China which has carefully forged geo-technomics (technology plus economics) hegemony in the global industrial space is not a new story. The Covid-19 pandemic, however, opened the Pandora’s Box to find that the global industrial complex is not only vulnerable to China’s supply chain dominance but also a hostage to the Dragon’s complex web of industrial networks and control. Worse news is: To break free from Dragon’s industrial hegemony and democratise global supply chains shall take ages with huge human and economic costs.
American business intelligence group Dun & Bradstreet Corporation data published in April 2020 pointed out that around 51,000 prominent global companies have one or more direct suppliers in Wuhan alone while 5 million companies have one or more tier-two suppliers linked to Wuhan region. A survey by American Institute for Supply Management indicates that around 57% of companies are experiencing longer lead times for tier-one China-sourced components including US tech giant Apple which, despite shifting some production to India and Vietnam, remains critically dependent on China.
While Graham Alison’s Thucydides Trap talked of emerging geopolitical confrontation between Christianity and Confucian order, Geneva School of Economics Professor Richard Baldwin’s ‘Great Convergence’ hypothesis very aptly translated the confrontation to the weapons of geo-economics—a phenomena of the fourth industrial revolution. China’s geo-technomics further sharpens the war turf with a vicious cycle of Dragon’s monopoly control over critical raw materials like steel, rare earth and a range of metals like cobalt, platinum, germanium et al.
Promoting a narrative of ‘China’s Peaceful Rise’, Xi Jinping rubbished Thucydides Trap. Philosophically China has mostly believed in killing the enemy without wasting a bullet. China is truly striding ahead with a web of global industrial supply chain control and an arsenal of geo-technomics architects that has clearly put global industrial dependence on China.
CHINA’S AI STRATEGY
The Fourth Industrial Revolution has changed many aspects of the world economy. Most notably, it has changed the mode of production, shifting it from manufacturing to a new generation of knowledge economy greatly dominated by artificial intelligence, algorithm, big data and decision trees as a new mode of wealth creation which integrates boundary free production variables for higher profitability. Capital and labour irrespective of nationality are integrated through these modern modes to deliver far higher profitability. While Deng Xiaoping laid the foundation for China’s industrial economy, Xi Jinping has carried Deng’s mission powering China with a great AI driven economy.
China is an AI world leader today. China has been carefully investing heavily in the AI driven techno-economic domain to gain control over global market advantages. China’s AI strategy 2016 to ‘Three Year Action Plan for Promoting Development of a New Generation AI Industry (2018-20)’ and finally AI-2030 vision of becoming a global AI superpower is a long calculated road map for Xi Jinping and his leadership.
It is in this backdrop and a larger goal of 2030, Dragon’s Artificial Intelligence (AI) driven geo-technomics is also growing to its next generation to encompass digi-currency, block-chain, beidou navigation system to smart warfare initiatives including cyber aggression that propose to change the way business of the world ever operated. Moreover, economy to warfare, productivity to travel and even currency and global transaction modes are all set to undergo transformation under the authoritarian patronage of Chinese President Xi Jinping.
China’s emergence as a techno-economic power in the last over two decades is set to recast the language and order of the game itself. Beijing’s decisive control over strategic and critical industrial use materials like steel and rare-earth brings it to an enviable position on the global technomics productivity landscape. Assured of this economic success and confident of huge forex reserves, China’s export-led economic growth has nourished a larger ambition—popularly referred to as ‘China Dream’ which is a native Chinese imagination of creating a ‘World Order’ that is Sino-centric in character. It seems to alter the ‘Western’ and ‘Eurocentric’ world order and replace it with Chinese variant called ‘Tianxia System’—a Confucian model of governance and engagement order. As it is seen today, President Xi Jinping has taken all the cudgels to see the ‘China Dream’ take visible shape and the country to gain the lost glory and emerge as a world leader both in terms of material and global value system.
DRAGON’S DREAM
The cat is definitely out of the bag now. All the hush-hush gossip and cheap China made products flooding the world markets from Buenos Aires to Boryspil and Tokyo to Tafo, Ghana were only a curtain raiser. China’s civilisational imagination—‘China Dream’—an imagination to regain China’s lost glory is to be achieved. If at all Wuhan virus conspiracy theory has any grain of truth, possibly Xi Jinping has put together his predecessor’s hard work to realise the China Dream.
It’s a well cut out three pronged strategy. First part, laying China’s modern industrial foundation which Deng Xiaoping built with a lot of imagination and hard work that converted China as the producer of the world or ‘Factory World’. Second, Xi Jinping’s global connectivity project-Belt and Road Initiative (BRI) that virtually took the world by surprise. Gradually penetrating into the geo-spatial boundaries of the sovereign nations under the rubric of BRI, Xi wanted China’s flags to follow the Chinese trade. A project of six economic corridors—China-Pakistan Economic Corridor, China-Indo-China Peninsula Economic Corridor, China-Mongolia-Russia Economic Corridor, China-Central Asia-West Asia Economic Corridor, Eurasian Land Bridge and Maritime Silk Road Corridor. Moreover, in this ongoing ambition, Beijing is constructing a network of infrastructure by lending soft loans to the BRI nations and then expropriating their precious raw materials much to the advantages of Chinese economy. At present, many BRI induced nations like Djibouti, Kyrgyzstan, Laos, Madagascar, Maldives, Mongolia, Montenegro, Pakistan, Republic of Congo, and Tajikistan are highly vulnerable reeling under Dragon’s debt-trap diplomacy.
Finally China’s ‘Geo-Technomics’—the great AI 2030 vision along with digi-currency, block-chain, beidou navigation system et al. President Xi Jinping visualises block chain as ‘an important breakthrough’ and Beijing, given the opportunity would ‘seize the opportunity’ to materialise China dream. Rallying round it, Professor Michael Sung, founder and chairman of Carbon Blue Innovations and co-director of the Fintech Research Center at the Fanhai International School of Finance at Fudan University, observed: “Chinese initiated Block chain-based Services Network (BSN) will be the backbone infrastructure technology for massive interconnectivity throughout the mainland, from city governments, to companies and individuals alike.” He reiterated, “The network will also form the backbone to the Digital Silk Road to provide interconnectivity to all of China’s trade partners around the globe.”
MULTILATERALISM NEEDED
China’s so-called peaceful rise has been a painful rupture of the global economy and international order. Markets of the world and global supply chain must be democratised and pluralised. A grand democratic global coalition against monopoly either of political, institutional, economic or strategic is needed for a peaceful world. Can the nation-states work towards a rule based multilateral world order?
Dr Jajati K. Pattnaik is an Associate Professor at the Centre for West Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. Dr Rudra P. Pradhan is an Associate Professor at the Department of Humanities & Social Sciences, BITS Pilani (K.K. Birla Goa Campus), Goa. The views expressed are personal.
China’s emergence as a techno-economic power in the last over two decades is set to recast the language and order of the game itself. Beijing’s decisive control over strategic and critical industrial use materials like steel and rare-earth brings it to an enviable position on the global technomics productivity landscape. Assured of this economic success and confident of huge forex reserves, China’s export-led economic growth has nourished a larger ambition—popularly referred to as ‘China Dream’ which is a native Chinese imagination of creating a ‘World Order’ that is Sino-centric in character.