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China’s Plan for Digital Dominance

Digital transformation is all the craze in China. Even the venerable Kweichow Moutai distillery now talks of the new digital processes necessary to brew a smarter liquor. But all of this only reflects the popularization of a long-running Communist Party initiative of far greater strategic significance. Over the past two decades, General Secretary Xi Jinping has been at the center of party efforts to create a comprehensive digital strategy of immense proportions, known as Building Digital China (建设数字中国), or more often simply Digital China. While sounding much like an industrial strategy, Digital China is never described as such internally. In broadest terms, it is a major strategic decision made by Xi Jinping in the aftermath of the 18th Party Congress in 2012 to digitally transform the nation. For the more technically minded, it is the overall strategy for national informatized development in the new era. Although mostly unknown in the West, Digital China has enormous implications for China’s developmental path, great-power competition, and the norms that will undergird the international system for decades to come.

As a concept personally tied to Xi, one might argue that not only has he made Digital China a key to national success, but that Digital China has also contributed to his individual success, as the concept has tracked his rise for more than two decades. Xi first adopted the precursor concept of Digital Fujian from a local academic while serving as deputy party secretary and governor of that province in 2000. It was originally conceived as a simple effort to use new and emerging digital technologies to improve local governance and improve economic efficiency — in essence, China’s first experiments in e-government. Xi Jinping’s Digital Fujian would evolve and expand over the next 20 years before finally reemerging as the party’s vision for a fully informatized Digital China: a sharp weapon that empowers the nation (improved national competitiveness) and a spring rain that benefits the people (improved operating efficiency of society).

New Type Infrastructure

Surprisingly, a strategic initiative of this size and scope has progressed mostly unnoticed in the West. Perhaps more surprising, even the most concrete elements of the strategy remain obscure outside China. At the onset of the pandemic, Xi Jinping directed the Communist Party to accelerate an infrastructure campaign of epic proportions in support of Building Digital China. This campaign, known in China as New Type Infrastructure (新型基础设施), is to receive an estimated 17.5 trillion yuan (nearly $2.7 trillion) over five years exclusively for the purpose of digitally transforming traditional infrastructure and building new digital infrastructure. As outlined in April 2020 by the National Development and Reform Commission, the state’s top macroeconomic planning authority, New Type Infrastructure falls into multiple levels and categories including the construction of an industrial internet, the building of a national dual gigabit network (integrated 5G mobile and fixed gigabit optical), the building of a satellite internet network, as well as the recent official launch of nationally integrated system of big-data centers. More broadly, Beijing describes the campaign as becoming the key support and important material guarantee for a new revolution in science and technology and a new round of industrial transformation. Simply stated, this plan is a pivotal part of China’s effort to dominate the Fourth Industrial Revolution.

 

 

Beijing also believes that the technology, manufacturing, and domestic subscribers arising from New Type Infrastructure will drive mutually reinforcing growth in China’s international trade and inward investment, a competitive trajectory and exemplar of the Communist Party’s new dual-circulation economic strategy. Xi introduced building a new development pattern based on dual circulation between domestic and international markets at a Politburo meeting in May 2020. Designed to respond in the short term to structural changes impeding China’s economic development, principally COVID-19 and barriers to high-technology imports, the pattern calls for a primary focus on the innovative expansion of China’s domestic economy, which in a hardening external environment would also serve as the principal driver for China’s continued access and expansion into international markets, in effect dual circulation. Former Vice Commerce Minister Wei Jianguo went so far as to describe New Type Infrastructure as core to building the dual-circulation new development pattern and further linked Xi’s vision to accelerate New Type Infrastructure construction using the strategic window opened by the COVID-19 pandemic to the origins of the dual-circulation concept itself.

