China’s Belt & Road Initiative gaining more overseas popularity: survey

BEIJING, Oct. 18 (Xinhua) — The China-proposed Belt and Road Initiative (BRI) is gaining more overseas popularity, according to the 2018 China National Image Global Survey released Friday.

About 20 percent of the overseas respondents have heard of the BRI and the ratio reached 40 percent or higher in India, Japan and Italy, the survey showed.

The top five countries with the highest awareness of the initiative were India (50 percent), Japan (43 percent), Italy (40 percent), the Republic of Korea (30 percent) and Russia (30 percent).

The BRI, proposed by China in 2013, refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, aimed at building trade and infrastructure networks connecting Asia with Europe, Africa and beyond.

The initiative’s positive impacts were widely affirmed, the report said, noting that the respondents in developing countries thought highly of the impacts on themselves as individuals, on their countries, and on the regional and global economies.

Jointly conducted by the Academy of Contemporary China and World Studies and Kantar from May to July 2018, the survey covered 11,000 people, aged between 18 and 65, from 22 countries. The above-mentioned data were drawn from 2,112 of the overseas respondents who know about the BRI.

Source: Xinhua| 2019-10-18 15:33:50|Editor: Wang Yamei

Exporters bank on Belt & Road gains amid dark Trade Cloud

Leading Chinese Exporters remained optimistic on growth prospects in the overseas markets on Tuesday, despite slowing global growth and rising trade protectionism.

“We have made several breakthroughs in technology and maintained an advantage in production costs, after years of innovation in the development of various products,” said Zhu Zhaoheng, Sales Director of Guangdong Hongyu Ceramics Co Ltd.

The company, based in Foshan, a manufacturing base in the heart of the Pearl River Delta region, along with some 25,000 domestic exporters, is optimistic of higher sales during the biannual China Import and Export Fair. Internationally known as the Canton Fair, the event is long regarded as the barometer of China’s trade performance.

According to Zhu, the company has maintained stable business growth in the Middle East, Southeast Asia & Australian markets in the past few years since it entered the international market in 2000.

“We will continue to look for opportunities to boost sales in the emerging markets,” he said.

Zhu said the company is especially optimistic on growth prospects in markets across the Belt & Road Initiative economies. “We are confident about transactions during this year’s Canton Fair, thanks to years of innovation and quality of our products,” he said.

According to Xu Bing, spokesman of the Canton Fair, the biannual trade event had become one of the important platforms for trade between China and BRI markets. Buyers from the BRI markets accounted for up to 45 percent of the total international buyers during the fair in the past six years, according to Xu.

“We are building stronger cooperation with business associations related to the Belt & Road Initiative,” he said.

According to Xu, 53 industrial and commercial organisations from 35 countries and regions involved with the Belt & Road Initiative had established partnerships with the Canton Fair Organisers.

China’s Foreign Trade maintained stable performance from January to September, increasing 2.8 percent year-on-year, according to the General Administration of Customs.

Of the total trade volume of 22.91 trillion yuan (US$3.23 trillion) in the past three quarters, the country’s exports expanded by 5.2 percent, while imports dropped 0.1 percent year-on-year.

Trade between the world’s second largest economy and the Association of Southeast Asian Nations, one of China’s top two trading partners, hit 3.14 trillion yuan in the first nine months, up 11.5 percent year-on-year, according to the customs sources.

“Looking ahead, China’s trade will maintain stable growth, with more exporters focusing on quality and innovation, despite slower global economic growth and rising trade protectionism,” said Xu.

According to Xu, buyers from 210 countries and regions have confirmed their participation in the Canton Fair, which opened on Tuesday in Guangzhou, the capital of Guangdong Province.

Source: Belt and Road News Network 

Dated on: 17/10/2019

Canton Fair sees Strong Belt & Road Presence

The 126th China Import & Export Fair, also known as the Canton Fair, is scheduled to open Tuesday, with around 60 percent of companies attending its import fair hailing from Belt & Road Countries and Regions.

The autumn session of the biannual fair holds import exhibitions in its first and third phases. With 998 booths, the import exhibitions have attracted a total of 642 enterprises from 38 countries and regions. These include 367 companies from 21 Belt & Road Countries and Regions.

According to Xu Bing, Spokesperson for the fair, the fair will improve the quality of import exhibitions to create a more open international platform.

The China Import and Export Fair, held every spring and autumn in Guangzhou, capital of south China’s Guangdong Province, is widely seen as a barometer of China’s foreign trade.

