The digital rise and its economic implications for China through the Digital Silk Road under the Belt and Road Initiative

Abstract

This research, based on a review of secondary information, explores how the government of China and the country's leading technological enterprises are working together to develop infrastructure for next-generation digital technologies, e.g. artificial intelligence, cloud computing, quantum computing, 5G networks, navigation satellites, and fiber optic cables; to establish technical norms and standards; and to provide services and digital content, e.g. digital messaging applications, mobile payment systems, and e-commerce platforms, to emergent markets; as well as how digital corporate giants of China like Alibaba, Huawei, Baidu, ZTE, China Telecom, China Mobile, China Unicom, and Tencent have been challenging the prevailing status quo. Beijing seeks to assert its dominant role in world affairs through the Digital Silk Road (DSR) to globally influence and control a sizable part of the digital economy. The DSR has significant potential for enhancement of digital interdependence with the underdeveloped and some advanced economies by bridging the gap created by the absence of a critical infrastructure of global digital technology. There is no viable competitor to the DSR's exciting and long-term vision of a globally connected digital future for facilitating mutual growth and collaboration that will ultimately push for a dependency of other countries on DSR under the Belt and Road Initiative.

Keywords

Alibaba artificial intelligence Baidu digital technology Tencent

Introduction

Xi Jinping, while addressing a conference in 2016 said: “the fact that core technology is controlled by others is our greatest hidden danger” (Xi, 2016). In the contemporary era of globalization, the entire world is presumed to be flat since all parts of the world can be seen and heard speedily by all people across the globe (Deqiang and Zhengrong, 2017). Recently, the internet has become an indispensable means of digital technology to transfigure new-fangled social realities, for which global infrastructure development has gained strategic significance for states to enhance their geopolitical and geo-economic influence (Hong, 2018). Digital technologies have become a critical pillar concerning the political and military superiority of Beijing which is identified as an instrument to raise China's international stature (van der Lugt et al., 2022). With the emergent competition, the possibility of a bifurcation in the worldwide information and security ecosystems of technology among the US-allied liberal democratic states and China-based information and communication technology (ICT)-dependent countries also grows (Nouwens, 2021). The race for great power projection has reappeared as a significant determinant feature of the landscape of the global geopolitical environment, with the US and China competing for global and regional domination through their rapidly expanding economic and military strength, on the basis of which a battle is waging over setting the standards for the Fourth Industrial Revolution, or world's digitalization (Ghiasy and Krishnamurthy, 2020). China aims to expand its political, economic, and strategic influence in Europe, Asia, Latin America, and Africa, where it perceives prospects to reinforce connections by transporting cutting-edge digital technologies (Sun, 2022). The ambition of China to become an emergent power in digital technologies is a politically motivated drive. The dependency and synchronization with the digital technology, software, and services of China by more and more nations will increase the influence of Beijing worldwide (Ghiasy and Krishnamurthy, 2020). From the Chinese perspective, the time has come for China to establish rules, norms, standards, and laws that protect and promote Beijing's security and interests on account of which it can also leverage the political and economic concessions from technologically (over-)dependent third world countries (van der Lugt et al., 2022).

China wants to bolster its political and economic supremacy in the international arena at the expense of the USA by pushing its satellite navigation system, for which it has adopted a state-led “Made in China 2025” industrial strategy aimed at boosting China's influence globally for the development of high-tech industry in order to remain competitive with the global trends (Bora, 2020). It includes fulfillment of Beijing's goals through the development of capabilities in the emerging as well as existing high-tech technologies like artificial intelligence (AI), driverless cars, cloud computing, and quantum computing (Ghiasy and Krishnamurthy, 2020). The DSR further expands China's Belt and Road Initiative (BRI), and shows its ambitions for leading the Fourth Industrial Revolution, which China is positioning itself to benefit from due to being the first to define the rules in a way that, through the world's digitalization order, it now has the opportunity to recover its legitimate place in the global system (Shi-Kupfer and Ohlberg, 2019).

Beijing is endeavoring to establish a newfangled China-centric digital order and is developing an information highway with itself at the core of all the incoming and outflowing data (Marr, 2018). It is believed that DSR will substantially bolster the contending supremacy of China, enabling Beijing to reshape an “information order” globally because one of the most significant objectives of DSR is to establish China as a superpower of digital technology. Primarily, the DSR, with the development and effective utilization of prevailing technology, desires China to emerge as an influential digital power (Ghiasy and Krishnamurthy, 2020) which, if combined with China's massive investment in evolving technologies and AI—the digital backbone of Beijing—will make available significant benefits to local governments and business corporations (Hemmings and Patrick, 2020). China will need to acquire autonomy of technology over its geopolitical competitors, most remarkably the USA, as well as also to explore prospects for the development of multilateral linkages with the middle-power states to counterbalance the decoupling effects of the US (Sun, 2022). The DSR is motivated by China's desire to enhance its global prestige, as well as by the reinforcement of political, economic, and militaristic capacities that epitomizes an innovative model of the economy for exploiting stock of the capital output by use of the internet, and thus becomes a source of economic development across the globe to the extent that China's idea of internet governance is reliant on the DSR (Nouwens, 2021).

