The Promise and Peril of the Digital Silk Road

The Huawei logo is seen on the side of the main building at the company's production campus on 25 April 2019 in Dongguan, near Shenzhen, China. Photo: Getty Images
The Huawei logo is seen on the side of the main building at the company's production campus on 25 April 2019 in Dongguan, near Shenzhen, China. Photo: Getty Images

North Africa is expected to become home to some massive infrastructural projects, including Morocco’s Tangier Med Port and Egypt’s new administrative capital, after all of the countries in the region signed up to China’s Belt and Road Initiative (BRI). While much has been written about the physical infrastructure under the BRI umbrella, China’s ambition to extend its digital footprint in North Africa has received far less attention despite the significant economic, political and strategic implications.

At the first BRI forum in May 2017, Chinese President Xi Jinping announced that big data would be integrated into the BRI to create the ‘Digital Silk Road of the 21st century’.

The Digital Silk Road, also called the ‘Information Silk Road’, brings advanced IT infrastructure to BRI countries, such as broadband networks, e-commerce hubs and smart cities. The Digital Silk Road is driven by China’s tech giants, most notably Huawei and ZTE, who are able to deliver high-quality fibre optic cables at much lower costs than their European and US competitors.

In recent years, China’s tech giants have become key players in North Africa's digital scene. Huawei opened its first cloud data centre in the region in Egypt in February 2019, and has signed a contract to build a data centre for the Algerian customs agency. Tangier Tech, Morocco's much-publicized Chinese-built smart city, is expected to host 200 Chinese companies, many of which operate in high-tech activities. In Tunisia, Chinese tech firms are actively participating in fulfilling the goals of the ‘Digital Tunisia 2020’ national strategy.

While the growing enthusiasm of some of the world's largest technology companies for the North African market can be exciting news, several downsides need to be considered.

Many aspects of China’s ‘going out’ policies pursued by Chinese tech companies fill unmet needs for digital connectivity in developing countries. However, the upgraded digital infrastructure provided by Chinese firms comes with  control over data flows. This means that the decisions North African governments take regarding the expansion of their digital networks will have considerable economic, political and geostrategic implications.

First, if Chinese companies come to dominate the North African digital landscape, it will hinder local players’ ability to capture domestic markets and compete. Control over digital data holds significant economic value. It may soon become one of the critical productive forces for countries to maintain competitive positions within global value chains.

By controlling data flows, Chinese tech giants can understand markets better, identify and eliminate local competitors and carry out commercial research and development, limiting the capacity of homegrown players to reap the economic benefits of data produced in the region.

In the mobile device segment, local manufacturers such as Algeria’s Condor and Tunisia’s Evertek are already facing fierce competition from low and middle range Chinese mobile producers such as Oppo and Vivo. China's own path to becoming a technological powerhouse through its state support of domestic firms provides valuable lessons that North African governments can use to make sure potential tech champions are adequately funded and protected.

The second key issue with China’s dominance of the global communication market lies in its ability to shape the future of cyberspace governance in ways that normalize censorship and restrict freedoms.

For semi-authoritarian countries around the world, a significant number of which are involved in the BRI, the Chinese use of the internet as a tool for population control appears quite appealing. Last year, China hosted sessions on its system of censorship and surveillance for media officials from Morocco, Egypt and Libya. These meetings have usually been followed by the adoption of repressive cybersecurity laws that resemble China's laws.

Egypt is the most high-profile case in North Africa to draw heavily on China's internet governance model. In 2018, the country passed a cybercrime law that infringes on citizens’ rights in the name of national security. It is estimated that over the past few years, Cairo blocked access to hundreds of websites, most of them belonging to media organizations.

Egypt signed a memorandum of agreement with Chinese ICT giants in April 2019 to further deepen cooperation, including in artificial intelligence, cloud computing and surveillance systems. To date, laws pertaining to data protection and cybercrime in Egypt and other countries in the region remain porous. Revision of these laws is urgently needed to protect citizens’ privacy and internet freedom.

Finally, as North African countries become increasingly dependent on China for their internet, they open the possibility of Beijing monitoring their data traffic, potentially feeding China's intelligence collection. Telecom operators in North Africa are installing Chinese digital surveillance tools, without many legal safeguards to ensure these tools are not abused.

An investigation published last year showed that confidential data on the IT network of the Chinese-built African Union (AU) headquarters was diverted to Shanghai every night between 2012 and 2017. The AU has since then acquired its own servers and declined China’s offer to configure them.

Of course, China is far from being the only country that spies using the internet. As shown by Edward Snowden, US intelligence services have accessed the data of millions of people in the US and abroad that was held and transmitted by US tech giants.

If applying stricter data protection regulations may help North African government mitigate the risks of foreign cyber-spying, developing technological capabilities and reducing dependence on international suppliers of digital equipment remains the most viable route to ensuring data sovereignty.

In the coming years, the expansion of the Digital Silk Road will have significant implications on economic growth, democracy, social cohesion and national and regional security. North African governments ought to ensure that cooperation agreements with China entail comprehensive knowledge and technology transfer mechanisms, including cooperation in research and development, and that Chinese investments yield quality jobs for the region’s young population.

Ultimately, if the region’s leaders are serious about the digital economy creating growth and benefitting local citizens, it is imperative to stop adopting the posture of mere consumers of tech products and services and start acting more like potential producers.

Tin Hinane El Kadi, Associate Fellow, Middle East and North Africa Programme.

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