At the conclusion of the Third Plenum in Beijing this week, innovation and the balancing of development and security were set out as some of China’s core strategic priorities. Meanwhile, in Westminster, there has been much speculation over the omission of a dedicated AI bill at the state opening of parliament, despite indications that the draft bill is largely complete. It seems China and the UK are on the same page in this regard as, while the EU AI Act is set to come into force at the start of August, China’s Draft Artificial Intelligence Law has also been pushed further back.

Delivering the keynote speech at the China Internet Rule of Law conference last week, Wang Hongyu, Director of China’s Legislative Affairs Committee (LAC), made this clear in confirming that China’s plans for implementing AI regulation are still under development. Comparing the legislative approaches of China, the US and the EU, he contended that, although there are undoubted risks in the early stages of development of AI, an over-emphasis on security hinders development and can lead to a loss of competitive advantage, adding that “not developing is the greatest risk”.

This phrase may be familiar to followers of Chinese politics, as it forms an integral part of the logic underpinning tech policy and reform. After what has become known domestically as the “century of humiliation”, during which China was subject to foreign intervention, annexation and subjugation by a host of industrialised nations, technology and innovation are seen as a cornerstone of national security in modern China. Symbolic of strength, competence and prosperity, they are a key policy priority throughout China’s five-year plans. Innovation is as much a matter of national pride as it is security.

Against the backdrop of a difficult economy – with slower than expected growth in the second quarter of this year, cooling consumer demand and a faltering property market – Wang’s comments come as part of a broader trend toward relaxation of regulations around innovation in support of “high-quality development”. At the end of March, we saw the Cybersecurity Administration of China (CAC) announce relaxations to cross-border data transfer, creating exemptions where it is necessary for the performance of a contract, e.g. in cross-border e-commerce, international payments and tourism, and also in the transfer of HR data (for more details, see CBBC member Bird & Birds’s take on the changes here.)

At the same time, pilot programmes lifting foreign investment restrictions in telecommunications services kicked off in Beijing, Shanghai, Hainan and Shenzhen earlier this year. Moreover, reports indicate that China’s National Health Commission is set to revise stringent regulations on the use and management of human genetic resources in a bid to boost R&D in China’s biotech sector.

These measures mark a change in the tide for regulation in innovative industries after the crackdowns seen on tech giants in 2021 as China moves to place innovation front and centre in its plans to stimulate growth, striking a balance between safety and innovation. On the ground at CBBC, we are seeing significant opportunities for grant funding for companies in innovative industries looking to China for manufacturing and R&D. While there are still clear red lines for engagement in sensitive sectors, taken together, these changes present a host of new opportunities for companies in the tech and healthcare space to capitalise on, and we expect to see further easing of regulations in these industries.

Elinor Greenhouse is CBBC’s sector lead for tech & innovation, healthcare & life sciences. For more information and to discuss your strategy in China’s knowledge economy contact Elinor at Elinor.Greenhouse@cbbc.org.

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Having already taken a hammering from Beijing’s antitrust initiatives in the tech industry, tech firms have become a lot quicker in reading the tea leaves and acting upon them.

Beijing’s increasing use of its “common prosperity” catchphrase has seen a rush of China’s tech giants pledging money to social responsibility programmes in recent months. RMB 500 million (£55.9 million) has come from the ByteDance founder Zhang Yiming’s personal wealth, Xiaomi is donating £1.58 billion in shares, Meituan is gifting £1.66 billion in shares, and Tencent has promised two massive pledges totalling £10.8 billion.

Last week, agriculture-focused interactive shopping platform Pinduoduo announced that it will give RMB 10 billion (£1.1 billion) to support China’s farmers and agricultural areas. This is arguably the smartest pledge by a tech company yet, as it ticks many of the boxes on Beijing’s scorecard.

Firstly, it supports rural residents, who have benefitted less from China’s rise than city-dwellers and are an important piece of the “common prosperity” puzzle. It also involves investment in smart technology to bolster China’s standing, which remains key to Beijing’s aspirations, regardless of the crackdown on tech giants. No less important is that it aids Beijing’s aspiration for greater food security, safety and efficiencies, and reduced exposure to natural disasters. The plan also aligns perfectly with Pinduoduo’s position as the world’s largest agri-tech platform, with 12 million farmers in China already using it.