The emergence of the DSR is a component of a more considerable technological competition that could bifurcate the global community into two distinct systems: one characterized by the utilization of Chinese products and standards and the other based on Western norms and goods. China is using the DSR as a tool in its pursuit of global technological superiority vis-a-vis the USA (Wedell, 2020). China desires to challenge the global hegemony of the USA without igniting a confrontation. It is through the unfolding of this competition that the DSR continues to gain momentum by leveraging the power of China's private and public sector economic giants for the furtherance of the norms and standards of Beijing's technological innovations into the emergent and least-developed digital ecosystems of the world economy. This is done in a way that there is no viable competitor to the DSR's exciting and long-term vision of a globally connected digital future for facilitating mutual growth and collaboration (Ghiasy and Krishnamurthy, 2020). China is playing a pivotal role in creating an ideal environment for the digitalization of the world, employing digital governance and diplomacy through multilateral institutions for which China proposes the creation of new norms concerning the security of data and cyber control that will ultimately push for the dependency of other countries on the DSR and BRI (Mochinaga, 2021). The DSR aims to support the exporters of China in the ICT industry by investing in technical ecosystems in host nations, making it the most extensive infrastructure initiative globally (Marcus, 2022). China intends to employ the DSR as a tool to facilitate the adoption of its type of tech-based authoritarianism by target countries. The long-term objective of China is to reshape the global landscape of technical competition by exporting and outlining its norms and standards for emergent industries, thus ensuring that China's products and services are not damaged by standards established by any other country (Shi-Kupfer and Ohlberg, 2019). Furthermore, China may have the opportunity to undermine US and Western power by breaking their monopoly on international norms (Doshi et al., 2021). As a result, China's enforcing of its technical norms on DSR nations contributes to a more divided global order (Marcus, 2022).

Research methodology

This study adopts a descriptive qualitative methodology and focuses on describing the social phenomena associated with the development of the DSR in the aftermath of the outbreak of Covid-19. It provides an interpretation and analysis of the facts in the field to find the context of time and space related to the idea of the DSR developed by China under the BRI. This study further intends to clarify and explore the DSR initiative's social facts by examining certain variables and investigating the relationship between each variable. The variables of this research are post-pandemic digitalization of the world, e-commerce, digital economy, infrastructural development of cutting-edge technologies under the DSR, artificial intelligence, Alibaba, cyber governance, Baidu, fifth-generation networks, smart cities, society, and the culture within the framework of the BRI. The data was collected through a review of the literature associated with the research topic from dissertations, theses, news articles, research papers, scientific journals, and other pertinent scientific publications.

The digital rise of China through the Digital Silk Road (DSR)

The outbreak of the Covid-19 pandemic brought specific changes in the advent of next-generation cellular networks and the utilization of artificial intelligence for the development of smart cities, and most significantly, it also pushed US antagonism towards the digital rise of China in the world (Eurasia Group, 2020), for which the infrastructure for digital technology turns out to be one of the most critical frontiers of the China-US competition for next-generation technologies (Sun, 2022). The desire to lead in technical development and research is a crucial part of Xi Jinping's China dream approach aimed at transforming Beijing into a superpower of world-class technology (Chan, 2018). The DSR is a component of China's aim to make its technology enterprises globally competitive in areas like smart cities, fifth-generation (5G) telecommunications, cyber governance, and artificial intelligence, as well as to persuade other regions of the globe to adopt technological standards and norms (Mochinaga, 2021). The DSR is expanding China's de facto technological standards by encouraging e-commerce through the internet and enhancing digital connectivity (Russel and Berger, 2021).