The fair features three phases. The first, falling on October 15 to 19, will mainly showcase electronic products, home appliances, mechanical equipment and building materials. The second, from October 23 to 27, will show consumer goods, decorations and gifts.

The third, from October 31 to Nov. 4, will display textiles and clothing, food and medical products.

Xu said the Canton Fair has become an important platform to promote trade between China and those countries and regions taking part in the Belt & Road Initiative.

Dated on: 15/10/2019

Source: Belt and Road News

 

Africa Embraces changes, focus on Infrastructure with Chinese Support

As we come close to the start of a new decade in a new era of industrialisation based on a digital economy, artificial intelligence (AI), robotics and bringing economies closer through an integrated hard and cyber infrastructure, Africa’s future depends on how well it is prepared to embrace the changes, shifting its economic policies toward e-commerce, absorbing new technologies, and linking its local markets to the global one.

African macroeconomic indicators are all veering towards a looming slow growth and recession.

The reasons for the economic slowdown is of course linked to a certain extent to the global scepticism due to the waging trade wars that the US administration is pushing forward, though the real driver Africa’s recession is poor economic policies, & a lack of infrastructure to support innovation and integration into the regional and global market place.

To put it bluntly, Africa suffers from an infrastructure deficit. Goods and people cannot move freely and reach potential markets.

To cater to the 12 million annual new job seekers, Africa needs to re-evaluate its macro level policies with regard to industrialisation. Key sectors such as power, water and transport services prove a comparative advantage.

There can be no economic integration in Africa, and no inclusive growth without infrastructure. It has been proven scientifically that good infrastructure and productivity costs reduction help move goods smoothly at a low cost between markets.

African policymakers need to change their approach to deal with their economic foes. Alternatives are needed to speed up their infrastructure’s needs, adhere to a new global initiative that can not only answer their immediate concerns but also help them make the jump to the 21st century’s industrial revolution.

Supporting a physical brick and mortar marketplace will reduce unemployment, develop digital economy and spur entrepreneurship. Countries today must help spur opportunities for wealth and employment.

Africa is unfortunately having what we call in business a market and policy myopia, meaning it cannot see past its colonial economic order.

In 1949, China had almost a non-existent infrastructure. Today, China is the second largest economy in the world, with a state of the art infrastructure that reflects a modern nation with an eye on the fifth industrial revolution.

Of course, China has supported Africa’s development needs since 1949. China has offered the world and Africa a new alternative in infrastructure development, notably in the Belt & Road Initiative (BRI).

Through the BRI and the Asian Infrastructure and Investment Bank (AIIB), Africa now has access to financial, technical, and market support with no restrictions or demands that put pressure on the sovereign right of countries participating in the BRI.

And the BRI not only can grow, but also integrate Africa’s regional economies and connect them to countries signatory of the initiative. There are economic opportunities in South Asia, the Middle East, Africa and Europe.

China not only will support Africa’s infrastructure, but will also build its communication network through its fifth generation innovative technology.

Unfortunately, only 27 percent of the Africans have access to the internet. With no mobile banking and a limited opportunity for online transactions, African youths have a limited chance to become familiar with cyberspace.

Huawei and ZTE have helped build the digital foundation for major economic players on the continent. Citizens are enjoying high-speed internet, learning the know how in key technologies and creating training centres to maintain and improve an internet infrastructure through local players. China is ready to help out more upon African policymaker’s needs.

Africa is facing economic and social challenges and the needed infrastructure to integrate a digital economy requires rethinking its macroeconomic policies.

The BRICS, the BRI, the AIIB are all sound alternatives because they emerge from developing nations and have faced the same problems as Africa during the second half of the 20th century.

However, they managed to create the momentum to escape the label of being regarded as underdeveloped nations, and need to eradicate poverty, as well as create inclusive growth on a global scale that has never been reached before.

Source: Belt and Road News Network

Dated on:  14/10/2019

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Chinese Companies shifting focus to Organic Growth

Chinese companies are now attaching more importance to localised management and organic growth in the domestic market, which will naturally translate into a global status, rather than focusing on growing International Market share via Mergers and Acquisitions, said experts from JPMorgan.

Sjoerd Leenart, Global Head of Corporate Banking at JPMorgan, said that there has been a discernible shift among Chinese companies in buying targets overseas to digesting and optimising the acquisitions.

“The way in which the companies are going abroad, has shifted from acquisitions to rolling out their business models abroad. It is sometimes better to roll out your own business abroad than buying a third party company,” said Leenart.

