Logic and Policy Suggestions of Digital Economy Boosting Service Trade

Text/Chunmin Zhao, Professor and Doctoral Supervisor of School of Economics and Business Administration, Beijing Normal University; Wen Lei, lecturer and doctor of capital university of economics and business Institute of Economics.

The rapid development of digital economy and service trade, and the driving relationship between them, is one of the outstanding performances of China’s entry into WTO for 20 years. With the global epidemic of COVID-19, the downward pressure on the world economy has been increasing, the process of economic globalization has suffered serious setbacks, protectionism, populism and unilateralism have gradually risen, and international trade and international investment have fallen sharply, which has brought great challenges to the high-quality development of China’s service trade. Therefore, how to use the digital economy to promote the high-quality development of China’s service trade has become an important issue after China’s service trade has entered a new stage of development.

First, the role of digital economy and service trade in promoting national economic growth

With the rapid growth of China economy entering a new stage of high-quality growth, the role of digital economy in promoting national economic growth has become increasingly prominent. According to statistics, the added value of China’s digital economy was only 2.6 trillion yuan in 2005, and it soared to 39.2 trillion yuan in 2020, and its proportion in GDP also increased from 14.2% in 2005 to 38.6% in 2020. With the global epidemic in COVID-19 and the increasing downward pressure on the world economy, the digital economy has become the key for China to cope with the economic downturn. The White Paper on the Development of Digital Economy in China (2021) shows that China’s digital economy will grow by 9.5% year-on-year in 2020, which is 7.2 percentage points higher than the nominal GDP growth rate in the same period; The scale of digital economy in 13 provinces and cities such as Guangdong, Jiangsu and Shandong exceeds 1 trillion yuan, and the added value of digital economy in Beijing and Shanghai accounts for more than 50% of GDP. From the vertical dimension, China’s digital economy has also experienced a long period of rapid expansion. From 2005 to 2020, the scale of digital economy has increased by 15.08 times, with an average annual growth rate of 18.48%, while the GDP has only increased by 5.55 times and the average annual growth rate is only 11.3%. From the perspective of value-added accounting, the contribution rate of digital economy to national economic growth is also significantly improved. From 2014 to 2020, the contribution rate of China’s digital economy to GDP growth exceeded 50%. The COVID-19 epidemic has promoted the rapid development of e-commerce retail, online office and other businesses, which has greatly released the potential of digital economy.In 2020, the contribution rate of digital economy to GDP growth is close to 70%, while the contribution rates of the three major industries in GDP in the same period are 7.7%, 37.8% and 54.5% respectively. In addition, the advantages of digital technology in anti-epidemic practice and social governance have gradually emerged. China has widely applied digital technologies such as 5G, big data, cloud computing and artificial intelligence in anti-epidemic activities such as epidemic monitoring, virus tracing, prevention and rescue, which not only provides effective and valuable experience for the international community’s epidemic prevention and control, but also fully taps the huge potential contained in the online model of social governance in the unprecedented changes in the past century.

Similar to the development of digital economy, China’s service industry and service trade also ushered in rapid development during the "Thirteenth Five-Year Plan" period, and important progress was made in the opening of service industry and the innovative development of service trade. The Research Report on the Development of China’s Service Trade Industry (2020) pointed out that from 2016 to 2019, the output value of China’s service industry increased by 6.6% annually, especially under the adverse impact of the COVID-19 epidemic, China’s service industry still rose against the trend in 2020, with a year-on-year increase of 2.1%; Compared with offline retail, transportation, accommodation and catering, new consumption patterns closely related to digital technology, such as online shopping, live delivery, community sharing and direct delivery in stores, have grown strongly. Take live broadcast with goods as an example. In the first half of 2020 alone, the scale of live stream economy reached 563 billion yuan, and the economic scale indirectly produced by live broadcast also reached 283.3 billion yuan. Compared with the development of service industry, China’s service trade has been negatively impacted by the COVID-19 epidemic. In 2020, the import and export amount of China’s service trade was 4.56 trillion yuan, down by 15.7% year-on-year, which was far from the growth rate of 1.9% of goods trade. However, compared with the negative growth of total trade volume, there are still some gratifying changes in China’s service trade: First, the trade deficit has been greatly reduced. Compared with 2019, China’s service trade deficit dropped from 1.51 trillion yuan to 0.69 trillion yuan in 2020, down 53.88% year-on-year. Second, the trade structure has improved significantly.Knowledge-intensive service products have become the main force of China’s service trade import and export. In 2020, the total import and export volume reached 2.03 trillion yuan, up 8.3% year-on-year. Compared with 2019, the share in service trade has also increased significantly, increasing to 44.5%. Third, important progress has been made in opening up the service industry. Since the establishment of the Shanghai Pilot Free Trade Zone in 2013, China has successively established 21 free trade zones, and put forward a series of differentiated pilot tasks based on the characteristics and advantages of each region; The number of service outsourcing demonstration cities has increased to 31, and the service trade volume of Beijing-Tianjin-Hebei, Yangtze River Delta and Pan-Pearl River Delta accounts for 60.6% of China’s service trade. In particular, the newly established Beijing Free Trade Zone in 2020, relying on Beijing’s position and advantages in China’s service industry opening and digital economy development, will mainly focus on the service industry, especially the development of digital economy and digital trade, and create a new highland for China’s service trade opening strategy.

