The Digital Silk Road is a component of China’s Belt and Road Initiative. It aims at the development and export of Chinese sourced embedded and systems technology in communications, infrastructure, cities, transport, logistics, fintech and educational technologies. Announced in 2015, within three years DSR-related investments outside of China had reached $79 billion.

The DSR includes digital infrastructure projects such as terrestrial and submarine cables, 5G cellular networks, data centres and global satellite navigation. At the component level, they include IoT and embedded systems, edge computing, intelligent cameras and a multitude of sensors and embedded controllers.

China’s Belt and Road Initiative was announced by Chinese leader Xi Jinping in September 2013. The BRI initially focused extensively on global transport and logistics initiatives. This has included major investments in port and logistics facilities throughout Asia, Africa and Europe.

In a series of speeches in September and October, 2013, Xi defined the Belt as a pan-Asia road and rail infrastructure with accompanying logistics that would stretch through to Europe. In the same speeches, he defined the Road as a maritime route equipped with supporting ports and harbours stretching from the China Sea to the coast of Africa and through to the Mediterranean. The main overland and maritime BRI routes encompass the historic ‘Silk Road’ which connected China to the markets of the Middle East and Europe from the 7th Century CE, under a policy formulated by the Chinese government of the day.

When launched in 2015, the Digital Silk Road was a natural complement to the overall Belt and Road Initiative. It provided necessary technical and communications infrastructure to underpin the building out of the overland, maritime and logistics hubs of the BRI.

But since 2020, the Digital Silk Road has developed more and more into a free-standing initiative, with greater focus from the Chinese leadership.

BRI itself is increasingly downplayed. Questions over its intentions, and contentious investments in foreign infrastructure have led to Chinese diplomats and political leaders not trumpeting it on visits abroad. While central to China’s objectives — as seen by Xi’s May visit to Europe, which involved a tour of European countries committed to the BRI such as Serbia and Hungary — China is wary of negative perceptions of the project outside its close allies.

Xi’s main stop on his European tour however was France. Not a major player in BRI, France is however pivotal to China’s plans to develop DSR in Europe. Huawei is beginning the construction of a $220 million manufacturing plant in France this year. 500 new workers will produce 4G and 5G Huawei equipment for the European market. The plant is expected to contribute $1.2 billion annually to the French economy.

US legislation is increasingly imposing restrictions on technology sharing with China. An example is the 2022 CHIPS and Science Act which commits $280 billion to development of semiconductors in the US, and forbids recipient firms from working in China or with Chinese firms. The EU has initiated similar legislation, the European Chips Act which was passed in September 2023. At the same time, post-pandemic, foreign investment in China has stalled, as has collaboration with foreign firms.

These shifts have seen the Digital Silk Road take ever greater prominence. China is increasingly seeing it not as a supporting act for BRI, but as a strategy to achieve technological independence from the US and Europe, and grow global market share through export of communications, surveillance and embedded technologies.

DSR has flown under the radar of the west, since China has neither trumpeted it, nor made major public investments. Instead, DSR investments and agreements are made by Chinese firms, and have been seen as market activities rather than state-directed actions.

DSR investments typically follow BRI participants. It has made inroads into developing countries, particularly in Africa and the Indo-Pacific. Many of these countries are already actively engaged in the BRI. But DSR is now extending beyond the ambit of BRI, with sizeable investments in countries such as Germany and Italy, as well as France. Mexico has also been an active participant in the DSR.

The DSR has a number of principal selling points. It is offering advanced technologies, including AI, cloud technologies, and smart city technologies, at far lower price points than the west. It provides generous financing packages. And DSR investments in countries are not constrained by investor relations or media outrage: DSR companies equip governments of all stripes through the Middle East and Africa with monitoring and surveillance technology.

Several governments, including the United States, are increasingly expressing concerns about DSR. Concern particularly focuses on collection of surveillance data, with processing and storage in cloud centres in China. However, a combination of low price points, generous financing and a government-friendly approach means that the DSR is going from strength to strength, despite growing concern from some western governments.