Daryl Guppy is a special commentator on current affairs for CGTN, and is an international expert in financial technical analysis. He has been providing weekly analysis of the Shanghai Index for media in mainland China for over a decade Guppy appears regularly on CNBC Asia and is known as "The Chart Man". He is a former national board member of the Australian China Business Council. The article reflects the views of the author and not necessarily those of CGTN.
Remember when there were multiple employees in the accounting department calculating payroll?
Then it must have taken someone about an hour to go to the bank and withdraw the cash. In the locked office, the cash was counted into individual pay packets for each employee. Employees then had to go to the bank to deposit their wages. Even for the more efficient companies that paid by check, several employees were required to print and authorize each one.
How times have changed.
Hours and complex wages are calculated by the software - and automatically integrated into the full company accounts. No cash is withdrawn from the bank and wages are paid by electronic transfer in seconds. Employees access their salaries via e-banking or WeChat Pay.
Productivity has increased, but how does this count in the national GDP accounts? It cannot be measured effectively.
Today, many employees have what Americans call a side-hustle. It could be selling products on WeChat, promoting products as an influencer on TikTok, or earning income from a second job or hobby that reflects their passion.
"We can no longer trust the economic data," Paul Donovan, chief economist at UBS Global Wealth Management, said during a visit to Sydney.
China's advanced digital economy combines both of these factors, but the economic numbers used to construct the GDP indicators do not reflect this transformation. The data collected for the Purchasing Managers' Index (PMI) is accurate, but no longer reflects the significant scale of new digitally enabled economic activity, let alone the impact on productivity.
The reality is that the Chinese economy is undergoing a fundamental change in its structure. It is a change that is not being experienced to the same extent in other economies. The digital shift is taking the Chinese economy in new directions. The key point rests on the ideas of dual circulation and shared prosperity. The Third Plenary Session of the 20th Central Committee of the Communist Party of China supported the deepening of reforms with further commitment to this economic change.
(Yawen)
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