As an important part of the digital economy and the most important manifestation of the internationalization of the digital economy, China’s digital trade ushered in a vigorous development during the "Thirteenth Five-Year Plan" period. According to statistics, China’s digital trade volume was 200 billion US dollars in 2015, and it has increased to 294.76 billion US dollars by 2020, with an average annual growth rate of 8.07%. In the same period, the proportion of digital trade in service trade has also increased from 30.6% to 44.5%. The Report on Digital Trade Cooperation and Development 2021 shows that the scale of China’s digital service trade will rank fifth in the world in 2020 and become the only developing country among the top five global digital trade. The international competitiveness of enterprises in the digital economy has been continuously improved, and the trade volume of digital services has gradually turned from US$ 14.82 billion in 2011 to a surplus. During the 13th Five-Year Plan period, except for 2017, the export volume of digital trade in China was greater than the import volume, and by 2020, the surplus difference would be US$ 14.77 billion. As far as the digital trade sub-sectors are concerned, information and communication technology services (ICT) are the areas where the export share has increased the fastest and contributed the most to the growth in the past 10 years. From 2011 to 2020, the share of ICT services in China’s digital service exports increased by 19.7 percentage points. At present, China has become the largest source of international patent applications among the member countries of the Patent Cooperation Treaty (PCT), especially in the digital technology fields such as 5G, blockchain and artificial intelligence, ranking first in the world.A large number of ICT enterprises with international competitiveness have emerged.

Second, the theoretical logic of the digital economy to promote the high-quality development of service trade

The digital economy promotes the high-quality development of service trade mainly based on the digitalization of trade methods and trade objects. The former means that with the development of information and communication technologies such as 5G, big data and cloud computing, the traditional service trade mode is becoming more and more digital and intelligent. By strengthening the integration and penetration of digital technology and trade mode, the cost of service trade is reduced and the efficiency is improved; The latter means that with the data becoming a new factor of production, and the gradual formation of the data trading market and the improvement of the data trading system, more and more service trade products are spread in the form of data, or even exist directly in the form of data, thus expanding the scope of existing service trade products and expanding the breadth and depth of service trade.

(A) the impact of digital trade mode

1. Reduce the cost of trade in services

Since 1980s, with the transformation of global economy from "industrial economy" to "service economy", the status and role of service industry, especially modern service industry, has become more and more prominent in the world economy. However, compared with the service industry, the development of global service trade is relatively backward. According to statistics, the proportion of service trade in global cross-border trade in 2020 is only about 1/5, which is far behind the proportion of service industry in global GDP. The reason for this phenomenon is related to the industry attributes of the service industry itself: on the one hand, whether it is traditional service industries such as tourism and transportation, or modern service industries such as information and communication, finance and education, most services require production and consumption at the same time and place, which makes it difficult for domestic service providers to directly provide services to foreign consumers. In addition, service products are invisible, easy to disappear, inseparable and easy to copy, which makes it difficult for service products to use offline logistics systems to achieve overseas sales through cargo transportation like agriculture and manufacturing. Therefore, compared with traditional trade in goods, the cost of developing trade in services is higher. The United Nations Conference on Trade and Development (UNCTAD) compared the trade costs of the three major industries, and found that the trade costs of the service industry were much higher than those of agriculture and industry, especially those of commerce, retail and other industries with prominent geographical attributes. On the other hand, because the personal necessities of life are directly related to the service industries such as commerce, transportation, education and medical care, ordinary residents have a stronger sense of the dynamic development of their service industries than the agricultural and industrial sectors.In addition, education, finance, medical care and other industries have great influence on a country’s traditional culture, social psychology, macroeconomic growth and other important socio-economic factors. Countries are relatively conservative in opening up key service sectors, and often impose many restrictions on foreign enterprises based on political, economic and cultural interests. Therefore, compared with other industries, countries have stricter regulatory policies and barriers to the service industry, which also increases the cost of foreign service enterprises and service products entering the domestic market.

