Beijing is on an industrial digitization drive

Even as Shanghai grapples with COVID-19, the city’s municipal government on Wednesday published an implementation plan for the comprehensive digital transformation of the economy. The plan envisages Shanghai to become the digital capital of the world by 2035, and includes standards and goals for:

• Data collection, storage, circulation and processing to facilitate digital infrastructure for smart city operations and smart services.
• Cloud computing, artificial intelligence, quantum communication, real-time logistics and distribution.
• Intelligent manufacturing.

Industrial digitization implies the application of digital technology in new as well as traditional industries to produce a more productive integrated economy.

• In 2021, industrial digitization was the main force for business expansion at China’s three major telecom operators, China Telecom 中国电信集团有限公司, China Unicom 中国联通, and China Mobile 中国移动. In 2021, China Mobile’s digital transformation business revenue reached 159.4 billion yuan ($24.73 billion), a year-on-year increase of 26.3%.
• The supermarket chain Yonghui 永辉超市 today announced it is implementing a digital retail system at its stores in China’s largest cities that includes digital labor management, intelligent ordering, and refined inventory management.

The context: Industrial digitization is a core component of the 14th Five Year Plan and the government’s development plans up to 2035.

• At the 25th meeting of the Central Commission for Deepening Overall Reform on Tuesday, Xí Jìnpíng 习近平 underlined the importance of developing digital and intelligent government operations to let “data do the work instead of people running around”.
• At a press conference of the Ministry of Commerce yesterday on the State Council’s decision to promote the integration of domestic and foreign trade, digital development of trade was identified as a key driver to accelerate the transformation and upgrading of traditional industries.
• The Ministry of Industry and Information Technology has released plans for intelligent manufacturing standards, and yesterday released a plan for digital and intelligent manufacturing in the textile industry.

The takeaway: Industrial digitization is a complex and long-term transformative process, but it is a key concept of the Chinese government’s economic development plans.

If it works, it could increase China’s industrial productivity and economic growth. The successful application of this process in various industries — new and traditional — in the coming years will be a key indicator of the overall vitality and growth prospects of the economy: China’s continued global competitiveness could depend on it.