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The United States is fighting a battle with its allies to preserve democratic values in the face of the Chinese Communist Party’s advance, while technology giants are setting the tone in the market amid sanctions and unfair competition from Chinese industry.
America launched a bid from 2020 to lead the 6G communications network and has continued to strengthen a supply chain and high-quality technology components, due to the chip crisis in the world.
Although the crisis halted the plans of several auto companies in America, technological diplomacy has allowed Americans to ensure in the medium and long term that the world’s best developers move factories to the United States.
However, Chinese companies are entering the market and politics hand in hand with the Belt and Road plan, with low-cost competitive developments. While some of China’s partners are seeking their own space in the market with innovation, as in the case of Vietnam, others are becoming more dependent on the developments of the Chinese giants, as in the case of Colombia.
For their part, South Korea, Taiwan, Japan and India are strengthening themselves at home and investing abroad to compete with Chinese technological developments, amid growing threats from hackers, intellectual property theft and the flight of talent with business secrets to China.
Diplomacy hand in hand with Chinese technology
China with its Belt and Road Initiative (BRI) has launched the Digital Silk Road (DSR). DSR has become an important part of Beijing’s strategy, “to provide aid, policy support and other assistance” to signatory governments.
DSR is the platform for Chinese technology giants such as Huawei to open up in partner countries’ markets. China seeks to expand its diplomatic capacity and offers developing countries access to systems such as “artificial intelligence, cloud computing, e-commerce and mobile payment systems, surveillance technology, smart cities and other high-tech areas.”
According to the DSR scheme, China already supports countries in Africa technologically, and the platform has served as a pilot for digital cities in Vietnam, Thailand, Cambodia and recently in Hong Kong, albeit without success among the community.
Alibaba is another of the large platforms that, hand in hand with Beijing, are entering markets in technological diplomacy. With a technological financial portfolio and now logistics in international trade, Alibaba seeks to expand in countries where American companies dominated, as is the case of Colombia.
Colombia, despite being a strategic partner of the United States for decades, has been developing important infrastructure projects with China. Consequently, Alibaba announced its arrival in the country hand in hand with programs that seek to turn Antioquia into a technological epicenter of Colombia and the region.
China strikes with low-cost technology
Made in China 2025 is a plan announced in 2015 to develop high-tech industries in the Asian giant. At the opening of the Chinese Communist Party Assembly in 2021, 5G development was marked as a priority, leading to heavy investment by the state to achieve technological independence and achieve market leadership.
While the world focused on containing the pandemic, in China, the 5G-capable smartphone market surpassed 200 million, taking into account the state investment that provides for 1,300,000 5G base stations nationwide until 2022, where more than 700,000 are already in operation.
Low-cost Chinese technological developments that are adapted to high-speed 5G communications have already entered the Asian market despite Western sanctions, competing head-on with the American company Apple and South Korea’s Samsung.
Chinese advantages center on the fact that part of their technological development has been borrowed from other companies and that the Chinese market is not focused on design as much as on performance.
With the expansion of 5G devices, the demand for high quality video content and gaming, simultaneous communication with a virtual reality tool is expected to grow.
Competition in the Asian market to develop and sell these devices will lie in components and semiconductors that achieve an ultra-fast processor rather than in the unique design of the parts.
In addition, China announced the investment of one hundred billion dollars to develop its own chip industry, and completely evade American sanctions. However, in the short and medium term, the most advanced devices will require sufficiently advanced chips, whose production is led by the Taiwanese and South Korean industries.
Camilo Bello is a consultant focused on Asia Pacific studies and has experience in strategic management. He has studied law in Colombia and is currently pursuing studies in language and history at National Taiwan Normal University. He has collaborated with Students for Freedom in Hong Kong and Taiwan // Camilo es consultor enfocado en estudios de Asia Pacífico y experiencia en gestión estratégica. Cuenta con estudios en Derecho en Colombia y actualmente se encuentra realizando estudios en lenguaje e historia en National Taiwan Normal University. Colaborador de Estudiantes por la Libertad en Hong Kong y Taiwán