ChinaWatch: What should China, EU make for digital cooperation under BRI, EU’s connectivity plan?

By Luigi Gambardella

Counting down to midnight, ringing the bells and making new year’s resolutions, this is how we greet a brand-new year. For Europe and China, the beginning of 2019 would also mark the right time for setting new goals, particularly for the promising digital sector.

The year 2018 registered a milestone for the China-proposed Belt and Road Initiative, or BRI — an ambitious plan to revitalize the ancient silk road that served for trading countless goods between Asia and Europe via the land or sea. The BRI enjoyed its fifth anniversary last year after being initiated by Chinese President Xi Jinping in 2013, and which has since gained great momentum.

Europe plays a key role in the BRI’s global push and has become actively involved. After a group of European countries joined the Asian Infrastructure Investment Bank, an important source of funding for the BRI, Brussels in September echoed with an ambitious Eurasian connectivity strategy ahead of the 12th Asia-Europe Meeting, which was attended by a host of national leaders including Chinese Premier Li Keqiang.

It is no surprise that both Europe and China highly value the importance of digitalization in connectivity against the backdrop of the new wave of tech innovations. They jointly decided to back each other’s efforts to seek international cooperation in the digital area.

As Brussels and Beijing have made plain, the BRI and the EU’s intercontinental plan, titled “Connecting Europe and Asia: The EU Strategy,” are anything but rivalries, and that’s also true of their digital connectivity ambitions.

In 2019, many opportunities await Europe and China to boost their digital cooperation under the BRI and the EU’s Europe-Asia connectivity strategy, but new efforts to advance those strategies are needed.

First, Europe and China should jump at the chance to further strengthen their dialogues and exchanges in the digital sector on many essential occasions scheduled later this year, among which the most important is the second Belt and Road Forum for International Cooperation, slated to take place in April 2019.

The forum is set to bring great opportunities for wider China-EU cooperation on connectivity, and digitalization is expected to stay atop the agenda.

Chinese President Xi already made a similar pledge. When addressing the first such high-level event in May 2017, Xi told the audience from more than 100 countries — including 29 national leaders — that Beijing sought to build a digital silk road. He vowed global cooperation.

The second forum in the months to come will be an occasion of great significance to renew leaders’ commitments on digital cooperation, and so are other high-level bilateral and international meetings. These include the annual China-EU summit, which usually takes place in the summer and the 2019 Group of Twenty (G20) meeting.

Next, established bilateral or multilateral links between China and European countries would facilitate the synergies between the BRI and the EU’s Eurasian connectivity strategy. Brussels and Beijing should make the most of, for instance, “16+1” mechanism between China and the Central and Eastern European countries, or the Italian government’s China Task Force, which aims to position Rome as “a privileged partner” in the BRI, to jointly work on their connectivity plans in the digital sector.

They could also start with tangible steps to walk the talk. The two sides can co-fund some projects to improve infrastructure for digitalization, bolster their e-commerce ties via cooperation on customs, logistics and so on, or facilitate companies from both continents to have more accesses to the other’s digital market. In the meantime, their coordination on the General Data Protection Regulation, or GDPR, is a must for businesses in both Europe and China, in particular, for their tech companies.

Last but not least, China and the EU could work to unleash potentials in specific areas. There exists a wide range of possibilities but the two should pay special attention to two fields that are embracing tremendous opportunities: tourism and e-health.

Both sectors represent vast markets with impressive potential. In tourism, China has for years been a top spender in the global market. In 2017, Chinese outbound visitors laid out $258 billion in total. Meanwhile, turning digital forges a new trend as Chinese travelers tend to use online channels to get information and book trips while platforms such as Alipay and WeChat Pay become the norm, especially among younger travelers.

To many Chinese observers, the e-health market in the world’s second-largest economy is phenomenal. According to data from the consulting company iResearch, from 2009 to 2016, the size of China’s Internet plus health care market has surged from 200 million yuan (about $29 million) to 22.3 billion yuan. Although the growth rate of the industry has slowed in the past two years, it has remained at around 40 percent.

China’s e-health sector is foreseen to have a big share of the whole healthcare market that, according to a report from consulting firm McKinsey, is projected to grow to $1 trillion in 2020.

More importantly, building better digital links between China and Europe in tourism and e-health sectors may be one of the direct ways to benefit Chinese and European people from every walk of life. In the end, both the BRI and the EU’s connectivity strategy are meant to bridge the divide, promote mutual understanding and serve the interests of their people.

This article appeared on ChinaWatch websites.