Building Digital China

Digital China, like all of the country’s national-level strategies in general, is built on Communist Party decisions, objectives, missions, projects, and priority areas of action — to name just a few. New Type Infrastructure is one of Digital China’s major missions, one of three focused specifically on developing core technologies. To use Communist Party nomenclature for strategy construction, building a National Information Infrastructure System, composed of New Type Infrastructure’s three main directions — information infrastructure (信息基础设施), integrated infrastructure (融合基础设施], and innovative infrastructure (创新基础设施) — is a major mission designed to support national informatization. To borrow Western nomenclature for strategy construction, New Type Infrastructure is simply one of the means, or in this case one of the system-level technical resources, required for Building Digital China. Two other system-level technical means are also required. The second major technology mission, closely tied to the New Type Infrastructure mission, is the elevation of the nation’s Information Technology Industrial Ecosystem (信息技术产业生态体系). Elevating this ecosystem, which will provide the traction for national informatization, parallels Xi’s drive to increase China’s innovative capabilities, and overlaps with two key focus areas, mastering core technologies and collecting cyber talent, from one of Digital China’s cornerstone strategies: cyber great power. The third major technology mission is the development of a Data Element Resource System (数据要素资源体系), a system described as core to the nation’s informatization effort and the focal point for the party’s overwhelming interest in data governance and control. Together, these three missions will supply the technical and systemic means, however difficult to achieve, that have been deemed necessary to realize Xi’s digital vision for the nation.

While the technical missions of Digital China are grand, the socioeconomic and geopolitical scope of Digital China is breathtaking. Marxist theorists routinely characterize the developmental components of Digital China, or to borrow Western strategy nomenclature once again, the ways of Digital China, as nothing less than the digital transformation of China’s path to national rejuvenation. As recently as the 14th Five-Year Plan, released just one year ago, Digital China’s five ways were mapped to the Communist Party’s five-sphere integrated plan (五位一体), the overall plan for building socialism with Chinese characteristics. Significantly, each of the traditional spheres was also digitally transformed for coordination and advancement under Digital China: digital economy, e-government, digital culture, smart society, and digital ecology. In short, achieving national informatization, the primary objective of Building Digital China, has become fundamental, guiding work necessary to achieve the national rejuvenation of a modern, socialist great power. Geopolitically, Digital China’s success would now be measured, among other markers, by a fully informatized smart society acting as a developmental model globally and a digital rule-setter internationally. A successful Digital China will also stand as a digital great power with global dominance in multiple strategic domains including cyber, manufacturing, transportation and logistics, and science and technology. In short, Communist Party leaders see Digital China as a transformative-competitive win-win.

In a paper to be published soon by the Texas National Security Review, my co-author, John Hemmings, and I draw from the two-decade trail of Communist Party commentary, government documents, and state-run media reports to outline the history, structure, and objectives of Digital China, its technology missions including New Type Infrastructure, as well as the developmental and geopolitical ends it is designed to achieve. While we note that there is already notable literature in the West on Chinese industrial and technology policies and their ideological underpinnings, we make what we think are two original contributions to the literature. The first of these is that there is an overall strategy driving a coordinated party approach to interrelated technology projects like artificial intelligence, societal programs like smart cities, and national strategies like digital economy, and so on — that it is called Digital China — and that it has gradually and almost imperceptibly become the party’s voice and strategy to drive Xi Jinping’s decades-old vision for digital transformation. The second argument is that the Communist Party’s approach to technology has been framed by Marxist thought — not incidentally, but deliberately. The governance and control of data within an informatized system is a key focal point of Digital China. But this new approach to data also required using historical materialism to justify an ostensibly Marxist economic system that had elevated data, not labor, as the key factor of production. In December 2017, Xi Jinping was the first party leader to publicly describe data as the key factor of production in a digital economy, effectively rewriting Marx’s labor theory of value at the highest level. The idea would churn in the party system until April 2020 when the Central Committee and State Council jointly published an opinion on the market allocation of factors of production, specifically adding data as a new factor of production for the first time, joining Marx’s labor, land, capital, and technology.

Challenges and Implications

Much (and perhaps most) of the original source material on Digital China remains untranslated. This may explain, in part, why these two concepts, Digital China and New Type Infrastructure, remain obscure outside China, particularly when both are a near continuous presence in China’s state-run media and the subject of repeated public education campaigns for party cadre and Chinese citizens. We believe part of the problem is also due to the evolutionary nature of Chinese strategy development, with key concepts and terminology morphing and continuing to morph as Communist Party knowledge, experimentation, and comfort deepens. Just as important perhaps is the sheer difficulty of Chinese technical translation, particularly with writers who are often more theorist than engineer taking the lead. Finally, there is evidence of obfuscation and mistranslation of key Digital China concepts in the official English-language translations of government documents. Although perhaps reflecting only inattention by translators, we believe the evidence points elsewhere. All of these challenges to analysis outside China point to our first recommendation: the overwhelming importance of a coordinated, multinational approach to translation and analysis on the topic of Digital China and all its subcomponents, a library of documents that would overwhelm any single translation effort and fracture any possibility of corporate analysis and understanding. The time to start this is now.

