Over the past decade, promoting infrastructure and connectivity projects has emerged as a key tenet of China’s foreign policy, particularly under the leadership of Xi Jinping, as a way of expanding the country’s power and influence in the region and beyond. Beijing’s massive undertaking—the Belt and Road Initiative (BRI)—has sought to capitalise on China’s rapid decades-long high economic growth to build new global connectivity contours with China at its centre. More importantly, perhaps, the BRI aims to portray China as a benevolent aid provider in Asia and beyond. Although the BRI initially comprised of two components—the Maritime Silk Road (MSR) and the Silk Road Economic Belt (SREB)—in 2015, the Digital Silk Road (DSR), a new sub-venture, was added to modernise the initiative, respond and take advantage of the new technological era.

By Jagannath P. Panda

Although initially a sub-component, DSR has now become the highlight of BRI and the primary channel for Beijing’s foreign policy outreach in the digital sector. At a macro level, the DSR’s primary objective is to improve regional and international e-connectivity while concurrently shaping Beijing s quest for great power identity. In other words, it aims to enhance digital connectivity by supporting regional digital infrastructure and digital security projects that integrate internet, big data, artificial intelligence (AI) and digitisation of industrial sectors. Such digital infrastructure building projects are intended to modernise various industrial sectors of the BRI participant states, thereby creating a market for China’s digital assets; ultimately, this would enable the regional industrial architecture to be optimised and integrated with China and prevent the global digital value chains from being controlled by the West.

Beijing’s Digital Superiority and India

Beijing has conceived several programmes and made significant moves to take the DSR initiative forward in the region—which forms India’s neighbourhood. Post DSR’s launch in 2015, China launched the Digital Belt and Road Program (DBAR) in 2016 which established the “Big Earth Data Alliance for the Belt and Road”. This expects big data to be a “peace envoy” for all regions along the BRI, to build the same in an organised way while also practically implementing the Sustainable Development Goals (SDGs). The DSR’s integration with three of China’s most crucial state-driven initiatives—BRI, Made in China 2025 and China Standards 2035 —further strengthens the central stage it holds in Chinese foreign policy. Beijing has already signed 16 Memoranda of Understanding (MoUs) with various countries, out of which 12 have begun actionable implementation. In fact, in 2019, on the sidelines of the second Belt and Road Forum (BRF), China held a sub-forum on the DSR which drew immense attention. Xi Jinping in his opening address at the second BRF stated that China must “keep up with the trend of the Fourth Industrial Revolution” and focus on creating new drivers of growth such as building “the digital Silk Road and the Silk Road of innovation” which will aid the “Belt and Road Science, Technology and Innovation Cooperation Action Plan”. China also launched the World Internet Conference—also known as the Wuzhen Summit—to promote the DSR; its 2020 meeting witnessed participation and display of cutting-edge scientific achievements of over 130 well-known enterprises/institutions such as Alibaba, Huawei, Tencent, Baidu, Epson and Infosys (among others).

Importantly, Southeast Asia—which is a central focus for India as part of its extended neighbourhood under its Act East Policy (AEP)—has emerged as the focus region for DSR. Even before the DSR initiative was launched formally, in 2014 itself, China held a cyber-space summit with the Association of Southeast Asian Nations (ASEAN) where Beijing initiated the establishment of the China–ASEAN Information Harbor. The Harbor was later approved by the China State Council in 2016 and has since expanded operations with offices overseas. Under the Harbor project, five telecom nodes, fifteen international fibre optic cables and seven big data centres have been planned—with some projects already completed— across the ASEAN states. In ASEAN and beyond, China until 2019 had installed fibre-optic cables in 76 countries, surveillance systems in 56 countries, supplied telecom equipment to 21 countries and internet connection appliances to 27 countries. In fact, China–ASEAN digital cooperation has seen such momentum that 2020 was declared as the ASEAN–China Year of Digital Economy Co-operation.

By 2025, the additional worth of the key ventures of the digital economy is expected to represent 10 per cent of China’s GDP. Originally a US$ 200 billion undertaking for the improvement of the country’s own digital foundation, its scope has vastly increased wherein it is estimated that China has effectively put US$ 79 billion in DSR projects around the world. For India, which is increasingly in a competition of its own for primacy in the region, the DSR only tips the already asymmetric balance of power in China’s favour. With China now being India’s top-most security concern—not only due to their military standoff along the disputed border at the Line of Actual Control (LAC) but also due to its increasing presence in India’s backyard, the Indian Ocean—the DSR’s potential to increase the gap in India and China’s capabilities makes it a huge national security concern for New Delhi.

DSR Through India’s National Security Lens

In India, the conversation on BRI has been a part of the strategic discourse for long, however, the growing concern about DSR, because of its overbearing security and strategic ramifications, has been more evident in the recent past. Albeit projected by the Chinese government as a worldwide advancement project, the goals and applications of the BRI and its segments like DSR are fundamentally geo-political and unilateral in nature. For instance, the e-commerce component of the DSR works towards building economic reliance of participating states on China, and therefore creates the conditions necessary for accomplishing Beijing’s goal of being a financial superpower. Both e-commerce and fintech are fields that will dominate national economic trajectories in the coming times, as the COVID-19 pandemic has prompted a rapid and dramatic shift to digitalisation from the brick-and-mortar world; Beijing is already leading the global race in the fintech space, particularly in terms of adoption of technologies like digital currency, with its introduction of the digital yuan that could potentially challenge the primacy of the dollar.

