European Union and China: Partners or Rivals in the Technology Sector of the Global South?

In a globalizing world economy, different players competing for technological and political supremacy have taken to the technology sector of the Global South to propel their rise to hegemonic power. The shift in the prime source of wealth and economic security from territorial control to world market shares provoked renewed competition for stakes in emerging economies. The growing capabilities and ubiquity of information and communication technologies (ICTs) warrant their relevance in international political economy, not least due to their potential to affect Strange’s pillars of structural power: on the one hand, a high degree of path dependency associated with technology adoption will affect production supremacy and possibly security; on the other hand, today’s standard-setting and norm development in multilateral fora will set the ethical and legal grounds for future technological attainments, shaping the knowledge pillar in the long-run. Trying to channel the diffusion and use of ICTs, virtually all governments have adopted some form of ICT policy. Arguably, the adoption rate of ICT policies reflects the significance ascribed to ICTs by national governments. Against this background, this paper adopts a mixed method approach to analyze various external factors that may favor or thwart the adoption of ICT policies and examines the differences in adoption patterns from 2013 to 2018 across macro-regions based on the ICT Regulatory Tracker compiled by the International Telecommunications Union (ITU). Multivariate regression analysis scrutinized the effect of various financial forces from abroad, including foreign direct investment inflows and stocks accumulated prior to the policy adoption, net official development assistance received, and whether a country was granted a credit by the International Monetary Fund. While also controlling for GDP per capita as a proxy for economic development, the analysis revealed consistent statistically significant differences in ICT policy adoption between macro-regions in the Global South with exacerbated divergences when taking into account membership in the Belt and Road Initiative. What explains the variation in ICT policy adoption between macro-regions in the Global South? This paper argues that the discrepancy arises from the diverging treatment of these regions in the foreign policies of the European Union and China. It will investigate to what extent the EU foreign policies such as the EU Neighborhood Policy and the EU Development Policy with emphasis on digital development shape the digital governance framework in emerging economies, and whether China’s infrastructure investments including in the telecommunications sector of developing countries spur or deter policy adoption. Finally, the inquiry will examine under which conditions the different approaches by the EU and China complement or defy one another, and the respective consequences for third states. The purpose of this study is to undertake a cross-regional comparison of European and Chinese engagement in other macro-regions in order to assess their current political and technological clout in the Global South—a vibrant field especially in view of the sharpening 5G rivalry. This will contribute to the broader debate of regional geoeconomic competition around the world and shed light on the importance of data-driven technologies in international political economy.