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China has become the world's second largest digital economy (about $3.5 trillion) behind the US, according to a yellow book recently released by Social Sciences Academic Press (China).

Japan and the UK rank third and fourth, respectively.

The yellow book, Report on World Innovation Competitiveness Development (2011-2017), said that after 70 years of development, the digital economy has infiltrated various aspects of society at multiple levels, becoming a crucial factor for the sustainable innovation of the global economy.

The US, China, Japan and UK rank first, tenth, fourth, and ninth, respectively, in terms of innovation competitiveness, the report said, saying that the digital economy is closely related to innovation.

The number of internet users per thousand people, as well as popularity, application and capability of digitalization were selected by the yellow book as the four major measurement standards. The results show that the global digital economy maintained a low but stable development in the past five years.

By clustering analysis, the report divided 100 major countries into four categories based on the levels of digital economy development. The grouping indicated large gaps between each category, and the least-developed category is far behind the first, revealing a severe imbalance in the development of the digital economy.

Except for a few developed countries such as US and UK, most others have shown obvious weaknesses in developing the industry.