China’s digital rise and digital independence-1

When defining the new “superpower” of the digital age, we can no longer point only to the US monopoly. China has become a global digital game-changer in a wide field extending to artificial intelligence (AI) and social media, especially in the last decade. While it sets global media trends with applications that keep young people glued to their screens, it is also building the technology of the future with its AI and infrastructure investments. All of this means that China is reducing its external dependence on digital infrastructure, technology, and data flows to create and control its own technological ecosystem. To understand this multi-dimensional vision of digital independence, which combines domestic policies with global moves, it is important to first focus on what China’s digital policy and strategies are.

First of all, China has continuously increased its state-supported R&D spending since the 2000s, reaching 2.4% of GDP in 2020 (OECD). With the “New Generation Artificial Intelligence Development Plan” it adopted in 2017, it made AI a national strategic priority (weforum.org). Thanks to state-backed investment funds and projects such as the “National Integrated Computing Network,” companies like Alibaba, Baidu, and ByteDance have gained access to vast R&D and computing infrastructure resources (rand.orgweforum.org). For example, the number of AI patent applications filed in China in 2022 reached approximately four times that of the US. Regular public-private cooperation and infrastructure investments have enabled Chinese firms to develop advanced transformer language models such as DeepSeek, Qwen, and MiniMax (weforum.orgnature.com). Despite US chip export restrictions, it has turned toward open-source model approaches (nature.com). For instance, DeepSeek’s R1 model was developed with approximately 2,000 Nvidia GPUs and a budget of only 5.6 million dollars, compared to its US counterparts. While its superior performance was met with astonishment in technology markets, it showed that it is advancing rapidly in generative AI and on the path to its long-term goal of establishing its own hardware ecosystem (rand.org).

For some time, China has been leveraging its large talent pool to provide AI training to millions of students. Companies are in close cooperation with state technology laboratories and incubators. In this way, while large companies like Alibaba, Tencent, and ByteDance are establishing their own AI research groups and increasing capacity, domestic startups like Baidu and Zhipu AI are also growing rapidly. On the other hand, the Chinese government reminded of state control by implementing serious regulations and antitrust interventions against Chinese technology companies in the 2020–2022 period. For example, the IPO of Ant Group was canceled at the last minute at the end of 2020; this was an effort to bring the growth of one of the world’s largest fintech companies under control (techpolicy.press). During the same period, companies like Alibaba and Tencent were investigated on grounds of corruption, monopolization, and data security (techpolicy.press). 

Chinese companies have tried different ways to diversify the market. Companies like ByteDance (TikTok) and Alibaba have developed special products for America and Europe (thecgo.orgthediplomat.com).  For example, ByteDance rapidly grew TikTok’s user base by acquiring Musical.ly in the US in 2017; in 2018, it spent 3 million dollars a day (~1 billion dollars per year) on US advertising alone ( thecgo.org). Thanks to this aggressive strategy, TikTok reached hundreds of millions of users globally in a short time. In addition to TikTok, China-origin applications such as Temu, CapCut, and Shein have become very popular among young users in the US. The Diplomat magazine states that four of the five most downloaded applications in the US are of Chinese origin. Interestingly, although TikTok and its associated video editing application CapCut appear to be based in Singapore on Google Play/App Store, they are companies owned by ByteDance (thediplomat.com). This shows how Chinese companies use local corporate structures to adapt to global markets.

As part of their overseas growth strategy, the new technology hubs of the Middle East, Africa, and Asia have become the focus of Chinese companies. For example, technology parks such as Dubai Internet City have hosted regional offices of firms like ByteDance and Huawei (scmp.comscmp.com). They have carried out media partnerships and investments worldwide. For example, while Alibaba Cloud competes with cloud services like Amazon Web Services, it has acquired local startups. Within the scope of the Belt and Road Initiative, China has expanded its technological influence by incorporating digital elements into infrastructure projects (for example, telecommunications infrastructure in Africa and Asia). Therefore, submarine cables, 5G base stations, and surveillance technologies have become a new form of export for accumulated Chinese capital. 

Interesting developments are also taking place in the digitalization investment relations between China and Turkey. While TikTok has reached 40 million active users in Turkey, Alibaba has become a major player in Turkey’s e-commerce with its 1.4 billion dollar investment in Trendyol, which serves 30 million users monthly. Huawei and ZTE played a critical role in Turkey’s 4.5G infrastructure, and 5G tests also remain an option on the table. The factory investment planned in Turkey by BYD, the world’s largest electric vehicle manufacturer and a rival to Tesla, points to a broader strategy extending to the digital mobility and battery ecosystem. 

In short, China’s competition with the US in the global technology field and its quest for digital independence have triggered a “technological cold war.” While US technology companies (Google, Amazon, Microsoft, etc.) have integrated the whole world into their digital networks, China has built its own state-protected technological ecosystem; thus, two separate models of digital capitalism have emerged. This divergence manifests itself today especially in the fields of 5G, AI, surveillance technologies, and critical semiconductors. As a result, the US, as the hegemonic power of digital capitalism, has set global standards; China, on the other hand, has built its own capital accumulation model over the years through protectionist methods. The situation described today as the “US-China technology war” is a clash of interests between two different capital blocs in the digital market.