A tale of two crises: China's infosphere revolutions

30 April 2020

At the time of writing, it has only been a week since West Texas Intermediate (WTI) crude oil has traded with negative prices for the first time in history.

Somewhat predictably, it didn’t take long until pundits online picked up the story, and the ageing tech metaphor ‘data is the new oil’ was declared dead. What the life (and declared death) of the analogy should remind us of, however, is that both oil and data are dependent upon a surrounding infrastructure that makes them valuable commodities.

In the case of WTI, the current COVID-19 crisis had ‘cut oil demand by up to a third worldwide’ — thus seeing planes grounded and private cars parked, as the world ground to a halt — leading to major storage problems and an infrastructure breakdown in Cushing, Oklahoma, effectively tanking oil prices. WTI crude had quite literally become useless. Similarly, data needs an infosphere to become informational, or use-full.

In his 1999 book Philosophy and Computing, Philosopher Luciano Floridi defines the infosphere as “the constitutive source of the environment of modern life“. He adds, “Infosphere is a neologism coined in the seventies. It is based on ‘biosphere’, a term referring to that limited region on our planet that supports life. […] Minimally, infosphere denotes the whole informational environment constituted by all informational entities, their properties, interactions, processes, and mutual relations.“

In the infosphere, according to Floridi, the distinction between online and offline life is gradually eroded and its technologies – 'internet and communication technologies', or 'ICTs' — are in the process of “enveloping the world to transform it into an ICT-friendly place.“

While ICTs are increasingly shaping this new reality by themselves, one should not forget that historically, these infosphere revolutions have been human-driven, effectively perpetuating human bias and political strategy within the very groundwork of informational infrastructures that envelop us (and will continue to envelop us) all in mature information societies. This fact should make us especially vigilant towards infosphere's atmospheric changes.

This article wants to take a brief look at how two crises, SARS and the current COVID-19 crisis, have been watershed moments for significant infosphere revolutions in China. The first such crisis took place at a time when the Chinese internet, and its data-processing technologies, were in its infancy and contributed to the rise of a giant in China's domestic infosphere: Alibaba. The second crisis, the on-going COVID-19 crisis, looks to have significant consequences for the way China is going to shape its society and the global infosphere.

While the rest of the world is currently preoccupied with the fallout from COVID-19, it looks as if China is again in the process of revolutionising its infosphere and quietly taking steps towards its strategic goals: ”ending the hegemony of the dollar, and reducing technological dependence on the US for foundational technologies.“

Recalled to life

In November 2002, China saw a ‘mystery pneumonia’ outbreak. By March 2003, 792 cases and 31 deaths had been reported by officials in the outbreak's epicentre, Guandong Province.

What later became known as SARS or SARS-CoV, posed a significant challenge to the Chinese economy. It is now estimated that the Chinese economy would have grown between 0.5 and 1 per cent more if the SARS outbreak had not happened.

Over the course of the outbreak, factories were closed and manufacturing suffered, but as people stayed home in self-imposed quarantine, retail turned out to be among the worst-hit sectors: growth in retail moderated to the lowest growth on record in May 2003. These quarantine conditions had a surprising side-effect, however: integrating millions of Chinese into the reality-making infosphere of e-commerce.

In 1998, the year Sergei Brin and Larry Page founded Google – and 5 years before the SARS outbreak – “just 0.2 per cent of the Chinese population was connected to the internet, compared to 30 per cent in the United States“, as Kai-Fu Lee, former president of Google China, points out in his 2018 book AI Superpowers: China, Silicon Valley and the New World Order.

Access to the internet was still dependent upon expensive and not widely rolled out tech (computers, modems, etc.). When Jack Ma founded Alibaba in 1999, it initially functioned as an online business to business (B2B) marketplace, its customers being mainly other (foreign) businesses, and its competitors mostly Chinese firms offering similar services. There simply wasn't an infrastructure yet for business to end consumer (B2B) or customer to customer (C2C) e-commerce.

In addition to limited access to the internet, Chinese shoppers (like many shoppers around the world when e-commerce was starting out) had been reluctant to shop online, wanting to see and test the product before making a purchasing decision. Shortly before the outbreak, Alibaba had roughly 400 employees and had just turned a profit for the first time. When employee Song Jie contracted the disease at the 93rd Canton fair in Hangzhou, Jack Ma put his entire company into lockdown on 6 May 2003. Work continued in quarantine. On 7 May, ”Alibaba’s business volume set a new record, with more than 12,500 business leads in China alone.“

Four days into working remotely, on 10 May, Taobao, the site that would push eBay out of China within a matter of years, was born. Of course, it wasn't SARS alone that led to Taobao replacing eBay, and Ma was careful to note that a tragedy that had caused thousands of deaths could not be called an opportunity. Taobao managed to replace eBay mainly because it made basic functions free, while eBay charged sellers a fee to list their products.

