China’s next-generation tech firms are about to challenge the US dollar
China’s next generation tech firms are about to challenge the US dollar
WRITTEN BY ABISHUR PRAKASH
23 November 2020
When Chinese officials look at a map of the world today, what must they be thinking? India has banned TikTok and WeChat. The United Kingdom is removing Huawei's 5G technology. Japan is moving its technology supply chains to Southeast Asia. And, from foreign STEM students to stock market listings to tech exports, the US is taking action on multiple fronts. Across the world, Chinese technology is under siege. China's new geopolitical power is being challenged. Have the trillions in Chinese loans and foreign investment failed? Did Beijing underestimate the ability of Washington to ‘steer’ nations in a specific direction?
To a certain degree, China has.
Except, for China, what's taking place right now over technology is just one fight within a much, much longer war. For those who are just waking up to the geopolitics of technology, there's a lesson that must be internalised: China doesn't think in months or years. It thinks in decades.
With all eyes on TikTok and Huawei, China is readying its biggest geopolitical move yet. And, most have no idea what's to come. Take Didi, China's equivalent to Uber (they also acquired Uber's China operations). Until recently, few had heard of it. Soon, Didi may be in headlines all over the world, like TikTok. Why? Because Didi is trialling China's ‘Digital Yuan’. This makes it and others like it both market challengers and serious players in driving de-dollarisation.
Could they help globalise China's currency? Already, the firm has a presence in Latin America. Didi could start offering rides in foreign markets in Digital Yuan (or even offer an incentive, like 15 per cent off, for customers who pay in Digital Yuan). This though is just the starting point. Didi is not just a rides haring firm, it also offers financial services, like loans. It is therefore important to clarify, are companies like Didi the next banks? If so, they will be looked at through a different lens.
From currency to navigation, the mainly American systems that have guided the world for decades are now being challenged. Right now, because all eyes are on TikTok and Huawei, the next generation of Chinese technology firms are quietly emerging unnoticed.
What's to stop it offering loans in Latin America or Eastern Europe or Southeast Asia in Digital Yuan. Didi, for example, already offers food delivery. All of this means, wherever they expand, they will bring financing, transportation, food and an entire ecosystem of services, with Digital Yuan at the centre. Through this next wave of companies, China could inject its currency into markets at lightning speed. As they expand, will the next-generation ditch USD and use Digital Yuan? Are alarm bells ringing in Washington?
Jump to Hellobike. The bike-sharing company is connecting itself to BeiDou, China's homegrown navigation system, to help track its bikes. While BeiDou systems have been exported to 120 countries, the Chinese navigation system has yet to find a serious way to take on GPS (from the US). Now, through technology startups like Hellobike, the opportunity is arising.
The next phase of Hellobike could be to become a courier company. If so, it would mean that any partnerships it builds will have BeiDou at the centre. If an Indonesian startup wants to deliver medicine through Hellobike couriers, it will depend on BeiDou. Or, if the Thai government wants to conduct a census through Hellobike couriers, it too will depend on BeiDou. This will be a grassroots challenge to GPS. And, because BeiDou may become so deeply embedded in nations, rivals like Galileo (EU), GLONASS (Russia) or NavIC (India), may struggle to catch on outside of their home market and region.
In conclusion
Piece by piece, the geopolitical orientation of the world is changing because of technology. From currency to navigation, the mainly American systems that have guided the world for decades are now being challenged. Right now, because all eyes are on TikTok and Huawei, the next generation of Chinese technology firms are quietly emerging unnoticed.
This means, what they do and the way they are used will be a surprise and shock to countries and companies. These firms are the new ‘building blocks’ for China's geopolitical power. And, they are quietly watching what's happening with their ‘big brothers’. They are learning and augmenting their strategies. While governments take pride in banning Chinese tech firms, they have actually made a huge mistake. At the beginning of a long fight, they have played their most powerful card, that is, the decision to ban.
As Chinese officials stare at the map of the world, they may feel angered that some of their most dominant and iconic technology firms are under siege. But, the next fight is about to begin. And, at the end of that fight, those same officials may smile. For the next generation, Chinese technology firms are about to do things few in the world have even imagined, let alone prepared for.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Abishur Prakash is a geopolitical futurist at Centre for Innovating the Future where he helps companies succeed in tech-driven geopolitics. He has authored four books including Next Geopolitics: Vol 1&2, Go A.I. and The Age of Killer Robots. Image credit: Brett Jordan/Unsplash