Bricks give way to clicks in wealth race
- By Yu Fenghui
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E-mail China Daily, November 2, 2014
The over-dependence of China's economy on exports, resources, investment and the real estate industry will not only distort the industrial and economic structures, but also pollute the environment. The old model is not sustainable. E-commerce, search engines and social media have charted a new path - which is nothing less than technological innovation in the US - for China's economic transformation.
The volume of e-commerce in China is already higher than that in the US. China's booming e-commerce sector can help small and medium-sized enterprises to overcome their difficulty in getting financing and force the government to reform its State-owned enterprises-oriented financial system.
The chemistry between the "Internet economy" and the other sectors of the economy shows that China's economic transformation is catching speed. Moreover, the dominance of Internet-related entrepreneurs on the Forbes list indicates the Chinese economy is increasingly embracing technological innovation, which, in turn, can boost total factor productivity.
A positive development is that wealth is being created and enjoyed by innovators and technology talents, rather than speculators in the real estate industry, and production factors will now favor innovative industries and enterprises.
None of the successful online enterprises in China is owned by the State. And since private capital is showing stronger vitality and innovation capacity, the government needs to create a favorable business environment for private enterprises by curbing local protectionism and intervention.
Internet-related enterprises in the US and the other developed countries will continue innovating new products and services to compete with Chinese enterprises. So, the Chinese government should take measures to overcome the blockage imposed by foreign countries on Chinese online companies and to protect their legal interests.
The author is a financial freelancer. The article is a translated and edited version of the original that appeared in Beijing News.
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