According to PwC, the total value of Chinese Companies mergers and acquisitions in the overseas market stood at $26.8 billion during the first six months of this year, down 48 percent year-on-year.

Oliver Brinkmann, Head of Corporate Banking at JPMorgan Asia Pacific, added that the cooling down in outbound moves can be partly attributed to the market share that they have gained in the overseas market.

“A lot of Chinese Companies from various sectors have gone overseas and gained certain market share. There is no need now to buy a third or fourth company in specific sectors. Once you have established a foothold, it will be more about adoption,” he said.

On the other hand, the Chinese Economy has grown massively, which has therefore given birth to an increasing number of global players, said Brinkmann.

Supported by adequate funding, large market scale and the adoption of technology, the Chinese artificial intelligence industry is one area to churn out global market players, he said.

Besides, given that the Chinese labour force is ageing, there is an inherent need for better and fast automation. Meanwhile, driven by the domestic need to control pollution, innovation in electric vehicles, as well as green technology in general, will take place at a faster pace and larger scale. The large number of user cases will be another impetus, said Brinkmann.

“All the three trends are driving domestic development and creating global champions from China. The big cross-border outbound trends are very much driven by technology,” he said.

Brinkmann also added that China’s State-owned enterprises, some of which are strong in the traditional sectors such as oil and agriculture trading, will continue to stage strong performance and invest overseas.

At a time of increasing complexity and uncertainty in the global market, Brinkmann said that the opportunities are in emerging Asia.

Education, healthcare, oil and infrastructure will be the areas where Chinese companies invest the most heavily in other parts of Asia, a trend that can be largely associated with the Belt and Road Initiative, he said.

Source: Belt and Road News

Dated on: 13/10/2019

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China-Pakistan ties always a Priority in Neighbouring Diplomacy: Premier Li

China has always regarded its relations with Pakistan as a priority in neighbouring diplomacy, said Chinese Premier Li Keqiang, while reiterating China’s firm support to Pakistan in defending its sovereignty, territorial integrity, and legitimate rights.

Premier Li made the remarks on Tuesday when meeting with Pakistan’s Prime Minister Imran Khan, who is on a two-day visit to China for discussions of the security situation in the region and economic ties with China. Khan is also expected to meet with Chinese President Xi Jinping.

Premier Li spoke highly of China-Pakistan relations. As China’s all-weather strategic cooperative partner, Li stressed that the bilateral ties, with no strings attached and are not targeted to any third party, are always a priority in China’s neighbouring diplomacy.

Noting that the relations are sincerely supported by two peoples, Premier Li promised that China will continue to support Pakistan in not only its national development, but also regional and international affairs by helping it play a more active role.

China-Pakistan relations serve both national and regional interests, said Li, calling for joint efforts to strengthen the bilateral ties to a new stage.

Learning that Pakistan has passed its economic hardship, Li said that China is glad to hear that and vowed to offer Pakistan assistance to its best capabilities.

Khan, for his part, attributed Pakistan’s stable economic development to China’s kind assistance and firm support. The prime minister pledged to expand the scale of trade and investment with China.

Speaking of economic cooperation, the two sides agreed to jointly promote the construction of the China-Pakistan Economic Corridor (CPEC) and Gwadar port, and beef up the synergy between the Belt & Road Initiative (BRI) and Pakistan’s development strategy so as to enhance cooperation in various fields and realise common development.

After the meeting, the two leaders witnessed the signing of over 10 bilateral agreements on infrastructure, law enforcement and security, culture, education, and media.

According to Chinese Foreign Ministry, Khan will also attend the closing ceremony of the Beijing International Horticultural Exhibition on Wednesday.

Source: Belt and Road News Network

Dated on:10/9/2019

More China-Europe Cooperation expected under EU’s New Leadership: Chinese Envoy

Ambassador Zhang Ming, Head of the Chinese Mission to the European Union (EU), hailed the progress in bilateral ties between China and Europe and expects closer cooperation with the EU under its new leadership.

Noting that China and the new EU leadership share many similarities in their ideology, Zhang expressed his hope for closer bilateral relations.

“A major event, which is the European Parliament elections and the change of leadership of the EU institutions, took place in EU this summer. We see that the new EU leaders give priority to developing the green and digital economy. At the same time, they emphasise the importance of multilateralism to address global challenges.

There are many similarities between China and Europe, which share common interests as well. We expect the new leadership of the EU institutions to maintain the stability and continuity of their China policy. They will work together with China to promote China-EU partnerships for peace, growth, reform and civilisation on the basis of mutual respect, fairness and justice, cooperation and win-win result,” he said.

