Riding the 'One Belt One Road' Wave: China's Internet Companies 'Go Global'
Posted: 1 Apr 2017
Date Written: March 29, 2017
Abstract
In recent years, China has adopted the “One Belt, One Road” strategy to extend its global reach, of which a critical aspect is to connect China to major Eurasian nations through infrastructure building, especially Internet infrastructure (e.g., fiber optic cable networks, cloud computing, etc.). Riding the wave of this massive international initiative, China’s now-potent Internet companies, encompassing equipment vendors, network operators and web application providers, have aggressively set their sights on the global market.
This paper examines the complex interactions between the Chinese state and China’s Internet companies in carrying forward the “Belt and Road” initiative, which have posed thorny questions both for hosting countries receiving Chinese cyber-infrastructure investment and for the current global trade and investment system. It asks: What are the roles played by Chinese Internet companies in the plan? How are we to understand their relationship with the Chinese party-state? And what are the implications both for receiving countries and for existing international trade regimes?
This paper offers some insights into these questions through detailed case studies on the roles of three Chinese Internet companies in the implementation of the “Belt and Road” project: Huawei, China Mobile and Alibaba. The three companies, each occupying a leading position in different cyber domains – i.e., Huawei in equipment manufacturing, China Mobile in network operating, and Alibaba in web services and applications – have anchored themselves securely in this new policy and have mobilized significant financial and diplomatic support from the state. At the same time, however, they have also encountered serious tensions and contradictions in combining the state agenda with their own internationalization strategies.
Drawing on extensive document analysis (e.g., government reports, state documents, trade journals and national statistical compendia) and interviews with policymakers in China, this paper argues that as commercial-oriented firms with deep and varying connections to the party-state, the global activities of these Internet firms cannot be fully understood according to the conventional state-market dichotomy. Instead, their global journeys present different patterns of state-market interactions, which need to be analyzed based on the different industrial subsectors they are operating. This paper therefore helps policymakers gain a deeper understanding of the intricate links between the state and Internet companies as China moves forward with its ambitious “One Belt One Road” strategy.
Keywords: China, Internet Industry, One Belt One Road, Internationalization, Case Study
JEL Classification: F50
Suggested Citation: Suggested Citation