How can we make use of financial innovation to boost digital economy, facilitate digital consumption and guide the development of digital economy? This is of great importance. Financial technology blends the rapid development of digital economy and the effective role of financial functions. Therefore, we must guarantee the standardization of financial technology.
To develop the digital economy, we need to encourage and attract venture capital to participate in financial innovation and boost the legitimate collection, application and sharing of data on digital platforms in order to make digital economy stronger and bigger. But it is also necessary to regulate platforms’ abuse of data and restriction of competition. As algorithmic data become a dominant production factor of the digital economy era, those large-sized digital platforms with financial capital involved have had the functionality of market data feedbacks and algorithmic prediction, breaking the original boundary of the industrialized economic system. Through developing potential market and expanding economic space, they have gradually occupied a monopoly position. The sharply widening gap between some monopolistic digital platforms and smaller follower-type competitors is bound to cause market disorder.
In the era of digital economy, financial innovation can promote the rapid development of digital economy, but we must hold the bottom line of guaranteeing the security of digital economy. We should be vigilant to "black swans" and keep away from "gray rhinos". Enough redundancy should be set up while financial functions are exercised. Anti-vulnerability, survival ability and sustainable innovation should be reinforced in the future uncertain environment. We should not only encourage legitimate data collection and data algorithm application, confirm rights of digital assets and develop digital capital, but also prevent the formation of oligopolies, especially the disorderly expansion of digital platforms. According to the Central Economic Work Conference held in December 2021,"We should correctly understand and grasp the characteristics and behavior rules of capital, and set up ‘green lights and warning lights’ for capital so as to strengthen effective supervision of capital and prevent wild growth of capital." Financial capital that participates in market competition in an orderly manner and promotes the healthy development of digital platforms can be supported and guided to innovate and develop in the direction of serving the real economy in the long term so as to further meet the needs of people for a better life. For those digital platforms that arbitrarily infringe on consumers' rights and interests by virtue of their monopoly position, supervision and punishment shall be strengthened to ensure the orderly development of the country's digital economy. For new commercial activities and models, such as digital payments, digital supply chain finance and digital insurance, regulatory team building will be strengthened, cross-sector and cross-industry laws and detailed rules and regulations on punishment shall be developed and implemented in order to prevent local risks of some digital platform enterprises from becoming social systemic financial risks.
In the era of digital economy of the 21st century, we must focus on both development and security to achieve development while conforming to regulations, make use of the institutional advantages of socialism with Chinese characteristics, enhance the construction of new infrastructure, guide venture capital to boost key digital technology innovation, facilitate the integration of digital economy with the real economy, promote the healthy development of digital economy, put relevant regulations in place, improve the digital governance system, take part in international cooperation in digitalization and explore a new Chinese-style path of modernization, innovation and development for the digital economy.
Shen Weizheng, lecturer of School of Marxism, Shanghai Institute of Technology