With the deepening of the integration and penetration of information and communication technology and international trade, new trade formats and models have been born, which has alleviated the information asymmetry in traditional international trade, thus effectively reducing trade costs. The development of international trade depends largely on the collection, processing and application of market information, and information communication technology has changed the way of information transmission and improved the efficiency and quality of information transmission of foreign trade enterprises, thus playing a great role in reducing market segmentation and promoting the development of service trade. As far as information acquisition is concerned, under the traditional trade mode, enterprises usually conduct detailed overseas research when entering new markets or looking for new customers, so as to fully collect information such as policy trends, market conditions and customer credit. Obviously, although these methods help to reduce the risk of foreign trade, the upfront cost of investment is also large. The extensive use of information technology enables enterprises to fully understand overseas market information through online search engines and digital advertisements, thus greatly reducing the cost of information collection. As far as information output is concerned, digital technologies such as internet, microprocessor and information communication provide more efficient and cheap ways for enterprises to promote their markets. Compared with establishing marketing channels and choosing below-the-line, foreign trade enterprises not only have lower cost, but also can achieve accurate delivery based on customer types by using online advertising or establishing virtual websites. The inherent trading mode based on fixed time and fixed real place is replaced by the digital exchange at any time and any place under the cross-border e-commerce integrated service platform.Both the hard constraints of physical space-time and fixed-time regulation are relaxed, thus providing unlimited possibilities for service enterprises to enter the global market.

Digitalization of trade mode reduces trade cost, which is also reflected in the organic combination of information flow, capital flow and goods flow. In traditional international trade, cross-border logistics has long time, many links, long distance and high cost, and it also involves complex issues such as customs clearance procedures in different countries. Payment in advance, letter of credit and other payment methods crowd out enterprise funds, which makes the return period of enterprise funds longer and increases risks. With the development of digital technology, especially the digitalization of cross-border trade comprehensive services such as market information services, logistics information services and payment and settlement services provided by cross-border e-commerce platform enterprises, the degree of integration of enterprise capital flow, goods flow and information flow is deepening, which greatly reduces the operating costs of foreign trade enterprises. In terms of platform intermediary services, some large cross-border e-commerce companies have entered the international market one after another, extending their service targets from domestic to overseas. In terms of market information services, big data service enterprises or platforms that provide data analysis and data docking came into being, which can not only help enterprises to update market information in time and improve production and operation performance, but also help enterprises to select products efficiently and increase sales through big data analysis. In terms of cross-border payment services, many intermediate links of collection and payment, including collection, exchange, payment and financing, can obtain "one-stop" financial services through the cross-border e-commerce payment platform. According to the report of China Payment and Clearing Association, RMB cross-border payment system handled 1,884,300 transactions in 2019, amounting to 33.93 trillion yuan, up by 30.64% and 28.28% respectively.

2. Improve the efficiency of service trade

With the application and development of digital technology, digital technologies such as 5G, big data, cloud computing and artificial intelligence are constantly being used in the process of transaction circulation and production management. In the transaction circulation, foreign trade service enterprises and foreign trade regulatory agencies are increasingly using digital technology, including digital terminals such as smart phones, intelligent robots and laptops, as well as services based on digital technology such as the Internet, search engines and e-commerce platforms, thus greatly improving the efficiency of serving foreign trade enterprises to participate in the global market. In the production management, in the process of digital transformation, the service outsourcing trend of enterprise digital delivery is becoming more and more obvious, including not only the digital service outsourcing of traditional business processes such as human resource management, financial audit and back-office support, but also the information technology outsourcing such as software research and development, platform support and information system maintenance. The continuous refinement of the production process and the vigorous development of digital and information service outsourcing not only create more opportunities for international division of labor, but also facilitate enterprises to efficiently divide production links in the areas with the most comparative advantages in the international market.

