Research pick: Navigating the digital silkroad - "To connect or not to connect? Responding to the Digital Silk Road in Central and Eastern Europe"

The Digital Silk Road (DSR) an economic initiative launched by China in 2015 is a key component of the country’s broader Belt and Road Initiative (BRI). Its primary aim is to extend China’s influence through digital and technological means globally, including the Central and Eastern Europe region, the CEE.

Research by Ágnes Szunomár of the Corvinus University of Budapest and Institute of World Economics in Hungary in the European Journal of International Management has looked at how the initiative seeks to integrate Chinese technologies and standards into the digital ecosystems of various countries. Ultimately, the DSR will open up new markets around the world to Chinese companies. Szunomár’s work shows how this expansion has been met with a mixed response across the CEE. Of concern are the balance of economic, political, and security considerations facing the region as China expands its global reach.

One of the major concerns surrounding the DSR is the increased involvement of Chinese companies in the development, installation, implementation, and maintenance of critical digital infrastructure. European countries are concerned that there could be not only a loss of industrial competitiveness, but increased dependence on China. Moreover, there is the worry that the Chinese government may well have ultimate control of such companies. There are thus national security issues to be considered as well as lower-level, but important, threats to privacy and security at the industrial and personal level. Given the potential for China to have control over the flow of data through the infrastructure its companies build these concerns may well be warranted.

The research touches on the growing economic presence in Europe of Chinese companies over the past two decades. Indeed, the European Union (EU) has designated China as a systemic rival. Although across the broader CEE, reactions to the DSR and Chinese technology companies varies enormously. Many CEE countries share the general European and, indeed, American concerns about Chinese influence. However, Hungary and Serbia are I seems more accepting and receptive to Chinese investment and technology. These countries see the low-cost telecommunications equipment offered by Chinese firms as presenting them with an opportunity for greater national economic growth and technological advancement.

In contrast, Czechia, Estonia, Poland, and Romania are among the more sceptical of Chinese advances and in some ways are in outright opposition. These countries are aligned more closely with the US and EU positions, in particular on the notion of digital sovereignty and cellular broadband, 5G, security.

Szunomár has looked at why there are such disparate responses to Chinese advances. Inevitably, those countries that prioritize security concerns and are aligned with the US and EU stance, tend to show greater opposition to the involvement of Chinese technology. The counties that are happy to take the perceived risks in favour of economic advancement are thus emboldened to accept greater participation from China in their technological affairs.

Szunomár, Á. (2024) ‘To connect or not to connect? Responding to the Digital Silk Road in Central and Eastern Europe‘, European J. International Management, Vol. 23, Nos. 2/3, pp.344-363.