Commentary: China’s long march with tech firms just got started
SINGAPORE: Prc'due south clampdown on leading Chinese technology firms seems the conclusion to its decades-long soul-searching practice on the extent to which national interests should override private proceeds.
Although a hallmark of Red china's economical miracle has been Deng Xiaoping and subsequent Chinese leaders' openness to global markets and strange investments, that pendulum may now be swinging the other fashion under President Xi Jinping.
These recent moves under 11 – the clampdown on tech firms, the rules on gaming hours and the demand for ride-hailing to provide full-time employment – have demonstrated rising techno-nationalism.
Information technology's clear China has decided marketplace reforms should serve the Leninist one-political party rule.
In this model, Chinese authorities are reverting to an old command economy approach to marshal companies and minimise risks, while also granting them a certain degree of autonomy.
People's republic of china ALIGNS TECH FIRMS WITH NATIONAL INTERESTS
For years, as Cathay moved upwardly its developmental model to leapfrog virtually modern economies with new capabilities in areas similar fintech, send and gaming, the economic system flourished.
Homegrown firms became household names, and, in turn, evolved to global tech titans – such as Ant, Didi, ZTE, Tencent and ByteDance. Crucially, this growth supported the rise of the earth's biggest middle course.
The time spent besides gave the Chinese political leadership infinite to master the fine art of leveraging tech to support national interests.
Regulators may be taking an expansive view of national interests when they decided to limit gaming to a maximum of three hours a week for under-18s, to combat gaming addiction and to cultivate "younger generations in the era of national rejuvenation".
Just national security remains at the middle of concerns. Didi was said to have been targeted because, as a New York Times report puts it, it chose to accept its initial public offering in the Us and potentially put reams of information into the hands of an antagonist.
Red china HAS LEVERAGED TECH TO SUPPORT NATIONAL INTERESTS IN THE PAST
Such recent efforts to rein in tech companies take occurred in parallel with the pursuit of modern technologies for social ends, for instance, the deployment of artificial intelligence (AI) for surveillance and the creation of a digital yuan granting the Chinese government greater ability in digital payments and transactions.
It it little wonder therefore that Beijing should also seek to more closely align tech companies with national policy and desired norms.
Just Chinese authorities, oft taking the long view, still view large companies – many of whom are emerging as global leaders in the tech manufacture – at the forefront of its model of Chinese development.
TECH EMPLOYED TO ACHIEVE STABILITY
Beijing knows it cannot slay the golden goose. Rather than clamping downwardly on such firms in social club to squash dissent, the goal is to keep to maintain government legitimacy past fostering technological innovation while keeping Chinese enterprises aligned with the regime's nation-building efforts.
Chinese political elites know they need to continually produce pipelines of innovative and job-producing, earth-class companies to help China sustain economic growth.
11's focus on targeting tech firms and the rising prominence of frontier engineering science sits in the wider context of the country's pursuit of mod technologies.
As outlined in the Chinese Land Quango'south 2022 New Generation Artificial Intelligence Development Plan, the evolution of AI is viewed every bit a means for People's republic of china "to raise national competitiveness and safeguard national security" while serving equally the "new engine of economic development".
Having outset access and control over new technologies also gives the Communist Party of China a leading border over its territory and population – especially equally information technology mobilises these resources for stability.
Authorities in Xinjiang rely on a grid system – fusing facial recognition technologies, smart surveillance systems and data stored on a database known as the Integrated Joint Operations Platform – to identify, track and locate activities of terrorists.
It'south Chinese AI companies such as Sense Fourth dimension corporation and Hikvision that take supplied the Chinese government with the surveillance technologies used there.
China'due south remarkably rapid roll out of a digital yuan is also instructive. With the world's largest unbanked population, the digital yuan seeks to correct this by bringing onstream millions of such citizens into the financial system without the need for a banking concern account or Cyberspace access.
