The Silk Road Re-Invented?
Source: unsplash
Sarrah Jasmin discusses China’s new digital development.
2,000 years ago, the Silk Road functioned as an ancient network of trade routes, connecting Asia to the Middle East and Europe. This East-to-West pathway of trade was crucial to the development of civilisations for countries including China, Korea, Japan, India and Iran. Recently, President Xi Jinping detailed plans to reinstate a Silk Road with the aims of linking China with the rest of Asia, Africa, the Middle East, Europe and Russia once again, but with a digital twist.
The ambitious development, entitled the Belt and Road Initiative (BRI), aims to boost trade and stimulate economic growth across Asia and beyond, by investing in large amounts of infrastructure connecting countries worldwide. The rhetoric “Digital Silk Road” has recently been termed to the scheme, as Xi Jinping detailed quantum computing, nanotechnology, big data, cloud storage and AI as all being at the core of BRI.
The initiative will assist other countries to build digital infrastructure and develop Internet security, starting in the western city of Xi’an. Previously a hub for trade, it now aims to compete with Silicon Valley and Bangalore. Xi’an produces up to 300,000 science graduates annually, with their technology centre Software Park set to employ a quarter of a million tech specialists in three years. Already, tech companies have headquartered their research facilities in Xi’an such as Huawei and HSBC, due to the attraction of Xi’an’s government claiming a large role in building the digital road and innovation.
China plans to pump $150 billion into the BRI, which can be separated into either the ‘Silk Road Economic Belt’, a series of overland corridors connecting to Europe through Asia and Middle East, and the ‘21st Century Maritime Silk Road’, which is a sea route linked to East Africa. While new markets for Chinese goods and technology will be created, benefiting China’s economy primarily, it is hoped that shifting cement and steel factories overseas to less developed regions will also boost the economies of these border regions through this connecting route.
China’s satellite navigation system will also be extended to 60+ countries along the Belt and Road, and by 2020 it hopes to rival, or even surpass, America’s Global Positioning System (GPS) by expanding its network worldwide. Other tech based benefits from the BRI also include improved access to foreign markets, due to upgraded technologies such as e-commerce, real-time data, blockchain and AI. Recent successes in digital transformations help inspire and further the BRI. One example includes the recent successful demonetisation of currency in India from a heavy reliance on cash to a digital economy, which is expected to boost the GDP of India. It has already reduced currency risk and liability due to a more sophisticated technological banking system.
However, Tom Miller, the author of China’s Asian Dream, insists that this initiative is only about making China the most dominant country in Asia, and comes as President Trump looks to step back from Asia. As a result, it will undoubtedly give Asia more influence over itself, with a plethora of geopolitical consequences. Furthermore, countries like Kyrgyzstan and Tajikistan are major supporters of the BRI, as the current Chinese power transmission projects are already providing economic benefits to the regions.
Despite certain governments in favour of this project, both Germany and the USA have previously declined attendance to forums that aim to discuss the initiative. Therefore, whilst some countries are inherently supportive of the initiative, there is still major confusion about what the BRI is, and what it actually entails for many governments globally.