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China talks of building a “digital Silk Road”

An ancient Silk Road city wants to cash in

May 31st 2018| XI’AN

CHINA’S vague but much-vaunted Belt and Road Initiative (BRI) has been providing buzzword fodder for government leaders and official sloganeers since 2013, when the country launched the scheme to extend its political and economic influence abroad by investing in infrastructure and other big projects. The “belt” refers to an overland push across Eurasia and the “road” to a maritime route to South Asia and beyond. But in recent months some new rhetoric (consistent in its challenging use of metaphor) has been promoting a virtual dimension: a “digital Silk Road”.

Xi Jinping, China’s president, has revealed few details, beyond that it will encompass quantum computing, nanotechnology, artificial intelligence, big data and cloud storage. In April he said it would involve helping other countries to build digital infrastructure and develop internet security. The digital Silk Road will help to create “a community of common destiny in cyberspace”, suggests Chen Zhaoxiong, a vice-minister of information technology.

Whatever that means, the western city of Xi’an is eager to cash in. The city was once China’s imperial capital (its army of terracotta warriors lures millions of tourists). It was also a hub on the ancient Eurasian Silk Road, which China cites as its inspiration for the BRI. That connection has encouraged Xi’an’s government to claim a role for the city in the building of a digital road. Its officials speak of it as a potential rival of Silicon Valley or Bangalore.

Compared with Guiyang in the south, another inland city with such aspirations (see article) but a shortage of skilled people, Xi’an has a lot going for it. The city of 8m is home to 63 colleges and universities, as well as hundreds of research institutes. They produce 300,000 graduates each year, most of them scientists. Xi’an has a long history, stretching back to the Mao era, of supplying technicians needed by defence industries.

Officials expect Xi’an Software Park, part of the city’s main tech centre, to employ 250,000 tech experts by 2021, compared with 165,000 in 2016. They predict that over the same period its revenue will rise by more than 150% to 500bn yuan ($78bn). Hardly a tech convention goes by in Xi’an without talk of the digital Silk Road. Earlier this month city officials held a conference about civil-military co-operation in building one. At a programmers’ festival in November, animations on huge screens showed data crackling westward from Xi’an to Istanbul. Speakers were greeted like rock stars by throngs of aspiring young programmers.

Xi’an’s efforts to attract tech firms, such as offering housing subsidies to their staff, are paying off. Huawei, a maker of telecoms equipment, has built its largest programming research-facility there. HSBC, a bank, uses developers in Xi’an to produce a variety of software, including versions for cyber-security and market analysis. What is happening in Xi’an, says Frank Tong, HSBC’s head of innovation, “is for real.” Unlike Guiyang, the city has considerable pull for young techies. It is only a bit less cosmopolitan than Beijing or Shanghai. Yet its housing is far cheaper.

The central government has been cheering Xi’an’s efforts. In April China’s official news agency said the city was in the “fast lane” to becoming a “Silicon Valley in the west” of the country. That may be an exaggeration. The toll of China’s heavy online censorship may not hinder the code-crunching of programmers. But for the kind of world-class nerds that Xi’an wants to attract, it must be a deterrent


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