Pinduoduo is likely to be feeling flush with cash, having just announced its second quarter results, which saw sales jump 89% and monthly active users increase 30% from a year ago, contributing to a net profit of £270 million. The company claims that the initiative will “not be driven by profit or commercial goals,” but strive to facilitate the advancement of agritech, promote digital inclusion, and provide agritech talents and workers with greater motivation and a sense of achievement.

The plan also aims to improve downstream market access for farmers to help them build their brands, training younger talent to set up agri-businesses, and revamping midstream logistics infrastructure to reduce waste, lower costs, and speed up the delivery of agricultural food products.

Although RMB 10 billion is just a blip in China’s enormous agricultural market, it is representative of the measured move away from peasantry farming on postage-stamp-size plots and dangerously fragmented supply chains. China is investing large sums to modernise and industrialise its agricultural sector. Last year, while venture capital funding fell by more than half in China, agri-food tech funding increased 66% to £4.3 billion. From monitoring chickens through blockchain and facial recognition, to agricultural drones that increase crop yields, high-rise hotels for pigs, and two-metre-high ‘giant rice’ – large tracts of China’s food production is moving from the primitive to the futuristic, which will have an impact on food producers globally.

Beyond providing another bump for domestic food production, distribution and sales in China, Pinduoduo and the other tech giants’ pledges illustrate that we have reached a new phase of corporate social responsibility in China. There will be more and larger initiatives, and they will need to be supported by more thoughtful campaigns than ever to get noticed.

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When I  first started travelling to China regularly in 2015, I was struck by how the country’s consumers, in particular its millennials, had become increasingly digital: payments were almost exclusively made by scanning QR codes, and nearly every aspect of daily life – from hailing cabs and finding food, to managing finances and booking medical appointments – was made with a few taps on their mobile phones.

Although the events of the past year have hit economic activity around the world hard, the growth of Chinese digital consumption has not abated. Instead, the country has seen accelerated digitalisation, not just in e-commerce and mobile payment adoption, but also in the transformation of more traditional businesses such as grocery shopping and house viewing.

Can British businesses benefit from the digital revolution of Chinese consumers, viewed by many as one of the important growth engines of the world? I firmly believe so. Businesses here should already be preparing themselves, so they can quickly capture these consumer trends amid a global economic recovery that the OECD predicts will be led by countries including China and India.

Why is keeping up and adapting to these fast-changing trends important? We know the average British millennial, born since the 1980s, has seen huge lifestyle changes brought about by technology, the advent of the Internet, and an almost doubling of per capita GDP in their lifetimes. But the changes experienced by the Chinese millennial have been even more significant, driven by growth that has been more than ten times greater.

And while spending power in the UK is concentrated among the older generation, the urban young are driving much of China’s consumption growth. This is partly enabled by much higher salaries in the cities, and also because of demographic change from past population control policies, which have seen a funnelling of resources from older to younger generations.

For a sense of the opportunity, consider these numbers: there are just over 12 million British millennials compared to 100 million in the EU. By comparison, there are more than 350 million millennials in China or about a quarter of the population. Despite China already accounting for 32% of all luxury good consumption, there’s also room for spending to grow, with income per capita still about a fifth of that in the UK, according to World Bank data.

Chinese consumers have also become savvier and wiser about their spending post-Covid, with surveys showing young consumers intending to save more, a greater overall interest in insurance products, and increased interest in better quality, healthier and more eco-friendly purchases, a recent report by McKinsey showed.

British retailers should take note, as there exists a huge opportunity to sell quality products to these savvy consumers who also happen to be digital natives, by diversifying sales channels to take advantage of cross-border e-commerce platforms such as Tmall Global and Shopify, and convenient and SME-friendly international payment providers such as WorldFirst.

Alipay QR Codes are used in nearly all retail and shopping experiences

Some British businesses find this prospect daunting, believing they may be too small to export, that the process will be too complicated, or that there won’t be strong enough demand for their products overseas. But this reflects a huge disconnect between perception and reality.

Last November, more than a thousand British brands took part in China’s famous 11.11 global shopping festival, among which, Welsh beauty company SmoothSkin and British tech giant Dyson made it into the top ten list of brands globally selling into China, according to a report by Alibaba. These tech platforms enable businesses to ‘start small’ and trial selling their products globally without huge upfront investment.

