A concept photo of digital economy Photo: VCG

In a letter sent to the US President Joe Biden, a dozen of US Republican senators urged the White House to begin digital trade negotiations with their "allies and partners" in Asia so that the US, rather than China, could "write the rules for digital trade in the 21st Century."

Expanded digital trade will have strategic and economic benefits for the US and will offer a counter balance to influence from China, the letter claimed.

Since Biden took office, his administration has been signaling its intention to complete a digital trade deal with countries in the Asian-Pacific region so as to "get back in the trade game" and rival China's influence in the region. The proposal seems lack of any tangible details or timetable, not to mention the unrealistic notion of the US politicians to write rules for digital trade in the 21st century.

The digital economy, a key growth sector across all countries and regions in the world, is being embraced by investors and governments alike across the globe; but without a set of mature international rules in place, it has become a field where the US seeks to take an upper hand to set rules which favors its own interests.

The US senators who penned the letter did not hide their selfish and hegemonic mindset, claiming that digital rules "must reflect American values", and they claim the Indo-Pacific countries are setting their own rules without the participation of the US which "could put US technology firms and consumers at a competitive disadvantage."

However, international rules should have general applicability, taking into account the interests of all parties; rather than protecting the interests of one party or being used as a tool to crack down on others. If the US wants to phase in a set of rules that only protect its own interests, many other countries and regions in the world will not accept them.

Currently, the rulemaking for digital trade has taken a regional focus, with different regions focusing on different concerns and some even holding opposing stances, which are not conducive to the global economic development, nor favoring the development of the digital economy. 

A set of fair and effective international rule clearly is in need for digital economy's growth. The Digital Economy Partnership Agreement (DEPA) inked in June 2020 by Singapore, New Zealand and Chile has initiated a commendable exploration of some key issues, which it said will help establish new rules and practices for digital trade, and promote ongoing discussion on issues like digital inclusion, inclusive trade and support for small and medium enterprises (SMEs) in the digital economy. 

One of the great features of DEPA is its 16 modular protocols, where participants don't have to agree to everything in the agreement; instead, they can choose different combinations of fields which they can participate in. 

China, as a responsible and far-sighted digital economy powerhouse, has committed to make its own contribution to the unity and transparency of the rules of the world's digital economy. On November 1, China officially filed an application to join the DEPA.

According to an estimation released by the China Academy of Information and Communications Technology (CAICT), the digital economy in 47 surveyed countries was worth $32.6 trillion in 2020, accounting for 43.7 percent of GDP, in which China's digital economy was worth $5.4 trillion, ranking second in the world, with a year-on-year growth of 9.6 percent, ranking first in the world. 

It has also become a major engine for growth for many industrial lines in China, especially since the outbreak of the COVID-19 pandemic in early 2020. An ever growing proportion of service trade has been transferred from offline to online, and the digitalization process of service trade has been further accelerated.  

As the world's two largest digital economy powers, the US and China still share the potential to explore mutually beneficial cooperation in the area as long as Washington can shake off its hegemonic mindset and recognize that digital trade rules will not become a tool for the US to suppress the development of China.  

The article was compiled based on an interview with Huo Jianguo, a vice chairman of the China Society for World Trade Organization Studies in Beijing. bizopinion@globaltimes.com.cn