Wider access to the internet and urban growth could reshape global networks by 2030, Washington think tank says in the report. With China and the US set to compete for the spoils, Beijing has begun building its ‘Digital Silk Road’.
China and the United States are poised to compete fiercely on communications and network technologies in the developing world, which will play a growing role in global networks in the next decade, experts say and Belt & Road Initiative countries could be the main battleground.
More than half of the global population has limited or no internet access, but more of the developing world is expected to come online in the next decade.
That projected trend could reshape global networks, according to Washington think tank the Centre for Strategic and International Studies (CSIS). Nine of the 10 new global megacities set to emerge by 2030 will be in Asia and Africa, and the two continents are forecast to account for 90 per cent of global population growth by 2050, it said.
Developing countries’ choice of communications systems “will impact the trajectory of the world’s largest network providers” and could make the next decade decisive in the China-US technology rivalry, the centre said in its report “Global Networks 2030”, released last month.
“After adopting equipment, countries may be locked in by high replacement costs,” the report said. “As these economies grow, the companies providing their technology will capture market share, which will underwrite their research and development investments and position them to set standards.”
In this competition for developing markets, China has advanced its vision: the “digital silk road”, a branch of Beijing’s infrastructure investment strategy, the Belt and Road.
Announced in 2015, the digital silk road constitutes aid for countries to improve their telecommunications networks, broadband internet coverage, e-commerce and mobile payment systems.
Under the digital initiative, China has signed memorandums of understanding with at least 16 countries in Africa, Asia, Latin America, the Middle East and Europe.
It has built more than 30 cross-border land cables and over 10 international subsea cables with Belt & Road Countries, and Beijing’s financing for Africa’s digital infrastructure has surpassed that of African governments, multilateral agencies and Group of Seven nations combined.
Lu Chuanying, Director of the International Cyberspace Governance Centre at the Shanghai Institutes for International Studies, said Chinese tech companies were more competitive than American ones.
“Developing countries need inexpensive products, and the price of Chinese products is lower,” Lu said. “Moreover, the infrastructure of those countries is often underdeveloped, requiring the equipment to be operable in special or extreme geographical and climatic environments. Chinese enterprises have advantages in meeting such requirements, because the application scenarios in China are also diverse and complex.”
Although the US has yet to put forward a vision for global networks, the CSIS report identified several advantages it would have over China in this sphere, including top research institutes, world-leading cloud computing technologies, and partners and allies with “deep historical and commercial ties in key emerging markets”.
“In terms of aid to developing countries, the US has advantages at strategic and policy levels, given that such aid has long been one of its key international strategies,” Lu said.
“Also, the US government has extensive international influence. In comparison, China lacks experience in such assistance and a deep understanding of the local politics. When encountering incidents such as coups that may lead to dramatic changes in the country’s domestic policies, China has less leverage because it has a principle of non-interference in other countries’ internal affairs.”
Urging the US to present a vision for global connectivity that would appeal to the developing world, the report said one way it and its allies could offer an alternative to China would be through a higher-standard “smart city” model with “sustainable city” certification, emphasising data security, commercial feasibility and energy efficiency. They should also expand financial support while increasing decision-making support for developing countries, it said.
Zhang Ruoyu, a telecoms engineering lecturer at Nanjing University of Science and Technology, said the US and China could offer differing strengths, although supply chains meant there was some overlap between the countries.
“The US has some exclusive core technologies in the telecommunications field that China doesn’t have,” he said. “But due to the outflow of manufacturing, the US relies on China or Southeast Asian countries for production.
“A main difficulty for China, in promoting its own products in developing markets, is how to ensure the quality of the equipment while maintaining low costs.”