China’s Digital Economy the World’s 2nd Most Competitive, Still Struggles to Catch up to US


A new report from the Shanghai Academy of Social Sciences indicates that while China’s digital economy is the second most competitive in the world it still lags far behind that of the United States.

The “Global Digital Economy Competitiveness Development Report (2018)” (全球数字经济竞争力发展报告(2018)) released by SASS on 27 October provides rankings for the competitiveness of the digital economies of 50 countries around the world.

SASS used four first-tier indices to rank the competitiveness of a country’s digital economy, including digital innovation competitiveness, digital equipment competitiveness, digital industry competitiveness and digital administration competitiveness.

According to the report the US is host to the world’s most competitive digital economy with a score of 84.24, followed by China in second place with a score of 63.05, for a narrowing yet still sizeable disparity of 21.19 points.

Singapore took third place, while the UK and the Netherlands were fourth and fifth position respectively.

The US enjoyed strong scores of around 85 for all four indices, while China only saw a similar robust reading for one index, scoring just 55 – 65 for the remaining three.

China’s digital innovation score was especially poor, ranking 21st amongst countries monitored, as well as lagging far behind developed economies in terms of tech R&D, human resource support and innovation conversion.

Despite its small size Singapore was only 2.74 points behind China in terms of its overall score. It is almost on par with the United States in terms of digital innovation, and considerably ahead of China in terms of digital administration, lagging in digital industry competitiveness due to its small size and the difficulty for it to achieve economies of scale.

The SASS report follows the release of the Digital Economy 100 by Forbes Magazine, which indicates that the US is host to the largest number of leading digital economy companies at 29 in total, followed by Japan (20) and China (11).

Two Chinese companies ranked amongst the top ten, with Huawei and Alibaba at seventh and eighth position respectively.

The China Academy of Information and Communications Technology’s “2018 China Digital Economy Development and Employment White Paper” says that in 2017 China’s digital economy saw nominal YoY growth of over 20.3% to reach 27.2 million yuan in total, accounting for 32.9% of national GDP.