THE ambitious China Belt and Road Initiative (BRI) continues to draw the attention of policy makers, business communities and academic researchers around the world. It gained unprecedented salience as the personal initiative of President Xi Jinping. The Chinese Communist Party’s system has brought great cultural, economic and strategic importance to the BRI. But skeptics may point out that Xi’s recent predecessors had also built their own pet political ventures and initiatives that did not survive their top tenure. Immediately, President Jiang Zemin’s ‘Three Represents’ and Hu Jintao’s ‘Harmonious Society’ readily come to mind. Although Xi’s ‘China Dream’ may be similar to his predecessors’ big ideas, the BRI must be seen not only as a leader’s personal commitment, but as an illustration of the Chinese economy’s unfolding transformations. While the BRI may not be linked to Xi Jinping’s destiny, in the coming decades, it will be the trajectory of Chinese capitalism.

The BRI, as an international initiative, was already preceded by massive Chinese investments in internal connectivity and the modernization of China’s domestic transport, communications and energy infrastructure. President Jiang’s ‘West Region Development Strategy’ unveiled at the end of 1990s underscored the importance of linking China’s underdeveloped far western regions to the economic heartland in the east. As China began connecting these regions, it also decided to extend that infrastructure to neighbouring regions in South, Southwest, Central and Inner Asian regions. The construction and connection of large number of ports in the eastern seaboard and their growing weight in the global maritime connectivity, China developed the capability to develop port and related infrastructure elsewhere in the world.

By the late 1990s, China was already encouraging the export of capital under the ‘going out’ strategy. Numerous port constructions abroad as well as infrastructure developments in third countries preceded Xi’s 2013 initiative. For instance, the Gwadar port and the Central Asian pipelines, the China-Pakistan Economic Corridor, the Hambantota port in Sri Lanka and the China-Burma Irrawaddy Corridor all date well before the announcement of the BRI.

New Delhi opposed many of these Chinese initiatives over the decades. Its opposition culminated in the strong critique of the BRI in 2017 and hereafter. However, Delhi seemed to ignore the digital dimension of China’s connectivity initiatives. Even more interesting, India opened its market for deep digital penetration by Chinese companies. Chinese propaganda presents these initiatives as being part of promoting a more inclusive globalization and enhancing the development opportunities for the non-western world. It is worth recalling that many of the connectivity initiatives in the colonial era too were presented as part of the civilizing mission in the East. That they contributed to the modernization of the developing world does not take away from the fact that it was driven by the commercial interests of western capital and the imperial imperative for political consolidation and control.

 

Like the BRI, the Digital Silk Road should also be seen as the external projection of the digitalization within the Chinese economy, the growth of major technology companies like Huawei, Alibaba and Tencent among others, a rapidly developing economy, deep penetration of the internet and massive investments in research and development relating to new technologies such as artificial intelligence, big data analytics, robotics, quantum computing, nano sciences, new materials and space technology. The impact of the DSR is likely to be as consequential as that of BRI’s overland industrial belt and the maritime silk road.

The idea of a silk road in the cyber and space domains has figured in the Chinese discourse for some time. The Digital Silk Road made its first formal appearance in the China-EU forums in 2015.¹ But it was only since the middle of this decade that it has been presented in a coherent form. In his speech at the first Belt and Road Forum in Beijing on 15 May 2017, President Xi urged the international community to ‘…pursue innovation-driven development and intensify cooperation in frontier areas such as digital economy, artificial intelligence, nano technology and quantum computing, and advance the development of big data, cloud computing and smart cities so as to turn them into a digital silk road of the 21st century.’²

 

Two years later in April 2019 at the Second Belt and Road Forum, President Xi again emphasised in his speech, the ‘…need to keep up with the trend of the Fourth Industrial Revolution, jointly seize opportunities created by digital, networked and smart development, explore new technologies and new forms and models of business, foster new growth drivers and explore new development pathways, and build the digital Silk Road and the Silk Road of innovation.’³ He further pledged that the Chinese government would ‘...support companies of various countries in jointly advancing ICT infrastructure building to upgrade cyber connectivity.’⁴

 

In presenting the DSR as an international initiative, President Xi was trying to serve a few national objectives. According to one analysis, Xi had five major objectives: ‘cutting industrial overcapacity, enabling corporate China’s global expansion, supporting the internationalization of the renminbi (RMB), constructing a China-centred transnational network infrastructure, and promoting Internet-enabled "inclusive globalization".’⁵ China’s leading internet companies and state agencies are partners in this enterprise. Jack Ma of Alibaba, for example, has sought to promote an electronic World Trade Platform (eWTP) that will bring barriers around the world down for e-commerce. The Chinese Academy of Sciences has launched an initiative on Big Earth Data that will deliver remote sensing data for a variety of projects along the BRI routes.