We had also seen before the pandemic how Chinese consumers’ digital habits travelled overseas, including to the UK, a top destination and named as one of the Chinese tourists’ favourite places to use mobile payments. Retailers have benefited in return, with four-fifths of those in the UK who adopted mobile payments experiencing increases in both footfall and revenue, according to a 2019 survey by Nielsen.

While the coronavirus has made international leisure travel almost impossible today, there are signs of green shoots for global tourism. The director of the International Air Transport Association predicted in a newspaper interview this month that personal and leisure travel will return from the second half of 2021 as borders reopen to tourists.

The good news for British businesses? We recently surveyed over 500 Alipay users who had travelled to the UK previously, and nearly 90% told us they planned to restart international travel in the next two years, of which about half planned to revisit the UK. China has announced plans for a ‘vaccine passport’ for its citizens that wish to travel overseas, which should avoid barriers to their travel plans.

So just as the British did in their post-renaissance period in the late 18^th Century, Chinese tourists will once again be going on their own Grand Tours, driven by the similar desire to experience different cultures, visit famous landmarks and see an amazing variety of landscapes. And shopping is also crucial with more than 40% saying that it was an important part of their trips.

For us at Alipay, we started out in 2004 to solve the issue of trust between buyers and sellers in the early days of Chinese e-commerce. More than a billion users now rely on our mobile phone app to make payments, enjoy merchant services such as marketing promotions and coupons, and engage in over 1,000 digital daily life services.

As more and more people start to travel overseas again, our aim is to help businesses around the world easily connect, engage with, and market to these tourists, including by adding Alipay as a mobile payment option. We also partner with financial institutions around the world, including UK banks such as Barclays, to help local merchants increase sales from Chinese tourists.

Over 90% of Chinese tourists surveyed by Nielsen in 2018 said they would be more likely to shop with merchants that accepted their digital wallet. Yet the reality was that they were only able to make 28% of their spending via mobile payments. This presents a great opportunity to make your business more appealing to a crucial group of consumers, who were responsible for £1 billion of spend in the UK in 2019.

One of McKinsey’s most recent reports called Chinese consumers the “Growth Engine of the World”. As the world economy starts recovering from the after-effects of the pandemic, don’t miss the chance to add this growth engine to your business.

Jonathan Quin is the head of Europe strategy for Ant Group and Alipay, China’s leading digital payment platform. He is the co-founder and previously Chief Executive Officer of UK-based WorldFirst, which became a part of the Ant family in 2019.

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Much has been made of both the opportunity and complexity represented by the Chinese market. For an ambitious business looking to take its products or services global, the idea of expanding into the second-largest economy in the world is hard to resist. Not only does it represent a market of 1.4 billion potential consumers, but it is a rich source of skilled labour in manufacturing as well as high-tech and digital industries.

China’s unique history, culture and political system make it a different prospect to the Western markets that many companies will be more used to operating within. The relationship between government, business and military is sometimes blurred, and the UK government has raised serious concerns about how China makes use of emerging technologies to monitor its citizens, as well as other reported human rights violations.

Organisations operating in China need to be particularly vigilant in the area of business ethics to avoid infringing UK or international law, not to mention the serious reputational damage that can occur if it is discovered that a company has been party to or benefitted from any abuses of human rights.

Military-Civil Fusion

The Chinese authorities operate a Military-Civil Fusion (MCF) policy, which was written into the country’s 13th Five-Year Plan in 2015 with the purpose of modernising the military and enhancing its technology. It seeks to achieve this by blurring the lines between civil and military research through an open sharing of science and technology resources.

What this means in practice is that the products a foreign company develops or shares in collaboration with a Chinese partner could theoretically be repurposed for military use – and without the foreign partner’s consent. Understandably, the UK government is concerned about the co-opting of domestic technologies for military purposes, and a business whose tech is discovered to be in use by the People’s Liberation Army (PLA) can face both legal issues and damage to its reputation.

A key way to avoid falling foul of the MCF is by ensuring that you have a comprehensive understanding of the technology your business is manufacturing or selling in China, particularly pertaining to its ‘dual-use’ potential – and have applied for the appropriate export licenses. China can be a highly valuable market for many technologies, but before committing to any deal it’s vital to assess your products for potential military and intelligence applications, even if they aren’t immediately obvious. Your business should consult the relevant UK export authorities if a product seems likely to be subjected to UK Strategic Export Controls. Visit the UK Government’s website –which offers guidance for UK tech firms on managing ethical, legal and commercial matters when working in China or with Chinese companies – for more information about how best to navigate these issues.

