The positive impact of online payment on the Chinese economy

The positive impact of online payment on the Chinese economy

Recent years have witnessed the development of digital economics, which has aroused a heated debate on online payment exert impact on the advantageous impact to the economy in China. Under this circumstance, I prefer to analyze this situation.

To begin with, payment through the virtual internet has been and is going to promote the specialized division of labor and technological progress and therefore to improve the productivity of the Chinese economy. Digital currency in time and space can connect business decision-makers all over the world, further expanding the boundary of the market. To be more specific, digital currency is legal electronic cash, with the characteristics of instant payment, which can improve the speed of capital turnover of enterprises, expand the scale of the industry. Thus, the free flow of promoting factors and specialization of the division of labor is realized, which improves labor productivity and promotes technological progress. Therefore, in the future, the total output could be enlarged.

Furthermore, there be merged lower economic operating costs compared only using the cash. The moral hazard for individual institutions can be reduced, due to the uniqueness of digital currency. Less governmental officers and employees of the companies dare to corrupt because banks would record each transaction. Specifically, due to the controllable anonymity of digital currency, the whole process of currency circulation can be monitored, and the space for illegal activities is greatly reduced. Therefore, the executive power of the government could be enhanced and the government expenditure (tax) and government revenue (tax) could be controlled more precisely.

Last but not the least, the internationalization of the Chinese currency could be spread. If digital currency is introduced, the payment process can be unified. The convenience of the inter-country settlement greatly improves efficiency. Since the implementation and promotion of “One Belt and One Road” in 2015, China has become more closely connected with the world. With the remarkable improvement of China’s comprehensive strength, the degree of opening to the outside world is constantly expanding, and the economic and trade exchanges with other countries are deepening day by day.

To sum up, the advantages of online transactions in the Chinese economy could mainly impact three aspects, namely, productivity, economic cost, and currency internalization.

Haoxuan Zhang

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