Digital economy

In part 2 of his article on China’s digital currency ambitions, James Pang takes a look at how a Chinese central bank-issued digital currency — the DCEP — can complement existing e-payment methods and have an edge over traditional cash and cryptocurrencies when it is fully rolled out. Being the first major economy to launch a CBDC, China’s experience will be useful for other countries looking to hop onto the digital currency bandwagon. Utilisation of Chinese DCEP could also aid the process of internationalising the Chinese Yuan (RMB).

What’s the difference between virtual currency, digital currency, cryptocurrency, and e-money? In part 1 of his article on China’s digital currency ambitions, James Pang traces the development phases of China’s central bank digital currency DCEP amid a growing global appetite for central bank digital currencies. He also guides us through the jargon of the digital currency world.

Qiao Xinsheng points out that one should not have any expectations about the globalisation of the job market. In the internet economy era, even though internet platform companies facilitate capital’s global search for talent, this has not improved labour’s freedom of movement in search of better job opportunities. Cheap labour will continue to be exploited through the long arms of overseas capital. Not only that, with these companies' technology-enabled capabilities to collect massive amounts of data, national security will be a concern.

Academic Pei Sai Fan notes that China’s active promotion of the e-CNY has been closely linked to its ambitions of turning the RMB into a global trade and reserve currency. He says that the internationalisation of the RMB cannot be rushed. The more important thing for China to do now is to work on building its capabilities for crisis and risk management as well as gaining international support.

Zhang Yugui points out that China’s financial services development is currently at the awkward stage where there is much financial innovation and the opening up of the financial sector, but not yet the corresponding capabilities to manage the complex financial systems and cutting-edge fintech. Hence we see the recent rash of anti-monopoly measures directed at tech giants such as Ant Group and Tencent. But has the industry reached a true tipping point? What must regulators do to bridge the gap?

Few realise that the mobile gaming industry and the mobile phone industry have a symbiotic relationship. Technology specialist Yin Ruizhi explains how cuts of the revenue that mobile companies get from game app developers help them to thrive despite offering "value for money" phones.

Chen Lifang, corporate senior vice-president and board director, Huawei, delivered a speech at the St. Gallen Symposium themed ‘Truth Matters’. At the virtual session, she stressed that standards and regulations will be two of the most visible embodiments of the interaction between society and technology in a highly digitalised, post-pandemic world. Common regulations and standards will build trust; the more widely they are adopted, the more effective they will be. Is it possible for humankind to build trust across cyberspace and international borders, and work together to construct the future global economy? 

As Chinese authorities take action against monopolistic behaviour and the “disorderly expansion of capital”, companies like Alibaba and founder Jack Ma are finding themselves falling out of favour not only with the authorities but with the public. The latest development is the name change for Hupan University, established by Ma, where the motivations of the institution have come under question. Zaobao correspondent Chen Jing looks at the issue.

Japanese academic Kai Kajitani notes that Chinese industrial policy has been attracting much attention these days, especially after recent moves to prevent monopolistic practices by major companies such as Alibaba. China has also been criticised by many for its practice of giving industrial subsidies. However, it is worth taking a closer look and examining these policies from the standpoint of current trends in economics, as like everyone else, China is experimenting with new possibilities.