In addition, the improvement of service trade efficiency by digital technology is also reflected in its influence on supply chain and value chain. With the increasing application of digital technology in supply chain management, the synergy efficiency of upstream and downstream enterprises in the same supply chain or value chain is improved, and the procurement cost, logistics cost and marketing cost are greatly reduced, which is conducive to enterprises to form new advantages in the international competitive environment. In fact, the optimization of supply chain by digital economy is mainly reflected in two aspects: first, enterprises can realize the resource integration of upstream suppliers by using digital economy, and through the in-depth value and quality evaluation of upstream suppliers, it will help foreign trade enterprises to make the most cost-effective procurement; Second, based on digital recognition functions such as big data and cloud computing, enterprises can more effectively distinguish and master the differences of consumer preferences in different regions, and can accurately locate the target population through personalized and customized products to obtain the highest income. According to the WTO research report, digital technology makes supply chain management change from a linear model to a more comprehensive model in which information flows in multiple directions at the same time. Market information is more diverse, open and transparent, so enterprises can transmit and obtain information more quickly in the new global value chain, thus improving the efficiency and accuracy of global division of labor. In fact, the traditional chain of division of labor in the value chain is long, including R&D design, marketing and after-sales service with high added value, as well as assembly, processing and transportation manufacturing with low added value. Too many intermediate links lead to the profit margins of the upstream and downstream of the value chain being diluted and compressed layer by layer.The cross-border comprehensive business service platform based on digitalization and intelligence removes the intermediate links, which helps to realize the direct interactive docking between supply and demand, and can optimize and innovate different links in the value chain division system in time through real-time market feedback. Therefore, with the popularization and use of digital technology, the cost of service trade enterprises has been reduced and the efficiency of new global value chain division has been improved.

3. Affect the opportunities for small and medium-sized foreign trade enterprises to participate in the global market.

As mentioned above, the application of digital technology will have an important impact on supply chain management and value chain division, but how to affect the participation of small and medium-sized foreign trade enterprises in the global market is still uncertain. As pointed out in the White Paper on the Development and Impact of Digital Trade (2019), digital technology first reshapes the production process, especially technologies such as artificial intelligence, 3D printing technology, and automated production, which reduce the degree of coordination demand for division of labor between countries and enterprises. With the continuous integration of upstream and downstream links in the division of labor chain, the length of the value chain is greatly shortened, which may reduce the opportunities for small and medium-sized foreign trade enterprises in developing countries to participate in the division of labor in the value chain. Secondly, according to the new trade theory, enterprises need to pay some sunk costs to enter the export market, including overseas market research, marketing channel establishment and advertising expenses, etc. Many small and medium-sized enterprises may find it difficult to enter the export market because they cannot pay these upfront costs. The emergence of digital technology, especially the cross-border integrated service platform, has greatly reduced the cost of coordination and matching, thus creating conditions for the majority of small and medium-sized foreign trade enterprises to participate in the global market. Thirdly, the integration of digital technology and the real economy has further strengthened the tendency of global production fragmentation, which has gradually exposed the individualized scattered demand of value chain terminals, which has provided new market space for small and medium-sized enterprises. Especially with the digitalization of trade methods, small and medium-sized service foreign trade enterprises can get rid of the complicated, cumbersome and lengthy intermediate links of import and export and focus on improving their operating efficiency and product quality.On the contrary, it may help SMEs to play a more active role in the global value chain.

(B) the impact of digital trading objects

1. Expand the scope of products for trade in services

The Opinions on Building a More Perfect System and Mechanism of Factor Market Allocation regards data as a production factor alongside land, labor, capital and technology, and requires "accelerating the cultivation of data factor market". Compared with other elements, data elements have incomparable advantages in replicability and shareability, unlimited growth and supply, and can break the restriction of limited supply of traditional elements on growth, thus providing a solid foundation for sustained and stable economic development. The value of data elements is not the data itself, but the value created in the process of data integration with other production factors. This kind of value appreciation and its stimulating effect are exponential. More importantly, data elements can improve the allocation efficiency and use efficiency of traditional elements such as labor, capital, technology and land, and improve the efficiency of enterprises in the actual production process by providing more efficient and convenient digital public services. In addition, data elements can create more material wealth and service products with less material resources, which may have a substitution effect on traditional production factors. For example, due to the impact of mobile payment, the number and business premises of traditional bank outlets and ATMs have been greatly reduced. Boston Consulting Group (BCG) estimates that the popularity of Internet and mobile payment has reduced China’s traditional offline payment infrastructure by at least 1 trillion yuan in the past 10 years. It is precisely because of the increasingly prominent role of data elements in the production process and the actual economic growth process that many countries, such as the United States, Britain, Sweden, the Netherlands, South Korea, China and so on, have successively put forward big data strategies.Promote the development of China’s big data industry by increasing investment in technology research and development, strengthening basic databases and promoting open data sharing.