China has taken the path of BAT-Baidu, Alibaba, and Tencent, which promote the technological goals of Beijing (Farhat, 2021). BAT of China has launched a digital revolution that evolved from hardware (Lenovo, ZTE, Huawei, Lenovo) to software (e-payments, robots, AI), establishing a platform for the commercial ecosystem in China while competing in the global arena with US platforms (Facebook, Amazon, Apple, Netflix, and Google (FAANG)) (Keane and Yu, 2019). Baidu, Alibaba, and Tencent have influenced the digital market of China, whereas the vibrant leaders, including Robin Li (Baidu), Jack Ma (Alibaba), and Ma Huateng (Tencent), are seen as innovators who have raised the living standards of the people of China (Leong, 2018). The digital revolution of China started in 2016, when Lee Sedol, generally regarded as the finest Go player of the last decade, was defeated by Google DeepMind's AlphaGo (Borowiec, 2016), which immediately stimulated China to reconsider enhancing its AI strategy pertinent to its national development planning to expand the digital footprints of China (Farhat, 2021). In 2018, China launched the “New Infrastructure” Plan to boost the digital economy through AI, 5G, the Internet of Things (IoT), and the industrial internet as a high-tech infrastructure (Sun, 2022). The Central Committee of the Chinese Communist Party (CCP) presented proposals in November 2020 for the creation of the 14th Five-Year (2021–2025) Plan for social development, national economy, and long-term objectives throughout 2035. Under the 14th Five-Year Plan, China aims to strengthen its technical autonomy from leading nations, predominantly in ICT, partly because Beijing is apprehensive about losing access to foreign technology (Xinhua, 2020). The DSR is gaining momentum among BRI countries for collaboration regarding the acquisition of novel technologies for the development of infrastructural investment and trade, and is a component of China's BRI plan, which focuses on the overseas enhancement of digital connectivity for the furtherance of China's technological supremacy (Cheney, 2019). It is regarded not only as a project of infrastructure development but also as a strategy for China to promote a worldwide China-centric digital order opposite to the US-centric one (Sun, 2022).

The DSR works as software for the BRI's hardware infrastructure (Russel and Berger, 2021). Through the DSR, China provides high-quality infrastructure and software to emerging economies. It is likely that the financial gap regarding infrastructure development of the world will be approximately US$15 trillion by 2040 (Gao, 2022). The DSR has been pushed by the tech giants of China, especially Tencent, Huawei, ZTE, and Alibaba, which are capable of supplying fiber optic cables of high quality at a lower cost as compared to their US and European competitors. The DSR is executing projects under the BRI in several countries by combining technology, media, and telecommunications (Kadi, 2019). The DSR operates in conformity with the terms of signed MOUs, which broadens its scope for further collaboration beyond the official partnership agreements and firstly emphasizes that China should proceed by financing the establishment of digital infrastructure networks of cellphone networks, data centers, and fiber optic cables. Second, in order to maintain its economic and military primacy, Beijing will need to invest in advanced technologies like quantum computing, satellite navigation systems, and AI. Third, considering the significance of economic dependence in expanding global power, China should develop digital free trading zones (DFTZs) and e-commerce platforms in order to gain access to new-fangled commercial markets by improving their presence in relevant global value chains (Bosetti, 2020).

The DSR rapidly becomes a crucial element of the BRI, with more than 130 projects continuously in progress across the globe (Nouwens, 2021), ranging from data centers and smart cities in Kenya and fiber-optic cables in Pakistan to 5G testing sites in Thailand and e-commerce platforms in Malaysia (Russel and Berger, 2021). The DSR also helps exporters of China and tech corporations like ZTE and Huawei to function globally (Dai, 2020). The DSR integrates BRI-participant countries through submarine and terrestrial fiber-optic cable networks. At the same time, Beijing has prioritized the construction of cables to Southeast Asia, South Asia, and the Pacific, which are frequently connected to Africa (Mochinaga, 2021). China Mobile and China Unicom are establishing undersea and terrestrial networks of communication in South Asia, the Middle East, Europe, and Africa (Eurasia Group, 2020). China Unicom has completed the construction of a submarine cable project, which is currently the quickest cable between Europe and Asia. The Asia-Africa-Europe 1 (AAE-1), a 25,000 km long submarine cable, runs from Hong Kong to France, connecting China with South Asia, Southeast Asia, the Middle East, Europe, and sections of Africa (Mochinaga, 2021). State-owned firms of China, such as China Mobile, China Unicom, and China Telecom, have already been establishing intercontinental lines of cable between Asia and Europe. Beijing is also constructing undersea and terrestrial cables to enhance fiber-optic connectivity between many regions of Eurasia and China. The World Bank has provided US$23 million to ZTE for the development of a fiber optic network in Afghanistan (Brown, 2017).

