Science Research Management ›› 2020, Vol. 41 ›› Issue (6): 157-171.

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Development opportunities and strategies for the digital economy industry in China under the influence of new coronavirus pneumonia

Wang Yangjie1, Tang Xiangbo2, Chen Xiaohong1,2   

  1. 1. Business School, Central South University, Changsha 410083, Hunan, China; 2. Hunan University of Technology and Business, Changsha 410205, Hunan, China
  • Received:2020-02-22 Revised:2020-04-24 Online:2020-06-20 Published:2020-06-20

Abstract: With the development of social economy and globalization, the frequency of major public health emergencies has continuously increased, and its prevention, control and governance have presented a huge challenge confronting the modern international community. Since 2009, the World Health Organization has announced six "public health emergency of international concern (PHEIC)", all of which have caused huge economic and social risks and disasters worldwide. In the face of complex and severe public health emergencies, there is an urgent need to systematically explore its socio-economic impact and coping strategies. The sudden outbreak of the Coronavirus Disease 2019 (COVID-19)has become a major public health issue with global concern and has brought a huge impact on China′s economic and social development. Affected by the COVID-19 pneumonia, China′s GDP growth rate is expected to fall to 4.5% -5.7% in 2020. Xi Jinping, General Secretary of CPC, pointed out that "the COVID-19 pneumonia is both a challenge and an opportunity for industrial development. We must take this as an opportunity to transform and upgrade traditional industries and foster emerging industries." While the COVID-19 has caused severe damage to service industries such as transportation, tourism and retail business, emerging industries such as unmanned distribution and smart manufacturing, as well as online consumption such as remote office work, telemedicine, online education, and online entertainment, show great developing potentials. The development of these emerging industries has further forced the government and enterprises to increase investment in digital infrastructure and technologies such as 5G, artificial intelligence, and the Industrial Internet, which is likely to accelerate the shift in driving forces and boost the development of digital economy industry in China. According to the classification of China Academy of Information and Communications Technology (CAICT), the digital economy includes two parts: digital industrialization and industrial digitalization. First, digital industrialization, also known as the basic part of the digital economy, is the information and communication technology (ICT) industry; second, industrial digitalization is the integration of next-generation information technologies such as the Internet, big data, cloud computing, and artificial intelligence with traditional industries. Recently, Xi Jinping has repeatedly stressed the need to strengthen and expand the digital economy, accelerate the advancement of digital industrialization and industrial digitization, push forward the continuous replacement of old growth drivers with new ones, and create new industries and new business models. The China Digital Economy Development and Employment White Paper (2019) shows that the size of China′s digital economy reached 31.3 trillion yuan in 2018, accounting for 34.8% of GDP. The digital economy has become an important driving force for the shift in driving forces for China′s economic development. How does this COVID-19 affect the development of China′s digital economy? In the long run, will the COVID-19 pneumonia once again prompt industrial restructuring and upgrading like the SARS epidemic, thereby reshaping a new form of economic development? How should the government grasp the transformation of the epidemic crisis as a new driving force for industrial development and better promote the high-quality development of our economy? Further exploration is urgently needed to solve these issues. Since the outbreak of the COVID-19 pneumonia, many scholars have analyzed the impact of the coronavirus outbreak on China′s economy, but most of them involve short-term forecasting and industry investment analysis, and the topics discussed are relatively broad. In response strategies, many scholars have proposed measures to reduce the impact of the epidemic on the economy. These analyses have improved our understanding of the impact of the coronavirus, and helped government departments to generate precise and differentiated epidemic control strategies. However, most of them focus on short-term emergency response and mainly present as policy proposals. There is little in-depth ad hoc analysis of the COVID-19 on the digital economy and corresponding strategic reform measures. From the earlier literature, there is insufficient research on the impact of public health emergencies on China′s industry. Foreign literature has systematically studied the evolutionary characteristics of public health emergencies, their impact on the economy and society, and strategies and its effects in response to epidemic events. However, the impact of public health emergencies on China′s economic development, especially important industries, is still insufficient. Considering that the digital economy has become an important force to promote the economic restructuring and upgrading and fostering new momentum for promoting high-quality economic development, it is urgent to consider the digital economy factor in evaluation of the epidemic socio-economic impact. The purpose of this paper is thus to analyze the impact of the COVID-19 on China′s digital economy industry, focus on the opportunities for the development of China′s digital economy industry under the impact of the epidemic, and provide corresponding structural reform strategies and decision support that able to turn China′s epidemic crisis into an opportunity for sustainable economic development. Compared with current literature, the main contributions of this paper are shown in three aspects: First, to the best of our knowledge, this is the first paper to specifically and systematically analyze the impact of the COVID-19 on the development of China′s digital economy industry and the corresponding strategies. Most of the existing related studies focus on the negative impact of the epidemic on the economy and society, and there are few studies on the development opportunities and new kinetic energy effects of potential emerging industries under the epidemic. Second, unlike the existing literature that generally focuses on the short-term economic effects, this paper focuses on the mid- and long-term impact of the epidemic on the digital economy industry. As the epidemic gradually stabilizes in China, the long-term economic development potential needs to be considered. Third, this paper documents the literature on the impact of various public health emergencies on the economy in a relatively detailed way, and provides a solid theoretical basis for the analysis of the economic effects and strategies of the epidemic from the perspective of industrial structure adjustment.

Key words: COVID-19 pneumonia, digital economy, industry, medium and long-term reform