China’s rapidly evolving digital economy spurs debate about tax, welfare system
- China’s government is being urged to rethink the way it calculates key indicators to ensure they are appropriate for the modern digital economy
- Analysts say things like China’s growing flexible workforce has implications for employment services and welfare, which need to be addressed
China’s fast growing digital economy is reshaping its economic structure, job market, tax and welfare system, but it will bring planning challenges if laws and lawmakers are slow to catch up, officials and analysts say.
“The discrepancy in the calculation of the digital economy is huge,” Xu Xianchun, who was deputy director of the National Bureau of Statistics from 2006-17, said in a seminar held by Peking University’s China Centre for Economic Research earlier this week.
The added value of the digital economy accounted for 39.6 per cent of Chinese GDP in 2021, which made it the world’s second largest after the United States, according to data from the China Academy of Information and Communications Technology, an affiliate of the Ministry of Industrial and Information Industry.
The estimate, however, was far different to the one offered by the Chinese Academy of Social Sciences, a governmental think tank, which put the figure at 18 per cent.
