Challenges for China and Africa to Build the Digital Silk Road

Although the construction of the Digital Silk Road will inject strong impetus into the all-encompassing leapfrog development of the African continent and bring great opportunities for its socio-economic transformation, risks and challenges remain. African countries’ backward

digital infrastructure, underdeveloped security assurance of cyber credit, and the complex coordination system in the region’s governance are just some of the many serious obstacles this endeavor is facing.

Backward digital infrastructure in Africa

The level of digital economic development in African countries is closely related to their level of industrialization, stage of economic development, and global industrial division of labor. Even in the 21st century, despite elevated international status, enhanced endogenous economic momentum, and increased foreign investment, Africa’s overall industrial development level remains comparatively low. Besides, Africa’s economic size accounts only for a small fraction of the world’s total, and the contribution of the digital economy to Africa’s development is very limited. At present, the digital economy in Africa is still in the early stage of development. Most African countries have relatively primitive digital infrastructure, a low coverage of intercontinental optical fiber, a poor submarine optical cable connection, an imperfect transnational and trans-regional communication network, limited coverage of broadband network services, and high access cost. In addition, the weak foundation of logistics and supply chains, the lack of mature e-commerce platforms, and the relatively sluggish development of power and other supporting facilities are also key factors that lead to the low degree of digital economic development in African countries.

The digital economic infrastructure on the African continent is characterized not only by a low level of overall development, but also by asynchronous development when the digital economies of different African countries are compared. In 2018, the BRI Big Data Center of China’s State Information Center evaluated the Digital Silk Road Readiness Index of 71 countries along the Belt and Road, including South Africa (ranked 11), Egypt (16), Morocco (50), and Ethiopia (60).22 Other African countries are not even qualified to be shortlisted as their digital infrastructure development

remains far behind. This reflects the regional imbalance and severe fragmentation of digital economic development in Africa, thus creating obstacles for eliminating the divide between China and African countries, and raising challenges for sharing achievements of the digital economy.

Underdeveloped security assurance of cyber credit

Based on the internet, the Digital Silk Road is characterized by virtuality, openness, stealthiness, and de-centralization. The Digital Silk Road jointly built by China and Africa requires that the two sides establish an inter-regional, inter-cultural, and inter-systemic credit guarantee mechanism to cope with the complex online trading environment. Nevertheless, most African countries suffer from certain deficits such as ambiguity of credit awareness, absence of credit morality, immaturity of credit management, and backwardness of credit intermediary services, among other flaws. The lack of effective legal protection and penalty mechanisms to solve these problems results in the condition that vital elements of the digital economy like electronic payment are difficult to be fully carried out in Africa in the short term. Take South Africa as an example. Most consumers lack enough confidence in e-commerce transactions and hold a more cautious attitude toward online shopping, preferring to purchase products in offline stores.23

Sufficient attention should be paid to cyber security issues that go with the Digital Silk Road. With the further development of global information technology and the internet, cyber-attacks have gradually infiltrated different types of internet terminals, causing violations like hacking, cyber fraud and cyber violence to significantly increase. The capabilities of local governments in African countries are limited, digital infrastructure construction level is low, and the abilities of digital communication enterprises to cope with risks are equally insufficient. Security issues in

digital communication projects, remote data transmission services and IT cloud systems are of great importance for China and Africa. Once grave security problems occur, the scale and scope of harm, as well as the potential losses, are incalculable. Therefore, how to ensure secure encryption, storage and transportation of data, and how to elevate the regional network security level in the process of building the Digital Silk Road are urgent issues for both sides in the foreseeable future.

Complex coordination system in regional governance

There are major differences among African countries in political institutions, economic development levels, social governance, legal systems, linguistic and cultural traditions, and religious beliefs. Most countries are in a state of socio-economic transition with limited governance capabilities, accompanied by a plethora of domestic political factions and interest groups, fragmented political landscape, poor reliability of foreign policies, and short-lived continuation of measures. From the perspective of regional governance in Africa, the above-mentioned factors increase the complexity of constructing the Digital Silk Road.

Disputes and frictions related to the Digital Silk Road will not only occur in the area of ordinary trade, but also in many industries and fields such as big data, internet of things (IOT), cloud computing, crossborder e-commerce, financial technology, intellectual property protection, and customs supervision. If stable governance is not in place in African countries, it will lead to a myriad of problems in areas such as Chinaafrica cross-border e-commerce. First of all, African countries import from China via various sources, including brand manufacturers, discount stores, professional intermediaries, or China’s “overseas warehouse,” leading to difficulties for African countries’ customs supervision authorities to conduct overall management. Furthermore, the complicated channels of receiving goods in African countries, uneven distribution of benefits, and fragmented market supervision also lead to immense challenges for local customs to register intellectual property. At the same time, some African countries do

not attach sufficient importance to the protection of intellectual property rights. Moreover, they have an immature understanding of international business practices and relevant regulations and policies, all of which is having a negative impact on the construction of the Digital Silk Road.

In addition, China and Africa have to overcome other obstacles in building the Digital Silk Road, such as a shortage of digital talents, crosscultural differences, geopolitical risks and the intervention of Western powers. How to explore effective measures to address the aforementioned challenges and avoid risks is an urgent question facing both sides.

Approaches to Jointly Building the Digital Silk Road

At present, the China-africa joint construction of the Digital Silk Road is still in its initial stage. The two sides have extensive cooperation potential in digital economic development, collaboration on digital economy projects, cultivation of digital talents, and digital economic governance.

