Valid Indicators of China’s Tech Prowess Outweigh the Scepticism

G Venkat Raman

It is common knowledge that we live in a highly connected, globalised world. In the third decade of the 21st Century, globalization has been accelerated by advanced communication technology so much so that events in one region of the world influence happenings in another region almost immediately. Bilateral relations, multilateral arrangements, economic sanctions, protectionist policies, and diplomacy are all reliant on the forces of advanced technology. 

Dr Simi Mehta, the CEO and Editorial Director of IMPRI Impact and Policy Research Institute, the moderator of this talk, initiated the discussion by contextualising the role of developing states such as China in the reformation of global governance structures. Dr Mehta added that the role of non-state actors in this reformation of governance structures and policy development required concerted understanding. She highlighted the need to engage with scholars and experts who are well-versed in the field, indicating that this talk was a step in that direction. 

Copy of State of international relations

Dr. G Venkat Raman is currently an Associate Professor in the Area of Humanities and Social Sciences, Indian Institute of Management, Indore. Venkat is a Sinologist and is one of those rare Indian academics who has completed his doctoral studies from the School of Government in China’s oldest and premier University, Peking University, Beijing. Venkat is a fluent Mandarin speaker. He has also worked in Beijing as a professional for two years and eight months.

Venkat offers courses like Understanding China, Geopolitical Perspectives in Business, and Business Ethics at Post Graduate Level. In the under-graduate level, Venkat offers courses like International Relations. He is also a Business Excellence assessor and has been part of the Business Excellence assessment team under the auspices of the Confederation of Indian Industries. He has been a visiting Fellow in the BRICS centre, Fudan University, Shanghai, and visiting Faculty in ICN Nancy, France. His areas of research interest are China’s interface with Global Governance and Business Ethics pedagogy.

Examining the Validity of China’s Tech Prowess 

Dr G Venkat Raman, Associate Professor of Humanities and Social Sciences at the Indian Institute of Management, Indore, and speaker of this talk, opened this discussion by examining how there are valid arguments for both validating and denying China as a technology superpower. With what Dr Raman referred to as a latecomer’s advantage, China entered the ‘Age of Implementation’ as opposed to the previous century’s age of discovery.

With the biggest cluster of AI scientists and the largest number of internet users at 800 million, China is arguably leagues ahead of the rest of the world. Chang ‘E -4 , China’s spacecraft landing was done in the far side of the moon. Landing in this part of the moon to obtain data requires a pre-positioned relay satellite which it could achieve successfully. China became the first country to achieve this feat. The prominent positions of Chinese Tech Companies on Global Supply Chains and the indigenisation of nuclear plants and high-speed trains further validate these claims.           

On the other hand, sceptics argue that China’s dependence on the imports of semiconductors, and the fact that only 22% of Chinese companies hold the market capital of digital platforms do not support these claims. Furthermore, China’s tendency to cut itself off from the wider world where technological developments are concerned and the strong edge the US and EU have over China’s 5G tech and Qualcomm computing further disprove this claim.                                                                   

That said, the valid indicators of China’s tech prowess outweigh the scepticism. Dr Raman shines light on how China’s massive domestic market allows it to occupy a pole position on Global Supply Chains. The national industrial policy favours funding large Chinese tech firms while placing higher taxes on foreign investments in China. In spite of the authoritarian and regulated policies, innovative flexibility and generous grants foster a culture of innovation.

China is building a completely self-reliant technology industry in an attempt to further cut trade ties internationally. According to the 3rd pillar of the Chinese Belt and Road Initiative, an infrastructure development plan in nearly 70 countries, investments to develop 5G networks and undersea cables have been boosted.

Due to the fact that there is no western involvement, the possibility of an increase in data monitoring is seen as a threat by many. With this massive reconfiguration of supply chains, China has become the largest producer of chips in recent years. Dr Raman elaborates on how Global Tech Value Chains have seen a major realignment as Chinese companies have begun to insulate themselves to avoid potential and actual pressures from American players. 

