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Contracting practices are systematized into broader techno-nationalist development strategies, in which platform firms are assigned roles as national champions. For instance, China’s National Development and Reform Commission approved investment plans for a range of tech giants in mid-2023 (Tang and Nulimaimaiti, 2023). This paved the way for them to access substantial state resources, including an anticipated \$139 bn worth of government bond-financed funding directed towards developing ‘new productive forces’ in advanced technologies (including big data and AI) (Pomfret et al., 2024). Under the 2017 ‘AI New Generation Artificial Intelligence Development Plan’, fifteen firms were afforded key roles in developing open AI platforms for specific industrial purposes. These included Baidu (autonomous vehicles), Alibaba Group (smart cities), Tencent (medical imaging), and iFlyTek (natural language processing) (Larsen, 2019; Roberts et al., 2021). Designated firms are afforded access to privileged state financial and data resources (Horowitz et al., 2018) which aligns state developmental objectives with profit incentives for platforms. Baidu, for instance, was able to successfully leverage its role as a AI Open Innovation Platform provider to develop its Apollo autonomous driving platform – attracting third-party firms such as BYD (Ren, 2022), and leveraging its position to become a major provider of autonomous driving ride-hailing services.⁴ Its software is open access and available for collaborators and rivals to both build on and develop. Partly due to this concerted techno-industrial policy drive, China now significantly leads the United States in AI patents filings (Bloomberg News, 2023).

National security is a crucial component of China’s techno-nationalist development plans. Platform firms play an important role in augmenting China’s military capabilities, through its ‘military-civil fusion’ (MCF) efforts to incorporate private-sector innovations into previously state-dominated military procurement (White and Yu, 2023). By one estimate \$68.5 bn ofstate financing has been deployed on MCF projects from 2015 to 2019, with evidence that Alibaba, Tencent, and Baidu have collaborated with Chinese military institutions (Kania and Laskai, 2021). For example, the Joint Laboratory for Intelligent Command and Control Technologies was established by Baidu and the state-owned defence firm China Electronics Technology Group (CETC), and its aim is to upgrade the Chinese military’s information warfare capabilities (Creemers, 2019). Military contracts are simply the tip of a much larger iceberg. China’s radically expanded conception of national security prioritizes substantive cooperation from its digital platform firms over individual data protection rights (Bradford, 2023) – from surveillance practices (Huang and Tsai, 2022) to consumer safety regulations (Martens and Zhao, 2021). China’s government has also directed state-owned enterprises to replace US enterprise software with Chinese equivalents by 2027 through its secretive ‘Delete America’ directive (Lin, 2024).

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4 BYD subsequently broke its contract with Baidu/Apollo to work towards establishing its own autonomous driving software.

China’s platform economy is further characterized by a state-directed form of financialization (Jia and Winseck, 2018). Despite the legacy of the 2021 regulatory crackdown, China’s platforms still enjoy high valuations. To the consternation of some American politicians, US investors have been and remain major financiers of China’s digital technology firms (see Table 4), while US IPOs remain the goal of many Chinese platforms. China’s highly open investment regime has enabled US investors (especially institutions) to take major stakes in these firms (Shen, 2020).

Despite their nominal private and global ownership, Chinese platforms also remain to a considerable degree under the effective control of China’s partystate. Foreign investment into restricted sectors like telecoms is channelled through Variable Interest Entity (VIE) structures, where overseas investors hold shares in offshore shell companies rather than direct equity in the Chinese operating firms. VIE structures bypass foreign ownership prohibitions but operate in a legal grey area within China. Crucially, they grant foreigners limited voting rights, concentrating control with domestic founders and investors. The party-state maintains decisive leverage through regulation, licensing, embedded Party influence, and the ever-present threat of enforcement actions – helping to ensuring platforms align with state objectives regardless of their ownership structure (Chen, 2022).