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China is a territory rich in potential for UK tech companies, with a hunger for technology and innovation. Yet organisations wanting to capitalise on these opportunities must sometimes overcome high legal and regulatory barriers. China is increasingly open to overseas tech investors and the burden of regulation is lower than ever before. Yet there are still likely to be some significant legal, commercial and ethical differences with the UK that tech businesses would be wise to acquaint themselves with.

Lists and licenses

Chinese regulations have loosened up considerably over the last few years, as the government works to bring high-tech firms and investment into the country. There are hundreds of development zones in China focused on technology and innovation, while the reform of China’s Foreign Investment Law in 2019 has also reduced many concerns for foreign tech firms around IP rights and tech transfer.

Yet, companies still need to check that they can legally operate in China before they start setting up a new business or Chinese office. This starts with consulting two negative lists – the Foreign Investment Negative List and the Market Access Negative List – to ensure that their work doesn’t constitute a restricted or prohibited activity. The lists aren’t particularly extensive, and you can find guidance on them here. They may also need to seek any licenses, permits and approvals that working in specific sectors might require, just as any local Chinese company would.

What’s more, the Chinese government has an Unreliable Entity List, which restricts or prohibits companies named on the list while operating in China. Though there may be little chance your company will end up on the list, this could affect your plans if you rely on suppliers that do.

Though there may be little chance your company will end up on China’s Unreliable Entity List list, it could affect your plans if you rely on suppliers that do

It’s best to do your research early. There are licenses to operate a website or a web-based service, along with customs and licensing restrictions that govern the import or manufacture of IT equipment or electronic goods. To obtain these licenses, products may need independent testing from accredited laboratories, while technical documents and product samples may need inspection. Technologies related to encryption, virtual private networks or cybersecurity may also be subject to additional controls. A new UK government website, aimed specifically at tech businesses setting up in China, has guidance and a range of useful resources that can talk you through some of the basic requirements and help you work out your initial steps.

China’s Corporate Social Credit System (CSCS) is another consideration. This applies to all companies working in China, without exception, and rates them across a range of government-selected metrics, with the government collecting relevant data on how each company is meeting or failing to meet its goals, with appropriate penalties and rewards. Don’t get too nervous – many of the metrics cover basic practices, such as paying taxes on time and holding all requisite licenses – but companies are also expected to meet environmental and product quality standards and ensure that any partners comply too. You can meet all of your CSCS goals, yet still get penalised for using a supplier that has failed to meet theirs.

On top of this, China also has its own workers’ rights regulations, covering everything from how you work with independent contractors, to employee handbooks and written contracts.

This might seem like a lot of red tape to get through, but your best tool to cut through it is preparation and research. There are many legal advisers and market entry consultancies that can help firms to navigate these regulatory barriers, and working with local consultants or specialists who understand your industry can help you meet your legal requirements and counter any regulatory challenges.

The Digital and Tech China website has some useful info on the areas to look into before hiring or going into partnership with local companies or consultants, and you can also get useful advice from the China Britain Business Council (CBBC) and the Department for International Trade, and techUK, the body that supports UK tech businesses looking to work internationally. CBBC also offers a basic due diligence service to help you vet Chinese suppliers and partners.

Intelligence and security

Tech businesses tend to have a large digital component, making them all the more likely to be affected by China’s cyber security and data regulations. China’s Cyber Security Law includes provisions on how data is collected, stored and transferred. In some circumstances, companies may need to seek government approval for the cross-border transfer of personal data or important data, and as a general rule of thumb data should be located on Chinese servers.

In some circumstances, companies may need to seek government approval for the cross-border transfer of personal data, and as a general rule of thumb data should be located on Chinese servers

It’s also worth being aware of China’s National Intelligence Law. This states that all Chinese organisations (as well as Chinese citizens) are obliged to provide support and assistance to state intelligence bodies and keep secret any state intelligence work they become aware of – or party to. The same applies to Chinese subsidiaries of Western multinationals. These laws may affect how you decide to structure your China business, how data is controlled and how you manage your core IP, so it’s wise to get advice on potential issues early on. You can find out more about these laws and their likely impact by heading to this UK Government online resource.