With data becoming a new factor of production, with the emergence of online virtual cloud storage with lower cost and more optimized methods, and the rapid upgrade iteration of hardware and terminal equipment such as smart phones and in-vehicle intelligent terminals, more and more products and services in international trade also appear in the form of data, including traditional digital products such as books, audio-visual products and software, as well as new digital services such as education, medical care and social media provided online. Limited by the fact that the production and consumption of service products are in the same place at the same time, services such as taxis, beauty salons, accommodation and catering in the digital age will continue to be provided locally and need the support of physical departments. However, in the service industries with high digitalization such as retail, software development and business process outsourcing, the trend of "de-localization" and globalization is becoming more and more obvious. Thanks to digital technology and the empowerment of Internet platform, many non-tradable service departments that were previously limited by time and space have become highly tradable through online remote delivery. For example, education, as an important field of service industry, is traditionally provided by local teachers to local students, so it is difficult to cover areas designated by local education authorities, and its strong exclusiveness leads to insufficient competition. The quality of education is greatly influenced by regional economic development, teachers’ strength and social concepts, and there are great differences among countries, regions and even communities. Under the impact of the COVID-19 epidemic, many areas stopped on-site teaching and replaced it with online and offline mixed teaching or cloud education. This new type of education has broken through the limitation of time and space.Any organization and individual with Internet access all over the world can access relevant educational resources. More and more teaching procedures, such as preview, teaching, answering questions, and even some types of exams can be performed remotely.

2. Reshaping the global value chain

With the improvement of the data trading market, the data elements flow faster between different industries or even within the same industry, which promotes the sharing of knowledge and technology throughout the industry, accelerates the industrial integration, accelerates the digital transformation process of traditional industries and strives to move towards the high end of the global value chain, which not only gives birth to a large number of new service trade formats and new models, but also realizes the reshaping of the global value chain. On the one hand, more and more cross-border digital products and services have entered the global value chain driven by digital technology. With the acceleration of the integration of digital technology and various production links in the industrial chain, the transaction process between the upstream and downstream links of the value chain is highly transparent and the transaction cost is greatly reduced, which provides the possibility for further refining and integrating the division of labor system of the value chain between different production links. Specifically, this effect is reflected in three aspects: first, in order to focus on more efficient production links, some enterprises will separate their own production or service products that do not have comparative advantages and distribute them to more advantageous areas for production through outsourcing; Second, a new generation of information and communication technologies represented by big data, cloud computing, artificial intelligence, 5G networks, blockchain, etc. create more new products and services on the production side, which in turn are further embedded or transformed into existing global value chains through digital technology; Third, digital technology promotes those specialized services that focus on the local market to "go global" and integrate into the global value chain system more quickly and efficiently.

On the other hand, cross-border digital products and services have changed the law of income distribution in global value chains. In the traditional value chain division system, the links at both ends of the "smile curve" create more value-added and earn the vast majority of the total profits of the industry. With the increasing application of digital technology, the existing international division of labor system has changed, which has also impacted the income distribution pattern of value chain to some extent. First of all, the value creation level of upstream and downstream production links of the "smile curve" has been further improved. In fact, compared with the manufacturing process, digital services are applied more frequently at both ends of the "smile curve". This integration process makes the whole digital service more dispersed and the tradability greatly increased, which creates conditions for the production of products and services with higher complexity. Secondly, the value creation ability of processing and manufacturing links in the middle of "smile curve" gradually decreases. The application of digital technology has accelerated the process of industrial automation and modularization, and the traditional manufacturing processes in the middle of the value chain have become more and more standardized. However, the value added created by standardized production may be gradually reduced because it is difficult to meet the individual needs of users. For example, in order to meet the requirements of online travel agencies, the products and services provided by various travel providers are becoming more and more standardized; Combined with the change of income distribution law in the value chain, many processing and manufacturing enterprises that were originally engaged in intermediate links have extended to both ends of the value chain one after another, and further integrated the knowledge and information stored in this production link by using digital technology.On this basis, the front-end and back-end digital products and services are developed, which not only promotes the digital transformation of enterprises, but also exports digital services.

Third, the main challenges faced by the digital economy to promote the high-quality development of service trade

(A) the integration of digital technology and service foreign trade enterprises may give birth to new risks.

