100 Days since Wuhan

Warwick Powell and Charles Turner-Morris*

Fukuyama was wrong. Twenty-one years on from those infamous words – the ‘end of history’ – and Pax Americana is no longer. A world dominated by a single great power is over, so it would seem. America is pulling itself apart, in the absence of a cohesive common purpose. Multi-polarity is the norm, though as yet, the institutions and balances that will define the ‘new normal’ are still being contested. 

While the world has been understandably focused on COVID19, the 21st century dimensions of multi-polarity are getting clearer by the day. 

Mythological Frames

Roland Barthes once described how mythologies are created as ways of naturalising particular world-views. It does so by simplifying the world so that signs carry inherent meaning. He says myth “abolishes the complexity of human acts, it gives them the simplicity of essences”. 

When COVID19 first broke in China in late December 2019 and into January 2020, some in the western world interpreted this as an opportunity to recast the emerging – if unstable – geopolitical status. The opportunity was to engage in an active phase of myth-making; to simplify and confer upon the sign (Coronavirus in China) some inherent significance.

Chinese instability suited a world framed by the USA’s explicit recasting of China as a “strategic competitor”. Coronavirus was a threat to China’s economic development. It was a threat to the Chinese Party-State’s legitimacy. Coronavirus would undermine the authority of the Party and President Xi Jinping. It would dent Chinese ambitions, derail Xi’s plans for a Chinese century, and undermine the sustainability of the Belt and Road Initiative (BRI), which has become a lightning rod of western critique. It would tip the balance of power in Stage 2 “trade war” negotiations in America’s favour. Talk was that China may renege on its commitment. That was then.

All that had to be done was evacuate its citizens out of China, and sit back and watch.  Former Australian Prime Minister Kevin Rudd was warning of a “great complacency” in early February. Few listened. Fast forward 100 days from Wuhan’s lockdown (23/01/20), and these early expectations have foundered.

With hubris befriending the Coronavirus, infection and death spread like wildfire across much of the Western world. Perhaps this should have been anticipated. The reaction was to cast blame. The tit-for-tat has been unedifying. It’s been a distraction.  Meanwhile, and here’s the crux of our argument here, China continued to progress a clear pan-national agenda of infrastructure aimed at realising a set of substantive priorities that have been clear to even the most casual of observers, since at least 2016.

Intertwining Threads

In 2016 China launched its Healthy China 2030 plan (Chinese Summary here). No doubt, in the present context, the poetic symmetry won’t be missed. In that plan China committed to comprehensive overhaul of, among other things, food supply chains through whole of chain digitalisation and data transparency.

Along with HC2030, the country began an ambitious commitment to the development of 21st century digital infrastructure. Work on digitalising the currency began in earnest with the establishment of the Digital Currency Research Institute in January 2017. New digitalised payments interfaces via ubiquitous Apps have now become the norm. WeChat as an example, now has over 1 billion users. WeChat Pay launched in 2013.

In the week just gone, China launched its National Blockchain-based Services Network (BSN) and rolled out tests of its Digital Currency Electronic Payments (DCEP) initiative. Whatever challenges there may be to conventional infrastructure funding in the BRI framework in the near term post-COVID19, these two digital initiatives will do more to transform the shape of pan-national economic interaction than anything else. Take note.

Getting trade going again is a key imperative for China, as it is for most of the world’s other economies. China announced an additional 46 e-commerce trade zones on 8 April. The strategic driver now is to streamline the safe movement of goods, services, people and data to drive down costs, minimise delays and get value flowing through the veins of the body economy. 

With capacity to fund via a digital currency, against a backdrop of decisions reached last year with other members of the Shanghai Cooperation Organization to adopt national currencies as the preferred trading method, it is easy to see two (or more) worlds emerging insofar as trading with China is concerned.

Emerging Worlds

The first is the existing world, ‘business  as usual’. The second, is the world of blockchain-enabled trading superhighways (BETS). Blockchain technology is well suited to a multipolar world in which trust is a premium. So long as the mechanisms for information creation, storage and transfer are also multilateral (which is what blockchain can make happen without losing sleep), countries (and their constituent actors – firms, associations and such like) – can just focus on getting the business done.

The BSN is the digital backbone to deliver multiway connectivity to China’s trading partners. It will operate a new internet protocol to enable data sharing, and more efficient ways to value and exchange digitalised assets. Costs will be inordinately low, removing barriers to on-boarding. 

Blockchain technology has the potential to empower via data. When the aim is to grow national and global economies via expanding trade and investment flow, China’s push into blockchain, DCEP and dedicated trade e-commerce hubs, is advancing relentlessly. Cross-chain interoperability, backed by robust cryptography and privacy preservation technologies, has the potential to lock in new data-enabled value flows across the world.

The singular idea of a global internet is being re-written, not as myth, but in all of its complexity and imperfection. Some talk of the ‘splinternet’, others of the Balkanisation of Data. What we are seeing with China’s multilayered initiative is the design and implementation of an expansive pan-national network of digital infrastructure coupled with a potpourri of trade-enabling physical infrastructure. We are witnessing the deployment of a Digital Silk Road. The blockchain architecture and operating system, coupled with digital payments, is the capstone on a long pathway of Chinese strategic engagement with the world.

As China stands on the cusp of becoming the world’s largest economy on PPP terms, an active and constructive engagement with this digital infrastructure is now more important than ever – especially for small trading nations like Australia.

The Regional Comprehensive Economic Partnership (RCEP) – a multi-party pan-Asian framework to which both China and Australia are signatories – is one important opportunity to facilitate just such an engagement.

Australia’s National Blockchain Roadmap is in this context, an important stake in the ground. It talks about the importance of blockchains in food supply chains. We couldn’t agree more. The context is necessarily domestic and, at the same time, needs to be set firmly within a global trading frame.

We export about 70% of agricultural output and a quarter of that is sold to China. Ensuring Australia is connected to the new trade superhighways is in the national interest. Given the digital infrastructure threads now being drawn together around blockchain, digital currencies and cross border payments by China, cultivating a digital detente on a pan-regional basis is imperative. A modus vivendi would create the space in which genuinely inclusive regional institutions can be crafted. 

We are 100 days since Wuhan was locked down. There will be a time and a place to trawl over the entrails of this tawdry pandemic. Meanwhile, it’s time to place your BETS.

 

*Warwick Powell is Adjunct Professor at QUT and Founding Chairman of BeefLedger Limited, a blockchain-enabled cross-border supply chain initiative. Charles Turner-Morris is a director of BeefLedger Limited. This is based on research supported by funding from Food Agility CRC Ltd, funded under the Commonwealth Government CRC Program. The CRC Program supports industry-led collaborations between industry, researchers and the community. The opinions are the authors’ own.