Government guidance funds (GGFs), which deploy a mixture of state and private capital towards strategic goals, are another important tool. GGFs (including the prominent state-operated China Internet Investment Fund) controlled over \$1.5 trillion in capital in 2021 (Wei et al., 2023). Capital steered by government guidance funds is deployed overwhelmingly to the technology sector. While a majority is invested in hardware development (especially semiconductor components), at least 17% is invested in software and computer services-based projects. Thanks to enormous investments in technology startups from GGFs, platform giants, and private (domestic and international) investors, China now rivals the United States in its share of global unicorn firms (unlisted startups valued at over \$1 bn). In 2023, China produced 56 unicorns, second only to the US 70. Over one-third of Chinese startups were spun out of state-owned enterprises (Hurun, 2024).

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The state also plays a role as direct (minority) owner of platform firms. Chinese state entities have taken ‘golden shares’ in a number firms like Alibaba, Tencent, and ByteDance. Alibaba recently disclosed that state funds had purchased such stakes in over twelve of its business entities (Zheng, 2024).

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These specially issued shares, though nominally small, permit state agencies significant powers to nominate company directors or grant them privileged control over board-level decision-making processes. Even when not used directly, they are likely to restrict the independence of companies and offer insight into their operations for the party-state – by embedding cadres in privileged positions within big tech firms.

None of this is to say that the party-state enjoys total or unidirectional power over its platform sector. On the contrary, it remains deeply reliant upon the dynamism and innovation capabilities of the private economy. The ‘regulatory storm’ ultimately blew over in 2023, and Jack Ma was politically rehabilitated in February of 2025 when President Xi convened a forum with Chinese tech leaders (Zhang, 2025). The CEO of Hangzhou’s DeepSeek – a private AI firm with few connections to the party-state which launched its DeepSeek-R1 large language model the month before – was also in attendance. Xi proclaimed his commitment to deploying the full resources of the state towards supporting the development of the new breed of AI models being developed or sponsored by China’s technology firms at a Politburo study session in April 2025 (Xinhua, 2025).

4.4 Internationalization Drive

China’s digital giants have made significant progress in their efforts to expand overseas. Four of the US top-ten most downloaded smartphone apps are Chinese owned (see Table 5). And Alibaba Group, for instance, derives over a third of its revenues from its international operations (Liu, 2024b). China’s platform firms have profit motives firmly in mind when growing overseas operations. As Shen (2022b) writes, there exist ‘complicated forms of power struggles among different government entities and units of internet capital across hardware, network and application layers’. Firms like Tencent and Alibaba compete directly with one another for market share in fields like cloud computing.

Rather than acting as a constraint on their competitiveness, engagement with the state provides critical support for Chinese platforms’ efforts to internationalize their businesses. Key in this regard is the ‘Digital Silk Road’ (DSR), which was launched in 2017 as a component of the broader Belt and Road Initiative (BRI), and aims to consolidate, integrate, and expand the activities of China’s platform firms in the name of international development objectives. The DSR is necessary precisely because most of what nominally constitute its activities are driven by the commercial decisions ofprivate internet firms, rather than centrally co-ordinated by ministries or carried out by state actors.

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The importance of the party-state’s support for China’s private internet giants should not be underestimated. China’s platform firms mobilize the Digital Silk Road (DSR) like a franchise model, seeking to obtain official policy support for their profit-driven investment decisions (Triolo, 2022). China’s telecoms firms are encouraged to invest directly in provisioning of hard infrastructure overseas as part of the BRI and DSR. Subject to soft budget constraints (by way of preferential access to state financing), they are consequently able to prioritize strategic objectives, such as expanding coverage at the expense of profits. Private firms operating at other layers of the stack (see Table 5) leverage Chinese state firms’ significant cost advantages in providing hardware such as undersea cabling, 5/6 G base stations, and telecommunications networks. Contracts and financing for hard infrastructure often include conditions necessitating further spending with Chinese entities or simply are only interoperable with Chinese software providers – and so produce ‘cross-layer dependencies’ (Heeks et al., 2024). As such, multiple products and services are ‘bundled’ with one another, integrating Chinese firms across layers of a third country’s technology stack.

