Demystifying China

Ah, the charms of the legacy western propaganda machine. Generations of us are indoctrinated with the insidious, perfidious nature of China’s goal of world domination.

Hmmm, it would be nice if we just embraced the truth of what China can offer the world rather than being forced into a mindset about which another economy suffers because of what they can offer. So, let’s start with a little bit of truth as it pertains to China’s most important trade relations.

Washington VS Beijing

As we bid farewell to a year full of digitalization for development, the magnitude of digital economies made technology an indispensable roadmap to the future. We saw the fall of some economies, the favor of some, the stabilization of others, and a push of power for the Chinese economy.

After a year of battling the pandemic, the outbreak heavily impacted the Chinese economy. The COVID-19 pandemic left Beijing at a crossroads of establishing and maintaining growth and stability to fulfill its economic growth and solidify its position as it materializes itself as a digitally self-sufficient economic powerhouse.

China’s digital economy reached new heights exponentially in the past decade. And China’s not-so-quick rise to power made it a force to be reckoned with as it became the world’s second-largest digital economy, placing Beijing in direct competition with the US as both national moguls seek complete domination of social media, digital finance, cloud computing, and a wide range of Internet-based services.

As the US was statistically working on unfolding a comprehensive and all-inclusive digital infrastructure, China was working on addressing its own economic structural problems. This birthed what can be considered one of China’s largest markets, electronic commerce or e-commerce, with transactions reaching an estimated $1.5 trillion in 2021 alone, a 20% increase Year-over-Year (YoY). There’s no denying that China revolutionized its retail sector and pushed it from the ground up by fully comprehending the role of technology. While some of the country’s sectors suffered, e-commerce managed to fight any struggle by simply accepting the opportunities digitalization can provide when meeting heavy customer demand.

Yet, despite the constant tactical bulldozing, China still lags behind the US in internet penetration, but it distinguishes itself by building a mobile-first, fiber-intensive, and inclusive digital infrastructure. An exemplary infrastructure, innovations tailored to the massive Chinese market, and local firms’ rapid commercialization of products and services turned the world’s largest domestic population into active online consumers, helping China overtake the US by a large margin in retail e-commerce and digital payment.

This surge in demand drives China’s digital economic ventures to enter a new phase in the race to become the world’s most dominant economic force. The rapid success of Beijing’s national development strategies led to the expansion of China’s digital infrastructure construction, mounting its digital economy’s share in the national GPD to hit a colossal 39.8% in 2021. By June 2022, China’s internet users rate climbed sharply to hit 1.05 billion, propelled mainly by its 5G network deployment. The country’s ICT sector became the driving force of economic growth, not only through capital deepening but as a support to all of its sectors, with the most critical market being the largest beneficiary, e-commerce.

Beijing’s reliance on these two primary sectors alone gave China the only two pillars it ever needed to improve its economic growth. All made possible through the enablement of technology and the infusion of innovation and technological fostering. To stand where it currently stands, Beijing resoundingly marked its presence in the economic race as it further cultivates new technologies and applications such as Artificial Intelligence (AI), the Internet of Things (IoT), and developing a new generation of communication networks linked to AI services for various economic and societal sectors.

Yet, as Beijing puts into action its national development strategies, world business leaders observe its abrupt technological development, and the West is putting everything at stake to ensure its sovereign rank. Understanding the East and the West vying means understanding the US and China’s assertive governmental regulations and censorships to establish an authoritative economic position, which means expanding their investments reach. This means shifting the attention towards a region with resources yet to be harnessed.

Nowadays, the ballad of the East and the West is no longer confined within the geographical position of both powerhouses. The hunger to expand their political and economic influence surged to reach a new region, a region that was once considered one of the US’s leading regional ally, the Middle East.

