Bengt Holmstrom, 2016 Nobel laureate and Finnish economist, delivers a video speech at Fintech Forum on Digital Transformation and Financial Security, a parallel event of the 2023 Zhongguancun Forum, in Beijing on May 29. (PHOTO / CHINA DAILY)
China is uniquely positioned to lead the world's digital economy, said Wang Yang, vice-president for Institutional Advancement of Hong Kong University of Science and Technology.
Wang made the remarks at Fintech Forum on Digital Transformation and Financial Security, a parallel event of the 2023 Zhongguancun Forum, in Beijing on May 29.
Digital credit is an effective approach to support credit decisions and the effectiveness is mainly reflected in the field of inclusive finance
China's advantages in the data base generated by a 1.4-billion-population, the foundation in the blockchain technology sector and the technological talent pool are the three most powerful tools for the country in leading the world digital economy, Wand said.
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The scale of China's digital economy rose 10.3 percent year-on-year to 50.2 trillion yuan ($7.11 trillion) in 2022, accounting for 41.5 percent of the country's GDP, according to Digital China Development Report 2022 issued by the Cyberspace Administration of China.
To develop the digital economy, payment and credit are very important elements. China takes a leading role in these areas.
"China has been a leader. They are leaps ahead of the West both in terms of their payment system and the back of payment system. They have gotten into this sort of new form of (digital) credit card," said Bengt Holmstrom, who is a 2016 Nobel laureate and a Finnish economist.
Holmstrom takes Alibaba, Wechat and Pinduoduo as examples to explain how the platforms collect data that can be used to figure out how creditworthy a person is and how an innovative kind of digital credit card can be generated.
Huang Yiping, the director of the Institute of Digital Finance at Peking University, echoed Holmstrom's opinion by saying that digital credit is a very important financial innovation in the era of digital technology, and China is the best in this field.
Digital credit is an effective approach to support credit decisions and the effectiveness is mainly reflected in the field of inclusive finance. Especially for those credit white households who have no record of borrowing, such an innovation can be revolutionary.
READ MORE: China's digital economy grew to 50.2 trillion yuan in 2022
In the past, for small and medium-sized enterprises it was hard to borrow money from the bank as they couldn't provide sufficient financial evidence, including balance sheets, profits and loss statements, and cash flow statements to prove their credibility.
However, the innovative digital credit has provided a possibility to solve this problem and, if it is used well and popularized, it is expected to possibly affect our macro financial stability in the future, Huang said at the forum.
Digital economy is expected to contribute 30 percent of global GDP and create 30 million jobs by 2030, according to the Digital Cooperation Organisation as reported by Edge of ITP Media Group.