The promotion of service trade by digital economy mainly depends on the digitalization of trade methods and trade objects. Whether it is the digitalization of trade mode or trade object, it requires the gradual coordination and integration of digital technology and production service process. However, the process of using digital technology itself contains new risks, which may lead to new risks in the digital transformation of service foreign trade enterprises. Specifically, this risk is mainly manifested in the following aspects: First, because the network environment has the characteristics of virtualization, strong accessibility and connectivity, and it is difficult to supervise, illegal and criminal activities such as cyber terrorism, online gambling, and online money laundering by using digital currency may take a ride in the digital transformation of foreign trade enterprises and further develop. These activities are wide-ranging, dangerous and concealed, and pose serious harm to national security. Second, the key to the digitalization of trade objects lies in data, and with the blessing of information and communication technology and microelectronics technology, the liquidity of data, a new production factor, is constantly increasing. Data contains a lot of consumer information, and the acceleration of data flow also aggravates the risk of consumer privacy being violated. For example, the "big data killing" that has been widely criticized in China means that businesses use digital technologies such as big data and cloud computing to analyze consumers’ preferences, consumption levels and consumption habits, adopt differential pricing in market transactions, and sell the same goods or services to consumers at different prices, resulting in that old users or members may even spend more on purchasing these products than new users. Third,Digitalization of trade mode increases the risk of infringing intellectual property rights and stealing business information and digital assets. Compared with offline transactions, counterfeiting and piracy in digital service trade are more difficult to control. The risks existing in the process of digital transformation of the above-mentioned service foreign trade enterprises can be regarded as "original risks". On this basis, in order to protect national security, public interests and citizens’ privacy, countries will strictly control service trade platforms and service products, which may induce "secondary risks". There are great differences among countries in the concept, rules and measures of digital trade control. The control behavior of one country may not conform to the control rules of other countries, which may lead to international disputes and affect the normal development of global service trade.

(B) The digital transformation of service foreign trade enterprises may aggravate the ethical problems of algorithms.

In the process of digital transformation of service foreign trade enterprises, algorithm is at the core. The algorithm here is not limited to abstract mathematical structure algorithm, but under the guidance of specific goals, one or more algorithms are executed in programs, software or information systems, and the results that can support people’s decision-making are obtained based on complex rules. There are many kinds of algorithms, although some of the recommended algorithm decisions have little influence on people, but the algorithm decisions in employment evaluation, crime evaluation, credit loan and so on may affect the interests of individuals and even some races. Moreover, a small mistake or discrimination in algorithm decision-making will evolve into multiplication effect or chain effect in subsequent decision-making, which will have a serious impact on individuals, groups and society. In addition, the algorithm has more and more life attributes, and the algorithm discrimination in the algorithm decision-making process is more likely to lead to ethical risks, such as discriminating according to the user’s gender, income or race based on the calculation results of big data, "killing big data", etc. Its essence is to further extend the inherent discrimination consciousness, cultural prejudice and social categorization tendency of human beings in the algorithm programming. Firstly, the ethical problems of algorithm come from the quality of data, that is, the original data collected are incomplete, incorrect, missing samples, and lack of protection of sensitive attributes, which leads to the result of "bringing in problems and bringing out problems" and forms a self-fulfilling discriminatory feedback loop. Secondly, the prejudice embedding in the algorithm model intensifies the algorithm ethics. Algorithm designers and program developers may consciously or unconsciously embed negative consciousness such as self-carried discrimination and prejudice in the coding process.Leading to the final result of non-neutrality. Thirdly, the algorithm ethics reflects the opacity of the algorithm process to some extent. Algorithm decision-making is usually completed by a large number of engineers with different division of labor, which contains a large number of rules that are difficult to detect. In addition, the input and output of the algorithm are unpredictable due to the processing speed of the machine and a large number of potential operating variables, which makes it particularly difficult to make manual intervention and real-time monitoring of algorithm decision-making.

(3) The giant e-commerce service platform is suspected of platform monopoly.

Digital technology greatly reduces the cost of service trade and improves trade efficiency by objectifying trade methods. In this process, the emergence of cross-border e-commerce integrated service platform has played a decisive role. However, for small and medium-sized platforms and small and micro enterprises, the unfair behavior of some giant e-commerce service platforms based on the competitive advantages of users, data, algorithms and capital may make their living environment and competitive environment worse. For example, there will be a positive promotion between the consumers who use the platform and the merchants who enter the platform, which will make it easier for the big platform to attract merchants and accumulate users, so it will have an advantage in operating costs, and under the influence of Matthew effect, a situation of "winners take all the food, losers take the overall plan" will be formed. At the same time, users are easy to form path dependence on the platform, and are often forced to compromise the unfair behavior and unfavorable contract terms of large platforms. Based on its powerful data and economic resources, the giant platform hides the unfair predatory competition process behind the scenes, which not only damages the competitive market environment, but also brings great challenges to the supervision work.

(D) digital technology to promote the development of service trade is restricted by the digital divide.

