In the spring of 2018, Amazon the price of the service suddenly increased Prime in Italy, the one that allows free shipping and also gives access to streaming movies and TV series. Suddenly and from time to time: from 19.99 to 36 euros a year, an increase of over 80%. It was able to do so because over the years it had built up a market, a reputation and a large customer base now “dependent” on its services. It acted (acts) practically in a monopoly regime.
The example of an American company can be useful to understand what other American companies and many governments fear China is doing: “infiltrate” with its technology, its products and its skills in the markets of historically partner countries of the West, prove trustworthy, make them “addicted” and ultimately remove them from US influence. By creating a sort of “digital” Silk Road alongside the real one, among other things hampered by 4 years of Trump presidency in the United States (Huawei’s blockade is just the tip of the iceberg).
A “made in China” network in 137 countries
A recent report dell’International institute for Strategic studies (and this) emphasized bilateral agreements signed by at least 16 countries for access to Chinese technologies, joint research projects, funds for the study of Chinese culture, even the provision of safety and surveillance devices for less democratic or completely authoritarian regimes: according to the IISS, the states most involved would be Indonesia, South Korea, United Arab Emirates, Israel and Poland. That they seem few, but they are not few if we consider that these countries in turn have commercial relations with other countries, thus bringing the number of those who have directly or indirectly opened their doors to Beijing to about 140.
As stated, this would be leading these states to move away from America’s sphere of influence and the West. The report gives some examples of what is happening:
– in Indonesia, in the last twenty years, Huawei has contributed to the laying of thousands of kilometers of fiber optic cables, created data-centers through which the connections of millions of people pass, provided the infrastructure to host the cloud inside which Indonesians save photos and videos and is also helping in the development of projects related to artificial intelligence;
– many of the United Arab Emirates are buying surveillance cameras from China as well facial recognition software (like this one) to be provided to law enforcement agencies to monitor residents’ behavior;
– in Poland, the Chinese government has invested money (a lot of money) in universities, including creating study plans with incentives for students such as travel, smartphones, internships (in Huawei locations) and much more, which would also have prompted the United States to abandon the I plan to build their base in the country.
US countermeasures
As you can imagine, entering in this way within the companies, communication systems, schools and police forces of these (and many other) countries it will make it very difficult for these same countries to distance themselves from Beijing in the future. Just like in 2018, it was difficult for us to distance ourselves from Amazon and its Prime service.
The problem is concrete, so much so that not only in the United States the Trump administration but also that of President Biden are setting up and have already set up commercial initiatives to counter the excessive Chinese power in the technological field, concretized through projects Made in China 2015 and indeed Digital Silk Road. Specifically, Biden will continue to pressure allies not to use Huawei’s infrastructure to set up 5G networks and to prevent American companies from doing business with the Chinese company, including (but not limited to) in the strategic sector of semiconductors. What’s more: the Americans are already selecting some valuable alternatives for their business partners, pushing them to enter into supply agreements with Ericsson, Nokia and Samsung.
Important names are also involved in the strategy, such as Eric Schmidt and Jared Cohen, respectively longtime CEO of Google and top-level executive of Big G, who prepared action plans it’s a advice list for Western companies that want (must) escape Beijing’s sphere of influence. The purpose is noble (to technologically unite democratic countries), but the aim is obviously commercial.
It remains to be understood not only if and how these attempts to obstruct the free market, that is, the possibility for countries and governments of the world to source from and do business with whomever they prefer, will work, but also what will be the long-term effects, especially on consumers. Because, to stay with Huawei, the fact that its smartphones no longer have the Google app it is a problem not only for the company, but also for those who would like to buy them, those smartphones.