Luigi Gambardella, President of ChinaEU in Xi’an at the Summit of the Silk Road Chamber of International Commerce
by Luigi Gambardella, President of ChinaEU
During the G20 Summit that was held early September 2016 in Hangzhou, connectivity enhancement, digital cooperation and innovation were put high on the international agenda. But we need now concrete follow-up proposals.
In the area of physical goods and trade, China’s ‘New Silk Road’ initiative has drawn great attention at both domestic and international levels since its announcement three years ago on 7th September 2013 by Chinese President Xi Jinping. Since then, China has made great efforts to guarantee the open nature of the initiate and welcomed new projects and fresh ideas. Thanks to it, enormous opportunities have been brought to the countries along the Silk Road. Today, 900 projects are already under way, worth $890 billion, including linking by rail of Beijing with Duisburg in Germany and China says it will invest at least $4 trillion in Silk Road Countries.
Why not a similar international strategy for the other but invisible silk road, the Digital Silk Road.
On the one hand, Europe is completing its ‘Digital Single Market’, whose main aim is the harmonization national regulations through reducing barriers of business operation across the EU’s internal borders, providing EU companies scale and resources to grow, as well as making the EU an even more attractive location for global companies.
If successful, the 28 European ICT markets would become a single market of 500 million Internet users, providing EU companies scale and resources to grow beyond the EU internal market and making the EU an even more attractive location for global companies. Of course, a European single market for the digital economy would also make it more attractive for foreign players to come in Europe and serve the 28 member states from a single shop. the EU intends to use the Digital Single Market strategy to revive the European economy and allow the EU to regain competitiveness and leadership in the global market. This will not happen overnight but the plan, if implemented will have gigantic consequences for global digital economy and for China.
On the other hand, China is betting on initiatives such as the ‘Internet Plus’ policy and the national Big Data Strategy to boost its digital growth as a springboard to the country’s economic development.
Why not combine both in the framework of a Cyber Silk Road Treaty? Such initiative is in the interest of both parties and would amplify the effects of the parallel programmes underway in both China and the EU. Chinese businesses have reacted to the digitalization of the industrial production processes swiftly and are fast in taking steps to adapt. The European manufacturing industry must be ready for this challenge as well. Creating an alliance with China, who is interested to increase its investment levels and cooperation opportunities in Europe, can be a precious opportunity for the European industry to accelerate its digital transformation.
Cyber Silk Road Treaty should cover the deployment of new digital infrastructures; the promotion of new digital services and applications and the approximation of administrative requirements and rules.
The infrastructure foundation of a digital silk road: 5G and Internet of Things
China is the world largest Internet market and will definitely take a leading role in global 5G and IoT development in the next decades. Europe should be the first to ally with China, allowing it to be in the forerunners club, develop its own 5G and IoT capability at fastest speed and ensure large shares in this new market.
China and EU could conduct joint actions both in the field of research and in technology trials. Concrete joint initiatives are also expected, such as the first “Full 5G Cities”, located along the Silk Road.
New e-services and applications for the Silk Road
China is the largest e-commerce market in the world, with online retail sales totaling 3.9 trillion RMB ($US590bn). Europe should focus on further strengthening its ties with Chinese e-commerce companies, and intensifying EU-China cross-border online trade.
Cross-border e-commerce along the Silk Road also means huge potential for SMEs located in Silk Road countries to reach the ever expanding and increasingly demanding Chinese middle class consumers. We need to think how to implementing Alibaba’s e-WTP initiative along the Silk Road.
A Silk Road fund would support and invest in SMEs along the silk road operating in 5G, Hi-tech, ICT who are passionate about expanding business in other markets and those who are interested in transform their traditional businesses into digital ones.
The fund would also target High tech startups. Startups can be seen as injections of fresh blood in the veins of an economy, carrying enormous vitality and nutrition needed for a stronger performance. In China, 13,000 new startups are set up every single day.
The benefits of cooperation potential in startups between countries along the Silk Road is beyond imagination.
Approximation of administrative requirements and rules
The rules that the EU is currently writing in the framework of its digital single market initiative will affect the way Internet is regulated worldwide. Here stands a unique opportunity to harmonize Chinese and EU Internet regulations at the same time.
In particular, negotiations should be opened to harmonize Chinese and EU rules for online purchases of digital contents, promote affordable high quality parcel delivery, harmonize IP regimes, and reduce the taxation burden in the EU and along the Silk Road.
Obviously, this is not only a matter for civil servants. CEOs should be involved through a stakeholders’ forum to provide their inputs on bottlenecks and problems dissuading direct investment and trade.
Moreover, such negotiations should be based on thorough academic study of respective Internet regulations in China and EU.
If the EU Digital Single Market initiative was widened from the EU to China, this would create a regulatory framework that can be invoked by nearly two billion end‐users to protect their interests.
ChinaEU advocates such Single Digital Silk Road Cyberspace, a genuine transcontinental Digital Single Market encompassing the EU and China along with further countries along the Silk Road that would seek to join the digital initiative.
ChinaEU is a business-led International Association aimed at intensifying joint research and business cooperation and mutual investments in Internet, Telecom and Hi-tech between China and Europe. ChinaEU provides a platform for constructive dialogue among industry leaders and top-level representatives of European Institutions and the Chinese Government.