China’s digital economy has expanded rapidly in recent years. While average digitalization of the economy remains lower than in advanced economies, digitalization is already high in certain regions and sectors, in particular e-commerce and fintech, and costal regions. Such transformation has boosted productivity growth, with varying impact on employment across sectors. | WP 19 16 China s Digital Economy Opportunities and Risks by Longmei Zhang and Sally Chen IMF Working Papers describe research in progress by the author s and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author s and do not necessarily represent the views of the IMF its Executive Board or IMF management. 2019 International Monetary Fund WP 19 16 IMF Working Paper Asia Pacific Department China s Digital Economy Opportunities and Risks Prepared by Longmei Zhang and Sally Chen1 Authorized for distribution by James Daniel January 2019 IMF Working Papers describe research in progress by the author s and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author s and do not necessarily represent the views of the IMF its Executive Board or IMF management. Abstract China s digital economy has expanded rapidly in recent years. While average digitalization of the economy remains lower than in advanced economies digitalization is already high in certain regions and sectors in particular e-commerce and fintech and costal regions. Such transformation has boosted productivity growth with varying impact on employment across sectors. Going forward digitalization will continue to reshape the Chinese economy by improving efficiency softening though not reversing the downward trend of potential growth as the economy matures. The government should play a vital role in maximizing the benefits of digitalization while minimizing related risks such as potential labor disruption privacy infringement emerging oligopolies and financial risks. JEL Classification Numbers E24 G18 O11 O40 Keywords Digital economy Fintech Productivity Employment Financial stability Author s E-Mail Address lzhang2@ schen@ 1 We thank Linde Jing for research assistance and China Academy of Information and Communication Technology and Tencent for data provision. We .
