Embracing the Digital

China and ASEAN explore prospects for digital economy cooperation

By Yuan Yanan

The spread of novel coronavirus pandemic hit the global economy hard, and economic growth in China and ASEAN countries has slowed significantly. However, the epidemic has brought the digital economy new development opportunities. The stay-at-home lifestyle has fostered the rise of the internet economy, and digital technology has become a key driving force for economic development.

New Opportunities

Miao Wei, minister of Industry and Information Technology of China, said at the opening ceremony of the China-ASEAN Year of Digital Economy Cooperation on June 12 that digital applications guaranteed people’s needs during the epidemic. In China, online teaching, digital classes, and other forms of distance education have ensured that more than 200 million students across the country continue studying despite cancellation of in-person classes. Online medical platforms such as WeDoctor facilitate remote consultation and drug delivery services, reducing risk of virus transmission. Remote office software such as WeLink (an intelligent work platform by Huawei), WeChat Work (a business communication and office collaboration tool by Tencent Technology), Tencent Meeting and DingTalk (an app by Alibaba) served the needs of more than 300 million users nationwide.

In Southeast Asia, the stay-at-home lifestyle has also promoted new development of the digital economy. Lazada, a Singapore-based e-commerce platform owned by Alibaba Group, has seen a fourfold increase in the grocery sales in Singapore from early April to early June. Shopee is a leading e-commerce platform in Southeast Asia. In the first quarter of this year, its order amount reached about US$430 million, an increase of 111.2 percent over the same period last year. Consumers generally started choosing electronic payment methods instead of cash.

Shopee Chief Commercial Officer Zhou Junjie said that the COVID-19 pandemic has accelerated the transition to online lifestyles, which is irreversible.

GoFood, a delivery service of Gojek, a leading on-demand and multi-service tech platform in Southeast Asia, increased its trade volume by 10 percent in less than a month. Just three months ago when offline consumption was generally depressed, Gojek received US$1.2 billion in financing. Gojek stated that the company would focus more on the development of digital economy to support payment and financial services in Southeast Asia.

With schools and educational institutions temporarily closed due to COVID-19, online education has been filling the gap. In Indonesia, Malaysia, Thailand and Vietnam, many educational technology companies have witnessed a rapid growth. Snapask, a Hong Kong-based online learning website targeting the Southeast Asian market, gained nearly 400,000 new users between February and March this year, 30 percent of all new users it gained in 2019. Usage and questions raised on the website also increased by 40 percent between February and March this year. Snapask founder Timothy Yu believes that online education is becoming normalized. “The choice between ‘online tutoring’ and ‘offline learning’ is becoming a thing of the past,” he said.

In China, the rapid development of e-commerce and online education has been accompanied by more “cloud mode” activities such as telecommuting, online consultation and online governance. China has accumulated rich experience in these realms.

“During the epidemic, new digital technologies that minimize or eliminate contact were rapidly introduced in China, providing us with much valuable experience to draw from,” said Miao Wei. “We are ready to share our experience with ASEAN countries, tap the potential of the digital economy, and jointly make positive contributions to protecting life, restoring economic stability, and promoting sustainable growth.”

Joint Development

The digital economy includes a vast array of activities and needs long-term planning and comprehensive organization. S Iswaran, minister for Trade and Industry of Singapore, opined that Singapore has unique advantages as a digital industry hub of the ASEAN region, making the country a good platform for Chinese internet companies to seek new market opportunities in ASEAN countries.

China and ASEAN have conducted successful explorations before. In terms of information infrastructure, the successful launch of the “Laos No.1” communications satellite brought China and ASEAN closer. A new undersea cable project jointly constructed by China and Thailand is planned to go live in early 2021. After completion, the cable will ensure delivery of various data between China and Thailand to facilitate business cooperation, tourism, finance, and internet development.

Cambodia, Thailand, Indonesia, and the Philippines are cooperating with Chinese companies to jointly build local 5G networks. Huawei completed 5G tests in the Philippines in January, which set a new 5G speed record. With the completion of 5G networks, smart cities, smart grids, real-time logistics tracking, autonomous driving, and real-time industrial control may all become reality.

In the field of digital research and development, National University of Singapore (NUS) and Suzhou Industrial Park jointly established the NUS Artificial Intelligence Innovation and Commercialization Center to facilitate the formation of an artificial intelligence (AI) ecosystem and industrial chain in Suzhou, eastern China’s Jiangsu Province. A Malaysian company and a Chinese company are jointly building Malaysia’s first AI industrial park, which will provide AI solutions in intelligent vision, voice recognition, natural language, and robotics. Thailand has contracted Chinese company Xunlei Limited to use cloud computing and blockchain technologies to promote Thailand’s digital identity system and smart city construction.

Singapore enterprises have turned to Alipay, WeChat, and other Chinese payment platforms to enable Chinese consumers to make payments in Singapore by scanning a QR code. JD established a smart logistics center in Thailand to deliver local orders within 24 hours. TikTok, a Chinese video-sharing social networking service, is widely popular in Southeast Asia, which is also helping cultural communication between China and ASEAN become more diversified.

Secretary General of ASEAN Dato Lim Jock Hoi predicts the digital economy in ASEAN to increase from 1.3 percent of GDP in 2015 to 8.5 percent by 2025. He noted China has a high level of expertise in developing digital infrastructure and implementing regulatory framework for the digital economy, making it a valuable partner for ASEAN in promoting development of the digital economy.

From a wide angle, the digital economy in China and ASEAN is developing vigorously and facing new opportunities. Both should continue to engage in practical cooperation and work to seize the potential in digital economy to propel economic and social development and improve quality of life.

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