China not only serves as a significant market that has attracted a large number of overseas investors, but it is also a prominent global entrepreneur in the digital sector (Sun, 2022). At present, FAANG dominate the digital industry of the world (Parker, 2019). Tencent, the largest tech company in China, was founded in 1998 and is based in the Chinese province of Shenzhen which has further expanded in Seoul, Tokyo, Palo Alto, California, and Amsterdam. It promotes innovation and sustainable growth, and is actively helping industries in shaping their digital future through its products, which are not limited to one domain but rather function in a variety of technology-related areas such as social media, video games, streaming, and cloud services, entertainment, and advertising (Farhat, 2021). An average of 45 billion messages are exchanged daily on WeChat by 1 billion active users (Liu, 2021). The DSR presents a novel platform where content containing audio-visual images and text will instantly be generated, altered, shared, and consumed. The use of audio-visual content on mobile platforms is expanding. In a society overloaded with traditional media, consumers prefer to enjoy short videos on their mobile devices rather than TV dramas, films, and entertainment programs. It will enhance finance and technological investment in developing new multilingual media platforms under the BRI to create exclusive media services with broadcasting internet, internet TV, mobile broadcasting, and mobile TV (Deqiang and Zhengrong, 2017). The DSR is widely regarded as one of the greatest accomplishments of China in terms of artificial intelligence, financial technology, and development of e-commerce, etc., which are vital for the transition of digital technology along the New Silk Route (Teo et al., 2019). The DSR provides next-generation digital technology in the shape of soft and hard infrastructure, which will increase the trading efficacy of China (Dutta, 2020). China intends to reconstruct the global digital order through this strategic endeavor (Farhat, 2021).

Artificial intelligence (AI)

AI is considered to be a substantial component of the Fourth Industrial Revolution, with the potential to reshape our society for many years to come (Barton et al., 2017). The AI-driven apps will be the next significant innovation for modification of user behavior, either with the introduction of new choices or through linking value, platforms, and resources (Jia et al., 2018). China and the USA presently dominate the world in AI development. Due to heavy investments, China has become one of the major AI development hubs of the world. As the country's population ages, the extensive use of AI technologies will be essential for the economic progression of China in the future, emphasizing the need to enhance. It is an effective tool for China to increase production and keep its economic trajectory (Barton et al., 2017). China's digital powerhouse Alibaba established labs in 2016 to develop AI products. Ali Genie was launched in 2017, allowing leverage to Alibaba's services like voice recognition (Jia et al., 2018). China aims to build an AI sector worth RMB 150 billion (€19 billion) (Slotta, 2021) and plans to raise the value of the core AI business of China to more than RMB 400 billion (€51 billion) by 2025 (van der Lugt et al., 2022). China has outlined goals to emerge as a global AI superpower by 2030, intending to create an industry worth RMB 1 trillion (US$147.7 billion) (Kharpal, 2017). AI can also improve the efficiency of supply chains, industrial machines, and logistics routing (Barton et al., 2017).

Alibaba established its cloud computing service, which eventually transformed into an artificial brain or ET Brain platform that empowers organizations to utilize AI technology in all fields (Jia et al., 2018) because AI systems can enhance productivity by executing existing work tasks more effectively, either by helping or substituting human beings (Barton et al., 2017). Alibaba uses AI to improve the effectiveness of its payment services and e-commerce, and also attempts to incorporate diverse urban services, such as traffic management and transit bills, into its AI ecosystem by developing the “City Brain.” It is investing vertically in AI hardware manufacturers like Cambricon and DeePhi Tech and software developers like Face++ (Jia et al., 2018). AI integrated with enhanced sensor technology, while using mass data analytics, enables government agencies to improve extensive surveillance (Feldstein, 2019). Advertisers often use the data collected from social media and other free services to target certain groups of people while using AI. AI will scan millions of hours of footage on its own, perform smart automated censoring on enormous numbers of social media postings, and produce predictions about which people are likely to hold unfavorable views, organize protests, or depart the country (Wright, 2019). The proliferation of AI technology and digital hardware by China, mostly through the DSR, reinforces Beijing's support of a policy that promotes state control over individual privacy and rights (Russel and Berger, 2021). Through mobile phone data, Chinese technicians have assisted the government in intercepting opposition conversations and tracking political opponents. ZTE and Huawei have installed similar systems globally in countries like Malaysia, Pakistan, Kazakhstan, Zambia, and the United Arab Emirates, and are providing software and hardware to state agencies that enable them to suppress dissent and shape public opinion (Feldstein, 2019). The DSR will also be utilized to transmit data for the projection of power in other countries for achieving political and strategic goals through campaigns of spreading disinformation targeting citizens of other states (Cheney, 2019).

