How China built a digital economy that works for everyone

A Brazilian student scans a QR code on a vending machine at the Yenching Academy of Peking University in Beijing, capital of China, April 13, 2023. [Photo/Xinhua]

China's digital financial ecosystem has become a defining feature of its rapid modernization, successfully transforming capital and consumption dynamics across the nation. This transformation is remarkable not just for its pervasiveness, encompassing QR-code-enabled transactions from street vendors to banks' digital currency operations, but for the unprecedented scale and speed of adoption across all economic sectors.

Crucially, this digital infrastructure is not merely a market outcome; it is the result of comprehensive reform that prioritized financial stability to enable faster monetary flows. This was made possible by the maturation of large-scale mobile internet and fintech frameworks first launched in the early 2010s.

Back then, China ensured that bank-linked digital wallets, smartphones and speedy networks were distributed equitably across its population within the banking system, which created conducive environments for local digitalization to take hold. A 2020 Brookings Paper, for example, cites how two major Chinese payment platforms – Alipay and WeChat Pay – reshaped the country's financial infrastructure in just under a decade. This transformation was made possible through the systematic implementation of reforms across China's provinces to optimize market conditions for investment, reform and digitalization. This included constructing digital government infrastructure across 31 provinces and expanding credit access to ensure equitable economic development for all income groups.

Moreover, the drive toward digitalization has been underscored by a forward-looking rationale: building national supply chain resilience. By providing companies with smoother, faster trade services and digital economic linkages, the government has allowed the economy to hedge against traditional barriers and counter external shocks, such as isolationism and tariff imposition. Digitalization has therefore proven to be not a one-time initiative but an ongoing product of coordinated financial and digital infrastructure development alongside consumer provisions like mobile internet and fintech.

The achievements are staggering. The country's total transaction value of digital payments is expected to reach approximately $10.04 trillion in 2025, with projections suggesting $13.52 trillion by 2030. A survey of Chinese consumers further demonstrated that mobile wallet usage for digital payments was high, with more than 84% having reportedly used one in the past year. China is hence one of the top countries in the world for mobile wallet usage. Similarly, progress in preceding years underscores Beijing's commitment to digitalization. In 2022, over 150 billion real-time transactions took place alongside over 80 million corporations and enterprises adopting digital payment systems. Such developments have resulted in near-ubiquitous digitalization across the Chinese economy, creating a largely cashless system that operates at speed and aligns with 21st-century standards. These gains have improved economic quality beyond higher GDP growth rates alone.

Digitalization has had an indelible impact on the costs of transactions for consumers and suppliers, which are significantly lower and allow small businesses previously on the fringes of the national economy to integrate into the mainstream market. This includes rural economies, where digital payments have outpaced traditional banking platforms, driven by stronger logistics and e-commerce networks reaching local populations.

This, in turn, results in more equitable economic growth in China, with small-scale enterprises building linkages with the consumer economy, aided by the modernization of supply chains. This forms an integral part of China's official policymaking as it seeks to expand economic growth in a meaningful way. More digitalization entails board-based prosperity, changing lifestyles for the local population. The digital economy, for example, allows street vendors to partake in transactions, marking an improvement in urban finance as well as access to low-cost mobile payments for previously underserved segments of the population. Consumer behaviors are also shifting as mobile wallets are now used for supermarket transactions, online stores and street vendors, making digital payments a lifestyle choice for all.

Such rewards being reaped in 2025 are a product of proactive reform agendas initiated in recent years. In 2024, official guidelines on digital trade set targets for 2029, projecting digital services growth of over 45%. The 2035 target is around 50%. To achieve these targets, however, China's robust digital payments system has proven pivotal. The rollout of digital currencies and QR-code interoperability has allowed China to enhance payment system resilience, efficiency and monitoring. By integrating mobile wallets into regulatory frameworks, the country has balanced commercial competition with financial stability and equitable access to funding.

Internationally, such digital payments have served China and its population well. The success of these platforms has increased traction for digital platforms abroad, resulting in greater cross-border services and trial runs for cross-border usage.

To sustain this excellent momentum, China should strengthen digital platforms, including broadband, wallets and identity systems in rural areas, while implementing increased regulatory frameworks for protecting consumers through data governance and fintech supervision. Interoperability in the form of unified QR-code systems, for example, can promote universality and reduce costs for merchants, traders, wholesalers and transporters. Consistent support for micro-enterprises and smaller companies, which have historically been on the fringe, continues to yield dividends in the form of inclusivity.

What is undeniable is that China has made massive strides from cash-intensive transactions to a digital payments system deeply embedded in its innovative reform agenda. Beyond mere convenience, this transformation has demonstrably changed lives, reinforced economic stability and accelerated China's push toward high-quality, inclusive national development.

Hamzah Rifaat Hussain is a former visiting fellow at the Stimson Center in Washington.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.