Huawei has become the global leader in 5G infrastructure technology. Photo: Stefan Wermuth

“When the winds of change blow, some people build walls and others build windmills.” – Chinese proverb

The above proverb tells a lot about the Chinese mindset. At a time when the whole world is grappling with the Covid-19 pandemic, away from the media glare, China is capitalizing on the situation. It is using this moment to expand its global leadership and advertise its governance model across the world.

The Chinese are rewriting the codes of the international world order through new strategic chokepoints. Chinese leaders have taken decisive and aggressive steps in the last few months to gain an advantage over all the strategic opportunities presented by the rest of the world, and especially the US, amid the Covid-19 crisis. 

A month back, Beijing established two new research stations in the contested South China Sea. At the same time, China has launched a maritime law-enforcement campaign, “Blue Sea 2020,” to run from April 1 to November 30. This has increased the chances of confrontation in the region as the project will target any violation of Chinese laws in sectors such as oil exploration, marine coastal construction, and deep-sea mining.

In the current scenario, this can only be seen as a way to target opposing claimants to territory in the sea and to conduct unlawful “law enforcement” operations in waters claimed by Southeast Asian states such as Malaysia, Indonesia, Vietnam and the Philippines.

China’s belligerent behavior including military maneuvers and large-scale deployment of military assets to the region has increased the chances of serious standoffs with other claimant states as well as raising serious questions over whether the Chinese respect international world order any more. But apart from the South China Sea, they are also creating new strategic chokepoints with the help of technology.  

The 5G revolution

The Internet played an important role in increasing US soft power and public diplomacy in the 20th century. The Americans were the key architects of the system, so much of the standardization or structure of the Internet was determined by them, and the rest of the world had to follow their rules.

US corporations like Google, Amazon and Facebook helped the Americans to control much of the Internet traffic. With the help of this data and the National Security Agency, they built the best surveillance system to protect their world order. 

But in February this year, amid the Covid-19 crisis, the world saw a new China. Patrol robots equipped with fifth-generation (5G) technology are being deployed to monitor mask-wearing and body temperatures in public places. In Wuhan, the Chinese city where the coronavirus that causes Covid-19 was first detected, hundreds of driverless vans were used to sanitize the streets.

These are a few examples of how China has harnessed ultrafast 5G networks and its manufacturing supply chain to fight the virus and why the rest of the world is still battling to keep up. The Chinese have pulled ahead of the West in a key technological battleground.

This is a clear demonstration of how effective the Chinese system has become and what other countries lack. China’s demonstration of 5G is a glimpse of what future Chinese smart cities will look like as well as a roadmap for their ambitious Silk Road project. 

More than a decade ago, none of the Chinese telecom companies came close to global standards in providing service to their customers. But today they are competing with their Western counterparts and in some areas outclassing them.

One company that is a major bone of contention in US-China relations is Huawei. In less than a decade, it has become the world’s largest telecom equipment company. It has built almost 70% of Africa’s 4G networks, and it has taken the lead in the race of developing fifth-generation mobile telephony.

According to a ranking compiled by IPlytics, Huawei is in the lead in 5G patents, with more than 3,000 patent applications filed in 2019, of which 1,200 have been granted. It is playing a decisive role in setting end-to-end 5G standards. So, currently, it is simply impossible to exclude China from the process of setting global standards for 5G.  

China is aiming to build and operate at least 600,000 5G stations across the country by the end of this year. All 300 prefecture-level cities in China are expected to be covered by a 5G network by the end of 2020, according to the Ministry of Industrial and Information Technology.

Automated economy

The idea behind the rapid expansion of 5G services in China is to test and reboot the economy through industrial automation and unleash new consumption potential to offset the pandemic’s impact.

According to the World Economic Forum, intelligent connectivity enabled by 5G will act as a catalyst for social-economic growth in the Fourth Industrial Revolution. China wants to be the torchbearer of 4IR by making its economy totally based on automation.

Half of all industrial robots sold in China will be domestically made by 2020. In 2014, the Chinese started a campaign for an automated economy with an overall aim gradually to replace manual labor with robots. The highly industrialized provinces of Jiangsu, Zhejiang, and Guangdong are the first to introduce it on a massive scale.

Currently, China is working on a war-footing level to be a fully automated economy under its flagship program “Made in China 2025.” 

With the global economy still in turmoil due to the Covid-19 pandemic, China is at a unique position to lead the subsequent recovery. According to a report by the Chinese Academy of Social Sciences, China will be more focused on its vast domestic market and home-grown technologies and improving its citizens’ lives. The Chinese are reorienting their strategy from a low-cost manufacturing economy toward more advanced technology like aircraft, telecommunications, virtual reality, and artificial intelligence.

Meanwhile, China has kept its monetary policy quite normal, which clearly indicates the sound fundamentals of the domestic economy will remain unchanged in the medium to long run despite the short-term slowdown due to the pandemic. The Chinese have sufficient policy space to support steady economic growth if needed.

There is a strong indication that China will have a V-shaped recovery, largely thanks to its strong supply chain and the government’s major focus on creating demand by providing excess liquidity through interest-rate cuts.

But for the rest of the world, the good news is yet to come. The International Monetary Fund recently said the global economic outlook had worsened since its last forecast. The US may slip into recession for at least two quarters and some countries will face a solvency crisis and will need debt write-downs rather than just payment postponements.

The US response to the Covid-19 crisis has been less than satisfactory, while China’s success in battling the virus and its outreach to poor nations may give it an opportunity to fill the shoes the rival superpower. But it would be immature to assume that there is not going to be any shift in the global order. 

Ravi Kant

Ravi Kant is a columnist and correspondent for Asia Times based in New Delhi. He mainly writes on economics, international politics and technology. He has wide experience in the financial world and some of his research and analyses have been quoted by the US Congress and Harvard University. He is also the author of the book Coronavirus: A Pandemic or Plandemic. He tweets @Rk_humour.