The digital economy can play a key role in building a strategic industrial chain in order to ensure higher-quality economic growth and modernize China's industries.

In keeping with the central leadership's "dual-circulation" development paradigm, China should develop strong strategic industrial chains to safeguard national security. And regional industrial chains should be so located that they can boost domestic demand.

Since the 1980s, China has been working to make the eastern coastal region prosperous first, and then developing the inland areas by gradually shifting advanced industries there.

However, the gap between eastern coastal region and western inland regions has been widening, partly because the complete industrial chains in the eastern region have facilitated its continuous development.

For example, more than half of all the smartphones nationwide are produced in the Pearl River Delta region. And the cost of shifting the manufacturing units making those to the western inland regions will be very high even though policies encourage the enterprises to do so.

The solution lies in improving the digital economy. Information technology enterprises can easily establish online service centers in the western regions, where its online workers can attend to queries over the phone, thus cutting costs and better meeting customers' demands.

The advantages the western inland regions have will help them to make breakthroughs in the digital economy. A good example is Southwest China's Guizhou province, where the temperature is mild throughout the year because of the karst landform. The provincial government has made good use of this advantage by offering tax incentives to leading IT companies such as Apple and Huawei to build their data storage centers there.

China already enjoys advantages in 5G technology, with Huawei being a global leader in the sector. The future is promising for this 5G sector.

－FANG YUEMING, A RESEARCHER IN ECONOMICS AT CHINA AGRICULTURAL UNIVERSITY