Introduction
The digital economy can be defined as “economic output derived solely or primarily from digital technologies with a business model based on digital goods or services”.
Governments around the world have recognised the digital economy as a strategic growth area and are making concerted efforts to develop digital infrastructure and competencies in order to maximise the potential value of the digital economy.
In this article, we compare highlighted digital economy ambitions of Malaysia and China using each country’s most recent digital economy plan.
Overview of Malaysia’s and China’s digital economy plans
It must be noted that Malaysia’s and China’s digital economies cannot be directly compared due to vast differences in population size, historical pathways and global economic positioning. China is much further along in terms of both its digital economy planning and implementation. This is, in part, due to successful implementation of preceding digital economy plans, such as Internet Plus (released in 2015), the Robotics Industry Development Plan (2016) and the Three-year Guidance for Internet Plus Artificial Intelligence Plan (2016). It is with their respective contexts in mind that we compare Malaysia’s and China’s digital economy plans.
China released its most recent five-year digital economy plan on 12 December 2021. This plan contains 30 strategies, including optimising digital infrastructure, prioritising the use of data, accelerating digital industrialisation, making digital public services more inclusive, and strengthening governance, monitoring and cybersecurity.
Released on 19 of February 2021, Malaysia’s MyDigital Economy Blueprint (DEB) is a 10-year blueprint spanning from 2021 to 2030. It represents the government’s aspirations to transform Malaysia into a regional digital economy leader. The blueprint outlines three objectives, six thrusts, 22 strategies, and 76 national and sectoral initiatives to achieve its goals. The six thrusts are “driving digital transformation in the public sector, boosting economic competitiveness through digitalisation, building enabling digital infrastructure, building agile and competent digital talent, creating an inclusive digital society, and building a trusted, secure and ethical digital environment”.
This blueprint is the latest of several plans intended to expand Malaysia’s digital economy, such as the eRezeki and eUsahawan initiatives (released in 2015), the National eCommerce Strategic Roadmap (first released in 2016, and updated to v2.0 in 2021) and Malaysia’s Digital Free Trade Zone (launched in 2017).
The growth of Malaysia’s and China’s digital economies
Malaysia’s digital economy, particularly the e-commerce sector, had been growing even before the pandemic. In 2020, likely due to pandemic movement controls, ecommerce contributed around RM163 billion (11.5%) to the nation’s overall GDP. In the fourth quartile of 2021, e-commerce income reached a total of RM290.3 billion.
In China, the added value of core digital economy industries, including big data, cloud computing and the industrial internet, accounted for 7.8% of the GDP in 2020, and the government aims to increase this to 10% in 2025. E-commerce transactions amounted to CNY37.2 trillion in 2020 (approximately MYR24.7 trillion) and are expected to reach approximately CNY46 trillion (approximately MYR30.5 trillion) in 2025. Broadband subscribers and industrial internet platform application rates are also expected to increase by 2025.
China’s priorities…
Three key areas feature prominently in China’s digital economy plans – data, cloud computing and the industrial internet. While Malaysia’s DEB does include data, cloud computing and the Fourth Industrial Revolution (4IR), it bears repeating that China’s plans are much further along in terms of how to incorporate these technologies into existing systems and infrastructure.
China’s initiatives emphasise the economic value of data, having declared data a factor of production. Its strategies for developing the digital economy include the creation of a data marketplace, a shift towards cloud computing and the development of an industrial internet.
Building a data marketplace
China’s digital economy plans are centred around data. The government is building a data marketplace with the intention of establishing a pricing system for data driven by market forces. This marketplace may even include the exchange of data of private corporations, both local and international.
However, this raises questions of data governance. In 2021, China passed two laws governing data: the Personal Information Protection Law and the Data Security Law. The impact of these laws on Chinese data processing has yet to be determined. As seen elsewhere in the world, misuse of personal data can violate the rights and privacy of consumers, and threaten national security.
Turning to cloud computing
China’s cloud computing strategy includes plans to build a centralised cloud-computing system powered by regional hubs. Energy-efficient data processors and data centres are intended to pivot China’s manufacturing industry from simply producing goods to producing and analysing data.
Developing an Industrial Internet of Things
The industrial internet of things (IIoT) has been defined as "the network of intelligent and highly connected industrial components that are deployed to achieve high production rate with reduced operational costs through real-time monitoring, efficient management and controlling of industrial processes, assets and operational time". It combines sensors, instruments, and machines to improve industrial and manufacturing efficiency.
…compared to Malaysia’s
Malaysia harbours ambitions to advance its use of data, cloud computing and the industrial internet, as can be seen not only in the DEB but also in its National Fourth Industrial Revolution (4IR) Policy and its plans to develop a National Robotics Roadmap.
Conclusion
The digital economy is a key growth area for Malaysia and China. Both countries have drawn up digital economy plans to develop this economy in a way that benefits all of society across different sectors and industries. Although the two countries are not directly comparable due to differences in land area, population and competitive advantage, their digital economy ambitions share some similarities in terms of scope, if not scale.
