China: the role of technology in recovering from the crisis
This column was previously published in L’Opinion on 12th June 2020
China was the FIFO (First In, First Out) country in the Covid-19 crisis and now it wants to perceive it as an accelerator of certain trends, rather than as a disruption as the West perceives it as being. It is committed to finding the way back to growth by a new phase in the digital revolution that will change the way of life in China — for the state, for businesses and for individual citizens.
Firstly, China is convinced that the countries that have best kept the virus under control are those that used technology the most. Big Data in conjunction with the Smart City made it possible to adopt a decentralized approach to lockdown, based on taking account of local data which enabled the comparison between the number of hospital beds available and the frequency of physical contacts. Those countries that have come out on top — mostly Asian countries with the exception of Germany — have thereby been able to keep down the cost of the pandemic to both the economy and to human life by means of the three Ts: Tracking, Testing and Treating. In this way, Hong Kong has supposedly only suffered four deaths from the coronavirus whilst being the most densely populated area in the world.
A massive investment plan. Its success has reinforced China’s profound belief that the cities of the future will be built round a new form of connectivity brought about by technology that will be at the core of any growth during the next decade: cities will be connected to each other by high-speed trains, and connected internally by optimizing people flow; people and machines will be connected by the Internet of Things. These concepts are at the heart of the Chinese government’s investment plan: between now and 2025, 1,400 billion dollars will be invested in the “new infrastructure”, including 5G, artificial intelligence, cloud computing and blockchains.
“Above all, it is the Chinese people who are increasing the pace by their rapid adoption of new applications created to facilitate a return to normal life, post-Covid.”
This effort in the public sector looks even more promising when compounded by the same dynamic in the private sector, as in the case of the giant company Tencent, which has announced an annual investment figure of almost 15 billion dollars over the next five years. This is the only company to rival the GAFA, and no credible European company seems to be coming up with any similar firepower. The upswing in digitalization is now having an impact on the whole of the Chinese economy, meaning that new players in sectors that have remained untouched up to now — Ant in finance, Youdao in education, Ping An Good Doctor in healthcare — are showing exponential growth with the prospect of future penetration levels similar to those of online trading, already at over 30% in China.
The risk of separation. But, above all, it is the Chinese people who are increasing the pace by their rapid adoption of new applications created to facilitate a return to normal life, post-Covid: geo-tracking, identification, traceability, contactless services, robotization, risk mapping of streets and management of people flow. These are all means of restoring the confidence that is needed for economic recovery. The West, on the other hand, regards them as infringements of personal freedom and this leads to the rejection of technological innovation.
Unless Europe wakes up, this divergence of beliefs in technology could, in the next 18 months, produce a separation: recovery in China but stagnation in Europe. It makes one think back to what Robert Rauschenberg said, several decades ago, about his art: “If you don’t accept technology, you better go to another place because no place here is safe…”