China application to join the Digital Economy Partnership Agreement (DEPA) is seen as a key step towards gaining a say in the global rule-making process for the Digital Economy.
This is another move by China to gain the initiative ahead of the US in the Asia-Pacific region, following China's application to join the Comprehensive Progress Agreement (CPTPP) in September.
The official statement from China's Ministry of Commerce reads: "The application to join DEPA is in line with China's direction of further deepening domestic reform and expanding high-level opening-up. It will help China strengthen cooperation in the digital economy, promote innovation and sustainable development with other members in the new development landscape."
Ahead of China's formal application, Chinese leader Xi Jinping announced the application in a video address to the GROUP of 20 summit on Oct. 30, saying that "China attaches great importance to international cooperation in the digital economy" and that "we should share the responsibilities of the digital era."
What kind of agreement is DEPA?
Launched by Singapore in 2019 and signed online with Chile and New Zealand on 12 June 2020, THE DIGITAL Economy Partnership Agreement (DEPA) is the world's first international agreement for digital economy cooperation. The agreement enters into force in Singapore and New Zealand on 7 January 2021.
Singapore website by the ministry of trade and industry, according to the agreement aims to establish new ways in the digital trade issues and cooperation, promote the interoperability between different structures, solve new problems in the digital, to provide convenience for the digital trade and made it possible to data flow, but also for different data system to establish mutual trust.
The agreement covers industry issues such as electronic payments, digital authentication and protection, AI AI regulation, cybersecurity, data management, transparency and openness, as well as social concerns.
Prior to China's application, a number of countries, including Canada, expressed interest in joining the DEPA, while South Korea formally applied to join in October 2020.
According to the Website of New Zealand's Ministry of Foreign Affairs and Trade, DEPA is a "living" open agreement open to all WTO members who meet the criteria.
Us and China compete for digital economy
In the half-century since its inception, the Internet has had a growing social and economic impact and now has the power to shape the global economy and politics. As a result, both capitalist liberalism in the United States and "characteristic socialism" in China have taken regulatory and anti-monopoly measures against digital platform giants at home in recent years.
On the other hand, competition between major powers, especially the United States and China, is becoming increasingly fierce in the field of digital economy.
In September 2020, China issued the Global Data Security Initiative, which called on countries around the world to "commit to maintaining an open, just and non-discriminatory business environment" and "have the responsibility and right to protect the security of important data and personal information related to their national security, public security, economic security and social stability."
China's global Data Security Initiative follows former US President Donald Trump's Clean Network initiative, which imposed restrictions on Chinese telecom operators, applications, cloud systems, cables, and more on the grounds of "safeguarding THE security of US assets".
The "Net Net" initiative is seen as part of a "technological iron Curtain" designed to completely exclude China's high-tech sector from the future international digital economy, which will be the biggest and most critical driver of the world economy in the next decade or two.
Who will dominate the digital economy?
It is widely recognized that to win the dominance of the future world economy, we must first win the dominance of the digital economy.
Although the current Biden administration has increased contacts with China, and its blockade action against Chinese tech companies, especially Huawei, recently ended with the return of Huawei's chief financial officer Meng Wanzhou to China, the US has not stopped its restrictions on Chinese tech companies.
In late October 2021, the US revoked China Telecom's licence to operate in the US, citing "national security" concerns. China Telecom must wind up operations in the U.S. within 60 days.
In June, U.S. President Joe Biden put 59 Chinese companies on a blacklist of investments by U.S. individuals and institutions.
China has made digital infrastructure an important part of its foreign aid in the face of restrictions on its technology sector by the United States and the West. Xi jinping said at the G20 summit that the world should help developing countries bridge the "digital divide" against the backdrop that China has promoted its digital technology to belt and Road countries.
The article on the official website of the China National Committee for Pacific Economic Cooperation said That China was "enabling all friendly members of the DIGITAL economy community to use 5G, AI, Internet of Things and cloud computing infrastructures proven in China's large market to help member countries develop their own local digital economy application ecosystems."
According to the Digital China Development Report (2020) released by the Cyberspace Administration of China in July 2021, China had signed mous on digital Silk Road cooperation with 16 countries by the end of 2020, and established bilateral cooperation mechanisms on Silk Road e-commerce with 22 countries.
At this stage, including the organization for economic cooperation and development (OECD), the asia-pacific economic cooperation (APEC), the group of 20 (G20) and the world trade organization (WTO), and other institutions are actively coordinated governance and the rule of international mechanism cross-border data flows, but to build on the data of the global economy standard management system will take time.
While the US and EU are moving in separate directions, China, the world's second largest digital economy country, has applied to join the DIGITAL Economy Partnership Agreement (DEPA) to "contribute China's proposal to global digital economy development and cyberspace governance," as the Chinese authorities put it.
The race to dominate the digital economy has already begun and is expected to intensify.
The Center for Strategic and International Studies (CSIC), a US think tank, published an analysis in August 2021 titled "Digital Governance: Time for US leadership again".
It argues that US leadership in global digital governance is in the national interest. "If China wins the race to institutionalize global digital economy governance and technology standards, the world will face a sharp decline in individual freedom and an increase in oppression, and innovation and competition will suffer," the article warned.
What is the digital economy?
The digital economy refers to economic activity generated by billions of daily online connections between people, businesses, devices, data and processes. Hyperconnectivity is the backbone of the digital economy, referring to the growing connectivity between people, institutions and machines enabled by the Internet, mobile technology and the Internet of Things (IoT).
The digital economy is disrupting and undermining traditional ideas about how businesses structure themselves, how companies interact with each other and how consumers access services, information and goods.
The use of data is changing business models, generating new products and services, and fostering new management cultures.
Uber, a taxi company, for example, doesn't own any cars; Facebook, the social platform, doesn't produce any content; Alibaba, an e-retailer, does not keep its own inventory; AirBnB, the world's largest provider of home stays, does not own any real estate......
In the current COVID-19 outbreak, many countries have begun to collect personal data such as health and geographical location to fight the pandemic, including tracking the trajectory of infection and mapping the distribution of infected people.
As UN Secretary-General Antonio Guterres said, "Data has become an important strategic asset for creating private and social value."
Who is the digital economy powerhouse?
According to the digital Economy Report 2021 released by the United Nations Conference on Trade and Development (UNCTAD) in September 2021, the United States and China lead the world both in terms of their ability to participate in and benefit from the digital economy.
'Half of the world's superscale data centers are in the United States and China, which have the highest 5G penetration, accounted for 94 percent of total AI startup funding in the past five years, 70 percent of the world's top AI researchers, and nearly 90 percent of the market capitalization of the world's largest digital platforms,' the report concludes.
The US and China are home to the world's largest digital platforms: Apple, Microsoft, Amazon, Alphabet(Google) and Facebook in the US, and Tencent and Alibaba in China.
These companies "are no longer just digital platforms, but have become global digital enterprises with global financial, market and technology power and vast amounts of user data," the report argues.
Another region playing a leading role in the global digital economy is Europe.
According to the White Paper on Global Digital Economy released by The China Academy of Information and Communications Technology in August 2021, the DIGITAL economy of the United States continues to rank first in the world, with a scale of 13.6 trillion US dollars in 2020. China is second in the world with $5.4 trillion. Germany, Japan and the United Kingdom ranked third to fifth.