China’s state platform capitalism is perhaps most visible overseas in Southeast Asia, where Chinese platforms have expanded rapidly (Jia et al., 2018). Overseas Chinese populations with have provided a ready audience for Chinese e-commerce, social media, and digital payments platforms. And governments in the region often have few reservations about collaborating with Chinese firms – especially when major investments and favourable financing deals are on offer. In Malaysia, the state-backed Malaysia Digital Economy Corporation collaborated with Alibaba’s Cainiao logistics platform and Lazada e-commerce system to develop a Digital Free Trade Zone (DFTZ) as part of a major Kuala Lumpur logistics cluster in 2017 (Naughton, 2020a). The DFTZ is the first major overseas project to incorporate the Ali-led electronic World Trade Platform (eWTP), a digital trade facilitation initiative initiated by Jack Ma endorsed by the 2016 G20 summit. Alibaba collaborated with Chinese ministerial heads to obtain permission for private provision of customs checks through online verification and clearance mechanisms in support of the DFTZ (Wang and Yu, 2022). A second eWTP-integrated zone went into operation in Thailand in 2022 (Cao, 2022). In Indonesia, Huawei and ZTE increasingly provide extensive physical networking infrastructure, software solutions and cybersecurity training packages to local and national governments (Priyandita et al., 2022). This has enabled and encouraged the entry ofChinese smartphone, fintech, and cloud players into Indonesia at scale (Rakhmat, 2022, He, 2024).

China’s firms have expanded to challenge US incumbents because they offer vital digital infrastructures and services at highly competitive prices. This is especially so in Global South markets where weak competition and high demand for connectivity exists (Ho et al., 2023). Nevertheless, Chinese platform internationalization gives substantial power to Chinese firms as they embed third countries within a Chinese ‘digital ecosystem’ (Hinane El-Kadi, 2024). And the Chinese state plays a proactive role in supporting and securing the international expansion of its digital technology giants, re-emphasizing its commitment to the DSR at the Xi’an World Internet Conference in 2024 (Jiang, 2024). China’s top economic planning body, the National Development and Reform Commission, recently published a strategy document pledging to further expand DSR activities as a policy priority in the coming years. As China’s platforms develop international commercial expansion strategies which more systematically incorporate the support of state actors and agencies (Oh and No, 2020), they have begun to make significant progress in challenging US dominance of global cyberspace, while assisting Chinese efforts to exercise digital ‘infrastructural power’ globally (Munn, 2023).

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Part II Spheres of Competition

Part I charted the rise of a new system of competition in the global political economy: state platform capitalism. Section 1 provided a schematic history and conceptualization of SPC’s logic. Focusing on the world’s two foremost digital ecosystems, the United States and China, Sections 2 and 3 pointed out how these differ both in their internal configurations of state-platform relations, and in their mechanisms for international expansion. However, these sections also identified striking similarities between how the Chinese and US states engage with their domestic digital platform firms collaboratively – to ensure their international influence by building geographically extensive ‘national’ technology stacks.

Discrete, national technology stacks do not, ofcourse, exist in reality. As long as the internet is built upon an open architecture, its total balkanization remains a technical impossibility (Mueller, 2017). Both the United States and Chinese national stacks continue to interpenetrate one another, with considerable Chinese hardware and software used in the United States, and likewise with American technology in China. And both stacks have long since overspilled their national boundaries. The United States in particular exhibits a worldspanning presence, while China is making considerable progress in internationalizing its digital technology ecosystem.

Nevertheless, the emergence of platform giants has made it considerably easier to develop sanitized and nationally centred digital ecosystems, which are difficult, undesirable or inconvenient for users to leave (Kontareva and Kenney, 2023; Mihelj, 2023). The power of first-mover advantage and lock-in, combined with their world-leading capabilities, ties many global users (individuals, firms, and governments) to US digital platforms. And the rise of state capitalist initiatives such as the Clean Network serves to deter adoption of Chinese technology. Where Chinese technologies are in use, bundling practices enabling interoperability between tiered layers of hardware and software make switching to US technologies overly costly and/or burdensome, encouraging further integration with Chinese platforms. As such, while the internet remains immune to ‘technical fragmentation’, the US and China’s national stacks are increasingly ‘real abstractions’ which shape technology adoption and digital ecosystems well beyond their borders (de Seta, 2021).

