China’s heft in e-commerce, AI, fintech will aid global shift to digitization along the New Silk Road

(JIN DING / CHINA DAILY)

As China pursues a development initiative that focuses on technological innovation, the battle for leadership in next-generation information technology, especially artificial intelligence, becomes a key policy priority and part of its “comprehensive national power”.

It should be noted that this course of development follows the conditions of the fourth industrial revolution. In the modern world, the technological and innovative factors directly affect the economic superiority of the state. The three previous industrial revolutions saw the rise of nations and regions such as the United Kingdom, the United States and the “Asian Tigers”.

That is why China, mindful of the realities of the modern world, is actively digitizing its economy. The Digital Silk Road was put forward in 2017 with an eye on the transition to the platform of the fourth industrial revolution. Chinese President Xi Jinping said in a speech that the Belt and Road Initiative (BRI) should become a road for innovation, namely the Digital Silk Road of the 21st century. According to him, for the implementation of the BRI, China has made visible efforts to create an intellectual Silk Road.

The Digital Silk Road project plans to create next-generation digital and telecommunications infrastructure around the world, from telecommunications and smart city projects in Asia and Africa to 5G communications projects in Europe.

Notably, three main directions have been implemented within the framework of the Digital Silk Road.

The first and foremost direction is e-commerce. It is an essential element in the implementation of the Digital Silk Road and plays a decisive role in the digitization of the global economy.

Chinese e-commerce giants such as Alibaba and JD have already confirmed their participation in “Digital Silk Road” projects.

The implementation of the Digital Silk Road will allow Chinese corporations to enter lucrative new markets, especially in South and Southeast Asia. In 2017, Alibaba partnered with Malaysia to create the first digital free trade zone under the Digital Silk Road framework.

The expansion of e-commerce and cross-border transactions at the regional level has the added benefit of accelerating the internationalization of the renminbi and application of mobile payment platforms in the countries involved in the BRI. 

The rapid growth of foreign and electronic trade has revealed the need for major changes in the transport and logistics system of the BRI. Automation of customs procedures with the help of IT projects of the Digital Silk Road can significantly reduce the waiting time for cross-border goods.

The second direction is the construction of the latest innovative infrastructure in the countries involved in the BRI. Through the implementation of the Digital Silk Road, China aims to become a world leader in creating and providing infrastructure in the digital sphere.

Echoing the Digital Silk Road, Chinese State-owned enterprises and private corporations are investing heavily in the development of these areas of digital infrastructure. China Telecom, China Unicom and China Mobile have already begun running submarine and terrestrial fiber optic cables in the countries involved in the BRI.

These projects will not only improve digital connectivity in underserved countries of Central and Southeast Asia, but also significantly speed up the transfer of data from the internet, as well as provide a direct internet route between Belt and Road countries.

The third direction is the development of advanced technologies. China is focused on developing advanced technologies such as the Beidou Navigation Satellite System, as a means of strengthening integration and mutual connectivity in the countries involved in the BRI.

AI is another area. According to Huawei Global Industry Vision, in 2025, 77 percent of the world’s population will have access to the internet, and 80 percent to mobile communications. The introduction of AI will help process the incredibly large volumes of data incurred.

China’s significant achievements in the growth of e-commerce, AI, financial technology, etc. are crucial for the transition to digitization along the New Silk Road.

Technological development and international connections in the digital space will play a critical role in determining the outcome of the great power competition that will ultimately shape the international order in the Asia-Pacific region and around the world.

The author is director of the International Institute of Central Asia and former secretary-general of the Shanghai Cooperation Organization. The author contributed this article to China Watch, a think tank powered by China Daily. 

The views do not necessarily reflect those of China Daily.