Global Economic Governance in Digital Era

The digital economy is a main economic form which comes after the agricultural economy and the industrial economy. It has profoundly changed the means of production， ways of life and modes of governance in the human society and has become a critical force reshaping world economic structure and transforming the paradigm of global competition. With flourishing digital economy at home， China has played an active role in reforming the global economic governance system in the digital age， shouldering its due responsibility as a major country in maintaining and improving the multilateral mechanism of governance on digital economy.

NEW FEATURES OF GLOBAL ECONOMIC GOVERNANCE

Despite a lack of uniform international rules and regulations and a coordinated global governance system of the digital economy， the world has witnessed rapid growth in the development of bilateral， multilateral and regional mechanisms in the sector.

First， the participants of global economic governance have become more diverse. Since the end of World War II， governments have played a crucial role in establishing the post-war political and economic order and providing global public goods. However， the age of digital technologies has seen the creation of many digital technology companies， whose functions may go well beyond that of the government， extending from online governance in a narrow sense to much broader social and even country governance. Moreover， as digital technologies including the block chain have brought about the distributed technology， and digital platforms have allowed for community-level self-governance， new channels are now available for individual participation in global governance.

Second， the objects of global governance have become more complex. The rise of digital technologies has accelerated the popularity of the global mobile internet and information technology upgrades， profoundly changing the model of traditional trade and finance and even currency form. Many problems have emerged， including digital development gap and systemic financial risks caused by cross-border data flow， private digital currency and frictions in digital trade. In addition to these problems generated from the integration of traditional and digital technologies， global governance also focuses on other global challenges created by digital technologies themselves.

Third， there is a growing trend of fragmentation in the mechanism of global economic governance. Since the end of the cold war， the global institutions for economic governance have become more fragmented， due to the signing of many regional trade agreements and bilateral investment agreements. This trend is made more apparent by the impact of digital technologies. Many countries have reached independent bilateral or regional agreements regarding the digital economy. However， there is still no uniform systematic global governance framework on the digital economy. Countries choose different modes of digital economic governance to protect their own interests. This fact has also added to difficulties in the agenda of promoting global governance on digital economy.

DIFFICULTIES IN GLOBAL ECONOMIC GOVERNANCE IN THE DIGITAL AGE

The main challenges in global governance in the digital age include the broad scale of governance objects， malfunction of traditional governance mechanisms and rising conflicts between governance participants. The major difficulties in global economic governance in the digital age are reflected in the following three aspects.

First， there is a rising conflict of power between sovereign governments and the private sector. The digital economy causes conflicts between currency nationalization and liberation. With the rise of the block chain technology， the Bitcoin and other private digital currencies have emerged. As private digital currencies are an integration of traditional finance and emerging technologies， their issuance and circulation are not without risks， which is a huge threat to financial security. Meanwhile， excessive use of private digital currencies also poses severe challenges to sovereign currencies. In international settlements and cross-border payments， private digital currencies may erode the trading system of central bank digital currencies， and even compete with the latter as equals. How the two can coexist remains a daunting task in currency digitization.

The digital economy also causes an invasion of the private sector into the function of sovereign countries. In the digital age， digital technology companies have gone far beyond their role defined in classical economics. They have even taken the place of traditional trading markets and now function as the facilitator of goods， currency and personnel circulation. Besides， the globalization of digital technology companies is severely threatening the political process of governments by means of public opinion manipulation and interference with media freedom.

Second， the differences and conflicts of policy between countries are increasing. The global paradigm of digital economic governance can be described as the U.S. and the EU each dominating one of the world’s two major governance systems of the digital economy. Their policies follow two different principles. Since the 1980s， the U.S. has been advocating for “liberalism” in global economic governance. It aims at leveraging U.S. advantage in the digital economic sector and setting “liberal” rules and regulations for global digital economic governance， which can in turn help the U.S. secure its leading position and a larger share in the global market. The EU has started to unify digital policies within the region since the 1970s. Its policy emphasizes human rights protection and aims at competing with the U.S. for domination of the global digital market. With the continued spread of COVID-19 and downward pressure of the global economy， the differences and conflicts between the U.S. and the EU will still linger in the near future.