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In Part II, we elaborate on how these digital ecosystems are increasingly defined by their competition and rivalry, as the United States and China compete to secure platform dominance and to reap the gains of governing through platforms. The United States, as the global digital incumbent, wants to preserve and expand its global platform power by ensuring no rival firms can emerge and that ‘latecomer industrial strategies’ ofthe kind pursued by China do not significantly displace US incumbents. The United States is mobilizing an expanding suite of tools to meet this challenge. As a latecomer, China is able to employ a different competition strategy to the United States. It is more accepting of its technologies being integrated with others – including those from the United States – in third countries. Meanwhile the United States has pursued a more rigorous ‘stack rationalization’ approach, attempting to eliminate as far as possible all traces ofChinese technology it deems threatening. For now, this grants China an advantage, as it can focus more attention on rollout, implementation, and ecosystem development, while the United States must do all this alongside devising exclusionary agreements and encouraging adoption of more expensive alternatives to Chinese suppliers. In the process, SPC competition increasingly and systematically blurs the boundaries between state and private actors.

In the remainder ofthis text, we examine how this competition unfolds across four different spheres: digital currencies, cybersecurity, standards, and smart cities. We focus on these four spheres because while none are traditional sectors ofthe economy, but they represent key areas where powerful platform firms and states can reshape rules, institutions, and norms in ways which embed their technologies ever more deeply in third countries’ technology stacks.

5 Digital Currencies

The United States is the world’s supreme monetary power. The US dollar remains the most widely used currency for cross-border payments by far, representing about half of all trade settlements and 62% of global forex reserves. The dollar maintains an enduring power vis-à-vis its major rivals, including the renminbi (RMB).

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[T]here appears to be just one true pole in the system–namely, the US dollar. The euro, number two globally, lags well behind the greenback; other secondary currencies appear to be little more than niche players; and the RMB is so far back in the race that it still barely even registers. (Benney and Cohen, 2022, 458)

The dollar’s dominance is tied up with the outsized role of the US financial system – the world’s most powerful by virtually any metric (see Fichtner, 2017). The dollar, the US banking system, and the Fed provide the financial and technical architecture which enable other parties in the world economy to pursue international trade and investment. The global dollar system can itself be understood as a kind of platform, since most greenback transactions do not involve paper currency but rather movements on digital ledgers controlled by messaging infrastructure. Just one-tenth of dollars exists in physical form (Black, 2020). A majority of all dollar deposits are held outside of the United States as ‘eurodollars’.

Some economies such as El Salvador are fully dollarized, while a sizeable minority peg their currencies to its value. The US government exerts power over this system through the Federal Reserve’s autonomy over broad money creation and the setting of interest rates. Dollar dominance is upheld by the ‘swap lines’ through which the US Federal Reserve trades dollars for other currencies with central banks’ (Pape, 2022), acting as an effective lender of last resort during periods of currency pressure. The dollar’s stability, ubiquity, and the liquidity of currency and US financial markets grant the United States the ‘exorbitant privilege’ of an ability to run endless deficits, alongside the ‘exorbitant burden’ of consuming (via debt and security issuance) the world’s surpluses (Pettis, 2011).

The dollar’s global role as financial lubricant within the international banking system is underpinned by the messaging system provided by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Clearing House Interbank Payments System (CHIPS) which nets and clears interbank payments, and the Fedwire Funds Service which manages central bank transactions. All three are dependent upon American regulatory institutions to function (Carter, 2012). Even SWIFT, despite being formally headquartered in Brussels and regulated by the Belgian central bank, is vulnerable to US financial sanctions due to its Virginia-based mirroring data centre. This has made it a key source of information for US counter-terror operations (Farrell and Newman,

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