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What is "Trade Digitalization"

Date:2021-08-25
Contributor: Ge Xiaoming, Senior Advisor of Guan Heng Group



       Cross-border e-commerce, digital trade, digitization of trade, and industrial Internet are all popular concepts at the moment. But what is so many concepts, sometimes it is not easy to be unclear.

  What is "Trade Digitalization" (Figure 2)


What is the "digital economy"?


What is "digital trade" (Figure 3)

Whether it is engaged in the Internet, e-commerce, cloud computing, artificial intelligence big data, it is summarized in one sentence-"The digital transformation of the world economy is the general trend." Digital transformation is a description of the trend, but it forms a new economic form when it is incubated, and its name is "digital economy".

The digital economy is composed of digital industries and industrial digitization:


▶Digital industry: Most of the information products produced by the Internet and digital technology are "visible but intangible".

Such as blockchain technology, AI algorithms, PaaS, SaaS, Internet platforms, online games, software, electronics

Child book.


▶Industry digitalization: It is the use of the Internet and digital technology to transform traditional industries.

For example, pig farms use artificial intelligence cameras, every pig can be recognized, and then the feed machine is eaten right away, and the pigs grow faster and save feed.

The machines in the factory connect to WIFI to become unmanned manufacturing, and the plane connects to WIFI to become unmanned aerial vehicles and so on.


Various sub-fields such as agricultural digitalization, industrial digitalization, and retail digitalization can be derived; but why are these fields not called automation or informatization?


Take a pig farm as an example, automation can only make the feed machine do the same thing every day; informatization is to calculate how much money you eat every day while the feed machine does the same thing every day; and digitalization tells you that the pigs are different. The growth data is recorded, and after the data is automatically calculated, the feed machine can be instructed to cook different meals.






Digitization of trade


What is "digital trade" (Figure 3)

The connotation of industrial digitization can be extended to the digitization of domestic and foreign trade-called digitization of trade; that is, the use of the Internet and digital technology to transform the trade industry.


  1.  The Internet is used in foreign trade business, and the result is "cross-border e-commerce."

  2. Foreign trade business uses digital technology; foreign trade factories, foreign trade companies, and international logistics companies all use cloud computing, artificial intelligence, and then add e-commerce, which is the digitalization of trade.


Therefore, the Internet of trade results in cross-border e-commerce; all links of trade use the Internet and various digital technologies, and the result is the Internet of foreign trade industry. Therefore, the result of trade digitization is the Internet of foreign trade industry.


▶Trade digitalization is defined as: With trade as the leader, industry as the foundation, and service as the guarantee, the coordinated development of trade, production and service will realize the digital transformation of the entire industrial chain and value chain of foreign trade.





However, it should be noted that, in the same way that the digital economy is divided into two categories, digital industry and industrial digitalization, it is also divided into two categories in trade: digital trade and trade digitalization.


1. Digital trade: It was first proposed by the United States in 2013, and the goal is to promote the free flow of global information and data.

Digital trade is mainly the visible and intangible information, data and online services such as e-books, online games, online advertisements, software, applications, Internet platforms, and online videos . It has nothing to do with the trade of visible and tangible goods such as clothes, cosmetics, and cars.

In the first report of "Digital Trade in the United States and the Global Economy" released by USITC in 2013, the concept of "digital trade" was clearly put forward for the first time. In the "Digital Economy and Cross-Border Trade: The Value of Digital Delivery Services" and "Digital Trade in North America" released in 2014 and 2018, it is even more important to make the United States a leader in global digital trade.


2. Digitalization of trade: the Internet and various digital technologies will be used in all aspects of trade, that is, the Internetization of trade (foreign trade) industries. so:

Trade digitization = digitization of foreign trade industry,

Digital trade = trade in digital services,

Foreign trade industry Internet = cross-border e-commerce + digital supply chain + intelligent manufacturing.




friendly reminder
FRIENDLY TIPS

Trade digitization is also described in China’s top-level documents. Article 15 of the “Guiding Opinions of the CPC Central Committee and the State Council on Promoting High-Quality Trade Development” on November 28, 2019 mentioned that the level of trade digitization should be improved and the formation of data-driven A digital, networked and intelligent development model with the core, the platform as the support, and the integration of business and industry as the main line. Promote enterprises to improve their trade digitalization and intelligent management capabilities, and vigorously improve the digital level of comprehensive foreign trade services.


What is "Trade Digitalization" (Figure 5)




The main manifestation of trade digitization

In these two aspects



What is "digital trade" (Figure 3)


▶Enable: Digitization empowers the whole process of trade.

The whole process of trade is long, including trade development, matching, execution, delivery, and service. The whole process can be empowered by digital technology, which greatly increases trade opportunities, reduces trade costs, improves trade efficiency, and shortens trade processes.

▶Transformation: The digital transformation of enterprises has become an important part of the digitalization of trade.





How should the road to digitization of trade go?


What is "digital trade" (Figure 3)

1. The digitalization of trade must take the road of integration and innovation development; the integration is reflected in four aspects:

A) Integration of domestic and foreign trade

Digitization will open up the domestic and international double cycle.


B) Integration of trade in goods and trade in services

Although the current digitalization is mainly embodied in the field of trade in goods, trade in goods will generate more demand for services, and trade in services will promote more trade in goods. In the future, the two will "integrate software and hardware" and "combine reality and reality" for integrated development.


C) Trade and industry integration

It is an important part of the digitalization of trade. Cross-border e-commerce plays a leading role in it. Trade is the forerunner and leader of industry, and industry is the foundation and support of trade. In the future, under the promotion of digitalization, the degree of integration of trade and industry will become higher and higher. The digitalization of trade provides a very good opportunity for the integration of trade and industry.


D) Integration of online and offline

Online and offline are mutually integrated and mutually promoted. Online trade makes offline trade even more powerful.


2. Five key points should be grasped for the innovation and development of trade digitalization:

A) The construction of new infrastructure is the foundation for promoting the digitalization of trade.

As the cornerstone of the development of the digital economy and an important support for transformation and upgrading, accelerating the construction of new infrastructure is what it means for the high-quality development of China's economy. The occurrence of the new crown pneumonia epidemic has highlighted its urgency and necessity.


B) The digital transformation of enterprises is a prerequisite for advancing the digitalization of trade.

As an important participant in foreign trade, the company's own digital transformation is very important. If the company does not carry out digital transformation within the company, its participation in the digital development of trade will be greatly reduced, and the digitalization of trade processes will lose its meaning.


C) The digital transformation of the entire trade process is the guarantee for the digitalization of trade.

The use of digital technology to promote the digital transformation of trade processes, and the establishment of a system of full responsibility, traceable and multi-party coordination, will greatly enhance the efficiency of foreign trade and the competitiveness of foreign trade.


D) The digital public service platform for trade provides support for data-driven implementation.

Constructing a digital public service platform for trade, realizing the smooth exchange of business, data, and information flows, and continuously transforming data into intelligent analysis and insights, will help foreign trade companies gain more agile action and market response speed , Which can truly release the driving effect of data.


E) Digital talent is an inexhaustible driving force for the digitalization of trade.

In the future, only by strengthening the supply of digital talents D1 and placing high-end and application-oriented talents in an equally important position can we realize the healthy and rapid development of enterprise trade digitalization.