Alibaba

Alibaba is commonly referred to as China's equivalent of Amazon, founded by Jack Ma in 1999 while leading a group of 18 entrepreneurs (Farhat, 2021). Since its inception, the core aim of Alibaba has been to make it business-friendly by leveraging the internet to enhance the competitiveness of SMEs as well as to open the doors for Chinese SMEs and consumers through the development of now-commonly-used e-commerce platforms (Seoane, 2019). Alibaba turned out to be one of the most successful e-commerce platforms, initially originating as a B2B platform for China to assist small and large enterprises in exporting products to China globally (Farhat, 2021). The core business model of Alibaba remains e-commerce, which can be separated into retail commerce in China through Tmall and Taobao platforms, wholesale commerce by Alibaba, and global retail commerce through Lazada Aliexpress, and Tmall global, as well as whole commerce through the English portal of Alibaba. Alibaba established its separate cloud infrastructure since all of these digital platforms require huge volumes of data to be stored, handled, and analyzed (Zeng, 2016). It consists of several endeavors, including cloud computing, core commerce, Ali cloud, digital media, mobile payments, and entertainment. It is generally an e-commerce company that controls the retail sector of China, operating as a gateway between the customer and the seller using two web platforms, Tmall for business-to-consumer and Taobao for the consumer-to-consumer services. The e-commerce services of Alibaba, such as Ali Express.com, are linked to the BRI in a global context. The BRI-participant countries subsequently doubled revenues in 2018, with 57% of orders originating from BRI nations; as of 2020, the market capitalization of Alibaba was US$648.31 billion. The BRI has enhanced prospects for Alibaba with the addition of 60% of the world's population to its seller list and 30% economic output globally (Farhat, 2021).

Outside of China Alibaba operates more than 22 data centers. It estimates that its overseas operations will contribute 40% of its income by 2027 and that the number of active buyers will increase from 423 million to 2 billion by 2036, with 1 billion people from countries outside China (Eurasia Group, 2020). It owns about an 83% share of Lazada and, with the takeover of helloPay, its mobile payment services have been changed to Alipay Malaysia, Alipay Singapore, Alipay Philippines, Alipay Indonesia, etc., in respective member countries of ASEAN. It has collaborated with Malaysia's Touch ‘n Go digital wallet as well as the main banks of Malaysia, including Maybank, CIMB, and Public Bank, to build a Malaysian version of Alipay. WeChat Pay, the major competitor to Alipay by China's Tencent, has sought a business license in Malaysia, which will enable local customers to connect their Malaysian bank accounts to the financial system, highlighting WeChat Pay's first venture into an international market. The Malaysian Open Lab is a cloud data platform for Asian entrepreneurship designed to foster collaboration between Malaysian enterprises and Huawei, which is situated in the Iskandar region and has been dubbed the next Shenzhen. Malaysia and China, under the joint vision of “two parks, two countries,” have agreed to build in Kuantan, Malaysia, the Malaysia-China Kuantan Industrial Park, as well as in Guangxi, China, the Malaysia Qinzhou Industrial Park (Nee, 2021). The WeShare platform of China has sought authorization from the central bank of Indonesia to use its AI expertise to collect and analyze massive amounts of data concerning potential borrowers (Ahmed, 2017). Alibaba has also attained 10.35% shares in Singapore Post, the official post services provider of the country. Ant Financial purchased the Singaporean mobile payment provider helloPay Group in 2017 as part of Lazada, which was initially established in Singapore by German Rocket Internet. It was introduced in Southeast Asia as analogous to the business model of Amazon. Huawei is building cloud data centers in both Pakistan and Kenya (Russel and Berger, 2021).

Cyber governance

As more and more activity is conducted over digital networks, cyberspace governance has become a key factor in international trade and politics, which has long been controlled by the USA globally (Gao, 2022). The evolving geopolitical scenario of cyberspace in the post-Snowden period, as well as the emergence of novel cyber powers, has threatened the hegemonic stature of the USA both within and beyond the Western bloc (Reddy and Soni, 2021). States are expanding their control over activity in cyberspace, while political tensions are affecting the cross-border flows of goods and information upon which globalization has been built (Lee, 2022). Competition in cyberspace is so intense that it has created a digital cold war between the states (Reddy and Soni, 2021). The rivalry between Beijing and Washington in cyberspace could thus be described as a government-dominated and sovereignty-driven approach versus an open multi-stakeholder strategy. This dichotomy is usually defined as a conflict between the West and non-West (Liu, 2012). Chinese support for a multilateral approach reveals its ambition to challenge the hegemony of the USA concerning cyberspace (Christou, 2014). As an emergent cyber power, China turns out to be a challenging competitor. With the most extensive internet community of 898 million, China has become a significant global actor in cyberspace (Gao, 2022).