Protecting IP

IP protection is one area where Chinese regulations have improved, making it easier for foreign businesses working in China to protect their intellectual property and trademarks. Keep in mind, though, that the onus remains on UK tech companies to file any necessary patents and obtain copyright protection before they launch. China, like many markets, has a first-to-file trademark system, so international trademarks are not automatically protected unless they are registered in China first. This leaves the way open for a Chinese entity to register your trademark, then use it to block your product or request a payment for its transfer.

Copyright and IP problems still cost UK businesses in China millions of pounds every year, but it’s really just a case of ‘forewarned is forearmed.’ Thanks to the IP-protection legislation that emerged with the Foreign Investment Law, UK firms now have more legal protection over IP and can request enforcement relief. Meanwhile, the UK Intellectual Property Office has an online IP Health Check tool you can use to identify and secure your IP assets, and there’s a range of useful information about intellectual property in China on this dedicated UK Government page. Understand both the value of your assets and the risks, and your halfway to securing your IP.

UK regulations count

UK businesses that want to work in China still need to consider relevant legislation back at home. Most recently, the UK government announced a package of measures to help ensure UK companies are not complicit in, or profiting from, human rights issues in Xinjiang. The UK government also has restrictions around selling products into China that might have military applications or be used in human rights abuses. The UK has export controls that state which strategic military and dual-use items need specific authorisation and an export license, and it’s only sensible to check any products or services being sold against these first.

Business operations in China are also covered by the UK bribery act, which ensures that UK businesses operating in other territories avoid improper business activities, particularly in public procurements. Since 2016, China has had its own tighter anti-bribery legislation, too. You can avoid falling foul of either law by monitoring your company’s activities and following due diligence on local representatives and partners. You can find advice here to help ensure that both you and any Chinese partners or employees stay on the right side of the law.

Resolving disputes

Conflicts and disputes can emerge between businesses in China, just as they do in the UK, and this may put UK companies in contact with China’s complex court system. There are many different types of court, ranging from the Central Supreme People’s Court to local Basic People’s Courts, and the processes and outcomes can vary according to the court’s type or location. Cases can be long and challenging to resolve, which might explain why many foreign companies prefer to resolve them through arbitration as opposed to litigation. In fact, arbitration clauses are built-into many contracts, setting out how things will work in the event of a dispute.

Written contracts and agreements are as crucial in China as they are elsewhere, but need to be drawn up in compliance with Chinese law and stamped with the official red stamp of the partner company. Again, bringing in local legal expertise is a sensible idea. For IP disputes, China now has two specific IP court divisions in Beijing, along with Internet Courts in Beijing, Guangzhou and Hangzhou to handle any disputes over online products and services. Again, your safest bet before any legal action is to refer to a local legal expert.

Meeting all these legal and regulatory requirements can be a challenge, but it’s part and parcel of doing business inside China. There are opportunities out there for high-tech firms to take advantage of, but you have to lay the legal groundwork first.

This article was published in partnership with china.theweek.co.uk, techUK and CBBC.org.  Visit the digital and tech China hub to learn more. 

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The world’s appetite for new technologies is only increasing, and China is determined to take advantage of this demand and become a leading global technology market. China’s tech landscape has grown rapidly in a short space of time, with its digital economy now accounting for about 30% of its GDP (that’s more than doubled since 2008). As Chinese businesses and consumers embrace technologies such as the Internet of Things (IoT), big data and artificial intelligence (AI), the government is also investing significantly in new technologies to boost China’s global position in science and technology innovation.

China recently set out the core direction of the forthcoming 14th Five Year Plan, which will drive China’s economic development from 2021 to 2025. Tech and innovation have been singled out as being central to this strategy, with a particular focus on achieving national self-reliance through increased research and development (R&D). This emphasis on technology and innovation is likely to create a range of opportunities for UK tech exporters to fill innovation gaps within increasingly sophisticated supply chains.

With a population of more than 1.4 billion, over 100 cities of more than a million people, and 900 million citizens with access to the internet, the potential for the tech sector is huge and presents a big opportunity for foreign tech companies. With important trade links across the whole of Asia, China is a key market to crack for any business with global ambition.

Investment in emerging technologies

A key driver behind China’s rapidly growing tech sector is the government, which has made it a priority to become a leading global technological superpower by 2050. In 2015, it outlined the Made in China 2025 strategy, a national 10-year plan to develop Chinese high-tech manufacturing such as IT and robotics. This aims to accelerate China’s transition from low-value-added manufacturing towards an innovation-based economy.

