"Five Classics" Data Reveals New Digital Economy Growth Drivers

The recent announcement of China’s fifth national economic census sheds light on the country's economic landscape, providing a comprehensive overview of its current state and future potentialReleased on December 26, 2023, the census data served as a vital economic health check, reflecting both the growth experienced over the past five years as well as the resilience of the Chinese economy amidst various domestic and international challenges.

The findings indicate a significant increase in the number of legal entities engaged in the secondary and tertiary industries, which reached approximately 33.27 million by the end of 2023—a remarkable growth of 52.7% compared to the figures from 2018. This escalation brought the workforce in these sectors to a staggering 428.98 million, illustrating an 11.9% increase over the same timeframeThe number of individual business operators has also soared to nearly 87.99 million, employing around 17.96 million people.

Such figures are not merely numbers; they represent a dynamic shift in China's economic development, highlighting substantial changes in scale, structural optimization, and innovation-driven growth

In particular, the census results reflect China's fundamental capabilities, robust resilience, and immense growth potential—qualities essential for any nation striving for a sustainable economic future.

This census marked a pivotal change by incorporating aspects related to the digital economy for the first timeAccording to Wang Guanhua, a key official from China's National Bureau of Statistics, the data underscores the vigorous development of the digital economy, with both digital industrialization and the digitization of traditional industries moving forward steadilyThese developments are injecting fresh momentum into broader economic and social advancement, indicating a clear trend towards a modernized, tech-savvy economy.

The census further elaborated on shifts in economic structure, revealing that current employment trends are favoring the service sector, which continues to expand

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The goal behind conducting such an extensive economic census is not only to grasp the scale and layout of strengths in the secondary and tertiary industries but also to understand the underlying connections between different sectors of China's economyIt's a comprehensive examination that sheds light on the new developments arising from high-quality growth and the construction of a more modern economic system.

Wang emphasized the importance of this thorough understanding, stating: “We need robust statistical foundations to facilitate modern statistical reforms, which in turn will enhance macroeconomic governance and inform mid- to long-term development strategies.” The emphasis on evidence-based policy-making aligns with global best practices, further indicating the increasing importance of statistics in legislative decisions.

Over the last five years, China’s economy has not only endured multiple domestic and external risks but has also maintained a steady upward trajectory

This notable resilience is reflected in five key areas: solid fundamentals, improved structural dynamics, abundant growth drivers, enhanced safety nets for development, and sustainable growth prospectsSpecifically, the overall contributions from the secondary industry have remained paramount, with significant advancements visible within the service sectorBy the close of 2023, the tertiary sector accounted for roughly 56.3% of the GDP, marking a notable increase of over two percentage points since 2018.

Comparing the current data with figures from the fourth national economic census, it is evident that the overall employment scale in the secondary and tertiary sectors has continued to expandNotably, the new employment trends indicate the ability of new industries and business models to drive job creation, further supporting broader economic growth and improving overall quality of life for citizens

By the end of 2023, there were 4.29 million individuals employed within legal entities in these industries, representing an increase of 4.575 million from 2018.

While these developments are encouraging, Wang acknowledged the persisting structural employment challenges that still require considerable attentionCertain demographics continue to experience difficulty securing employment, something that needs priority in future policies aimed at fostering high-quality, full employmentThe focus is now on developing targeted support for vulnerable groups, ensuring that job creation remains a central theme driving national policy.

Manufacturing, often viewed as the backbone of the physical economy, has also played a crucial role in China's economic ascent, maintaining the world's largest manufacturing scale for 14 consecutive yearsChina's strategic approach has intertwined the development of manufacturing with advancements in the digital economy, relentlessly driving modernization within industrial practices

The results are evident: industrial firms have benefited from digital advancements enhancing both productivity and efficiency across the board.

The latest census has revealed that by 2023, the number of industrial enterprises across the nation had increased to 4.236 million, up from 3.45 million in 2018—an impressive growth of 22.7%. The total assets held by these entities surged to 201 trillion yuan, demonstrating a climb of 44.3%. Revenues in the industrial sector reached 152.4 trillion yuan, up 28.6% from previous years, further validating the strength of China’s manufacturing capabilities, which now account for approximately 30% of the global total.

As the manufacturing ecosystem evolves, a noticeable shift towards high-end, intelligent, and environmentally-friendly production processes has emergedBy 2023, the number of significant equipment manufacturing and high-tech manufacturing entities reached 192,000 and 53,000 respectively, with each segment experiencing growth rates of 44.5% and 57.4%. These statistics demonstrate that Chinese manufacturing not only continues to grow but is also climbing the value chain toward more sophisticated production techniques.

The ongoing transition towards new industries is facilitating rapid growth in strategically significant emerging sectors

By the end of 2023, there were nearly 96,000 industrial enterprises in these emerging industries, reflecting an increase of 45% since 2018, which constitutes 19.5% of all large-scale industrial units—a clear indication of the shifting landscape in favor of advanced manufacturing sectors.

Support for the high-tech manufacturing sector has bolstered this transformation, fueled by a strong domestic supply chain, an expansive market, and a plethora of application scenarios that have highlighted the potential for digital economiesWei Qijia from the National Information Center articulated that the boom in high-tech manufacturing is in part due to China’s commitment to adjusting to the latest technological developments and industrial reforms, which aim to enhance the real economy through effective policies, thereby nurturing the growth of the high-tech sector.

While acknowledging impressive growth metrics, Kang Yi remarked that challenges remain as China continues its industrial journey, moving beyond sheer scale to achieve qualitative improvements

Innovations in key technologies are still needed, particularly among small and micro-enterprises, which often struggle with operational difficultiesThe call for sustainable and modern industrial practices remains paramount, with a focus on enhancing scientific innovations and integrating them deeply within the manufacturing sector.

The census has also shed light on the burgeoning digital economy, an area highlighted due to its transformative potentialNotably, digital industrialization represents the heart of the digital economy, encompassing the manufacturing of digital products, related services, and technology applications—all crucial for nurturing and growing this sectorBy 2023, the digital economy accounted for a substantial 10.9% of total revenues generated within the secondary and tertiary industries, signifying a prominent role in China’s economic landscape.

As a result, the digital manufacturing sector has demonstrated remarkable growth, with revenues reaching 48.4 trillion yuan

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