China is making substantial efforts to establish cyber rules, which will position it to become a cyberspace norm- and regulation-setter (Segal, 2020). The DSR will play a crucial role in China's aspirations to promote its cyber governance vision. China had concluded collaborative treaties on cyber governance with 16 states under the framework of the DSR by 2019 (Gao, 2022). Chinese tech firms are setting norms by leveraging the DSR under the BRI. The world's emerging economies are receptive to the cyber governance model of China for two key reasons. Firstly, several countries remain reluctant to adopt the Western-centric strategy since their views are marginalized. Secondly, they consider cyber sovereignty as a means to diminish the hegemony of the USA in cyberspace, due to which Djibouti, Zimbabwe, and Uganda are apprehensive about joining an internet that would serve as a gateway for Facebook and Google to occupy their digital domains, hence they would seek online services centered on non-Western values and standards. Therefore, developing internet infrastructure under DSR-related initiatives is an appealing option for such countries (Adee, 2019). In addition, China is extensively engaged in global cyber-governance to redefine organizational rules and enhance its dominance (van der Lugt et al., 2022) because it considers that its concept of cyberspace governance can broaden its authority across the globe (Mochinaga, 2021). Thus, China views its participation in the global standard-setting as a mutually advantageous (win-win) opportunity to achieve a shared vision in cyberspace (Doshi et al., 2021).

Baidu

Baidu, developed by Robin Li in 2000, is China's internet search engine equivalent to Google and controls over 80% of its market share (Campbell, 2018). Baidu and Google both operate in an identical ecosystem of online services. Baidu focuses on China's indigenous market, while Google promotes its facilities for the global market. With a market capitalization worth US$48.38 billion, Baidu has become the world's fourth most popular website (Farhat, 2021). As part of China's aim of becoming a tech-robust, Baidu made a substantial investment in 2013 to develop the Institute of Deep Learning and AI labs, on account of which it successfully launched Baidu Brain and Baidu Cloud. Baidu Brain is a platform for algorithms, and Baidu Cloud provides an infrastructure for data production, analysis, and tagging. Baidu has been employing its newly established AI technologies for its core products, such as mapping and searching, to increase efficiency and develop the AI-modified DuerOS operating system and self-driving platform Apollo (Jia et al., 2018). Generally, 209 countries are covered by Baidu's map, with monthly active users reaching 300 million (Eurasia Group, 2020). However, with the addition of AI, it has become an AI-based smart map that could work closely in collaboration with the BRI's smart map to provide technological and scientific assistance alongside BRI-participant countries to promote smart tourism (Farhat, 2021). Thirty BRI member nations have adopted the GPS navigation system of Baidu for surveillance (Wheeler, 2020). Baidu introduced its cultural heritage program in 2018 while expanding its role in the cultural area between the states within the framework of the BRI (Jia et al., 2018). The services of Baidu, like the Baidu Cloud, cultural heritage program, Baidu smart map, and AI translation, are considered beneficial for the BRI. The AI translation adopted by Baidu aims to alleviate linguistic barriers (Farhat, 2021). Baidu, the giant search engine of China, developed a joint research laboratory in collaboration with the Singapore Agency for Science, Technology, and Research in 2012. In addition to the Baidu lab, Huawei has also established an Open Lab in Singapore. Thailand and Laos have adopted the navigation system of Baidu, which is China's alternative to the much-used Global Positioning System (GPS) (Ahmed, 2017). Baidu is also significantly investing in voice interaction and self-driving vehicle companies like KITT AI and NIO (Jia et al., 2018).

Smart cities

China initiated domestic pilot projects of smart cities in 2012. Beijing is promoting its domestic technical values through the DSR under the BRI, with the export of safe cities, smart cities, and smart port technologies and signing MOUs to develop standards (Russel and Berger, 2021). According to recent research, 106 countries have the adopted smart cities and linked technologies of China (Atha et al., 2020). Kenya has signed a contract worth US$175 million with Huawei to develop data centers and smart cities. So far, Huawei and ZTE have built around 200 and 170 smart city schemes worldwide (Hemmings, 2020). Huawei is also developing projects involving smart cities in Southeast Asia, Central Asia, and African nations (Eurasia Group, 2020). China is deploying next-generation monitoring, surveillance, and censoring technology for security reasons (Feldstein, 2019). Huawei has installed nearly 1000 security cameras in Serbia and Belgrade, as well as a facial recognition venture worth US$126 million for surveillance in Uganda (Stojanovic, 2019).

The economic implications of technology for China under the Digital Silk Road (DSR)

The outbreak of Covid-19 stimulated the rise of online businesses, which further contributed to the digitalization of the Chinese economy at the end of 2019 (Zipser and Poh, 2021). The evolution of China's digital economic policy may be divided into four stages, i.e. 1990s: information infrastructure; 2000s: internet economy; early 2010s: e-commerce; and after 2015: digital China (Sun, 2022). Online payment and e-commerce through high-speed internet connections have become a part of daily life that cannot be ignored (Mochinaga, 2021). The contemporary world is more reliant on online business than ever before. The online business of digital payments, electronic items, and online marketing progressively dominates digital trade (Herbert et al., 2021). The DSR offers internet connection and logistics to countries, which are essential for financial services and digital payment. Currently, more than 81% of internet users in China utilize e-commerce applications and apps (Xiang and Linbo, 2014). During the Covid-19 pandemic, the digital economy of China further expanded owing to the increased usage of online food ordering, shopping, telecommuting, online healthcare, and remote schooling as a result of the outbreak (Sun, 2022).

