science and Technology Wang Zhigang made statements calling for a high level of national self-reliance in science and tech. “Positioning enterprises as agents for innovation in science and technology is a requirement for building a strong scientific and technological nation,” Wang stated, emphasizing that this has been the MoST’s stance for years.
Fast-forward to March 5, during an interview with the press at the Two Sessions. Wang Zhigang went further and said that the Ministry of Science and Technology would increase its support of China’s businesses in this regard. “We must strive to create an ecosystem for supporting enterprises to become agents of scientific and technological innovation,” he stated.
Wang Zhigang’s tone grew somewhat more cautious when the topic of ChatGPT was raised and he discussed China’s plans for AI development. While commercial enterprises such as Baidu, JD.com, and Alibaba have confirmed that they’re working on ChatGPT-like software, Wang simply stated that China had spent a great deal of time on this issue, pointing to the government’s initiative in publishing its “Eight Principles” (八项原则) for AI administration, as well as its own domestic applications of artificial intelligence.
Without delving too deep into the future of ChatGPT-inspired generative AI in China (expect this in an upcoming article), we can likely expect to hear more about regulations on ChatGPT-like AI models and software before we get a clearer picture of the role this technology will play in China’s national digitalization project.
Baidu Baike: 北京大学数字中国研究院
China National Radio: 《什么是数字中国？如何建设数字中国？请看人邮记者解析》（Apr. 2018)
Cyberspace Administration of China: 《“十三五”规划纲要：实施网络强国战略 加快建设数字中国》(Mar. 2016)
Gov.cn: 坚定不移推进数字福建建设 高标准打造高效协同数字政府 (Aug. 2022)
Gov.cn: 加快实现高水平科技自立自强——科技部有关负责人谈新举措新进展 (Feb. 2023)
Gov.cn: 中共中央 国务院印发《数字中国建设整体布局规划》(Feb. 2023)
IDC China: 【IDC研究精选】《数字中国建设整体布局规划》对中国ICT市场的四大积极影响（附限时免费资料）(Mar. 2023)
ijiwei: 科技部部长在“部长通道”上借梅西解释ChatGPT：要注意趋利避害 (Mar. 2023)
Jiemian: 数字中国建设预期不止，中国联通涨停，三大运营商A+H集体走高 (Mar. 2023)
Times Finance: 专访全国政协委员周鸿祎：数字安全是数字中国建设的底板 (Mar. 2023)
Still curious? Here are some recommended reads on the topics discussed in this article.
On Digital China
Want another take on the Digital China plan? Check out this recent article by DigiChina, who also published the translation of the plan summary I mentioned earlier.
Last month Kevin Xu published an article in his newsletter Interconnected about how the “AI arms race” launched by ChatGPT’s emergence has led to a scramble for Chinese companies like Baidu to produce their own killer AI software.
I suspect that some of my readers have already come across this article. If not, I recommend checking it out.
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Translator’s note: The phrase 五位一体, often translated as the “Five-sphere integrated plan,” originates from the 18th National Congress in 2012.