China's plan to drive innovation and build a digital economy is exemplified by the transformation of Shenzhen, a small fishing village in Guangdong Province, into a global tech hub. In 1980, Shenzhen was designated as a special economic zone (SEZ), which paved the way for significant economic development. The city's strategic location, excellent infrastructure, and skilled workforce have attracted both domestic and international investors. Shenzhen is now home to some of the world's largest technology companies and is considered a hub for innovation and entrepreneurship. The government's reform policies and unique preferential policies for investors played a crucial role in Shenzhen's transformation. The city experienced rapid development in four phases since 1978, focusing on labor-intensive development, capital-intensive development, and becoming the hub of the world's telecommunications devices supply. The government also made significant investments in critical infrastructure to enhance the city's appeal to foreign investors. Shenzhen's success as a global tech hub is attributed to its innovative policies, strategic initiatives, and the attraction of young talents from across the country [25773905].
Meanwhile, Shanghai's Xuhui District aims to become a leading global artificial intelligence (AI) hub by attracting top talent and innovative AI companies. The district hosted a key forum at the World Artificial Intelligence Conference titled 'Accelerating Artificial Intelligence + to Build New Quality Productive Forces.' Representatives from tech companies, academic institutions, and AI experts discussed AI development and its integration into various industries. Xuhui plans to establish a pioneering AI innovation ecosystem, attract more AI companies and talent, improve the industrial ecosystem, and support AI applications across various fields. The district aims to create a globally competitive AI core area in Shanghai, with a digital economy industrial cluster centered on AI. Xuhui had a total output of 80.3 billion yuan in AI-related industries last year, with an annual growth rate of over 30 percent in the past five years. The district plans to build a comprehensive industrial town integrating commercial, office, residential, educational, and ecological functions. The Shanghai Foundation Model Innovation Center has already attracted over 80 companies and aims to provide comprehensive services for AI foundation models [25773905] [934f7ccc].
China's ambition to become a global leader in innovation aligns with its efforts to fully digitize its economy. The country aims to compete with the United States in terms of complete digitization by 2035. To achieve this goal, China plans to develop a 5G mobile Internet system with 887,000 5G stations and transform major industries such as transportation, infrastructure, finance, education, and healthcare. China also aims to import $40 trillion in goods and services over the next 15 years and is inviting foreign capital, particularly from large American multinationals, to invest in high-tech industries. The goal is to integrate with the North American economy and become the most advanced economy in the world [19e843d7].
As China drives innovation and builds a digital economy, it is also focusing on the development of digital infrastructure at the national level. The National Development Reform Commission (NDRC) and the National Data Administration (NDA) have released a new plan that aims to leverage data assets and adopt a forward-thinking approach to digital infrastructure. The plan includes the creation of a national integrated computing network and the advancement of the digital silk road through the Belt and Road Initiative. China aims to scale up its computing capacity by 50% by 2025 and has signed strategic deals with Belt and Road Initiative members to boost digital connectivity and develop an open and inclusive digital economy. China's digital economy grew by 5.2% in 2023 and is expected to continue growing at a similar rate this year. The goal is to achieve complete digitalization of production and services, driven by the deployment of artificial intelligence (AI) [19e843d7] [069da79a].
While China leads in digital economy and innovation in Asia, there is a digital divide across Asian economies. Countries like China, Japan, Singapore, and the Republic of Korea are at the forefront of digital infrastructure development, while other countries in the region face insufficient investment and technical support. Hong Kong, in particular, should focus on developing its digital economy, especially in finance, trade, and logistics. The trade landscape is being shaped by geopolitics and the need for speed in mobile and e-commerce. Hong Kong should digitalize trade documents and align with the Model Law on Electronic Transferable Records to boost trade and stay in step with the mainland. Improvements are needed in tech interfaces across government departments to support Hong Kong's claim of being world-class [e050f846] [24137fc4].
In the context of Asia's growing digital economy, Shenzhen's transformation serves as an example of how government efforts to promote foreign investment and trade can lead to significant economic development. Shenzhen's success as a global tech hub is a result of its strategic location, excellent infrastructure, skilled workforce, and innovative policies. The city's journey from a small fishing village to a global tech hub showcases the potential for other cities and regions in Asia to leverage their unique advantages and drive innovation and economic growth [25773905].