As an emerging industry, digital economy is based on three major elements, i.e. big data, intelligent algorithms and computing power platforms. It has now become an important engine for building a modern economic system, thus regarded as a key factor for China’s national strategy. The Outline of the 14th Five-Year Plan and Long-Range Objectives Through the Year 2035 sets out a comprehensive plan for the development of digital economy.
While the term digital economy sounds like a new concept to many people, it is never strange for Mr. Shi Yong, counsellor of the State Council, director of the CAS Research Center on Fictitious Economy & Data Science (FEDS), academician of The World Academy of Sciences for the advancement of science in developing countries (TWAS) and academician of the International Eurasian Academy of Sciences (IEAS). He has been engaged in the research related to big data for 37 years, particularly regarding the algorithms and application of this sector. He has witnessed the whole process in which big data grows from a single concept into a promising industry, and is now praised worldwide as one of the pioneers in the field of big data mining.
For decades, Shi has devoted himself to the research of both the theory and application of big data, allowing massive data with noises to accumulate for the optimization of data mining, so as to give full play to the value of data. In his eyes, there is huge dynamism in big data, whose application will definitely be extremely innovative.
In 2009, Shi’s team jointly established a national personal credit scoring system with the Credit Information System Bureau and Credit Reference Center of the People Bank of China (PBC), by which he won the Cheng Siwei Global Research Prize in 2022. In February 2020, his team took the lead in making a big data analysis model for the prevention and control of COVID-19 as well as the work resumption, which has been highly valued by China’s top leadership. The model provides scientific support for the decision-making in the fight against the pandemic, and won him the 2020 Outstanding Individual in Combating COVID-19 issued by the Central Committee of the Democratic National Construction Association.
With greater emphasis being put on data elements and the digital economy by the national leadership, Shi is now even busier with his work related to this industry. In 2021, he and his colleagues from the Counsellors’ Office of the State Council (COSC) spent a lot of time visiting and investigating eight data centers and computing power hubs that belong to an integrated big data network across the country. On November 24, 2021, at the 19th meeting of the Standing Committee of the 13th National Committee of the Chinese People’s Political Consultative Conference, he was invited to give a lecture entitled the Development and Future of Digital Economy. In the special consultation symposium of the National Committee of the Chinese People’s Political Consultative Conference on May 17 this year, Shi put forward his own insights on the development of integrated national big data centers and the planning of megalopolises.
Recently, the 21st Century Business Herald (21CBH) interviewed Shi on big data, intelligent algorithms, computing power support and industrial model related to the development of digital economy.
Photo of the Interviewee
Developing Data-Related Infrastructure in a Holistic Manner: Taking Carbon Peaking and Carbon Neutrality into Consideration
21CBH: The digital economy has become an important engine for development. How do you think about the supply capacity of China’s digital economy? What obstacles still exist at this moment?
Shi Yong: The digital economy, as I understand, consists of three parts: if we take the digital economy as a carriage, its body is the computing power platform, while big data and intelligent algorithms serve as a pair of wheels. Without big data, there is no material to work on, not to mention creating something valuable by intelligent algorithms. Likewise, computing power platforms are also an irreplaceable part in digital economy.
To be specific, China’s national strategy for digital economy includes the coordinated development of two parts: industrial digitization and digital industrialization. Let me explain this: digital industrialization refers to the process in which digital technologies are applied to industrial uses, therefore providing basic technologies, products, services and solutions for the overall progress of digital economy, such as artificial intelligence (AI), cloud computing and other emerging industries in recent years; industrial digitalization refers to the upgrading of traditional industries by digitalizing production factors and applying digital technologies for a larger scale or a higher efficiency of production. For example, traditional automobile manufacturers can adopt intelligent manufacturing production lines.
At present, China’s digital industrialization has already taken shape and is now relatively advanced. However, it is still necessary to continuously guide the healthy and orderly development of this sector through institutional norms. China’s industrial digitization, on the contrary, still has many shortcomings, and it will take some time for the digital transformation of major economic sectors, such as the specific application of big data and intelligent algorithms in various fields of the economy throughout the entire process, as well as the implementation and collaboration of computing power platforms.
21CBH: In recent years, the Party leadership and the central government have issued a series of policies, proposing the building of an integrated national big data center system and the promotion of channeling more computing resources from the eastern areas to the less developed western regions. Since different megalopolises have different characteristics, in your opinion, how can the tasks be allocated effectively to avoid building redundant digital infrastructure?
