Li Wenlong: Building a financially strong country also requires building a digitally strong financial country

The “14th Five-Year Plan” proposed accelerating the development of a strong financial nation, vigorously advancing financial technology, green finance, inclusive finance, pension finance, and digital finance, with particular emphasis on “digital finance.” This represents a significant upgrade and breakthrough compared to the “14th Five-Year Plan,” which outlined the construction of a modernized powerful country across eleven sectors: “culture, education, talent, sports, science and technology, manufacturing, quality, internet, transportation, trade, and ocean”—but did not mention “financial power.”

In fact, from the perspective of the global economic division system, building a strong financial nation holds extremely important top-level value and strategic guiding significance. Moreover, in the context of the world accelerating toward a digital economy, it is even more necessary to focus on building a “digital financial powerhouse.” This is key for China to gain a leading advantage in the current and future global digital economy development.

1. Finance is the apex of the economic division pyramid, determining whether China’s nation can truly rise.

From a global industrial perspective, in the traditional economic division pyramid, agriculture and resource industries are at the bottom, with manufacturing in the middle. Because the financial industry provides the financing, payment channels, and payment methods for global economic activities, and is the carrier and form of wealth, it is the critical sector of the economy, thus occupying the top of the global economic pyramid.

From the perspective of national economic division globally, even though the manufacturing sectors of the UK and the US have been shrinking and their influence limited, they have maintained dominance because of the control of the global financial system by the Anglo-Saxon groups and Jewish financial oligarchs. Positioned at the top of the pyramid, the US and UK have exerted the greatest influence worldwide, wielding finance as a tool of control and deterrence. Relatively, although Germany and Japan have developed manufacturing industries, they have never been able to reach the top-tier financial advantage of the US and UK.

Currently, China is a major global manufacturing power, but its position in international finance remains significantly weak. International financial payments and payment tools are controlled by Europe and the US, preventing China from reaching the top of the global economic pyramid. This will be a long-term major pressure and challenge for China’s rise. Therefore, while building a manufacturing powerhouse is extremely important, if China becomes complacent with just being a global manufacturing giant or stops there, it may only develop into a “big Germany” or a “big Japan,” potentially blocking China’s path and steps toward becoming a true global financial power, and affecting its ability to become a top-tier global superpower.

2. The world is accelerating toward a digital economy, and the explosion of digital finance based on data elements and digital assets is an inevitable trend.

Currently, the global shift from traditional to digital economy is irreversible and widely recognized as a major development trend. In the digital economy, digitalization has generated vast amounts of data elements and data resources, becoming core assets alongside traditional real estate, movable property, and financial assets—forming the four major asset classes. The rapid emergence and accumulation of digital assets, which grow faster than traditional assets and actively participate in economic activities, will lead to increasingly active and explosive digital financial activities centered around digital assets. Under compliant and regulated conditions, blockchain technology can link real industries with digital financial activities, characterized by high credibility, liquidity, tradability, and traceability, and is destined to become the main financial expression of the global digital economy.

3. Digital finance plays a core role in the digital economy.

In the traditional economic division pyramid, agriculture and resource industries are at the bottom, manufacturing in the middle, and finance at the apex. Correspondingly, in the digital economy division pyramid, digital agriculture and digital manufacturing occupy the lower-middle levels, while digital finance undoubtedly occupies the top of the pyramid. Therefore, besides focusing on the development of other digital industries, it is crucial to recognize and highly value the strategic position and top-tier advantage of digital finance in the digital economy. This is directly related to China’s core goal of building a modernized powerful country and the correct strategic direction.

4. Building a strong digital financial nation is essential for truly rising in the global digital economy.

Currently, China leads in foundational areas of the global digital economy, especially in social governance and manufacturing, but remains relatively weak in digital finance. Notably, the international influence and application of digital renminbi are still in early stages, and compliant digital financial applications supported by blockchain technology are just beginning. Fortunately, in the current global digital economy division pyramid, the layout of digital finance has not yet been fully shaped, providing China with significant opportunities.

At the same time, it is necessary to be vigilant that the US has accelerated its layout at the top of the digital economy pyramid to establish global leadership in digital finance. Given this situation, China should aim to build a digital financial powerhouse as its core goal of becoming a strong financial nation. This is crucial for the Chinese nation to truly achieve a rise in the global digital economy.

(Author: President of Zhejiang Zhijiang Digital Economy Innovation Research Institute)

(Original source: Yicai Global)