China is eyeing a new partnership as it substantiates its position as the leader in the digital economy and has extended a unique and diplomatic partnership reach with GCC economies, initially reliant on oil and gas resources but now expanded to include digital technologies. As the GCC endeavors to establish a knowledge-based economy, to lower its increased reliance on oil, the US lays the foundation for its global position as the world’s largest economy, as China inspects the endless potentials and prospects the Middle East has as it currently works on grounding itself as a digital economy.

Chinese Investments in the MEA

Around mid-December last year, on the laptops, mobile devices, and televisions of the most powerful figures in American society, possibly the most devastating blow to US foreign policy was delivered. Middle Eastern oil was to be purchased in the Chinese Yuan. Wait. What? The foundation of American geopolitical policy had just fallen prey to a seismic event, leaving the home of the brave on very shaky ground indeed. The ripple event of Arabian oil not being purchased in dollars may well even be a killer blow to the Democrat’s hopes for a second term in office; that’s how American politics roll. But this was also the same foreign policy that has kept half of the world in the dark about China, with only the fear about what would happen if China’s economy moved from a communist base to a free market base. An outright contradiction to the reaction of the country becoming communist in the first place. Oh well, ignorance is, after all, the most powerful navigation tool in politics. 

But what the clickbait of Yuan-purchased oil largely masked was the enormous and far-reaching implications of the investment by the Chinese in the Middle East and African tech. Huawei, which the US Administration has continued to promulgate as a giant security concern, will build 5G networks in the GCC whilst developing cloud computing in Saudi Arabia. (One can just picture Uncle Sam, a deep furrow on his brow, his hand propping up his chin, as he fashions a worried frown which looks to be globally paternal but, well, isn’t.)  The proprietary protocols and other systems in a Huawei ecosystem represent something of a shutout to American and Indian technologies. One wonders how this will be spun by

Washington in the future. I’d write ’watch this space,’ but that would be pointless: there will be no geopolitical promotion here. I suppose that last sentence may appear to be contradictory, considering our bias towards China’s rise in technological matters. But honestly, I challenge you to find a definition of the remarkable Digital Silk Road (DSR) that hasn’t been written by an American or one with American interests at heart. And on the subject of the DSR, the country’s nearly 60 billion Yuan investment in Africa will bring all of Sub-Saharan Africa essentially into the digital era. Huawei, ZTE, and Cloudwalk will now have an entrenched presence in mobile telephony, social media, and e-commerce in Nigeria, Angola, Zambia, Zimbabwe, and Ethiopia.

That’s a pretty wide geographical bandwidth in economies that are burgeoning both formally and informally. Infrastructure, mobility, opportunities for individual growth, prosperity, and better education systems. Not forgetting self-determination, better healthcare, and tech-based agriculture.

This is a history lesson in the making.

From a country that much of the ‘civilized’ world held in pariah status since 1949 when it became a communist enclave called The People’s Republic of China. That was shrouded in a cloak of mystery and held as a Sword of Damocles over western society, blamed for such things as COVID without material, conclusive evidence, etc.

The ambitions of China are certainly not above suspicion, as are all hegemonically-inclined communities, like the old British Empire, America’s ‘coca-colonization’ of the world, and the former Soviet Union.

But knowledge, as they say, is the gateway to wisdom. And ignorance is the key to votes. So, by all means, keep a beady eye on China’s assimilation with the Middle East and Africa. But then, keep the other beady eye on the West’s similar ambitions. And remember, China isn’t North Korea or Albania. It didn’t pull the cloak of mystery over itself. It was thrown over it.

Final Thoughts

It’s one of the hardest things in the world to have a balanced view of something, particularly if that something is close to one’s heart or wallet. In principle, convergence is a human action which keeps war at bay and allows us to grow. The dimensions of China’s relationship with the world are numerous and stretch quite far back into antiquity. If this article has cleared the mists a little for you, mission accomplished. If not, perhaps the best course of action if you don’t understand something, is to respect it anyway. But if you are one of the few that always keeps an open mind and a balanced viewpoint, you’re to be congratulated. The world is yours.

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