Nevertheless, information technology also promises "controllable anonymity", allowing authorities to monitor uppercase flows and financial transactions down to the last cent.
While anonymised transactions are not normally accessible, Beijing can choose to access them if they suspect unlawful activities, such as money laundering or gambling.
PROVING THE IDEOLOGICAL SUPERIORITY OF CHINESE GOVERNANCE MODEL?
Such moves to align the Chinse tech sector to national security interests may have been motivated by the vulnerability of Chinese tech firms to punishing deportment past the US, including blacklisting, presidential executive orders during the Donald Trump years.
And why non, when on Jul 14, the Biden assistants added Chinese companies and other entities to its economic blacklist, post-obit allegations of their involvement in human rights abuses and loftier-tech surveillance in Xinjiang.
The neat ability competition between the United states of america and Communist china is heating up and both sides know technological say-so underpin this competition.
This may be a clash of narratives and the boxing for hearts and minds, as much equally information technology's a fight for material superiority.
For some in the US, the rise of Chinese tech fuels a form of digital authoritarianism that threatens Western liberal autonomous values.
Chinese officials accept too framed the development of AI as an event of national security and degrees of freedom, a train of thought nowadays since the first day the Great Firewall was erected.
A deep-seated anxiety to overcome its century of humiliation and avoid a repeat of history too underpins Communist china's "securitisation" of tech.
In recent years, China has also sought to buttress its evolving approach with strong institutions, with the creation and expansion of the Central Cyberspace Affairs Commission which oversees the Cyberspace Administration of China and the Central Commission for Cybersecurity and Informatisation, chaired by Xi Jinping personally.
But China is playing offence as much every bit defence. It wants to testify the ideological superiority of its values which the Chinese model of governance hinges on.
It was proud of the global coverage of its success with deploying high-tech surveillance in the wake of the COVID-19 pandemic and commentary that this was a model to emulate.
It was lauded for decision-making the spread of the pandemic with new digital tools without the deliberative democratic processes constraining Western liberal societies.
And then there is little surprise the Chinese state has adopted a utilitarian approach to including tech into its updated Chinese developmental model – i able to rival the conventional market-driven model.
Whether China succeeds will depend on its "discourse ability" (huayuquan) – its ability to set agendas and shape international norms. This is an area for strategic rivalry.
As the global economy becomes increasingly more than digital, the development, usage and export of emerging technologies in internet, AI and more are currently unclear and open up for contestation, and start movers hold an advantage.
RISKS AND OPPORTUNITIES Alee
Semiconductors are now the technological arena where the battle between the United states of america and Mainland china will play out and it remains to exist seen how China will wrest back control.
As outlined in its national strategic policy, Fabricated In China 2025, China plans to increment domestic semiconductor manufacturing every bit a share of domestic consumption to lxxx per cent by 2030.
It likewise plans to reduce all external dependences, including reliance on firms such as the Taiwan Semiconductor Manufacturing Company .
Nevertheless, there is growing pushback against sharing sensitive tech, more than cautious knowledge transfers, coupled with increasingly hostile relations with the United states, Taiwan and some quarters of Europe. These developments are making it harder for China to realise its full potential to be self-sufficient in semiconductor production.
With massive state support, coupled with a surfeit of talent and resource, People's republic of china is already a technological powerhouse.
Nevertheless, People's republic of china'due south moves to align the tech sector with national security upshot could encumber foreign tech firms and make the Chinese market less attractive for global labour and capital letter.
But i matter's clear: Beijing's long march to mobilise the land'south technological prowess for national imperatives has merely just begun.
Stefanie Kam is Associate Research Fellow at the S Rajaratnam School of International Studies at Nanyang Technological University. Dylan MH Loh is Assistant Professor at the Public Policy and Global Diplomacy program at Nanyang Technological University.
Source: https://cnalifestyle.channelnewsasia.com/commentary/china-economy-tech-ant-bytedance-didi-tencent-gaming-ai-digital-yuan-295051
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