As of early 2019, China had signed cooperation agreements with over 16 countries to strengthen the construction of the Digital Silk Road (DSR).⁶ The China-based Belt and Road Portal has also reported that over 6,000 of China’s Internet enterprises alongside over 10,000 Chinese technological products have gained access to overseas markets.⁷ Among the areas that Chinese entities are making an impact are the following: telecommunication infrastructure including 5G, space and satellite services, e-commerce and smart cities. The low cost of Chinese digital products services and a solid alliance between the state and internet companies have made China’s digital expansion rather welcome in most parts of the world. In India, its neighbourhood in South Asia and the Indian Ocean, there has been significant growth in China’s DSR technological projects and investments. By far, the largest of China’s spending on Digital Silk Road projects have gone to India, according to a 2019 Deloitte finding.⁸

 

Numerous Chinese telecommunication companies also have stakes in pan-regional cable projects.⁹ For instance, China Unicom in the Africa Europe-1 (AAE1) which connects India and Pakistan to Southeast Asia; China Mobile in the Bay of Bengal Gateway which connects India and Sri Lanka to Oman and United Arab Emirates; Huawei Marine in the Pakistan East Africa Cable Express; and China Telecom Global in China-Nepal and China-Afghanistan cable projects. In space, companies like Bei Dou and the China Great Wall Industry Corp provide satellite services to Pakistan. In the world of internet, Alibaba is seen as acquiring or investing heavily in local e-commerce establishments across Pakistan and India.

But economists argue that the DSR, much like the BRI, is driven by the Chinese capital’s imperatives of expansion beyond borders. The criticism of China’s DSR has begun to gain ground in the last couple of years, but Beijing appears to be playing by the same book that guided the western powers. American historian Daniel Headrik, has written about the role of technology in advancing European imperial ambitions in the past. And his study of the spread of global telecommunication in the 19th and early 20th centuries reveals the strong connection between technology, power, and the ability to shape the global norms and enforce technical standards.¹⁰ It should not be a surprise therefore, that China would like to use its growing national capabilities in the digital arena to exercise leadership in the emerging fourth industrial revolution, capture the markets around the world, use it to buttress its own political power in the international arena, defend the CCP rule in China, and export the ‘Chinese model’ of political and social organization to the rest of the world.

 

As it envelops India and its neighbourhood, China’s digital expansion presents at least three sets of challenges for policy makers in Delhi. The first is the impact of the unfolding contestation between China and the United States on digital issues. The deepening economic integration between the US and China seemed to reach its pinnacle in the partnership between the US technology companies and China in the 2000s. Tensions in the economic and technological relationship started rising in this decade and culminated in the vigorous push back from the Trump Administration. The US has begun to decouple the two economies that have fused over the last four decades. It has mounted a political challenge to the BRI and confronted the Chinese tech companies, especially the digital ones that have become quite central to the trade war between the two countries.

 

There is a growing sense that the current conflict over 5G and Huawei is about deciding whether the US can retain its technological edge over China or cede space irretrievably to Beijing. If the US is putting pressure on India, as on so many other partners, to keep China out of 5G development, Beijing is warning Delhi that any rejection of Huawei in India’s 5G choice would be an unfriendly act.¹¹

India’s careful navigation between China and the US, one of its principal foreign policy preoccupations in the 21st century, will come under increasing stress. Delhi’s simultaneous pursuit of good relations with both China and the US will become harder as the pressure to make choices begins to mount. Somewhat unexpectedly technology issues have acquired their place, front and centre, in the triangular dynamic between Delhi, Beijing and Washington. The choices Delhi makes will have deep impact on its IT and telecom sector that has evolved with significant dependence on Chinese hardware, and also deep connections to Silicon Valley on the software side. Rearranging its digital economy amidst the US-China Cold War will be quite hard.

Second, beyond 5G and the US-China confrontation, there are larger political issues of digital governance that will challenge India. For what is at stake in dealing with China’s digital rise is the Indian commitment to democracy and pluralism. India on its part has tended to drift somewhere in the middle between the extreme positions that China and the West have come to represent in the debate on the issues. To be sure, there is no longer absolute unity within the West on these issues of digital governance. The divisions are not just between western nations, but within them as well. In the broader debate, India has often vacillated between the emphasis on the need for state control and the importance of limiting it according to democratic norms.

