The digital revolution has transformed geopolitics. Technology is now shaping global power dynamics, and countries are upending their strategies accordingly. Over the last decade, unprecedented breakthroughs in emerging technologies have convinced world leaders that leadership in AI technology translates into economic growth and military might. This has sparked a race among global powers to dominate the digital empires, and technology is set to continue to play an increasingly important role in future geopolitics.
The launch of the Huawei Mate 60 Pro by China in August 2023, equipped with a cutting-edge 7nm semiconductor chip sent shockwaves across the world. The move signals a response to the US after the Biden administration introduced export control measures on 7 October 2022, aimed at targeting China’s access to semiconductor chips and manufacturing equipment. Back in 2019, the Trump administration decided to place Huawei on the Entity List, severely restricting China’s access to American technology and starting a tech war between the US and China. However, the US so far has not succeeded in stifling Chinese growth while China has effectively responded to the US export control measures.
Approximately, a quarter of the global trade involves either semiconductors or products dependent on these tiny but vital chips. The semiconductor chips power an array of critical industries, including automobiles, planes, trains, communications, businesses, factories, banks, finances etc. Thus, the global semiconductor landscape has become the new heartland with global powers vying to wrest control from each other.
Over the past decade, the protracted struggle for these chips has intensified, partly in response to China’s substantial achievements in the domains of artificial intelligence, semiconductors, digital technology, telecommunications, and cloud computing. The Chinese government plans to invest another USD 27 billion in its semiconductor industry fund and announced a 10% increase in the national science budget. HiSilicon and Semiconductor Manufacturing International Cooperation (SMIC) in China ensure Chinese self-sufficiency in semiconductor design and manufacturing capabilities and provide impetus to China’s chip industry. The US is also investing billions of dollars to build its domestic chip plants. The CHIPS and Science Act passed in 2022 invests USD 280 billion to bolster US semiconductor capacity, catalyze R&D and create regional hi-tech hubs.
The growing hi-tech rivalry between the US and China is jolting the supply chains and pressure appears to be growing on key players to take sides. For instance, the Netherlands is restricting exports of critical technology to China that is used to manufacture the most advanced chips, which China claims is part of a campaign by the US to undermine the Chinese economy. Thus, the ongoing US-China tech competition has opened a new theatre in the ongoing global power contestation.
China’s telecom industry has invested nearly 600 billion yuan to build the 5G network, generating economic output of about 9.4 trillion yuan in 2023. At present, the US lags far behind in the race for 5G technology. China’s speed in setting up 5G base stations is much faster than that of the US. China’s breakthrough in 5G technology prompted the former Google CEO Eric Schmidt and Harvard Professor Graham Allison to urge the Biden administration, in their op-ed published in the Wall Street Journal in June 2022, to make 5G a national priority, otherwise “China will own the 5G future.”
China’s Huawei has made significant progress in 5G technology by introducing 5.5G technology also called “Beyond 5G”, which will offer a tenfold improvement in network performance over standard 5G. Beyond 5G will enable faster IoT devices, more efficient factories and transportation systems, and 3D content creation. It is expected that China will complete technical research and early application scenarios of 6G by 2025 and will set international standards by 2030. Huawei’s progress in Beyond 5G will put China in a stronger position to influence this process.
China under its Belt and Road Initiative (BRI) has forged new transport networks, especially by building parallel projects running underground, undersea and through the airwaves, such as The Digital Silk Road (DSR), Space Silk Road and Maritime Silk Road. Importantly, China’s DSR has been spurred by the country’s advancements in digital and telecommunications technology. The DSR has helped expand the Chinese economy and enhance digital connectivity across regions. According to the China Academy of Information and Communications Technology, “the scale of China’s digital economy increased by 4.1 trillion US dollars, with an average annual compound growth rate of 14.2 per cent from 2016 to 2022.”
The DSR has successfully offered cost-effective technology, accessibility, and innovation to the world, with a focus on countries in Asia and Africa. These countries previously had to rely on limited and expensive Western alternatives. One successful example is the Chinese subsea cable connecting Pakistan with Djibouti under the Pakistan and East Africa Connecting Europe (PEACE) cable system. PEACE cable is set to become the shortest Internet link between Asia and Africa. The construction of the route from Pakistan to France under the PEACE cable system has been completed and is ready to use.
Importantly, the DSR poses several challenges to the West as it fits well with the ambitious Chinese national goal called “China Standards 2035” which seeks to establish global technical standards. China’s vision is supported by the “dual circulation” economic model announced by President Xi in 2020, which is aimed at sustaining exports to foreign markets while decreasing reliance on foreign technology domestically.
The Space Silk Road which is part of BRI aims to create a range of space capabilities including satellites, launch services and ground infrastructure, as well as support related industries. The Space Silk Road connects Eurasia and Africa through the BeiDou Navigation Satellite System (BDS) and plays a pivotal role in providing China and the BRI participating countries with global positioning, navigation, and tracking capabilities, serving both civil and military purposes. BDS, which is China’s largest space-based system, is one of the world’s four global navigation networks. It offers an alternative to GPS, enabling China to challenge the US central role and establish partnerships globally in various technological domains. BDS has served over 200 countries and regions.
China’s unprecedented rise in the technological sphere suggests that Washington’s endeavors to contain China’s geopolitical rise have not yet proven to be much effective. While both countries are investing heavily in their domestic tech industries, there is a need for international cooperation to replace rivalry to ensure that the benefits of emerging technologies are shared equitably. Chinese President Xi Jinping has said, “The world is big enough to accommodate both countries, and one country’s success is an opportunity for the other.”
