China’s Digital Silk Road: Chris Devonshire-Ellis Q&A With Zawya
Digital know-how along the Belt and Road Initiative will set future global tech standards
The Middle East financial newspaper Zawya recently interviewed Dezan Shira & Associates Chairman and Belt and Road Initiative expert Chris Devonshire-Ellis about digital tech capabilities along the BRI. These are some of the Q&A.
Z: How would you assess China’s technological prowess? What are the key technology areas where China currently has or is expected to increase its dominance on the world stage?
CDE: China is behind in some aspects of new technology and in the sourcing of raw materials needed to make certain component parts. However, as we have seen with the initial – subsequently withdrawn – Huawei telecoms equipment, it does on the other hand have leading capabilities in other areas. China will be focusing on communications technologies, as well as security technologies such as blockchain and fintech. I suspect they are not as behind as sometimes the Western media suggests.
Z: How its dominance in the areas of future technologies such as Artificial Intelligence, 5G, fiber-optic infrastructures, satellite services, data centres, internet exchanges, cloud computing, and blockchain is going to impact BRI?
CDE: These are key areas. One overlooked aspect of the BRI s that it will turn China into a global supply chain middleman. It is not just making products and building the infrastructure – it will operate much of it. Much of the entire Eurasian supply chain including the EU will be using Chinese equipment and services. In that way, whatever anyone buys as the final consumer price will have passed through Chinese built and operated equipment and services such as Ports. Everything someone buys in Paris or New Moscow has a price component that will have been charged by a Chinese business.
Z: Does China’s technological prowess give it an edge to push BRI’s hard projects such as renewable energy, transportation, infrastructure, power, and healthcare and so on?
CDE: Yes, absolutely. This is all infrastructure and supply chain technology. It’s a sound strategy for Chinese operators knowing that for every Euro spent on a product, a percentage of that went to a Chinese business. It’s exactly ‘the same business model as how China integrated itself into the global auto industry – they made the parts for other manufacturers before developing their own brands.
Z: How can BRI partner countries (mainly developing nations) take advantage of China’s technological prowess to deliver infrastructure/construction projects? Will China be willing to share these technological advancements with partner countries?
CDE: Partnering with Chinese operators is the obvious solution. In the West, the capitalist system has focused too much on profits and not enough on cashflow business and service lines. The Chinese are developing technologies to hook their services into supply chains to generate cashflow streams. That is a very sustainable business model.
Z: As China is pushing to achieve global supremacy over the digital space and future technologies, is it also be expected to dominate/influence the future construction/design process/project financing of infrastructure projects, especially under BRI?
CDE: Especially under the BRI. But the main focus will be investing into cashflow generating business models rather than production. Manufacturing will slip away longer term to parts of newly industrializing Asia such as Pakistan, parts of the Middle East and to the African continent.
Z: In terms of investment under BRI, how China is expected to spend in the coming years? Is China likely to increase its funding for soft infrastructure under the Digital Silk Route?
CDE: Yes, I think that is a reasonable assumption. But increasingly it will be products that can be inserted into supply chains for a cashflow, middle-man business reward. China will become one of the world’s largest, and most integrated global service providers.
The complete article can be downloaded from Zawya magazine here.
Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email email@example.com or visit us at www.dezshira.com