The Digital Silk Road, part I-Cloudy Networked World Calling
China’s Digital Silk Road (DSR), which is part of the larger Belt and Road Initiative (BRI), came into being in 2015 and accelerated after 2017. Broadly speaking, the DSR promotes connectivity in the information and communication technology (ICT) space and encompasses projects relating to artificial intelligence, cloud computing, fintech (e-payments), smart and safe cities, and telecommunications. It is not entirely clear how many countries are participating in the DSR, though it has been reported that 16 countries have signed DSR Memorandums of Understanding (MoUs) with China.
While some Chinese state-owned enterprises (SOEs) participate in the DSR, the vanguard of the DSR largely consists of private Chinese firms such as Alibaba, Hikvision, Huawei, SenseTime, and ZTE. These firms are active around the world laying fiber optic cables, constructing data centers, building telecommunications networks, setting up e-commerce platforms, and installing surveillance systems. Three sets of concerns have arisen in regard to the DSR despite the fact that the major DSR players are not SOEs. The first pertains to data security, which has links to national security, sovereignty, and economic independence, economic security (e.g., the protection of corporate trade secrets), and consumer privacy. The second concerns the competitive effect of the DSR on Western firms in the ICT space. The third pertains to governance (with some fearing China may undermine democracy by exporting so-called techno-authoritarianism), civil liberties, and human rights. On the other hand, even though these concerns are, in concept, valid, it also must be recognized that the DSR can increase connectivity, improve productivity, facilitate industrialization, enhance health and education systems, and fulfill unmet service needs like the requirement for banking services. Before turning to any account of costs and benefits, however, one first should examine what actually is happening to avoid cloudy optics. That is the focus of my next blog.