In May, over 400 million people from the 28 European Union (EU) member countries voted to elect 751 members of European Parliament (MEPs) for a five year term.

Ursula von der Leyen, former German Defence Minister, is due to take office as the new EU Commission President on Nov. 1, and Charles Michel, Prime Minister of Belgium, will assume office as the new President of the European Council on Dec 1.

Zhang added that EU member countries are more and more actively participating in China’s Belt & Road Initiative.

“I have witnessed more and more concerns to and participation in the Belt & Road Initiative from EU members. Projects including the Piraeus Port in Greece and Smederevo steel plant are well underway. Over 17,000 trains passed from China to Europe.

And the connectivity platform has become one of the five largest cooperation platforms between China and Europe and a China-EU Joint Investment Fund was set up for this purpose. Chinese and EU leaders stressed their important consensus on aligning the Belt & Road Initiative with the connectivity project of the EU on different occasions,” he said.

The Ambassador also hailed the new progress made in cultural exchanges between China and the EU.

“People-to-people and cultural exchanges is one of the three pillars of China-EU relations. Since the high-level mechanism on cultural exchanges and dialog has been implemented for seven years, both sides have carried out close cooperation in education, culture, science and technology, media, sports, women and youth. We hosted the China-EU Tourism Year last year with big enthusiasm, both sides made tremendous efforts to organise about 100 events were held.

As two major civilisations, China and the EU will continue to play a positive role in people-to-people and cultural exchanges and cooperation and consolidate the public opinion foundation of bilateral relations so as to serve as an important facilitator for a community with shared future,” he said.

Source: Belt and Road News

Dated on: 10/7/2019

Xi’s Pledge on peaceful development, cooperation receives global applause

Chinese President Xi Jinping’s speech on Tuesday’s National Day celebrations has earned wide praise from overseas officials and scholars as he pledged that China will stay on the path of peaceful development, and pursue a mutually beneficial strategy of opening up.

“We will continue to work with people from all countries to push for jointly building a community with a shared future for humanity,” Xi said in his speech.

Echoing China’s commitment to world peace and development, Dmitry Novikov, first deputy chairman of the Russian State Duma Committee on Foreign Affairs, said he is confident that the vision of a community with a shared future for humanity helps China create favourable conditions to ensure the successful realisation of the Chinese Dream of national rejuvenation.

Jose Luis Robaina, a researcher at Cuba’s Center for International Policy, a think tank, said that Xi’s speech conveyed Beijing’s visions of peaceful coexistence, win-win cooperation, and a community with a shared future for humanity to the world.

“China’s foreign policy was oriented in building a peaceful world where cooperation is the driver of international relations,” said Francesco Maringio, an Italian China expert.

The Belt & Road Initiative and other multilateral platforms launched and hosted by China in the past years, said Maringio, “give us the possibility to measure our ideas and proposals into a new dynamic and cooperative framework.”

Anri Sharapov, Associate Professor of the Tashkent State Institute of Oriental Studies, said that China’s development experience in the past 70 years “can be very useful” for Central Asian countries, including Uzbekistan.

China’s vision of jointly building a community with a shared future for humanity is “of strategic importance in the further development of international and interstate relations,” he said.

B. R. Deepak, a sinologist and professor at India’s Jawaharlal Nehru University, said that Xi’s pledge that China will stay committed to peaceful development indicates that “China will continue to work with other nations adhering to the policy of win-win cooperation, common prosperity and common security.”

Source: Belt and Road News

Dated on:10/4/2019

 

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China’s Free Trade agreements along the Belt & Road Initiative

Rerouting Supply Chains to Reflect Growing Chinese Influence

The elimination of tariffs and taxes is always a boom for exporters, and is something that China has taken advantage of very effectively over the past two decades.

When China first began its journey towards becoming the massive manufacturing giant it is today, it attracted foreign manufacturers, from which the Chinese could learn, by eliminating or cutting profits tax rates for up to five years worth of profitable operations. This represented something of a boom time for foreign businesses in China, and arguably kick-started the entire Chinese economic growth.

China has also been very busy in agreeing Double Tax Treaties, which often contain clauses and reductions in taxes beneficial to the respective parties trade. China has also been active when it comes to participating in Free Trade Agreements; it has significant and wide ranging deals with the likes of ASEAN, Australia, Singapore, South Korea, and New Zealand among others and is actively engaged in negotiating several more.

