Digital economy leaves imprint despite turbulence

Overcoming barriers

These developments highlight China's broader efforts to overcome geographical barriers to expand network construction, which, according to industry experts, will greatly drive common prosperity and lessen the gap between the eastern and western regions of the country.

The plan launched in December also pointed out that by 2025, positive progress shall be made in closing the gaps between regions, urban and rural areas, different population groups as well as in basic public services through the development of digital economy.

By 2030, substantial progress will be achieved in promoting common prosperity through the digital economy, with a set of innovative practices on the collaboration between eastern and western regions ready to be replicated and promoted nationwide, it said.

Viewed from a business perspective, China's small and medium-sized enterprises are also reaping several benefits from the ongoing efforts of driving common prosperity through digital economy development.

The global tech industry downturn has deepened amid rising geopolitical tensions, and the smartphone market has been declining for several quarters, posing unprecedented challenges to Chinese supply chain providers.

For instance, Yihong Precision Technology Co Ltd, a type-C adapter maker from Guangzhou, South China's Guangdong province, has been benefiting from its digitalization drive. The small factory of 45 skilled workers recently decided to leverage WeCom, the communication platform for enterprises developed by Tencent's social media platform WeChat, to digitalize its production processes and management support.

Hua Jiansheng, deputy general manager of Yihong Precision, said: "With such a simple move, repetitive paperwork and communication with external factories have been eliminated from the company's wholesale production processes. It has resulted in a significant reduction in workload for employees, which has also allowed them to focus more on production to improve product quality."

The most direct indicator of such a digitalization effort has been that the company has gained a 1 percent improvement in product yield rates, which refer to the proportion of products that meet quality standards and are considered usable or salable, out of the total number of products manufactured or processed.

"Don't underestimate the 1 percent increase in yield rates. With this 1 percent, we, an SME, are no longer incurring losses. The gross profit margin of the adapter industry is only around 5 to 10 percent, which leaves little room for profit," Hua explained.

Huo Jinjie, president of market research firm International Data Corp China, said in a previous interview that digital resilience will determine whether or not companies worldwide, including those in China, can respond quickly to business disruptions and restore market confidence amid rising economic uncertainties.

Li Baodong from BFA added that amid the ongoing global changes and historic transformation, the world today is increasingly strained by an economic downturn, which has posed multiple challenges to global development.

"China and other Asian economies need to enhance their cooperation in the field of digital economy and align their development strategies in a joint effort to create an open, inclusive, trusted and collaborative digital economy ecosystem that seeks common development, wealth and prosperity for all."