New internet applications can add 0.3 to 1.0 percentage points to China's GDP growth, according to a new McKinsey Global Institute (MGI) report.
These applications can enable 7 to 22 percent of GDP growth through 2025, transforming the nation's economy.
China's digital transformation depends on the government's ability to create a supportive policy environment, the readiness of companies to go digital, and the capacity of workers to adjust.
About 618 million people currently use internet in China that is characterized by thriving social networks, and the world's largest e-tailing market.
The nation's internet economy was 3.3 percent of its GDP in 2010 and it reached 4.4 percent by 2013. Today China's internet economy is larger than those of the United States, France, and Germany as a share of GDP.
Shift employment opportunities
The internet will raise the bar for China's labor force and shift employment opportunities to a new set of markets.
This technology has boosted innovation in consumer electronics and will continue having a significant impact on this, contributing about 14 to 38 percent of the overall growth expected through 2025.
The internet can assist automakers to manage increasing marketing costs as consumers go online to inform their purchase decisions.
Forecasting and production in the chemical sector can be improved as users can leverage detailed, real-time data on everything from suppliers' inventory and shipments in transit to downstream customer demand.
The Internet can also enhance R&D capabilities, provide a huge number of real-time data points for analysis in financial services, identify serious buyers more quickly in real estate and be an important tool in China's health-care reform.
It can contribute about 2 to 13 percent of the growth in health-care costs projected from 2013 to 2025.
Sign up for CIO Asia eNewsletters.