However, SARS exacerbated a crucial issue that Taobao's success depended on: the aforementioned deficit of user trust in online shopping. To overcome this, Jack Ma's team created Alipay, which served to create trust in online purchases by holding off payment to sellers until the buyer confirmed they had received the purchased product. Today, Alibaba has 711 million annual active users across its shopping platforms. At the time of the SARS outbreak, 6 per cent of the Chinese population had access to the internet. While this doesn't sound like much at first, taking into account the size of China's population, this translates to about 77 million internet users.

The United States, in comparison, where 61.9 per cent had access to the internet in 2003, had roughly 180 million internet user at the same time. By forcing consumers to adapt to the new necessity of shopping online, and conversely, requiring trust-building innovation from companies, the SARS outbreak laid the foundation of millions of citizens engaging with an internet that, for the first time, blurred the line between online and offline life for many Chinese customers, increasingly intertwining their offline lives with the infosphere.

In Alibaba: The House That Jack Ma Built, Duncan Clarke sums it up succinctly: „For many Chinese, the SARS outbreak […] came by chance, making people realise what they could do at home. The full power of China’s e-commerce boom may not have been felt until years later, but this was indeed the beginning.”

The golden thread

When the novel coronavirus (SARS-CoV-2) emerged in China's Hubei province in December 2019, the Chinese economic landscape looked a lot different than it did at the time of the SARS outbreak. China's economy was a lot bigger (and weaker), supply chains were globalised, and most importantly, the internet had long outgrown its nascent stage, with around 840 million users in 2019 — the largest online community in the world.

Additionally, the novel coronavirus was deadlier and spread faster than SARS, posing greater challenges to containment efforts. The World Economic Forum writes: “it's outbreak in China presented the fastest spread, the widest scope of infections and the greatest degree of difficulty in controlling infections of any public health emergency since the founding of the People’s Republic of China in 1949“.

To combat these ‘greatest difficulties’, the infosphere revolution pioneered by tech companies such as Alibaba during and after the SARS outbreak now functions as the building block for tech solutionism leveraged to deal with the coronavirus crisis, with real (and lasting) implications for China's domestic and foreign policy.

Domestically, COVID-19 created a state of emergency that allowed the ubiquitous infosphere to intrude ever more into people's lives in the form of government surveillance, tracking online and offline behaviour, all the while continually shrinking the areas of life that could still be considered truly ‘offline’.

While, as stated above, only 6 per cent of the population had access to the internet during the SARS outbreak, that percentage has now risen to more than 61 per cent. Then and now, the Chinese government tried to limit the dissemination of information during the outbreaks.

With a comparatively small 'online population' in 2003, government control over information spread was arguably much greater (and easier) than it is now. In turn, the novel coronavirus crisis has again laid bare the paradoxical situation in which today's Chinese domestic infosphere is revolutionising — and not in the positive sense of the word – ever new informational technology to contain the dissemination of vast amounts of information made possible by the very same informational technology.

Maya Wang, a China researcher for Human Rights Watch sums this up well in a recent issue of the New York Times: “Such surveillance creep would have historical precedent. [...] China has a record of using major events, including the 2008 Beijing Olympics and the 2010 World Expo in Shanghai, to introduce new monitoring tools that outlast their original purpose, Ms Wang said“.

She continues: “The coronavirus outbreak is proving to be one of those landmarks in the history of the spread of mass surveillance in China.” The effects of the coronavirus crisis on China's foreign policy and geopolitical strategy should also not be underestimated. Shortly after localised outbreaks had turned into a pandemic, China harnessed the global public health crisis for soft power in the form of health diplomacy — a strategy that has since largely backfired.

Significantly less attention has been paid to the way the current crisis has become a testing ground for the key emerging technologies that form part of China's techno-strategic goal of becoming a major cyber power, and a global leader in the digital economy, most importantly AI, blockchain, and 5G.