Concurrently, we can also begin to try to model the downstream implications for liberal democracies that would flow from a fully successful Digital China. By party definition, Digital China will increasingly drive Beijing’s competitive strategy against the United States and its partners. The across-the-board transformation of Beijing’s manufacturing industries, its society, governance model, and innovation are couched in terms of domestic and geopolitical outcomes. The United States and its partners — though weary of decoupling from what might become the world’s largest economy — must weigh the interests from a democratic and geopolitical perspective. One clear challenge even now is how new disruptive technologies — like artificial intelligence and informatized societies — are empowering innovative attempts at authoritarianism. While Digital China includes industrial goals, there is also clear party direction to transform society and the ways that Chinese citizens are governed by the party. This is not simply perfecting tools that already exist. Instead, this is developing innovative new tools that will be tested as pilot projects in localities across China. While not all the ideas will be bad, it is clear that all of them will be executed through the lens of an authoritarian system.

A second implication arises from the first: As China is — by many calculations — predicted to surpass the United States in any number of measures (or come close to surpassing the United States) in coming decades, democratic nations are confronted by the possibility of the world’s first authoritarian hegemonic power. Technologies associated with Digital China, their manufacture and standards, and how they integrate data into forms of control, should be of immense concern to those states that continue to prize political and individual rights. Digital China’s technology projects are highly integrated at both the national and the global level, and Beijing intends to export its technical standards, its network architecture, and the governance model implicit in those. As an early indicator, Beijing has already expressed interest in the gradual deployment of data centers in support of Digital China’s industrial internet to countries participating in the Belt and Road Initiative. As mentioned earlier, the Communist Party’s approach to data is both Marxist and authoritarian in nature and exerts a sort of totality of control over individuals that could ultimately impact nations enticed by Digital China’s New Type Infrastructure.

What’s Next?

Following the 18th National Congress of the Chinese Communist Party, General Secretary Xi Jinping made a major strategic decision to launch Building Digital China with a focus on the future. This entails the construction of major digital infrastructure networks across the nation as well as a nationwide system to govern and control data. Its intent is growing China’s digital economy, strengthening and informatizing its governance, updating and promoting its manufacturing, bolstering its innovative ecosystem, and enabling its leadership to shape global digital governance. With New Type Infrastructure as a primary technology mission, Digital China has incrementally become China’s overall strategy for national informatization, evolving from its humble roots as a provincial-level strategy in the early 2000s. Now, it is openly linked to Xi Jinping, facilitating his national economic strategies both digital and dual circulation, as well as transforming China’s path to national rejuvenation. The question, of course, for liberal democracies will be how much it fuels China’s own rise to hegemonic status in the international system and the downstream consequences this might have on their own national interests.

There is a clear and pressing need for an expanded research agenda on Digital China. We must not only analyze its ambitions, but tally the resources being put into it, as well as assess its likely success in achieving the Communist Party’s stated objectives. We must also begin to understand its likely impact on the global standards of digital technologies and on our own national economies and societies. And ultimately, as we have sought to do when faced with the dangers of other historic authoritarian challengers, we must rise to the occasion and find ways to outcompete and outlive it. This begins with our own understanding of Digital China, of New Type Infrastructure, and of the Communist Party’s vision for the governance and control of data.

Let’s begin now.

 

 

David Dorman is a retired U.S. government China specialist. He has served as a professor at the Asia Pacific Center for Security Studies, director of the China Strategic Focus Group at U.S. Indo-Pacific Command, executive director of the Congressional-Executive Commission on China, senior professional staff member on the Senate Foreign Relations Committee, foreign-policy advisor to U.S. Senator Chuck Hagel, and as a China program manager at the National Security Agency. He holds a Ph.D. in Government and Politics from the University of Maryland at College Park.

Image: China Daily (Photo by Guo Shining)

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