Aligning demands and jointly determining direction of cooperation

Based on the desire of African countries for more economic development, China and Africa should further coordinate their positions and jointly formulate a cooperation agenda, which would see African countries’ communications network infrastructure integrate with their railways, highways, electricity, bridges and dams in order to achieve coordinated development of network and conventional infrastructure.24 Meanwhile, the two sides should closely align their demands and work out specific timetables and roadmaps for the development of digital infrastructure in Africa. In particular, it is necessary to broaden cooperation in Africa’s information infrastructure construction, communications technology improvement, and digital skills training. It is also of great

significance to expand broadband access and enhance broadband quality, encourage the middle class in Africa to adopt the consumption habits of online shopping, and promote the integration of logistics, payment, customs clearance and data, thus forming a cross-border e-commerce ecosystem between China and Africa where both sides can share the benefits of digital economic development.

In fact, some African countries have begun to explore potential ways of working with China in order to align their demands in the field of the digital economy. Chinese companies are also exploring the market demand in Africa and seeking areas with converging interests. In January 2018, 12 officials in charge of 9 ministries of the Rwandan government visited Alibaba in Hangzhou, learning from the enterprise’s experience on the development of inclusive finance in e-commerce and looking for approaches to applying the Chinese digitalization experience with Rwandan characteristics.25 The China National Building Materials Group has proposed a comprehensive foreign trade service operation mode of “crossborder digital trade + shared overseas warehouse” for Africa, integrating e-commerce elements into traditional international trade, proffering onestop comprehensive foreign trade services for African countries such as South Africa, Kenya and Sudan.26

Promoting project implementation and utilizing complementary advantages

Within the framework of the BRI, the Forum on China-africa Cooperation, Agenda 2063 of the African Union, and development strategies of African countries, China and Africa should precisely explore the convergence points of digital economic development between the two sides, so as to identify practical cooperation projects that complement each

other’s strengths. China and Africa can work together to build critical digital infrastructure, such as cross-border and undersea optical fiber cables as well as satellite navigation. At the same time, they can advance a number of practical cooperation projects among African countries on e-government, smart cities and wildlife protection, etc.

In the process of digital transformation in African countries, Chinese enterprises have made remarkable accomplishments by helping African countries build digital infrastructure. As a case in point, Huawei launched Africa’s first ICT Innovation and Experience Center in Johannesburg, South Africa, where local people can experience frontier achievements including 5G communications technology, virtual reality and smart home.27 ZTE has delivered its products and services to 54 countries in Africa, establishing communication networks for governments, private enterprises and operators, and helping local governments with informatization.28 Alibaba and the Kenyan animal protection authorities cooperatively developed the Kenya Wildlife Intelligent Protection Project, which aims to employ big data and the artificial intelligence technology to establish a digital system for wildlife protection.29

Cultivating talents and building solid foundation for cooperation

To eliminate the shortage of digital talents in African countries, research institutes and enterprises in China should be encouraged to strengthen personnel exchanges with the African continent through the establishment of joint research centers and innovation platforms. In order to build a solid foundation for cooperation, it is necessary to put forward a comprehensive solution to digital education and joint cultivation of professional technical talents. Up to April 2019, Alibaba has invited more than 200 entrepreneurs from dozens of countries along the Belt and Road to learn about China’s experience in digital economic development, among

which 87 entrepreneurs were from Africa.30 Huawei has trained more than 30,000 ICT professionals in seven Africa-based training centers, and the “Future Seeds” talent program has been successfully implemented in African countries such as Kenya, Zambia and Zimbabwe. It is estimated that 1,000 African students will benefit from it within the next five years.31

China’s local governments, universities and enterprises can try to establish education platforms and training plans to create outstanding talents for the e-commerce sector. They would be built for supporting African business incubation, reinforcing talents training, and for building a multi-agent collaborative network, which serves to transform research outcomes into economic benefits. Through a collaborative service platform with a set of talents, commodities, projects and education tools, the African demand and the Chinese supply could be efficiently matched. At the same time, social organizations and enterprises in China and Africa should be supported to carry out exchanges and training activities at various levels, which serves to promote the spread of digital skills, enable people’s utilization of digital tools to access information, and enhance cultural communication and people-to-people exchanges.

Strengthening communication on governance and creating a fair and just cooperation environment

African countries have gradually recognized the importance of national governance for developing the digital economy. Thus, they have endeavored to ensure the consistency between domestic governance and international legal obligations. Additionally, in choosing their particular development paths, they have come to follow their respective historical and cultural traditions, national legal systems, and governments’ development strategies. According to the report released by the UN Economic Commission for Africa in 2019, “African governments should support the development of the digital economy ... In

doing this, governments need to set up infrastructure and legal frameworks to prepare for the complex economic operations of the digital economy” and avoid governance failure caused by emerging economic forms.32

China and Africa should strengthen communication on governance, improve dialogue and consultation mechanisms on cyberspace issues, and jointly build a community of shared future in cyberspace. China can actively promote its internet governance concepts and practices to African countries, and offer them assistance in formulating laws and policies in the fields of intellectual property, privacy protection and cross-border data flow. At the same time, both sides should give full play to the role of the government to better coordinate at the macro governance level, thus achieving top-level policy design. In the process, projects should be differentiated according to priority and be carried out in batches and categories.

Conclusion

The development of the digital economy is of utmost significance to enhance Africa’s division of labor in the global value chain. It is also the key to Africa’s poverty reduction, socio-economic transformation, and effective participation in economic globalization. Depending on data and information, building the Digital Silk Road will gradually become an innovative path for China and Africa to construct a community of shared future and shared interests, which is beneficial for mutual prosperity in the digital economy era. The Digital Silk Road will effectively promote comprehensive cooperation between China and Africa in various fields such as information infrastructure, trade, finance, industries, and science, education, culture and public health. It will provide African countries with a strong foundation for improving information infrastructure, eliminating the digital divide, and achieving inclusive growth and leapfrog development.