In Geopolitics Today - Thursday, June 24th
China’s Incredible Digital Payment Transformation and Russia’s Entrenched Position in Syria
China’s Incredible Digital Payment Transformation
China used to have a cash-based economy prior to the widespread introduction of the QR-code system. Online payments have transformed the Chinese economy in an unprecedented way. One of the reasons for this tremendous success of online payments is the relative lack of regulation at the time these platforms were built.
When the mobile payment applications were first getting off the ground, authorities were hands-off in dealing with them, both due to a lack of familiarity with the new technology and because of the small size of the pie that early adopters occupied in the banking sector. Government policy at that time was also encouraging growth in the e-commerce sector.
The meteoric rise of Alipay and WeChat Pay in China has brought convenience to more than a billion consumers. Ant Group and Tencent have consolidated their market shares into market-dominating positions. But the time when domestic regulators turn a blind eye to fintech and cryptocurrency expansion appears to be over according to developments in recent months.
Opportunities for partnership and expansion abroad, if leveraged successfully, still persist. Systems already in place in Africa, Latin America, and Southeast Asia will be used to incentivise future cooperation in each region, with the experience Chinese fintech entrepreneurs are gaining in China already playing a significant part behind its international reach.
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Russia’s Entrenched Position in Syria
Russia came into the fold in Syria with considerable military matériel in 2015, with a major military intervention that played a consequential role in defeating anti-government rebel groups. Most of the Russian support was logistical in nature, such as the provision of military supplies and assistance in repairing Russian tanks, artillery and other systems. In addition, air support for Syrian forces have been considerable, with over 45,000 sorties flown since 2013.
None of this would have been possible without the new Hmeimim airbase. The base was rapidly built by Russia next to the main airport outside Latakia City, which has a port that could support the appropriate cargo ships necessary to bring in supplies for construction. The new Hmeimim airbase is in a favourable strategic position, north of the port of Tartus and just 50 kilometres from the Turkish border.
The Russian airstrikes have done major damage to Assad’s opponents, and this has led to further cooperation between the Syrian and Russian governments. In 2018, Syria and Russia signed a new treaty expanding and legalizing Russian control over the growing Tartus and Hmeimim bases under a 49-year lease agreement. In 2020, Syria agreed to expand the 2018 agreement, and provided Russia with additional land next to Hmeimim for an expansion. All indications point toward Russia moving in to stay.
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