Although the G7 has begun efforts to cooperate in the research and development of their own central bank digital currencies (CBDC), China has already begun extensive domestic trials for the digital yuan with the aim of rolling it out in near future. From a broad perspective, the DSR can be argued to be a vehicle for China to consolidate control over the international digital space and deploy a regulatory framework in countries which are a part of the BRI. The DSR can give China the power to shape global digital governance norms in its favour and the political, economic and strategic tools to be a technological hegemon, leaving enormous implications for emerging economies including India.

The export of technology under the DSR also has grave cyber security concerns; it could potentially make troves of data, including sensitive information available (whether openly or unknowingly) to China—hence positioning it in a place of data superiority. By promoting cyber-sovereignty as its favoured model of digital administration, the DSR allows China deep entry into the political and social networks of countries. Without a doubt, the DSR is perhaps the most potent of BRI’s components; it has become even more relevant in the post-pandemic world where physical infrastructure projects have received a setback amidst a wider shift to the digital realm. It also stands as China’s strongest tool in its foreign and security policy toolkit, in its quest for supplanting the US as the predominant politically influential nation.

From a strategic and security point of view, the DSR’s potential implications present a clear threat for participant states in the region, including those in India’s neighbourhood, particularly South and Southeast Asia. Beijing’s advanced digital footprint via IoT in India’s neighbourhood can be (perhaps already being) utilised by the CCP for spying, gathering sensitive intelligence and mounting digital assaults through sustained cyber-attacks. In combination with the Space Information Corridor, the DSR supports China’s pursuit of its national interests and warfare capabilities in the space and cyberspace domains; actions like the enhancement of Command, Control, Communications, Computers (C4) Intelligence, Surveillance and Reconnaissance (ISR) capabilities under the DSR’s digital and satellite networks can aid the People’s Liberation Army Strategic Support Force’s activities in the near future. This presents a security risk not only for India but also regional partners like Japan, the US and Taiwan, all of which are currently embroiled in tensions with China.

European powers like France, Germany, the Netherlands and also the United Kingdom—each of which is now subscribing to a more overt Indo-Pacific outlook, if not entirely strategy—are also strategic partners of India that are wary of China’s digital footprint. Yet, some of the top recipients of DSR include important European and G-7 powers like Germany and Italy. Furthermore, a study commissioned by UK’s Department for International Development on DSR and the sustainable development goals (SDGs) concluded in praises for the Chinese venture; reportedly, two authors of the report were affiliated with a Chinese think tank, showing an example of influence operations by Beijing. Ultimately, DSR focus in Europe has been on smart-city technology, fintech and 5G. Nonetheless, in areas such as physical infrastructure in the digital sphere—like undersea cables and submarine cable construction—mainstream Europe and the European Union largely view China’s ascendance as a threat.

Summing Up: The Indo-Pacific Calculus

As the US seeks to balance—if not counter—the emerging Chinese superpower, India’s vast size, geographical location, and wealth of skilled information technology (IT) professionals are more important than ever before. India is gradually moving up the value chain when it comes to advanced technologies, with more focus on research and development, and innovation in fields like machine learning and IT. However, for the Quad group of countries—as well as other like-minded powers from the EU—to effectively challenge China’s increasingly dominant position, cooperation to rapidly bolster capabilities and increased collaboration with third countries is essential. As the US–China tech-war builds,33 and China’s ties with the EU, Japan and Australia grow adverse, the focus of multilateral groupings such as the Quad and the India–Japan–Australia trilateral is also looking towards tech and digital connectivity.

The Quadrilateral Security Dialogue (Quad)—comprising India, Japan, Australia and the US—offers a natural platform for cooperation in the tech and economic domains, as it is already being seen “developing regulatory frameworks for the subsea cable market”. As part of the March 2021 Quad Leadership Summit, the group announced the formation of a “Working Group on Critical and Emerging Technologies”, clearly indicating their intent to scale up collaboration in the field. The Quad’s broad focus through such initiatives must, first and foremostly, be to ensure that the development of emerging technologies is governed via democratic norms—along the lines of building a free, open, inclusive and liberal digital order—and not autocratic trends which Beijing is likely to further. In this context, the Quad states must seek to coordinate digital policy within themselves, as well as with other major and middle like-minded global and regional powers. It must push back against Beijing’s efforts to use its first-mover advantage to influence global standard-setting processes.

Furthermore, the Quad states can enhance collaborations at the research and development level to support and bolster each other’s capabilities and thus gain a competitive edge vis-à-vis China. More importantly, such collaborations must extend to pooling of capabilities and resources to extend digital outreach to South and Southeast Asia in direct competition with the DSR. The four Quad states already have a strong interest in balancing out or countering the BRI’s influence in the region by promoting quality infrastructure development under projects that impose fair, transparent and sustainable debt upon borrowing nations; the Blue Dot Network, led by Japan, Australia and the US aims to further this goal. Now, however, there must be a renewed focus on supporting digital infrastructure development in the region based on transparency and democratic values. One potential area for cooperation could be undersea fibre-optic cables, which are responsible for a majority of global data transfers, in the Indo-Pacific. Beyond the Quad too, such a focus on countering or managing the influence of the DSR can emerge under the recently proposed and adopted G7 initiative, the Build Back Better World (B3W).

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