Digital technology has come to be regarded as a magic bullet by China to resolve long-standing policy issues which for decades hampered the CCP, as well as an accelerant of growth in the economy (van der Lugt et al., 2022), which during the last three decades has developed to emerge as a global player. China's digital economy grew enormously in 2019 to worth US$1.5 trillion and 25% of all online retail transactions, which were more than double the volume of the US e-commerce share (Farhat, 2021). China is now the second biggest digital economy in the world after the USA, estimated in 2021 to be worth US$7.1 trillion, accounting for 39.8% of the overall GDP. It also contributed to generating 30% in 2019 and 40% in 2021 of GDP while assisting the economic recovery of China from the crisis of Covid-19 (Sun, 2022). The online trade in China reached US$203.6 billion, contributing 26% of the total service trade in 2020 (Gao, 2022). The Fourteenth Five-Year Plan of China incorporated digital trade as one of the main economic targets for 2021–2025 and one of the long-term goals for 2035 (Sun, 2022). China's economic growth will be boosted further by creating a new stimulus and commercial engine of e-commerce (Bora, 2020).

E-commerce is the most lucrative industry due to the expansion of the DSR, which will broaden the worldwide use of e-commerce to enhance global trade and increase the country's network quality. China is one of the largest emergent market leaders in e-commerce, with US$634 billion in revenue in 2018, and it will continue to dominate by 2023. The Statista Digital Market Outlook (SDMO) forecasts that the e-commerce sector will reach US$2 trillion in 2019 (Bora, 2020). China emerged as the biggest e-commerce market in the world, with a market share worth US$1.5 trillion (RMB 42.3 trillion) in 2021 (Sun, 2022), which now hosts the world's largest e-commerce retail market, with a 40% share of global sales (Liu, 2021). China has also surpassed the USA as the world's biggest retail market, owing to its nationwide online retail sales of products and services (Bosetti, 2020). The overall transaction value of China's e-commerce is projected to be more than that of Germany, France, the UK, Japan, and the USA collectively (Sun, 2022). Mobile payments are so common in China that even beggars collect alms through QR codes (Liu, 2021). China's mobile share of e-commerce sales is around 70% vs. 30% in the USA; its share of internet users making mobile digital payments is about 68% vs. 15% in the USA. China also became the world's biggest mobile payment market, with revenue worth RMB 2976 trillion in 2021 (Sun, 2022).

Key technologies and the digital economy are at the core of US-China competition globally. China is conscious that its reliance on SWIFT and the US dollar may pose a risk, particularly if the USA seeks to use SWIFT as a tool against Beijing (Mochinaga, 2021). China is engaged in commercial statecraft to enhance its capabilities for establishing regional preponderance and projection of its power in the global and regional framework (Cheney, 2019). The main focus of China's economic strategy now is to revamp its digital infrastructure, including AI, 5G networks, data centers, and IoT (Sun, 2022). It is leveraging digital platforms and infrastructure to develop global norms concerning online payment and e-commerce (Mochinaga, 2021). China could capitalize on an opportunity to build a monetary institution parallel to the IMF and the World Bank that has hitherto been under the domination of the USA (Hong, 2018). China's central bank launched the Cross-Border Interbank Payment System (CIPS), a clearing and settlement system based on the Chinese yuan, in 2015, which by June 2020 expanded to 96 countries, including Japan and the USA (Mochinaga, 2021). In addition, it has also created the first digital currency in the world (Liu, 2021). China has pushed its banks to utilize a renminbi payment system to be self-sufficient from the west-centered global networks of financial transactions (Mochinaga, 2021).

China understands the critical role of economic interdependence in achieving global hegemony through promoting DFTZ under the DSR (Cheney, 2019). Alibaba and other internet companies are continuously focusing on developing the DSR, which would facilitate the export of Chinese goods to international markets. Chinese products will be sold and purchased worldwide through the DSR platform, which was created by internet giant Alibaba for trans-border transactions of e-commerce (Bora, 2020). The DSR actively supporting cross-border e-commerce and DFTZ is, in fact, a recognition that China benefits from globalization and free trade (Cheney, 2019). It will not only be advantageous for the business companies of China but will also allow them to spread broadly into other economic markets. China could be able to take benefit from smaller financial markets for the enhancement of its power to manipulate their domestic policy (Bora, 2020). In this respect, efforts made by state authorities and business corporations of China for establishing e-commerce and DFTZ to expand their mobile payment shares in international markets should be examined under the auspices of the DSR (Cheney, 2019). Implementing the DSR will accelerate financial growth, generate job prospects, increase commercial performance, and enhance the well-being of people (Lazanyuk and Revinova, 2019).