One in three of the world’s unicorn companies (the term given to privately held start-ups valued at over $1 billion) are now Chinese

China’s government has promoted the development of emerging technologies through a supportive policy environment, establishing large-scale funding of research, and attractive incentives for tech entrepreneurs. One in three of the world’s unicorn companies (the term given to privately held start-ups valued at over $1 billion) are now Chinese. The country also accounts for 50% of global digital payments and three-quarters of the global online lending market.

China now has the second-largest AI market after the US, and PwC predicts that AI technologies could contribute a 26% boost to GDP by 2030. Part of China’s AI success is also down to its vast population, which enables companies to gather and harness huge amounts of data. China’s rapid adoption of AI and data-driven technologies is now a major growth driver. For some sectors and applications, opportunities are emerging for closer UK-China collaboration, leveraging the UK’s deep expertise in this area. The UK’s AI unicorns have now all launched in China.

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It’s no secret that 2020 was a year many would like to forget. But while much of the global community is still grappling with the Covid-19 pandemic in 2021, China is in a quite different situation. In fact, thanks to strict lockdowns in areas where cases pop up, the country managed to turn the rudder 180 degrees, ramped up domestic consumption, and is heading for a 7.9% GDP increase in 2021, according to the World Bank. Here are the three main areas of change based on key trends that emerged in 2020.

1. China’s digital society will advance to new heights in 2021 

Think of China these days and it’s hard not to talk about its technology and digital advancements which, quite often, are ahead of many Western countries’. Here’s what we can expect from digital China in 2021:

Digital governance  

Beijing is encouraging the use of electronic chops and seals to verify documents

With 940 million internet users, China has used digital transformation as a new means to modernise China’s governance and make it more convenient for citizens. In the past four years around 600 million users via Alipay alone gained access to urban services, including payment for electricity, water and property management fees. 

The digitalisation of documentation has also extended to the property market, allowing Beijing residents to purchase Beijing-based properties wholly online since 1 January 2021, ending the need to visit registration halls in person. 

Beijing residents can purchase Beijing-based properties wholly online since 1 January 2021

This is only the start for the Chinese government, as the expansion of e-government services will be ongoing in 2021. For example, Beijing is encouraging the use of electronic chops and seals to verify online documents, enabling bureaucracy to become quicker and more convenient. Electronic certificates for medical services and payments will also come into force next year, which brings us to the next digitalised sector. 

Online medical consultations 

Online medical consultation will also grow this year

Unsurprisingly, the Covid-19 pandemic has hastened the digitisation of China’s medical sphere as several tech giants launched new online medical consultation services. As well as preventing cross-infections in hospitals, these in-app services helped patients gain direct, rapid access to free professional healthcare information.   

One example is JD Health, e-commerce platform JD’s healthcare subsidiary, which launched its family doctor service in 2020 with the aim of helping over 50 million families by 2025. The digital platform offers 24/7 medical consultations and promises users a response within 48 hours. Users are also able to gain access to the highest quality of medical care through appointments with doctors from top ranking hospitals. But it doesn’t end there. As well as medical advice, patients can purchase over 220,000 healthcare products on the platform. 

Thanks to the convenience of online medical consultation services like JD Health, these are rapidly becoming patients’ preferred option over traditional face-to-face appointments and will only grow more popular in 2021. 

Smart education 

Smart education is seeing a rapid uptake due to an increase in home learning

China is home to the largest population of young netizens, with 93.1% of the country’s under 18-year-olds (175 million teenagers) using the internet in 2019, according to a report by China Internet Network Information Center and the Chinese Communist Youth League. Their hyper-connectivity provided the right conditions to scale-up online education when the Covid-19 pandemic hit. 

The rapid uptake of online education among schools, parents, and the general population looking to develop new skills, resulted in the development of countless new technology-based education platforms.  

For example, China’s largest online education start-up, Zuoyebang, which literally translates into ‘homework help’, launched its Cocos-courseware platform in September 2020. The AI-assisted learning platform has gesture, voice and face recognition functions that help to engage young students and monitor their concentration in class. No more sleeping on the desk it seems – even at home.

As educators and parents continue to discover the benefits of online education services, technology will become deeply ingrained in education – both through online learning and within the physical classroom. 

5G expands to 6G 

Shenzhen and Beijing have already achieved full 5G coverage

Does your smartphone have 5G capabilities? If you’re in China and the answer is no, you’re clearly missing out on some high-speed internet. 

