The sharing economy is blossoming in China with people using services ranging from homeshares to clothes swaps.
Attendees of the Second World Internet Conference (WIC) in the eastern town of Wuzhen this week were given a glimpse of China's digital future, and sharing featured prominently. As the government looks to new engines to power the slowing economy and move from an investment-driven model to one powered by consumption, it has flagged up the sharing economy as an area with plenty of potential.[Special Coverage]
China is now implementing the "Internet Plus" action plan, advancing the building of "Digital China," developing the sharing economy, and supporting Internet-based innovation in all forms, with a view to improve the quality and efficiency of development, President Xi Jinping told attendees of WIC during his opening remarks on Wednesday.
Internet Plus is an action plan that aims to assist the upgrading of traditional industries with smart technology, while Digital China will develop technology that will help the public.
Decentralization is a key feature of the sharing economy. It makes full use of idle resources and offers personalized services at a lower cost to the end user and is, often, more efficient, according to Cheng Wei, board chair and CEO with Didi Taxi, a taxi-hailing company and one of the forerunners of China's sharing economy.
In a recent survey, Nielsen found that 94 percent of Chinese are willing to share, compared with just 43 percent of North Americans, making them by far the most receptive to the concept.
With a population exceeding 1.3 billion, it thus comes as no surprise that investors have jumped on the opportunity to support these services. Rideshares can be found on sites such as 58.com, and social media applications, such as WeChat, have made DiDi more available. There are also services such as Atzuche, which allows people to rent out their luxury vehicles, as well as Tujia, Xiaozhu, and Mayi, accommodation services that are similar to Airbnb.
However, as the sharing economy begins to mature, it is experiencing growing pains.
The main worry is regulatory uncertainty. Will room-renters be subject to hotel taxes, for example? In some American cities, peer-to-peer taxi services have been banned after lobbying by traditional taxi firms.
Just as online shopping forced the likes of Walmart and Tesco to adapt, sharing-business models will bring new challenges to traditional industries, which puts pressure on authorities to regulate.
The Ministry of Transport released draft polices on the regulation of mobile taxi-hailing services in October for public advice. Although there was heated discussion over some of the restrictions, over 60 percent of respondents supported better management of the sector.
It is only natural that technology will outpace regulation and it's a common case across the world, according to Sam Cai, chief law researcher at Tencent Research Institute.
Cai suggested that the government should do their homework. It must have a full understanding of the technology and the business model so that it can treat each case according to their specific conditions.
"Most importantly, the government should shift their focus from supervision to management [...] and let the market play the leading role in empowering small businesses," Cai added.
