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The Digital Silk Road: Expanding China's digital footprint

Eurasia Group whitepaper on China's Digital Silk Road.
The Digital Silk Road: From branding exercise to key platform for Team China's global technology ambitions

China is intensifying its focus on the Digital Silk Road (DSR) as part of its broader Belt and Road Initiative (BRI). The country has signed DSR-specific memorandums of understanding with more than a dozen countries, including England and Saudi Arabia. DSR-branded infrastructure projects are increasingly viewed as an avenue for Beijing to enhance its influence in emerging and developing countries and as an opportunity for domestic technology companies such as Alibaba and Tencent to expand their global business footprints.

Leading Chinese platform players have been attempting to use the DSR to  boost their competitiveness with entrenched US industry leaders in over the top (OTT) services, ranging from smart cities, to cloud services, to digital payments. However, Western narratives generally overestimate the extent to which DSR-related projects are part of a coordinated and comprehensive high-level Chinese strategy.  Projects lumped under DSR are largely private sector-driven, and allow Chinese companies to take advantage of policy support provided under the DSR brand, while responding to growing demand in BRI countries for digital infrastructure. But the politics of global technology have changed significantly since the 2015 birth of BRI, and the DSR now appears poised to be one vehicle through which Beijing will increasingly push against what it sees as a US-dominated technology world.

Looking forward, the expansion of Chinese digital companies' global footprints under the BRI/DSR umbrella will face significant challenges as the coronavirus pandemic puts downward pressure on the global economy, the US steps up efforts to provide alternatives to BRI, and concern grows about overreliance on Chinese digital companies in some markets.

This special report analyzes the evolving vision for DSR in Beijing and within leading Chinese technology companies, and how this is playing out on the ground in Belt and Road countries.
The authors thank Thao Nguyen-Kelly for her assistance in preparing this report.
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