The International Tech Regime

Quoting Werner Von Siemens the, 19th century German Industrialist and Innovator“One who owns the standards owns the market,” Dr Raman draws parallels to China’s geopolitical tactics to manipulate tech markets. This goes on to prove that the standards are no longer set by the West. Surely not when Chinese firms are all set to export 5G and advanced AI tech to about a hundred countries.

This has allowed China to have a larger say in international bodies under the UN that regulate technological exchanges, and other standard-setting bodies such as the International Telecom Union through which it enhances interest in its tech firms. The current chairperson of the International Telecom Union is Zhao Houlin, a Chinese official elected for the second term in Jan 2019.

China has been using this growing monopoly over technology to influence governance as well. Its growing technology prowess to influence the framing of the newly emerging technology regime and in the process influencing global governance outcomes. One Connect, a Chinese financial cloud service, has been successful in rewelding pipelines channelling money into developing countries in Africa and Asia. “It is kind of like waging a proxy battle against US giants,” Dr Venkat Raman states.

China has launched CIPS, an interbank messaging system that will allow the easing of international payments in the Yuan. “Alibaba and Tencent have already built a parallel banking system,” Dr Raman adds. ALIPAY, a digital wallet service, already in use in 56 countries, tactically has bought minority stakes in the wallets of 9 Asian jurisdictions, allowing it to influence the industry while also avoiding paying for licenses. 

In the post-covid era, large technology firms are playing an increasingly important role as allies in foreign policy formulation. Western tech firms are also looking at the Chinese model for inspiration where the state plays an important role in funding, in order to compete with Chinese giants. This has massive ramifications for the realignment of state-business relations.

By their shrewd use of Intellectual Property rights and other efforts made to prevent foreign dominance of technology in areas of key significance, China has built a monopoly in the field. The State’s efforts have greatly harmed American and other Western interests in the high-tech field. The way the trends are moving, we are looking at a certain kind of balkanization of the internet, Dr Raman remarks.

With the number of Chinese apps in international digital markets that could potentially relay back tons of personal data, there is increasing competition for digital real estate. The Internet of Things is emerging as an area of technological control, wherein the more stakes one holds in global IoT, the more geopolitical advantage they have.

Black-box AI algorithms are another area of concern. These are systems that generate results with accuracy but mysterious reasoning, which many scholars think could be used for racial profiling. “One is thinking of a world where human rights could be significantly compromised.” especially as China shares this technology, “there is a threat to liberal values,” Dr Raman warns. With the increase in the possibility of this ‘Weaponized Interdependence,’ the USA has retaliated with a series of sanctions, threatening trade partners to change trade policies with China and delisting Chinese firms.                                                                                                                                                                                                 

Although strong arguments have been made for the solidity of China’s tech prowess, experts in the field have identified certain disadvantages to the existing robust system built by the state. The top-down state-led efforts in developing robotics, quantum computing, and AI may fail after a certain point if no efforts to allow bottom-up efforts are made. The stifling of bottom-up efforts of innovation may lead to the system’s eventual decline. Chinese tech companies may face economic and political pressures as they globalise with Western competition. Furthermore, if the US re-energises its digital diplomacy tactics, China will be at a disadvantage.

While disadvantages are discussed, it is equally important to discuss possible threats that the world will face with China’s growing status as a cyber superpower. Experts are certain that a digital divide that has already been created will only grow in the international cyberspace. Moreover, Beijing will reap diplomatic and intelligence-related benefits that once flowed to Washington DC, at a higher risk to national security. The cost and complexity of doing business in China for foreign investors will increase highly, and experts believe Intellectual Property Rights violations will increase manyfold. Dr Raman concluded by stating that rival spheres of influence will only grow more hostile.

The geo-epistemological advantage of tech companies is tremendous for China’s chip production. The state-led development initiatives’ drive to export transportation technology and nuclear technology will come at a high cost. “Other countries may begin to take a leaf out of China’s book to push for state-led innovation and to what extent liberal values will be contested is something we will have to look out for,” Dr Raman noted.                                                                                             

Watch Dr G Venkat Raman on China’s Emergence as a Tech Power IMPRI #WebPolicyTalks



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