These are important because they can and do direct and massively influence bilateral, and in some cases multilateral trade patterns. Taken overall, FTA impact upon and are the structural support for all global trade.

The current trade and tariff tensions between China and the United States has seen a resurgence of Chinese interest in developing free trade routes, and especially along the Belt & Road Initiative.

While not all products, and especially IT and hi-tech related components currently obtained from the US will be available from new suppliers, China will be investing in developing these, most notably with Russia. Meanwhile, staple items including energy resources, food and other consumables will increasingly be sourced from markets closer to home.

Consequently, the issue of Free Trade along the Belt & Road Initiative is a matter of keen interest. In fact, some agreements that impact this are already in position. Others are pending. This is an overview of how things stand at this moment in time.

The China-ASEAN Free Trade Agreement

This agreement has been in force since 2010 and was expanded in 2015 to incorporate an extension into the economies of Cambodia, Laos, Myanmar and Vietnam, who had asked for more time to adjust.

This agreement covers both goods and services provided by the above nations as well as China, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand and essentially eliminates tariffs on some 95% of all traded goods and services. This covers much of the Belt & Road Maritime Routes.

China, Hong Kong Macau Closer Economic Partnership Agreements

Although Hong Kong and Macau are part of China, they have different customs and tax regimes. To cater for this, and also recognise the status of Hong Kong and Macau, these CEPA agreements have been entered into between them and China, which in certain cases provides investment incentives, especially in service areas, that only companies registered in Hong Kong and Macau can benefit from.

These include tax reductions as well as preferential market access to otherwise restricted investment areas in mainland China.

The China-Pakistan Free Trade Agreement

This came into effect in 2009, and has formed the backbone of Chinese investment into Pakistan. A direct result of this has been the Chinese development of Pakistan’s Gwadar Port, as well as the “China-Pakistan Economic Corridor” which ultimately aims to link China rail from Kashgar in its south western Xinjiang Province through to Pakistan’s rail networks at Islamabad. This route will allow Chinese goods to exit via the Arabian sea. To date much of the investment has been from the Chinese side.

The China-Gulf Co-Operation Council Free Trade Agreement

This deal, between China, and the GCC member states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, is still under negotiation. It includes details of goods and services, however given the nature of the GCC economies is largely focused on energy.

However, tourism and services are expected to be a large part of this, especially as the United Arab Emirates includes Dubai, a popular destination for Chinese tourists and businesses wishing to reach out into Arabia. The ninth round of discussions were concluded recently in Riyadh, and it is understood that most major points have been agreed.

The China-Sri Lanka Free Trade Agreement

This agreement is still under negotiation, although China has been investing in Sri Lankan Ports and road infrastructure for some time now. The country is also a preferred destination for increasing numbers of Chinese tourists.

There has been some resistance to this proposed FTA in Sri Lanka, notwithstanding recent scandals involving Chinese investment in the main Colombo Port. Sri Lanka is coveted by both China and India as a base for transshipment, as well as potential for Naval operations. In truth the Sri Lankans are probably content to play one off against the other. The fifth round of talks was held in Colombo in January 2017.

The China-Georgia Free Trade Agreement

This agreement, which gives China access to the Caucasus markets and through to the Black Sea, was “substantially concluded” as at the end of 2016. The agreement will mean that “Chinese enterprises and consumers will have greater access to high quality products like wine and fruits from Georgia, while Georgians will benefit from cheaper China-made industrial products” according to Chinese Commerce Minster Gao Hucheng.

Chinese buyers have already been to Tbilisi looking at purchasing products. However, a word of warning – the prices offered have been relayed to me as being so low that there is very little profitability in China trade for Georgian farmers and producers. It remains to be seen what impact this has on the Georgian economy, other countries such as Armenia, Azerbaijan and Turkey will be studying this closely.

The China-Eurasian Economic Union Free Trade Agreement

This agreement was signed off last year, although the real meat of the deal – which product categories will be included, is still under negotiation. When agreed, it will effectively bring the Free Trade of Chinese goods right up to the borders of the European Union.

The EAEU is a trade bloc, rather like ASEAN, but comprising of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. If the EAEU were a country, it would be the fourth largest global economy, with a GDP in excess of USD4 Trillion. China is keen to get a deal done as these countries, and especially Kazakhstan, Russia and Belarus, offer China uninterrupted transportation of goods from China right up to the borders of the European Union at Brest, in Belarus, where Poland, and rail and road infrastructure leads directly to Germany.