Fun fact: China constructed 718,000 5G base stations in 2020, with Shenzhen and Beijing achieving full 5G coverage. Telecommunication company Ericsson China’s CEO Juntao Zhao was even quoted saying that “building a million 5G base stations in 2021 is not a problem.” Indeed, China will see a rapid step-up in the availability of 5G in 2021 with more cities gaining full coverage.  

While 5G will continue to be applied to develop key industries, authorities have announced that plans to rollout 6G in 2029 are already underway.  

2. Covid-19 has re-invigorated China’s deep-rooted focus on health 

Chinese consumers have declared 2021 a year oriented around health, as Covid-19 still lingers in the country. The pandemic has inspired people to pursue a healthier lifestyle, which will be especially evident in dietary habits.  

 The power of plant-based  

Plant-based products and veganism are on the rise

It has emerged that an increasing number of people are consuming less meat and more vegetables – a completely new lifestyle for most Chinese people, particularly those in lower-tier cities. According to the South China Morning Post, China’s vegetarian market is expected to grow by more than 17% between 2015 and 2020. Also, the demand for plant-based food is surging, resulting in an exponential growth of the meatless market. Several famous food brands took a step into China’s plant-based meat market in 2020: Starbucks, HeyTea, McDonalds and KFC all released plant-based products. As consumers look for healthier and meat-free options, more and more brands will tap into this market in the coming year.  

Dietary supplements  

Dietary supplement demand grew as a result of the outbreak but those combating hairloss and skin problems prevail

The demand for dietary supplements grew as a result of the Covid-19 outbreak, as consumers sought to boost their health in order to fight the virus. In particular, supplements to regulate blood flow, protect organs and improve the immune system have skyrocketed in popularity. Those most popular among the post-90s generation are supplements to combat hair loss, skin and sleep problems.  

Due to quality and trust issues towards China-produced dietary supplements, many consumers have opted for foreign brands. Australian healthcare brand Swisse saw its GMV increase by 1,535% on e-commerce platform JD, which also welcomed 150 dietary supplement brands in the first quarter of 2020.  

3. China’s wanderlust is unstoppable  

Due to travel restrictions and self-quarantine rules, Chinese tourists were unable to travel abroad in 2020. As confidence in containment of the virus grew throughout the year, so did travel within China, resulting in a boost for the domestic travel industry.  

Domestic tourism booms 

The outbreak has reignited interest in domestic travel

What many people – even Chinese people – sometimes forget, is that China is a vast country brimming with incredible landscapes and historical sights. Thanks to the pandemic and several booster campaigns by local governments and travel agents, many have been reminded of this and found their passion to travel domestically reignite once more.

According to a report by the China Tourism Academy, China’s in-land travel market is expected to grow continually over the next five years, reaching 10 trillion RMB in annual tourism consumption. In fact, 10 billion domestic trips are predicted to take place per year by the end of 2025. We can expect continuous promotions of domestic travel destinations through campaigns, events and discounts.  

While Covid-19 will still affect people’s international travel plans, at least for the first half of 2021, international destinations should also prepare for an influx of Chinese travellers. 

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International travel remains on pause – for now  

The pace of recovery of international travel depends on national and international vaccine deployment and the ability to control the pandemic in a global context. According to a recent survey by the China Outbound Tourism Research Institute (COTRL), about 20% of Chinese travellers want to travel abroad as soon as possible within the Asia-Pacific region, with Europe being the most popular further-afield destination for Chinese tourists. South-East Asian countries are also keen to see Chinese tourists return, with Thailand even recognising the upcoming Chinese New Year as a special holiday for the first time to entice more tourists to come during the national holiday. 

Yet, the virus has changed the way in which Chinese people travel. When Chinese tourists restart their outbound travel, they will look to destinations which offer nature, authenticity, local culture and family-based travel options.  

China rapidly moves into the future 

China has made huge progress in digitising all aspects of society in 2020, from currency to bureaucracy to e-commerce – a transition which has been hastened by the impact of Covid-19. The forces driving these trends will continue to grow in 2021, with the application of digital technologies expanding throughout Chinese society. The virus made its mark on most industries, but nowhere more obviously than in the health products sector and in the growth of China’s domestic tourism industry.

This article was compiled by the team at Dao Insights. Visit their website for more.

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