Time for a new gameplan

Our Insights

Pick your catchphrase, strategic competition or the great game. Either way, China’s “Digital Silk Road” has established a growing digital and economic footprint across the globe, particularly in the resource-rich continent of Africa. Which is to say China has a growing footprint of digital technology installed in Africa. That growing footprint is an accelerating economic advantage for China’s tech vendors who are competing with American hi-tech companies.

For many African governments, saying yes to China’s Digital Silk Road is increasingly easy. They’re all working to digitize government services and their broader economies. Some of the impetus to digitize government services is a response to the COVID-19 pandemic. Some is a long-standing desire to “improve the delivery, efficiency, security, and  effectiveness of Government programs1”. This isn’t just a priority here in the US. It’s a priority for dedicated government leaders around the world.

Another long-standing goal of governments is to digitize their economies. After all, the world’s economy is increasingly shaped by digital opportunities, and few want to get left behind. African governments are no exception. That has increased their receptiveness to China’s offers. Meanwhile, China itself has been transparent that both its “Digital Silk Road” and its Belt and Road Initiative are intended to embed China’s economy in the global economy2. This is in part a response to moves the US government made to protect its own high-tech sector from the competition by China’s state-owned and state-sponsored firms. I witnessed the “uneven playing field” of this competition from inside the high-tech sector while I was an executive of Hewlett Packard Enterprise doing business in China and East Asia. If you wanted to do business in China, you had to transfer technical know-how into your Chinese operations. That was/is a one-way street. And then Chinese government-linked firms would poach your people and intellectual property so they could compete against you.

Figure 1. The China-Africa tech stack

This US v. China competition has been going on for more than two decades. Let’s take a look at how well China has played its hand. Consider the strength of its tech stack (Figure 1) deployed in Africa. It’s formidable!

Now consider the scale of China’s footprint in Africa:

    • China’s Huawei equipment constitutes 70% of the 4G infrastructure in Africa3
    • China’s Huawei was the first in the continent to offer 5G services4
    • China’s Transsion Group has 40% of the smartphone market5
    • China’s Transsion Group has 64 % of the feature phone market
    • Chinese firms built > 50% of the continent’s wireless sites and high-speed mobile broadband networks6
    • Chinese firms laid > 200,000 km of optical fiber, giving broadband Internet access to 6 million households, and serving more than 900 million local people7
Investment activities by Chinese tech giants touches all but a small handful of countries across the African continent (Figure 2). China’s strategy is seamlessly integrating investments, hardware, fiber optics with data centers and even key research nodes to fully realize these new digital economies.

Figure 2. Building the digital silk road

https://merics.org/sites/default/files/2020-05/Merics_Digital-Silkroad-Tracker_RGB_final_web_0.jpg

    Investment activities by Chinese tech giants touch all but a small handful of countries across the African continent (Figure 2).  China’s strategy is seamlessly integrating investments, hardware, fiber optics with data centers and even key research nodes to fully realize these new digital economies.

    Looking at this through a National Security lens, I have bad news, and I have good news. The bad news is the US is in a whole-of-country competition with China, and we’re being outplayed. The good news, the competition isn’t a zero-sum game as long as it stimulates net economic growth. But the US needs a new game plan before we fall further behind. After all, every country’s military strength is ultimately an expression of its economic strength and social cohesiveness. China is grinding away at our economic strength. Social media platforms are grinding away at our social cohesiveness for the sake of advertising dollars. Hackers and bot farms are launching opportunistic attacks on both. It’s time to change our game plan. We need a bi-partisan initiative to bring the whole of the Federal government together with the American Industry, especially the high-tech sector, to produce that game plan.

    1The Biden-Harris Management Agenda Vision
    2The real reason China is pushing “digital sovereignty” in Africa
    3The China-Africa Internet Development And Cooperation Forum
    4Ibid
    5Ibid
    6China and Africa in the New Era: A Partnership of Equals
    7Ibid

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