This would be a significant trade development and would change the course of EU supply chains. This article The Eurasian Economic Union. About To Bring China To The EU’s Borders explains this scenario in greater detail. In the meantime, Singapore is also about to sign up an FTA with the EAEU while Vietnam and Serbia have already done so. The momentum for trade development with this particular bloc is highly significant.

The China-Regional Comprehensive Economic Partnership Agreement

This agreement has been touted by some as China’s answer to the TPP. It is between the ten member states of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and the six countries with which ASEAN has existing free trade agreements (Australia, China, India, Japan, New Zealand, and South Korea).

As such, it is a purely Asian deal. The main prize here for China would be to draw India and Japan into an FTA through the RCEP, which would give Chinese manufacturers access to two huge, dynamic, and powerful markets. China does not have full-blown free trade status with either, though it does with all other RCEP states via other multilateral agreements.

But getting Japan and India on board will not be easy. Japan has ongoing political tensions with China, particularly related to territorial disputes. Many Japanese businesses are wary of China, and keen to keep innovative manufacturing technologies such as advanced robotics out of China’s reach.

India, meanwhile, may slowly be beginning the process of taking over China’s mantle as workshop of the world. India will be wary of large quantities of cheap Chinese products entering their huge domestic market while Indian manufacturers are still in the process of upgrading and improving their own capabilities (the iPhone has begun production in India). Cheap Chinese imports flooding the market would be politically disastrous and interfere with India’s transition to a global manufacturing hub.

China, to be fair, probably agrees. A short-term gain in India is not want the Chinese want. Indeed, China will need Indian manufacturing capacity just to keep its own domestic consumers supplied with inexpensive consumer goods.

The RCEP has also not been without its critics. It has gained some notoriety over what have been called “the worst provisions ever drafted on copyright protection”.

While the negotiations continue – the 15th round was recently held in Tianjin the RCEP and China will need to provide major concessions to India and Japan to get anywhere fast. At present, these discussions look like they will be an ongoing saga for some time to come.

In addition to actual Free Trade Agreements, China is also busy developing specific zones, which are duty exempt and used to encourage the joint development of Chinese and other foreign companies in making end products using expertise from both.

Examples are the newly announced Heilongjiang Free Trade Zone on the border with Russia, & the Khorgos Gate FTZ in Kazakhstan. n overview of Free Trade Zones along the Belt & Road leading all the way to Europe can be found here

Source: Belt and Road News Network

 

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China is creating a New Global Data Highway

China has a massive blueprint for boosting its economic growth, and part of the project is called the “Digital Silk Road.”

Not to be confused with the online darknet marketplace, China’s “Digital Silk Road” refers to a route that lies alongside the country’s big infrastructure push across continents termed the Belt & Road Initiative (BRI) or the New Silk Road deeply integrating it with the rest of the world.

Over the past few years, China has poured billions of dollars into developing its digital capabilities in various ways from fostering homegrown talents like Alibaba and Tencent, to deepening its digital reach with other continents like Europe, ultimately hoping to “generate fresh economic growth, foster effective governance and control, and project global power,” according to a report by Berlin based Mercator Institute for China Studies (MERICS).

To be clear, “Digital Silk Road” is only one part of China’s grand plan to achieve those three objectives. And it’s a crucial story of the modern wold that involves players like the Chinese Communist Party, Huawei, and the U.S. government.

Digitisation Helps the CCP Reestablish Legitimacy

With the original BRI, a colossal project in its own right  China has pushed billions of dollars into various economies in Asia and Europe through opaque loans to expand influence around the world.

The BRI is envisioned as a revival of an ancient trade route between China and Europe, as well as a vehicle to boost economic growth and re-establish legitimacy among its people.

“The CCP’s legitimacy rests heavily on economic performance; stagnating or even declining growth poses a serious risk to its grip on power,” the MERICS researchers wrote.

As a result, digitisation was considered one of the best ways forward to “upgrading China from the ‘workshop of the world’ into a high-tech leader with globally attractive innovative products and services, and modernised manufacturing processes,” they added.

Digital Silk Road as a National Security Threat

But China’s goals aren’t singularly focused and that economic growth isn’t the only objective, argue experts.

The MERICS researchers say that China’s digital ambitions “combine economic goals with broader normative and security aims.”

The U.S. Government also sees Digital Silk Road projects like the Chinese and Russian tag team that’s building up cable networks connecting Asia and Europe overland to bypass “U.S. controlled data routes,” according to MERICS, or undersea cables laid out or upgraded by Chinese company Huawei as a national security threat.

Source: Belt and Road News Network