The digital silk road

The Belt and Road Initiative (BRI) with the Digital Silk Road (DSR) as its evolving centrepiece is intended to help Beijing achieve its centennial aim of becoming a world’s leader of value chains by establishing companies that have their own technological norms and standards and by reorganizing global supply chains. Ensuring a good return on investment in BRI and DSR projects means encouraging participating countries to adopt Chinese standards for infrastructure development, transportation, finance, industry, digital economy, urbanization, and data management – under the direction of leading Chinese companies.

Guangxi-ASEAN relations

The southern Chinese province Guangxi has become an important anchor in China-ASEAN economic relations in recent years. Xi Jinping has defined the three primary roles of Guangxi as an international corridor opening to the ASEAN region, a new strategic anchor for the opening-up and development of the southwest and mid-south regions of China, and an important gateway connecting the Silk Road Economic Belt and the 21st-Century Maritime Silk Road.

The province was presumably selected because it is the only one, that has a coastal area along the Gulf of Beibu/Gulf of Tonkin and therefore its harbors also serve to connect South-China´s landlocked provinces. In the same spirit, Guangxi plays a strategic role in China´s seaport alliances with ports in Southeast Asia, for instance Kuantan in Malaysia, to form economic corridors.

Guangxi has also been chosen as a secure location for national vital digital storage and backup systems, because of its natural advantages like cool climate, clean air, abundance of hydropower as well as its “attack-proof” mountainous setting. This designation has brought nearly all of China’s tech giants to the rather remote and poor province, including Huawei, Foxconn and the “big three” SOE telecoms carriers, China Mobile, China Telecom and China Unicom.

The China-ASEAN Information Harbor

The China-ASEAN Information Harbor (CAIH) is a flagship BRI project, which was launched in 2016 and is since then hosted by Guangxi province. CAIH, designed for enhancing digital connectivity between China and ASEAN, will also be crucial in distributing Chinese digital standards for the related sectors throughout the ASEAN region.

China-ASEAN Information Harbor Co Ltd. (CAIH Co.) is a specially created company mandated to carry out the construction of the Information Harbor. It provides both digital products and services. The company has also entered the Southeast Asian markets and set up subsidiaries in Malaysia and Indonesia. The comprehensiveness of CAIH Co.’s range of activities and businesses offers it opportunities to cater to and engage with ASEAN countries with different levels of economic development. Especially to the poorer mainland Southeast Asian countries, CAIH Co. could be the ideal partner for investment and technology cooperation. CAIH Co., while being the most important government-backed company for the construction of CAIH, it is not the exclusive one. Other enterprises based in Nanning (and Guangxi), as long as they serve the purpose of enhancing digital connectivity with ASEAN countries, can also be conceptualized as part of CAIH, like for example the Lazada cross-border Eco-Innovation Service Center.
 

CAIH as a building stone of an integrated China-ASEAN industrial region

The development of CAIH – and respectively its Siamese Twin “Digital Guangxi” on provincial level – has been as much about Guangxi’s own digital development and transformation as digital connectivity with Southeast Asia. So far, the project has focused more on creating the domestic digital foundation of Guangxi. However, in the long-term, CAIH is intended to establish Guangxi as the digital hub for the whole of southwest and mid-south regions of China, and to make Guangxi China’s southwestern gateway to the ASEAN region. Different ASEAN countries, based on their level of development, will draw different kinds of opportunities in cooperating with the Information Harbor project.

The ongoing COVID-19 pandemic has created even greater demands in the digital economy sector, which is going to be reinforced by the entry into force of the Regional Comprehensive Economic Partnership (RCEP), expected in 2022. In 2020, ASEAN already overtook the European Union as China’s top trading partner, which illustrates the rapid economic integration of the Asian economic powerhouses. With a stronger domestic foundation, CAIH stands a good chance to be an impactful DSR project in the coming years and to contribute to Beijing’s long-term aspiration of establishing an integrated China-ASEAN industrial region.

 

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