From railways to 5G: why China is plugging into the Digital Silk Road

At the first Belt and Road Forum for International Cooperation in 2017, Chinese President Xi Jinping touted the global infrastructure-building plan as "a project of the century".

He recounted the story of the Silk Road, telling world leaders in Beijing that "our ancestors, navigating rough seas, created sea routes linking the East and West".

From a railway in Indonesia to a port in Pakistan, the Chinese leader said the Belt and Road Initiative had brought "enhanced infrastructure connectivity" to the world.

"We should promote land, maritime, air and cyberspace connectivity, concentrate our efforts on key passageways, cities and projects and connect networks of highways, railways and seaports," he said.

Six years on, analysts say the huge infrastructure deals Beijing previously championed appear to have taken a back seat as countries struggle with mounting debt and as their priorities shift.

Instead, projects under what China calls the Digital Silk Road have emerged as a driving force of the initiative, now in its 10th year.

At the forum in 2017, Xi had listed the digital economy as a "frontier area" of cooperation. Analysts say China's digital push is part of efforts to cement its status as a global technology leader while keeping the belt and road plan appealing as it tries to expand its influence around the world.

China launched the Digital Silk Road in 2015 as the technological arm of the Belt and Road Initiative aimed at boosting digital connectivity.

While it remains loosely defined, analysts agree that it broadly covers network infrastructure such as 5G, e-commerce and the digital economy, as well as urban planning.

Lim Tai Wei, an associate professor at the Singapore University of Social Sciences, said Digital Silk Road projects had grown in importance in recent years because some emerging economies had matured beyond basic infrastructure needs.

"[Countries] are ready to kick-start their own Industrial Revolution 4.0 and are now requesting that Beijing share those technologies with them," he said.

Last year, a report by the official People's Daily said countries along the belt and road plan's trade routes had "weak digital infrastructure and low access rates to the internet" and that China was helping them in those areas.

Yu Hong, a senior research fellow at the National University of Singapore's East Asian Institute, said developing countries increasingly saw the value digital technologies could bring to economic growth.

He said that while infrastructure projects would still be the mainstay for some countries such as Cambodia or Laos - where physical infrastructure remained weak - others have sought to tap into China's tech capabilities.

One example was African countries. In August, Wu Peng, director general of the Chinese foreign ministry's Department of African Affairs, said African nations had asked Beijing to consider a shift away from building infrastructure.

Beijing's belt and road projects in Africa have mostly focused on critical infrastructure such as roads, railways and ports.

In Southeast Asia, Malaysian Prime Minister Anwar Ibrahim told Xi in April that his country would work with China to expand cooperation in the digital economy.

Domestic reasons have also played a part in raising the profile of the Digital Silk Road.

Lim, from the Singapore University of Social Sciences, said China's technological capabilities had grown rapidly in the past decade and it was now a "peer competitor" with the United States.

Exporting this tech meant China could build its own circle of friends "for its own interests" as the West increasingly looks to de-risk from China and cut off Chinese technologies, he said. Digital projects would allow China to set its own tech standards and it would be a "win-win situation" when other countries adopted them.

Lim said Digital Silk Road projects were "taking centre stage, and unlike basic infrastructure they require less capital-intensive and long-term commitments".

"Technology is a form of soft power as it demonstrates China's tech leadership that can attract countries to follow their standards without China compelling them to do so. That is a classic definition of soft power, in this case tech soft power."

Alvin Camba, assistant professor at the Josef Korbel School of International Studies at the University of Denver, said digital projects had gained significance as China involved its major tech firms, from Huawei to Tencent.

Ventures under the initiative could help China increase its commercial gains, he said, adding that digital projects "seem to be the pillar of the Belt and Road Initiative which has the most momentum today".

Yu from the East Asian Institute said China intended to use the Digital Silk Road "to cement its position as a leading international technology power through increasing the digital access among the urban and rural population of developing countries".

Chim Lee, a China analyst at the Economist Intelligence Unit, noted that China's developmental finance and overseas direct investments had slowed in the past few years.

He said risk tolerance had declined among many Chinese investors as the government increasingly emphasised the "rationalisation" of overseas investments.

The Chinese president in 2021 urged companies to avoid "dangerous" places and to prioritise "small and beautiful" projects when he set out plans to move the belt and road scheme forward.

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