In China's socialist market economy, technological innovation is not often left to chance. In July 2017, the State Council of China presented the New Generation Artificial Intelligence Development Plan (AIDP), effectively enshrining China's plan to become the leading AI power by 2030 into national policy.

Along with Made in China 2025, released in May 2015 – it forms the core of China’s AI strategy. October 2019 presented another defining moment for China's commitment to these strategies. In a speech, XI Jinping announced that China needed to “seize the opportunities“ presented by blockchain and described it as an „important breakthrough in independent innovation of core technologies. In October, as Arjun Kharpal writes, “The technology [was] still very much in its early stages“, but “development of the technology is certainly underway. Since March, over 500 blockchain projects have been registered with the Cyber Administration of China“.

On 17 February 2020, The People's Daily, official newspaper and propaganda tool of the Central Committee of the Communist Party of China, published an article titled ‘Blockchain technology improves coronavirus response’, claiming that “from Feb. 1 to 14, at least 20 applications based on blockchain were launched to tackle the emerging challenges.“

The article lists the application of blockchain technology related to various challenges posed by the coronavirus pandemic: online health consultations and screenings, Access Pass, an app on WeChat that generates QR codes to enable residents to enter gated communities (and, presumably, will also work to keep others out), reviewing, recording and tracking of supply chains relevant for epidemic prevention materials, etc.

The article concludes by lauding blockchain's ability to “dispel rumours, helping citizens to cope with the epidemic in a positive and reasonable way“, hinting at the fact that blockchain's traceability and its resistance to tampering will ensure that the information disseminated and the way blockchain is used is government approved by blurring the lines of security and secrecy.

Along with the aforementioned technologies, it is to be expected that this use of blockchain will outlast its original purpose. That this not only paints a catastrophically dystopian future for China's public sphere is evident in the way China is using the crisis to gear up to expand its authoritarian technocratic aspirations beyond its borders.

The coronavirus crisis and, correspondingly, the looming global financial crisis, has newly focused China's attention on the use of blockchain in its Belt and Road Initiative (BRI). Until recently, coverage of China's 'Digital Silk Road' project was mostly narrowed down to debate around 5G. With the building of physical infrastructure currently close to impossible, journalists (and others) would do well to register the atmospheric changes in China's infosphere alluded to above, instead of claiming that the '‘Coronavirus Outbreak Puts Belt And Road Projects On Hold, For Now’.

Just recently, on 20 April 2020, China's National Development and Reform Commission (NDRC), the cabinet-level department in charge of crafting economic policies and strategy, announced to reporters that blockchain was now part of its emerging technology strategy. On 25 April 2020, China launched its National Blockchain Service Network (BSN) which some journalists are already describing as the ‘foundation of a whole new futuristic age’.

It is set to become ‘the key infrastructure-of-infrastructures that allows the vertical integration of cloud computing, 5G communications, industrial IoT, AI and big data, with fintech and other application-level services overlaid on the stack.’ With a global launch date set for June 25, the importance of this cannot be overstated.

As Michael Sung writes for coindesk.com:

“The scale of the BSN is breathtaking, with a hundred city nodes across China at launch and participation by all three major national telecoms and major framework providers on the mainland. The central government has developed a master top-down plan to connect all the major cities in the country, rolling out to 200 cities over the next year and rapidly to all 451 prefecture-level cities thereafter. […] The network will also form the backbone to the Digital Silk Road to provide interconnectivity to all of China's trade partners around the globe.“

While the rest of the world is currently preoccupied with the fallout from COVID-19, it looks as if China is again in the process of revolutionising its infosphere and quietly taking steps towards its strategic goals: “ending the hegemony of the dollar, and reducing technological dependence on the US for foundational technologies”.

The Track of a Storm

It is perhaps too early to tell whether the ongoing coronavirus crisis will turn out to be a similarly defining moment for China's geopolitical tech strategy, as it has been for mass surveillance technology in China's public sphere and as the SARS outbreak had been for Chinese e-commerce and the way the Chinese population interacted with the internet. However, one thing seems certain: the current storm has already created a track that follows along the Digital Silk Road.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Lisa-Maria Hönig has an MA in philosophy from LMU Munich. Her main research has been in practical philosophy, especially political philosophy and ethics. She is currently working on a PhD exploring China's role in shaping the ethics of emerging technologies and the challenge this poses to the notion of universalist ethics and European foreign policy. Image credit: President of Russia.

In Focus, Most Popular9DLApril 30, 2020China, Covid-19, Internet, United States