What Should Iran Ask from China?
Part 7 (Science and Information Technology)
An Iranian minister visits China in January of 2022 to sign a 25-year economic plan between Iran and China. As he returns, there is an unsolved question in his mind: “What should we ask from China?”
Well, this article tries to answer that question.
In my previous article I tried to emphasize contributions that China could have on Iranian Oil Trade. Here I expand what Iran could ask from China on Science and Information Technology.
Science and Information Technology
While China started key scientific and educational changes in 2011 with more than $100 billion in research and development, it only came to fruition years later, and generally in a specific dimension where most countries were short of Computer Chips. The Chinese supercomputers and robotic industry are among the most powerful in the world with a significant growth in recent years.
In 2015, China’s share of global microprocessor sales was about $13 billion, but by 2020, China had already started to secure its position with 6.3% annual growth. In 2021, China accounted for 9% of the market share (equivalent to about $40 billion). In 2020, China overtook Taiwan for the second year in a row, behind Europe and Japan (with a 10% market share).
If the same growth rate is maintained, by 2024 China’s annual revenue in this area will have reached $116 billion with a market share of about 18%, right behind the United States and South Korea.61 China is expected to overtake the US in Artificial Intelligence (AI) papers by 2030, with broader plans for its Quantum Computing and Blockchain.
In recent years, Chinese state-owned Telecommunications companies have increased their investment in submarine cables. Most of this investment is focused on infrastructure outside mainland China. In an electronic world, undersea cables are the main method of transmitting information, especially in the Pacific Ocean. In fact, the Digital Belt plan is taking shape in the Pacific Ocean.
The three Chinese state-owned companies investing the most in this sector have the power to decide where a cable should be laid, to which regions of the world it should be connected, and at what speed (bandwidth). As a result, cable owners are helping to transform the physical appearance of the global Internet. Internet traffic routing is not simply the shortest geographical route between “sender” and “receiver”, i.e. it is not necessarily sent in the fastest route possible. Traffic routers prefer faster routes to slower ones, which is why laying a new cable (with higher bandwidth than its neighbors) can be a way for governments to encourage traffic onto different routes, even across specific borders.
Suggestion
Since there are many financial benefits to invest in submarine cables within country borders — such as expanding connections to markets overseas, building infrastructure to support products and services (e.g. Cloud Data Centers), profiting from licensing, and cable bandwidth — it is not uncommon for companies to invest in such an endeavor. Submarine cable construction often involves several companies (from those that make internal fibers to those that cover fibers in metal), and it can take several weeks to install. As a result, international companies often enter into joint ventures for such projects or form consortia that manage projects between different owners on a global scale.
As of December 2020, 383 entities, both private and public, owned a total of 475 submarine cables located globally. Traditional Telecommunications companies such as AT&T in the US and Airtel in India, as well as new Internet companies such as Facebook and Google, will get involved in the project. They also include state-owned Telecommunications and investment companies such as Bharat Sanchar Nigam Ltd (India), Telecom Egypt (Egypt) and Ethio Telecom (Ethiopia). This type of activity is common among middle-income countries as well. Saudi Arabia, for instance, has invested $6.4 billion in the world’s new technologies alone, including $1 billion from global oil giant Aramco to build a transformative startup to support its entrepreneurs. The Saudi Telecommunications company has also invested $1 billion in submarine cable and data center infrastructure. Besides, the Saudi government has also invested $1 billion in the next generation of Metaverse and $ 1.4 billion in digital content and Blockchain.
With all this in mind, it is more than obvious that Iran should invest its oil export surplus, rather than keeping it in foreign accounts. Investment in high-yielding and long-term strategic projects providing alternatives to the oil and gas industry is key to equipping Iran with what’s needed for the changes to come in the next 30 years. The more these projects break Iran’s isolation in the international community in terms of security, the greater the volume of influence and concessions in others becomes. Also, the transfer of electronic chip technology is strategically significant for Iran. Iran must start to produce fully at least those processors which are required for its domestic needs. This technology will help to produce a variety of electronic devices in Iran. In January 2022, Saudi Arabia and Japan signed a contract to receive this technology. Iran can also receive it from China to reduce its costly imports.