Shi Yong: the purpose of establishing such an integrated national big data center is to coordinate the construction plan and application layout of the national big data center infrastructure on the basis of comprehensively taking consideration of both the overall picture of the country and the specific characteristics of each province. Resources are shared among various sectors and across different regions, so as to improve the efficiency of data resource utilization, accelerate the development of information resources, and build China into a digital power with strong internet facilities. In practice, there are great regional disparities between the supply by existing data centers and the growing demand in this industry, while different megalopolises require differentiated computing power support. Therefore, we need scientific and reasonable deployment against the backdrop of the integrated national big data center system, so as to implement the country’s development plan in this sector. To be specific, things will include:
First, strengthen regional integration on a nationwide scale and arrange the coordinated development of digital infrastructure. The construction of big data centers needs to be done with a carefully-made plan at the national level. Based on different realities of each region and their future development, the planning of big data centers in various megalopolises should be coordinated, with new national hubs added or existing ones connected according to geographical characteristics. By doing so, things get connected for the joint scheduling of computing power among multiple regions and at multiple levels, therefore promoting integrated and collaborative innovation of computing power resources, algorithms, data and application scenarios.
Second, improve the construction of new infrastructure in megalopolises within a particular region and, further, complete the integration of cross-regional computing power. In the planning and layout of megalopolises, factors such as demand by the market, views by the public and basic supportive facilities should be taken into consideration, so as to provide new data infrastructure that conforms to the development of this region, as well as to realize the integration and optimization of computing resources such as data centers within this place.
Third, match the demand for digitalization and the supply by data center infrastructure. With market-based allocation of data elements as the key principle, strengthen the construction of data infrastructure in a particular region, optimize the integration of computing resources among regions, keep data infrastructure construction in pace with growing digital demand, and promote the innovative synergies among computing power, algorithms and computing power both inside and outside the region so as to offer better services.
Fourth, optimize the mechanism for scientific and technological innovation, and promote the training of relevant professionals and technical talents. In the specific implementation plan for the construction of regional megalopolises, it is necessary to both integrate digital infrastructure resources for coordinated regional development and provide talent training mechanisms that are in line with the actual needs by the market, so as to build a solid base of human resources for the fast and sound development of the digital economy.
21CBH: According to your observations, what is the current level of computing power in China, and what specific factors shall be further improved?
Shi Yong: Computing power is the fundamental resource for big data in terms of both storage and analysis. There are two specific forms of computing power: centralized computing power, such as supercomputing centers and cloud computing data centers, and distributed computing power by smaller devices such as PCs or mobile phones. Generally speaking, a computing power platform is composed of four parts: the hardware (the whole set of equipment), the chip (processors), the operating system (OS) and the application software. China’s development of computing power platforms are very advanced in terms of hardware construction. However, due to high energy consumption, poor underlying technologies for software, absence of powerful independent operating systems and other issues, this industry also faces all kinds of constraints, particularly in terms of application and algorithm.
What needs to be carefully addressed is that data infrastructure that provides computing power support is highly energy-consuming, which becomes a major obstacle for the development of this industry. Although the current electricity usage by data centers in China is not high compared with residential consumption (with those in budget only accounting for about 2% of the total number), the growth rate is exponentially fast, with an annual growth rate of nearly 12%. This trend is closely related to the rapid development of the digital economy. However, 70% of the power supporting computing facilities comes from traditional energy sources, so the resulting consequence of carbon emission is extremely prominent. Therefore, when planning the construction of new Internet data center and other forms of computing power platforms, it is highly necessary to properly handle great energy consumption, high carbon emission and other negative implications.
At present, the demand for computing power in eastern China is growing faster than that in the central and western regions, with both the market and consumers eager to see the growth of computing power. However, due to limited power supply, energy consumption quotas and other factors, the expansion of computing power faces all kinds of difficulties.
Therefore, at the current stage, the development of data infrastructure should be combined with China’s national strategy of carbon peaking and carbon neutrality. By optimizing the supply-demand structure of data centers, promoting network interconnection, strengthening energy supporting mechanisms and expanding international cooperation in infrastructure, it is arguably possible to optimize the national layout for an integrated big data center system with cluster synergy and high quality.