The DSR will be extending the transformation of the economy, boosting integration in the regional domains, and strengthening financial resources for political stability to advance multilateralism globally (Bora, 2020), and will also provide newfangled avenues for incorporating the idea of sustainable economic growth (Lazanyuk and Revinova, 2019). China aims to promote its very model of state-led development in BRI participatory countries, which demonstrates Beijing's ambitions concerning the internationalization of its economic statecraft (Herbert et al., 2021). The BRI is thought by some academics to be a new form of economic hegemony to maintain its financial aristocracy (Deqiang and Zhengrong, 2017). The digitalization of trade in China has expanded connectivity with its partners, as well as more services and products to Chinese consumers through online livestreaming sales and e-commerce platforms (Sun, 2022). Beijing is fostering the liberalization of digital trade among its partners while maintaining protective barriers to digital trade at home and pushing for its state-led capitalism to the world. China optimizes that the combination of soft power and economic growth will herald a novel era of globalization that will place China at the core of geopolitics (Herbert et al., 2021).

Conclusion

It is imperative to conclude that China is endeavoring to establish newfangled economic markets for export of its technology by broadening its base for technical development through the access of data, and developing the physical infrastructure for the BRI as well as promoting a goodwill attitude towards China in beneficiary countries. The DSR will enable China's technological companies to expand globally to emerge as a vehicle through which Beijing pushes for an alternative to what it sees as a US-dominated technology world. China has been relying on the technology and infrastructure of the DSR to penetrate and capture new and untapped economic markets. It has also been pursuing global leadership in digital technology by making efforts in areas of research collaboration, e-commerce, and the development of digital infrastructure. So far, the challenge has been the unequal distribution of the internet and new media infrastructure in the numerous countries through which the BRI passes, which will impede the DSR's acceleration. The expansion of the DSR has elicited significant apprehension regarding its potential adverse effects on China and the recipient nations, particularly in light of Beijing's increasing global assertiveness. The potential authorization of Chinese corporations to construct 5G networks and other infrastructure, as well as to establish technology standards, may pose a threat of espionage and coercion towards the political affairs of other nations if Beijing utilizes data breaches to bribe political elites. Chinese technology firms have previously assisted foreign governments in developing surveillance capabilities that may be employed to monitor dissenting factions. Implementing internet filtering, content moderation, data localization, and surveillance may assist recipient countries in enhancing their internet control. The rapid growth of DSR may jeopardize the West's post-Cold War goal of a liberal and open Eurasia. Initially, introducing Chinese surveillance technology into BRI nations may lead to an increase in authoritarian repression and an improvement in its effectiveness. China has trained authorities and tech firms in DSR nations on real-time internet censorship and surveillance. Even more problematic is deploying China's Smart City programs under the DSR, which utilize intrusive AI and face recognition technology to monitor and handle public monetary and security affairs. Apprehensions concerning the DSR in countries such as Egypt centered on the potential for it to facilitate the dissemination of a regulated form of the national internet. The provision of technical assistance from China has the potential to bolster the Egyptian government's capacity to suppress internet freedoms. In other ways, the DSR might assist authoritarian regimes in maintaining their control. Huawei has built a data center where the Zambian government can store and process its data. Nonetheless, as Zambia, once a democratic success story in southern Africa, falls towards authoritarianism, its technical partnership with China may strengthen Zambia's authorities even more. According to reports, Huawei has provided technology to the Zambian government for spying on political opponents and has allegedly helped the government of Uganda to monitor political rivals. The Chinese government can obtain secret information with the help of DSR projects. The USA and certain European countries are concerned that the Chinese agencies could access data on Huawei networks in Serbia through secret backdoors. European states would be apprehensive if Chinese intelligence and potentially the Chinese military had access to a covert gateway. The political opinions concerning the DSR have also been affected by an emerging narrative amid Western politicians that Beijing is pushing to adopt a Chinese “techno-authoritarian” model to BRI countries. China is frequently accused of engaging in debt-trap diplomacy, enticing poor nations into accepting untenable loans to fund infrastructure projects so that, when they run into financial difficulties, Beijing may seize the asset, therefore expanding its strategic or military reach. Technological development is not only essential for economic viability, but is also crucial to the developing power conflict between China and the USA. The global digital divide is widening as they strive in a zero-sum game. During Trump's administration, the escalating technical competition between Washington and Beijing and the rising friction over digital technology were in the limelight.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Ethical clearance

This study was approved by the institution.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Fakhar Hussain

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