The chart shows fixed broadband connections per 100 people and is a good place to start a summary of the paper highlighted today. Nothing makes is clearer how China has stepped up its game in terms of digital connectivity versus the rest of the developed world.
Khong Vu and Yiya Lu from the National University of Singapore and the Renmin University of China provide a detailed comparison of progress between the U.S. and China from 1995 to 2020.
Over the period the U.S. sped ahead in innovation driven services and knowledge sectors. China, with its more statist model has excelled in Information Communications Technology (ICT) hardware, telecoms and industrial digitalization. An analysis of these two approaches may be helpful for other economies trying to come up their respective curves.
By 2020 the size of China’s digital economy had reached U$2.97trn in PPP terms, on the same basis the U.S.’s digital economy was worth U$3.74trn so China was about 80% of the U.S. However, if real dollars are used for comparison China’s digital economy falls to around half the U.S. Either way we cut it there’s still a sizeable gap between China and the U.S. which can’t have closed up in the last 4 1/2 years.
The paper is a slog as it goes into detail unnecessary for most to understand just the trends. For industry specific followers maybe there’s some marrow in there for you.
The five main conclusions are:
- The U.S. continues to lead however you care to express the numbers, but China’s catch up has been impressive and continues.
- China leads in ICT hardware manufacturing and telecoms infrastructure but remains significantly behind the U.S. in I.T. services and media.
- China’s progress, unsurprisingly, has come from its industrial focus. The U.S. has progressed via service and knowledge intensive competences that China doesn’t yet have.
- Both economies leading contributors are much the same i.e. public administration, wholesale and retail trade, financial services and education.
- China’s model remains heavily influenced by where the government would like to go. The U.S. goes where it’s entrepreneurs want to go.
The researchers sign of with a suggestion for China to do a bit more of what the U.S. does best and for the U.S. to close up it’s vulnerability in ICT-products manufacture. I think both governments are on it…
You can review the paper yourself via the following link The Evolution of the Digital Economy in China and the Us.
Happy Sunday.