The foundation of digital technology to promote the high-quality development of service trade lies in digital technology itself. However, what needs to be seen is that digital technology is transforming people’s lives at an unprecedented speed and scale. While bringing huge opportunities, it may also create new inequalities because it is difficult for everyone to share digital dividends. Among them, the digital divide is a prominent manifestation. This inequality is manifested in many aspects, including the inequality in digital infrastructure and digital rules at the national or regional level, as well as the inequality caused by the limitation of digital access and output of some social groups. Specifically, the digital divide includes three types: one is the difference in access level caused by digital communication technology, for example, it is difficult for some African countries to use the Internet and smart phones due to the limitation of digital infrastructure; Second, the differences in the use of digital communication technology, such as the elderly or low-skilled labor force, it is difficult to use upgraded smart phones or laptops because they cannot master the updated operation methods; Third, the differences in the use of information resources to participate in social life caused by information inequality, such as the difference in the degree of Internet use, will have a significant impact on family asset selection, employment and wages, entrepreneurship, and agricultural land transfer. With the digital divide becoming more and more obvious, its negative impact on social life is gradually emerging, which will not only create a new gap between the rich and the poor, but also aggravate the existing social and economic inequality. Especially in the case of the accelerated development of digital trade, developing countries have a weak foundation in big data-based technologies such as 5G, Internet of Things and artificial intelligence.The "digital divide" may further widen its economic and technological gap with developed countries.

Fourth, the path choice of digital economy to promote the high-quality development of service trade

(1) Improve the transaction and circulation system of data elements to provide security for the digital economy to promote the high-quality development of service trade.

The vitality of the data market is inseparable from the legal and compliant circulation of data elements. According to some characteristics of data elements, we should build a multi-level, traceable, supervised, safe and effective data element market to promote the standardization of data element circulation. As a new factor of production, data is an important cornerstone of building a modern economic system. Accordingly, data security has also become an important component of the national security concept. The Tenth Five-Year Plan clearly points out that it is necessary to "comprehensively strengthen the network security guarantee system and capacity building, and earnestly safeguard the security of new fields". At the same time, the Data Security Law of People’s Republic of China (PRC), promulgated in 2021, provides a legal basis for ensuring digital security and safeguarding the rights and interests of individuals and organizations in the process of data development and processing. Therefore, a healthy data trading market should have both liquidity and security. First of all, combined with the diversity of data elements, a multi-level market trading system is constructed. Different from standardized goods, data elements are very different in performance, attributes and forms. Even the same original data will form different new data after screening, splitting, adjusting and coding. Therefore, a healthy and orderly data circulation market should reflect the diversity and multi-level of data, and establish an elastic adjustment mechanism to meet the requirements of specific types and scenarios. In addition, according to the different requirements of data security, privacy and sensitivity, the data market can be divided into three different types: completely open, incompletely open and never open. Among them, we should pay special attention to incomplete open data, and combine the data use, data nature, related data and privacy cost of regulatory difficulty, etc.Set different desensitization degrees, usage restrictions and handling requirements. Secondly, use blockchain technology to strengthen the traceability of data. Because the data can be copied, the circulated data is no longer unique to the seller, and if there is a dispute during the transaction, the seller will bear higher risks. Therefore, blockchain technology, which has natural advantages in confirming rights, can be used to record and trace the prior consultation, transaction process and data access of data transactions. When a transaction dispute occurs, the rights holder can prove its legal ownership through the timestamp of the blockchain transaction, and can also trace and detect the undesirable or illegal behavior. Thirdly, use privacy protection technology to ensure data security. The replicability of data itself means that there is a great risk of privacy leakage in the transaction process, and the interception, tampering and resale of the trading platform aggravate the data security problem. This requires that in the process of data generation, circulation and use, the protection standards of data classification and classification should be formulated according to data content and application scenarios, so as to achieve targeted, hierarchical and differentiated data privacy protection and security protection.

(B) actively resolve the ethical issues of algorithms in the digital transformation of service foreign trade enterprises.

To solve the ethical problems of the algorithm, we need to start from three aspects: First, in view of the transparency of the decision evidence of the algorithm, we should strengthen the supervision of the decision evidence involved in the algorithm, including both combing and controlling the whole process of the algorithm beforehand and accurate and effective real-time monitoring during the algorithm process. Specifically, it can be implemented by regularly reviewing the implementation of data processing, or using external regulatory agencies to conduct post-event review, or at any time to retrieve research reports designed to enter the algorithm in time. Second, in view of the value bias of the algorithm subject, we should strengthen the correct guidance of values. The information involved in algorithmic decision-making tends to be personalized and fragmented, but the value ethics contained in it is social. Therefore, we should pay attention to the guidance of the correct values of the algorithm subject. On the one hand, the algorithm is strengthened to screen and filter information, and the value bottom line of fairness and justice of decision-making results is adhered to while improving the efficiency of decision-making process; On the other hand, algorithm decision-making should strengthen "man-machine combination", and "man" should intervene in the process of "machine" algorithm to neutralize and objectify negative values such as discrimination and prejudice, and "machine" can identify the negative values that "man" may hide when inputting and executing programs in time by using the principle of big data, and limit the authority of "man" through appropriate feedback and restraint mechanisms. Thirdly, in view of the infringement of autonomy and privacy caused by algorithm reconstruction, on the one hand, the government can protect the right of the right subject to object or human intervention through legislation and strengthening law enforcement.In order to avoid and punish some data collection agencies in time, they use the principle of economic and security exemption to collect their data illegally without the knowledge or willingness of the right subject. On the other hand, privacy is closely related to the identifiability of information, and it is necessary to weaken the identifiability of individuals through relevant privacy theories. For example, group characteristics can be used to replace individual characteristics to blur the identifiability of individuals, and at the same time, the knowledge and actions involved in individuals should be equally protected in groups.

