What we know so far about China’s digital silk route.
China has commenced an extensive digital and infrastructure plan to make the nation future-ready. The country’s expansive Belt & Road Initiative (BRI) has included projects such as Myanmar’s Kyaukpyu port, the high-speed railway system in northern Laos, and rail and pipeline installation across Malaysia. Additionally, China has invested billions of dollars into similar projects in the African and European continents thereby reviving the age-old silk route. China’s BRI expansion strategy is three-fold: through land, sea and through digital. As such, it comes as no surprise that China is dominating the infrastructure front and by the same token, their digital transformation is just as zealous. In fact, China’s digital giants are leaving significant footprints in APAC economies and as a result, it has been promoting business opportunities for ICT companies from around the world to invest.
China’s involvement within APAC’s digital landscape falls under the country’s Digital Silk Road (DSR) concept. It is vital to point out that the DSR project hasn’t had nearly as much government involvement as the BRI’s land and sea projects and thus, Chinese national tech companies are spearheading the digital arm. Global tech giants such as Huawei, ZTE, Alibaba and Tencent have been drivers of the tech invasion from China. These companies have largely found success through delivering quality products at a significantly lower-than-market price with support from the government.
Their involvement within the APAC regions includes significant investment in online-based platforms such as Singapore-based e-commerce site, Lazada. The Lazada Group accounts for the highest number of active users across the region, month on month. Similarly, Alibaba’s Alipay paved the way for e-payment whilst Tencent and Didi (amongst other Chinese car companies) have entered the carsharing industry, overtaking US giant, Uber. Similarly, Huawei and ZTE’s involvement has been focusing on ICT infrastructure, especially laying fiber optic cables. Huawei Marine has already completed over 12 undersea cable projects in the APAC region with more than 20 underway. China’s APG, Asia Pacific Gateway submarine fiber optic cable line spans a distance of 10,900 kilometres, connecting Singapore to Japan with landing stations in Malaysia, Thailand, Vietnam, Hong Kong, Taiwan, China and Korea. Paving the way across the entirety of East Asia supports massive business opportunities. With over $17 billion in investment, the DSR allows Chinese tech companies to become global champions, providing the basis for high-tech leadership with the country and promote China’s homegrown cyber standards across the world.
China’s DSR project has also put a heavy focus on building APAC’s launch to the fastest wireless connectivity: 5G. Chinese ICT companies are developing the 5G network and having a significant stake in its expansion in Southeast Asia. These ambitious endeavours aren’t just on paper. Earlier this year, Huawei launched its 5G testbed in Thailand while Alibaba Cloud opened a second data centre in Indonesia.
Although US-based companies such as Apple, Amazon and Facebook have a monopoly on digital services and presence in the APAC region, their involvement in the information and communication technologies have been relatively modest. On the other hand, China’s aggressive entrance into 5G, cloud computing and e-payment have allowed the nation to gain market share very quickly. The involvement in digital frontiers has started to transform China from a workshop-like hub to a global leader in digital and technological fronts.
An important element that governs much of China’s digital silk road is understanding its intent. Albeit simple, their goal is powerful: to gain technological and digital global prowess through seamless connectivity of infrastructure around the world. Through the BRI, China is amassing digital prowess and the project is comprised of four components. These include digital infrastructure, domestic technology such as sat-nav systems and AI, a digital free trade zone through the Digital Silk Route and lastly, digital diplomacy and multilateral governance. All four concepts combined posits China amongst other global powers such as the US in harnessing the power of digital. In fact, China’s efforts have provided infrastructure to power emerging communities like never before. Ranging from the African continent to developing economies in the APAC region, the connectivity has been phenomenal. The DSR is far from finished and private and public companies are seeking ways to leverage the power of the connectivity. With the DSR laying the foundation for many a digital transformation, including automotive applications, optical security and performance, and intelligence services, command the network with the help of those who know-how.