COVID-19 Forcing China to Focus on Blockchain Projects in Its Belt and Road Initiative
The ongoing COVID-19 pandemic has affected almost the entire world. Both large and small, countries have been struggling to deal with the consequences of the virus and keep their economies afloat. And while China, which was hit the first and the hardest with the outbreak, has quickly managed to restore normalcy, it doesn’t mean that it isn’t suffering from dire economic consequences.
One of the biggest problems the country is currently facing is the delays in its massive Belt and Road initiative. A massive infrastructure project that spans almost half the globe, Belt and Road has been seriously affected by the crisis that developed in many countries that have taken loans from China. According to a report from the U.S. Council on Foreign Relations, Djibouti, Laos, Maldives, Pakistan, and Zambia are just some of the countries that have asked China either to renegotiate or forgive Belt and Road loans. Kyrgyzstan and Sri Lanka have already extracted concessions, Bloomberg reported earlier today, with other countries poised to join relatively soon.
The 190-page report was based on the findings of an independent task force chaired by former Treasury Secretary Jacob Lew and retired Admiral Gary Roughead. Its purpose was to analyze the current state of the Belt and Road initiative and help the U.S. calibrate an effective response to it.
The first reactions to the Belt and Road initiative were made by the Obama administration, which set out to pursue a more constructive engagement with China. The Trump administration took on a more confrontational approach as it identified the initiative as a serious threat to the U.S. One of the first orders of business the Trump administration took against China was banning the sales of 5G wireless network gear, but the council noted that the biggest danger Belt and Road poses to the U.S. isn’t wireless—it’s digital.
It’s China’s push in blockchain that poses the most serious threat to the U.S., the report noted. The council identified China’s Blockchain Service Network (BSN) as the most threatening blockchain infrastructure. With dozens of major global blockchain projects joining the network, the U.S. could lose its dominance over the burgeoning technology sector before it even reaches mainstream adoption.
“Such integration also allows Beijing to bring this “international plumbing,” including the network infrastructure in Australia, Brazil, France, Japan, South Africa, and the United States, under its influence,” the report concluded.
And it seems that China has also identified blockchain technology as its strongest weapon against the U.S. The country has been investing unprecedented time, money, and effort into developing its digital yuan and launching networks that provide cheap and easy-to-use infrastructure to projects looking to launch their products on a blockchain.