 

In multilateral forums India has often tailed the Russians and Chinese on ICT issues but has also occasionally tilted in favour of western positions. While it will continue to balance the competing political imperatives, India may have shown little inclination to support the framework of ‘cyber sovereignty’ that China talks about. For China, cyber sovereignty is about subordinating the entire digital domain and its uses in the service of the state and its ideology.¹² India has no reason to accept or support a model for an authoritarian digital state that China is promoting with its digital exports to the developing world.¹³

Third, is the challenge of limiting China’s power in India’s neighbourhood. Although never stated in such bald terms, this has been a major Indian foreign policy objective since the middle of the 20th century. Concerning infrastructure and connectivity, India has either opposed Chinese initiatives on the grounds of sovereignty (Karakoram Highway, CPEC) or competed with the Chinese projects (road building in Nepal or port construction in Sri Lanka). As China rose to be a great power and its economic impact in India’s neighbourhood grew, Delhi’s concerns have rapidly grown and have been reflected in India’s criticism of the BRI. But Delhi seemed to be utterly oblivious of the digital dynamic and its consequences for South Asia.

 

It is not that there were no warnings. Through the last two decades, there were frequent warnings from the intelligence community on the dangers of letting Chinese technology companies enter the Indian market. But the low price of Chinese products and the commercial interests of Indian telecom companies, which were preparing for a major boom in the Indian markets, tilted the balance in favour of China. It has continued to deepen in the last two decades. An India that could not see the consequences for its own market seemed even less prepared to see China’s digital expansion in South Asia and the Indian Ocean littoral.

Despite much talk about ‘neighbourhood first’ and the emphasis on connectivity, India has steadily ceded its digital domain to China within the region. Although India had considerable advantages in the field of IT and space technologies, Delhi seemed unable to leverage it in pursuit of its foreign policy goals in the neighbourhood. One Indian initiative, the South Asia Satellite for example, has done little to counter the significant advance of China’s space cooperation with Delhi’s South Asian neighbours. The time has come for Delhi, then, to take a fresh look at the challenge of digital diplomacy in the neighbourhood, identify the current limitations and find ways to overcome them.

 

* This article is adapted from a paper presented by the authors at the Symposium on ‘China’s Digital Silk Road: Implications for India’, organized by Institute of Chinese Studies, Konrad Adenauer Stiftung, India International Centre and National University of Singapore’s Institute of South Asian Studies, held at the India International Centre in Delhi on 25 September 2019.

Footnotes:

1. Kristin Shi-Kupfer and Mareike Ohlberg, ‘China’s Digital Rise – Challenges for Europe’, Mercator Institute for China Studies (MERICS), April 2019. https://www.merics. org/sites/default/files/2019-04/MPOC_ No.7_ChinasDigitalRise_web_final.pdf

2. ‘Full Text of President Xi’s Speech at Opening of Belt and Road Forum’, Xinhuanet, 14 May 2017. http://www.xinhuanet.com/english/2017-05/14/c_136282982.htm.

3. ‘Xi’s Keynote Speech at the Opening Ceremony of the Second Belt and Road Forum for International Cooperation’, Belt and Road Portal, 27 April 2019. https://eng.yidaiyilu. gov.cn/qwyw/rdxw/88232.htm.

4. Ibid.

5. Hong Shen, ‘Building a Digital Silk Road? Situating the Internet in China’s Belt and Road Initiative’, International Journal of Communication 12, 2018, pp. 2684-85.

6. ‘Digital Silk Road Helping Developing Countries’, China Daily, 27 April 2019. http://www.chinadaily.com.cn/a/201904/27/WS5cc3a6e7a3104842260b8add.html

7. ‘Wang Wei: Digital Silk Road Construction Helps Economic Development’ (translated from Mandarin to English), China’s Belt and Road Portal, 25 November 2017. https://www.yidaiyilu.gov.cn/ghsl/gnzjgd/36420.htm

8. ‘BRI Update 2019 – Recalibration and New Opportunities’, Deloitte. https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/ser-soe-br/deloitte-cn-bri-update-2019-recalibration-and-new-opportunities-en-190422.pdf

9. ‘Mapping China’s Tech Giants’ Database, Australia Strategic Policy Institute, Barton, September 2019. https://www.aspi.org.au/report/mapping-chinas-tech-giants

10. Daniel R. Headrik, Tools of Empire: Technology and European Imperialism in the 19th Century. Oxford University Press, New York, 1981; See also his Invisible Weapon: Telecommunications and International Politics, 1851-1945. Oxford University Press, New York, 1991.

11. ‘China Warns India of ‘Reverse Sanctions’ if Huawei is Blocked’, Reuters, 6 August 2019. https://www.reuters.com/article/us-huawei-india-exclusive/exclusive-china-warns-india-of-reverse-sanctions-if-huawei-is-blocked-sources-idUSKCN1UW1FF

12. For a discussion see Adam Segal, ‘When China Rules the Web: Technology in Service of the State’, Foreign Affairs, September/ October 2018.

13. See Alina Polyakova and Chris Meserole, Exporting Digital Authoritarianism: The Russian and Chinese Models. Brookings, Washington DC, August 2019.