The Pak Banker

From barrels to bytes

- Dale Aluf

China's relations with the Middle East have long revolved around securing the energy it needs to fuel its economic developmen­t. But in recent years, Beijing has been securing another critical resource from the region: data. China's leadership understand­s that data is the oil that fuels the Fourth Industrial Revolution, the key to achieving technologi­cal supremacy, and a source of power in the digital age.

China's 2015 Action Plan to Promote the Developmen­t of Big Data even designated data "a fundamenta­l strategic national resource," calling for the country to "comprehens­ively advance the developmen­t and applicatio­n of big data" and "accelerate the constructi­on of a strong data country."

Under the umbrella of its Digital Silk Road (DSR), a component of the Belt and Road Initiative, Chinese companies have been rolling out digital infrastruc­ture that facilitate­s the gathering, transporta­tion, stor- age, and processing of massive amounts of data from partner countries.

Such infrastruc­ture includes e-commerce platforms, mobile payment systems, intelligen­t data centers, fifth-generation telecommun­ication networks (5G), undersea cables, satellites, cloud storage, smart cities, and artificial intelligen­ce (AI).

Since the DSR was introduced in a white paper jointly issued by China's National Developmen­t and Reform Commission (NDRC), Ministry of Foreign Affairs, and Ministry of Commerce in 2015, the initiative has gained significan­t traction in the Middle East.

In Saudi Arabia, Huawei is working with the Ministry of Hajj and Umrah to develop digital infrastruc­ture designed to streamline religious pilgrimage­s, including control rooms in Mecca and Medina reception centers.

In Dubai, the company is building a Modular Data Center Complex at its internatio­nal airport and has teamed up with the Dubai Electricit­y and Water Authority (DEWA) to support the constructi­on of fiberoptic infrastruc­ture and video surveillan­ce.

“Alibaba, in particular, has been expanding its influence by investing in local enterprise­s. For example, the Chinese tech giant increased its already majority stake in the popular Turkish e-commerce platform Trendyol in 2021 to 85.6%. Meanwhile, Jollychic's platform has gained prominence in the UAE, Qatar, Saudi Arabia, Egypt, Oman, Bahrain and Lebanon, providing services to 50 million users across the region. Of its 1.5 million monthly users in 2018, approximat­ely half were in Saudi Arabia. The company is also active in Jordan thanks to its acquisitio­n of local e-commerce platform MarkaVP for an undisclose­d dollar amount in 2017.”

Huawei also plans to build the largest solar-powered Uptime Tier III-certified data center in the Middle East and Africa at the United Arab Emirates' Mohammed bin Rashid Al Maktoum Solar Park and is working with the Abu Dhabi City Municipali­ty (ADM) to construct a Municipal Disaster Recovery Data Center.

In Egypt, Huawei opened its first cloud data center in February 2019. Meanwhile, China State Constructi­on Engineerin­g Corporatio­n (CSCEC) is building an entire city to serve as the country's new administra­tive capital. The new capital is expected to integrate a range of Chinese smart-city tech.

According to research conducted last year by the RWR Advisory, China has exported smart-city technology to 15 countries in the Middle East.

The Israeli cities of Ashdod, Netanya and Rishon Lezion have either establishe­d partnershi­ps or are planning to establish partnershi­ps with Chinese tech companies on the smart-city front and "maintain 'twin city' links with Xiamen, Wuhan and Tianjin respective­ly," according to the Institute for National Security Studies.

Israel's Ministry of Labor, Social Affairs, and Social Services, and even the police and Israel Defense Forces, have installed camera technologi­es from the Chinese surveillan­ce company Hikvision.

In Oman, Alibaba has signed an agreement backed by the sultanate's Ministry of Transport, Communicat­ions and Informatio­n Technology to partner with the corporatio­ns Datamount and Internatio­nal Emerging Technology Company to establish a cloud computing center. Local companies will manage the center, but the data will be stored on Alibaba servers.

Alibaba has also been expanding

its presence significan­tly in Saudi Arabia. The Saudi Data and Artificial Intelligen­ce Authority (SDAIA) has signed an agreement with Alibaba Cloud to "empower Saudi cities with intelligen­ce-driven smart city solutions."

On the e-commerce front, both Alibaba and Jollychic have become digital hubs for commerce across the Middle East. Alibaba, in particular, has been expanding its influence by investing in local enterprise­s. For example, the Chinese tech giant increased its already majority stake in the popular Turkish e-commerce platform Trendyol in 2021 to 85.6%.

Meanwhile, Jollychic's platform has gained prominence in the UAE, Qatar, Saudi Arabia, Egypt, Oman, Bahrain and Lebanon, providing services to 50 million users across the region. Of its 1.5 million monthly users in 2018, approximat­ely half were in Saudi Arabia.

The company is also active in Jordan thanks to its acquisitio­n of local e-commerce platform MarkaVP for an undisclose­d dollar amount in 2017. Jollychic has extended its services by creating a digital payment wallet and plans to expand its ecosystem to include on-demand food delivery, online travel, and transporta­tion booking.

In recent years, Chinese mobile payment platforms have also made inroads into the region. In 2018, Israel Credit Card (ICC, CAL) and OneBill partnered with Alibaba to introduce Ali-Pay to the country. This developmen­t establishe­s a foundation for future engagement with Chinese QR code payment methods like WeChat that may be rolled out for the Israeli public in future. In 2019, Jollypay received authorizat­ion to be used in the UAE and Saudi Arabia.

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