(3) Strengthen the anti-monopoly supervision of cross-border e-commerce integrated service platforms.

Monopoly market structure reduces the operating efficiency of market economy, destroys competition, and also has a negative impact on consumer welfare and market innovation vitality. Compared with the intermediary sector of the real economy, the large-scale cross-border e-commerce integrated service platform can gain new advantages far beyond the small and medium-sized platforms through network cumulative effect and dynamic competition effect because of its advantages in collecting and processing information, attracting customers and gathering funds. Therefore, the anti-monopoly problems faced by digital platforms are more complicated and arduous. What needs to be clear is that the development of digital platforms cannot undermine reasonable and orderly fair competition in the market. Therefore, based on the implementation and revision of the Anti-Monopoly Law, the anti-monopoly rules of digital platforms should be constructed in line with the new characteristics of digital economy, and revised and improved in time in the practice of supervision and improvement of platforms. However, compared with traditional anti-monopoly, the development of digital platform has its own characteristics in market subject authentication, market boundary determination and market power judgment, which cannot be simply applied. For example, traditional market players can judge whether they have a dominant market position by market share, market concentration and marginal profit. But for digital platforms, high market share, high market concentration and high marginal profit are the only criteria for their own characteristics rather than market power. Therefore, the traditional static analysis of monopoly behavior is inconsistent with the dynamic competitive development of digital platforms. In this case, the anti-monopoly of the digital platform should be more tolerant and flexible than traditional industries, instead of emphasizing strict supervision and heavy punishment. Innovate the concept of supervision,Taking the principle of inclusiveness and prudence as an important governance principle of digital platform supervision, we should seek the theoretical basis and the middle ground of governance principle between over-regulation and over-inclusion, so as to ensure that regulatory measures can not only restrict unreasonable and unfair market competition, but also avoid inhibiting the innovation and creativity of digital economy, a new format and new model.

(D) Bridging the digital divide and providing favorable conditions for the digital economy to help the high-quality development of service trade.

The existence and continuous expansion of the digital divide will lead to more unequal distribution of benefits in the digital economy and have a negative impact on the high-quality development of service trade. For those who are difficult to contact or master the latest digital technology, they cannot expand their social capital, and are often excluded from the digital dividend distribution system, or can only get a very small part from it. And those who are familiar with and can quickly master digital technology can extend and expand the social network by virtue of digital advantages, and turn it into their own economic resources advantages, thus occupying an absolute advantage in the "cake" of dividing digital dividends. Especially after the COVID-19 epidemic has evolved into a global pandemic, the development of digital services such as online shopping, live delivery and online office has created more favorable conditions for the development of digital economy, but the inequality caused by the digital divide has gradually emerged. Therefore, bridging the digital divide and ensuring that the digital dividend contributes to all citizens has become an important issue related to high-quality economic development. First, further improve the digital hardware facilities. The government can support the construction of broadband networks and mobile communication base stations in backward and remote areas through capital allocation and technical assistance, and ensure the steady and accelerated Internet access in remote areas such as the central and western regions by accelerating the deployment of the global low-orbit broadband Internet constellation system. Secondly, strengthen the construction of digital talents. Cultivate digital talents in China through public selection, online training and cross-regional exchanges of outstanding talents in the field of digital economy, and regard professional talents as a bridge and link for the spread of digital technology.Introduce and absorb the advanced experience of digital technology application in developed countries and regions. Thirdly, build a multi-level and distinctive digital literacy training system. We should extensively absorb multiple subjects such as government agencies, educational institutions and social forces to participate in this system, formulate multi-level, multi-disciplinary and multi-component training objectives, and use diversified training systems to improve the country’s digital security maintenance capabilities, digital resource collection and identification capabilities, and digital content creation and output capabilities.