LONDON: Where are the growth markets? Concurrent with the answer is a question about the nature of the growth opportunities. COVID-19 has underlined the irresistible and accelerated growth in digital industries. This goes beyond settlement platforms. It includes logistics delivery services, customer service and a new awareness of access to global consumer choice. Economies will be restored, but the new digital shape will not disappear. Dispersed offices and working from home are set to become a permanent feature of the economic landscape.
The potential for digital growth is the key investment question. The Datareportal Global Digital Overview estimates the U.S., with a current online population of 263 million, has the potential to add another 39 million. That’s a 14 percent growth. China has a population of 838 million internet users with the potential to add another 583 million. That’s a growth potential of 69 percent, offering more opportunity both in raw numbers and in percentage growth terms.
It is clear which market offers more opportunities. However, the thought of two very different digital standards makes the idea of one digital product for multiple markets difficult to implement. And the discussion of essential policy standards has been side-tracked by a national security debate. President Trump and his acolytes have promoted the idea that Chinese tech companies cannot be trusted to provide critical infrastructure or social media platforms because, they claim, civil liberties, human rights and personal freedoms will run second to China’s strategic interests.
These issues play well to an un-informed domestic audience, but they obscure the broader picture of digital transformation and the increasingly urgent policy issues that surround these developments. These policy issues shape the way investors can access the growth potential of the China digital environment.
Who sets the protocol standards for digital connectivity? These standards include blockchain, artificial intelligence, digital currency, distributed ledgers and other arcane but critical parts of the digital economy. Without collectively developed and agreed policies, the digital economy would fracture into incompatible fortresses. Currently, governments are using crude tools to deal with the global digital revolution. The headlines include security, legislative control and intervention in the ability to complete financial transactions.
For decades, standards were primarily led and set by the U.S. in a broadly collegiate environment. Under President Donald Trump, the U.S. pursues an America First agenda at the expense of its position as arbiter of the world’s information ecosystem. They seem oblivious to the cost to economic growth, to the strangling of global innovation or the security impacts on anyone else – including its allies.
The U.S. refuses to allow China to play a role in setting these standards, going as far as to withdraw from some global forums if China is also represented.
–The Daily Mail-CGTN exchange item
