China's platform economy has faced numerous challenges recently, including regulatory crackdowns, monopolistic practices, and new technologies such as ChatGPT. Nevertheless, the platform economy is making a solid comeback, as evidenced by a series of positive signals from the government and prominent figures in the industry, such as Jack Ma's return to China.
The Central Economic Work Conference (CEWC) has proposed supporting platform enterprises in leading economic development, job creation, and global competition. This shift in attitude is essential to understand the platform economy's benefits, including economic growth, job creation, international competition, and entrepreneurship and consumption.
Economic development
Chinese mainland companies accounted for 17.9% of the global total in research and development (R&D) investment in 2021, surpassing the European Union. Internet platform companies Alibaba and Tencent ranked 17th and 18th, respectively, on the Industrial R&D Investment Scoreboard. These companies have significantly invested in cloud services, modern logistics, and supply chain finance, driving innovation and leading development.
Job creation
The platform economy has created jobs for around 200 million people in China through flexible employment. For instance, the number of merchants on e-commerce sites Taobao and Tmall has exceeded 10 million, with 4 million born in the 1990s and 2000s. Additionally, food delivery couriers numbered approximately 13 million, and there were nearly 140 million live-streaming accounts in China by the end of 2021. As a result, the platform economy has acted as a "job reservoir" and "social stabilizer" for China's youth.
Global competition
China's platform economy has allowed the country to maintain a strong position in global competition. In the latest World Intellectual Property Organization (WIPO) report, China overtook the United States for the first time as the largest source of international patent applications. This achievement reflects the country's commitment to fostering innovation and protecting intellectual property rights, enabling its platform companies to excel in the global market.
Entrepreneurship and consumption
The platform economy has facilitated entrepreneurship and consumption, empowering individuals to create new businesses and providing consumers with various choices. A study conducted by Tsinghua University's School of Economics and Management revealed that one in every 80 people between 18 and 30 in China is a seller on Taobao. The platform economy has, therefore, played a crucial role in promoting consumer choice and fostering a vibrant business environment.
In conclusion, China's platform economy has demonstrated remarkable resilience and adaptability in facing challenges. The resurgence of the platform economy, as evidenced by the series of positive signals from the government and industry leaders, has the potential to drive economic development, create jobs, strengthen global competition, and foster entrepreneurship and consumption. As China continues to embrace and support the platform economy, it is well-positioned to reap the rewards of this dynamic and innovative sector.
Reference
- https://www.reuters.com/markets/us/exclusive-alibaba-founder-jack-ma-resurfaces-2023-03-28/
- https://www.chinadaily.com
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