A robot (left) inspects operations at a net-zero emissions data center in Haidong, Qinghai province, in March.[LI JUN/CHINA NEWS SERVICE]

Chinese manufacturers use digital technologies to enhance output, serve consumers better for competitive advantage

A workshop manufacturing home appliances in Tianjin offers consumers a chance to customize washing machines using their mobile phones remotely. When they place an order, intelligent equipment in internet-connected factory automatically reads the information and starts customized production in accordance with their preferences.

The digital information system and automated production line are empowered by COSMOPlat, an industrial internet platform developed by Chinese home appliance maker Haier Group.

Currently, manufacturers can customize products quickly and at scale by collecting and analyzing data collected from consumers, suppliers and factories with internet-connected sensors via their industrial internet platforms, while boosting productivity and cutting costs.

Haier's example offers a glimpse into Chinese manufacturing enterprises that leverage digital technologies, covering advanced data analysis, cloud computing and the internet of things, to transform and upgrade traditional industries. Data have become a new type of production factor and are playing an increasingly vital role in bolstering industrial digitalization.

China's emphasis on promoting the development and application of data resources, and building the basic systems for data, will help foster new growth drivers and inject fresh impetus into the effort for high-quality economic development, industry experts said.

Highlighting that data serve as the core element of the digital economy, they called for more efforts to accelerate the construction of digital infrastructure, promote sharing, circulation and trading of data elements, and expand the application scenarios of data in more fields, so as to unleash the value of massive data resources.

China will take further steps to promote reforms related to the market-oriented allocation of data elements and improve the basic systems for data, as part of its broader push to foster new quality productive forces, said Liu Liehong, head of the National Data Administration, at a recent news conference in Beijing.

Liu stressed efforts to speed up the formulation of policies concerning data property rights, circulation and transaction, revenue distribution and security governance. He also emphasized the need to nurture a nationwide integrated data market, and press ahead with the construction of data infrastructure like a national computing power network.

China will step up the push to bolster the development and utilization of public data and enterprise data, expand the application scenarios of data elements, as well as strengthen international cooperation in the digital economy domain, in order to cultivate new competitive advantages, Liu said.

He also emphasized the significance of promoting the smooth circulation and efficient allocation of data elements, which play a pivotal role in nurturing new industries, new business models and new growth drivers.

Liu's remarks came after the third plenary session of the 20th Central Committee of the Communist Party of China adopted a resolution on further deepening reform comprehensively to advance Chinese modernization. The resolution called for efforts to improve the systems for promoting full integration between the real economy and the digital economy.

China will build and operate national data infrastructure to promote data sharing, and accelerate the establishment of a system for data property rights concerning ownership determination, market transaction, proceeds distribution and interest protection, the resolution said.

The country has unveiled a plan for the overall layout of the country's digital development, vowing to make important progress in the construction of a "Digital China" by 2025. By 2035, China will be at the global forefront of digital development.

Jiang Xiaojuan, a professor at the University of Chinese Academy of Social Sciences, said data have permeated all aspects of society and have an impact on the allocation of social resources as well as the logic of economic and social operations.

Noting that China, the world's largest data producer, has unique advantages in accelerating the development of its digital economy, Jiang said it is of vital importance to give full play to the multiplier effects of data elements, create abundant applications in a wider range of sectors and promote the development and utilization of public data.

Statistics from the National Data Administration showed that China's total data output reached 32.85 zettabytes in 2023, up 22.4 percent year-on-year, while the added value of core digital economy industries accounted for 10 percent of GDP.

The top data governance regulator has unveiled a guideline to expand the application scenarios of data elements in 12 key fields such as industrial manufacturing, modern agriculture, trade circulation, transportation and financial services.

The country will create more than 300 typical application scenarios for data elements, double the scale of data transactions, and nurture a batch of data merchants with strong innovation capacities and third-party professional service organizations, according to the guideline.

"In the digital era, data elements have become a key and strategic resource driving economic growth. The in-depth integration of data with traditional industries will improve production efficiency, optimize the allocation of resources, and create novel business models and new social value," said Pan Helin, a member of the Expert Committee for Information and Communication Economy, which is under the Ministry of Industry and Information Technology.

For instance, enterprises can learn about market demand and consumer behavior more accurately through the analysis of large amounts of data, so as to optimize research and development, production and sale of products, Pan said.

Xu Ran, CEO of Chinese e-commerce giant JD, said the company has invested more than 100 billion yuan ($14 billion) in basic science and technology R&D since 2017, and is committed to enhancing the resilience and safety of supply chains by leveraging digital technologies.

Looking ahead, JD will speed up the transformation and upgrade of traditional industries, promote the in-depth integration of the digital economy with the real economy, and make efforts to build a modern industrial system, Xu said.

The revenue of China's digital economy reached 50.2 trillion yuan in 2022, ranking second in the world and equivalent to 41.5 percent of the country's GDP, according to a report released by the China Academy of Information and Communications Technology.

Ouyang Rihui, assistant dean of the China Center for Internet Economy Research at the Central University of Finance and Economics, said data are playing a pivotal part in promoting the transformation and upgrade of traditional industries, improving total factor productivity and giving birth to new industries, new models and new growth drivers.

Data have the attributes of commodities, which could be effectively allocated through market evaluation and trading, so as to create huge economic and social value, Ouyang noted.

He said more efforts are needed to promote the confirmation of data-related rights, explore a data pricing mechanism and value assessment system, and speed up the building of a unified domestic data elements market, in a bid to give full play to the value of data and boost the development of the country's digital economy.

The National Industrial Information Security Development Research Center said revenue derived from China's data elements market is projected to rise to 198.9 billion yuan in 2025, with the compound annual growth rate surpassing 25 percent during the 14th Five-Year Plan period (2021-25).

Wu Jianping, an academician at the Chinese Academy of Engineering, said the emergence of innovative digital technologies like 5G, artificial intelligence and internet of things has laid a solid foundation for unleashing the huge value of data elements, while underlining the significance of safeguarding data security, which is a prerequisite to ensure orderly development of the data elements market.

China aims to increase the size of its data security market to over 150 billion yuan by 2025, with a CAGR of more than 30 percent, according to a government guideline.

"New cybersecurity challenges have appeared along with the rapid development of AI technology and the accelerated application of data elements in more scenarios," said Qi Xiangdong, chairman of Chinese cybersecurity company Qi-Anxin Technology Group.

Qi said Qi-Anxin has rolled out a large language model targeting the cybersecurity industry to ensure the safe operation of networks, enhance cybersecurity response capabilities and fend off potential cyberattacks.

Qi said cybersecurity and AI are inextricably linked, while AI has greatly lowered the threshold of cyberattacks and raised some concerns about data leakage and malicious misuse of data. He said data security is more important than ever, and called for efforts to invest more in the training of high-caliber cybersecurity talent.