In order to better support the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, four ministries under the State Council jointly formulated the goal for the computing power hub implementation plan through a collaborative, innovative and integrated national big data center system. Four megalopolises (Beijing-Tianjin-Hebei, the Yangtze River Delta, Guangdong-Hong Kong-Macao, and Chengdu-Chongqing) and four provincial-level regions (Inner Mongolia, Ningxia, Gansu, and Guizhou) will take the lead in the deployment of this plan. Meanwhile, key national strategies for regional development, together with energy structure, industrial layout, market development, climate environment and so on, will be taken into consideration. National big data hubs will be built in areas with rich energy supply and suitable climate, with high-speed data transmission network in between, so as to support the resource scheduling on the national scope and to form a national network of computing power. In this process of layout, China also needs to vigorously promote the construction of data centers in a green, environment-friendly manner, particularly in terms of the transformation of data centers for energy-saving, so as to better support the joint construction and coordinated operation of power grids and data networks, and to greatly reduce the cost of electricity consumption of data centers.
The goal for the implementation of this plan is that by the end of the 14th Five-Year Plan, data centers across the nation will be reasonably located with low carbon emission, better cluster synergy and a strong network for integration. A structural balance will be reached between the east and the west, with power utilization efficiency by large and super data centers dropping below 1.3. Cluster synergy, industrial scale and energy saving will all be significantly improved, with remarkably higher percentage of usage. A public cloud service system will be initially formed, with a much lower average cost of obtaining computing power. Data barriers among governmental agencies or between the public and private sectors will be broken with increased vitality of data resource circulation. Besides, a group of strongholds will be particularly established for certain industries or megalopolises, so that computing resources and data resources in the whole society can be efficiently transformed into intellectual outcomes.
Reducing Redundant Limitation and Maintaining Necessary Regulation: Giving Full Play to Data Elements
21CBH: You are one of the pioneers of big data mining, with a long-term focus on the development of this industry. According to your observation, what is the current status for the application of big data technologies in China? What aspects have been improved, and what are the shortcomings?
Shi Yong: At present, one-third of China’s GDP is somehow driven by industries related to the digital economy. New technologies we see today, including 5G, IoT, AI, supercomputing and even quantum computing, are all based on big data. Big data has been incorporated into the factors of production by China’s leadership, and it has now been brought into all aspects of our life and all sectors of China’s socio-economic development.
However, there are still three major challenges in the development of big data analysis: the first is the structuring of unstructured data, that is, how to convert unstructured data such as text and images into structured data through data fusion, and then use existing structured data mining methods for further analysis; the second is the complexity and uncertainty of data, that is, how to comprehensively rebuild and display the overall complexity and uncertainty of big data from different scenarios and perspectives; the third is data heterogeneity for differentiated decision-making, that is, how to better support different kinds of decision-making through heterogeneous data according to different realities in a specific scenario.
21CBH: The ownership and marketization of data have always attracted our attention. In your opinion, how should a market system built for data elements? How can we solve the problems arising in the confirmation of property rights and the transaction of data resources?
Shi Yong: First of all, it is highly necessary to continuously strengthen both data openness and data protection. We need to further coordinate the development, utilization, privacy protection and public security of data, which is vital for clarifying specifications for property right confirmation, transaction (circulation) and security assurance. While openness is required, regulation is also a must: China needs to speed up the marketization of data elements and build a new four-in-one ecosystem for data circulation, integrating government, enterprises, the society and individuals into the whole network. In addition, the relation between the government and private enterprises regarding the confirmation and usage of data should be properly handled, therefore providing good guidance on the private economy to correctly use data in a reasonable manner: data is obtained from the public and shall be used for public good as well.
Secondly, it is imperative to step up the establishment of a credit reporting system for the whole society. Any scenario, where there is a transaction, needs to be supported by credit: the continuous improvement of a social credit reporting system will ensure the maturity and quality of the digital economy. There are two main forms of credit rating in advanced economies: credit scoring system for individuals, such as the FICO score in the United States, and credit rating mechanisms for enterprises and sovereign states, such as S&P, the Moody’s and Fitch. The building of China’s credit reporting system started from credit loans, and has gradually formed a pattern based on the PBC’s financial credit information database, supplemented by market-based credit reporting agencies. In the future, it is vital to speed up the establishment of Credit China to realize Digital China by promptly building a credit reporting system covering the whole society through legislation as well as turning one’s credit scores into a label for his life in society and transforming a company’s credit rating into a business card for corporate reputation. In addition, third-party credit evaluation should also be fostered for maximizing the social value of credit for the government, enterprises, the society and individuals.
Finally, take the initiative to participate in international cooperation. As the world’s second largest economy, China cannot develop its own digital economy without the support and cooperation from the international community. In this regard, there is both necessity and feasibility to actively join various international organizations, particularly in the formulation of international rules for digital economy.