Unraveling the Digital Divide: The U.S. and China Divergence


The proclamation by Thomas L. Friedman in 2005 that the world was flat, leveling global opportunities, was grounded in burgeoning digital advancements. The subsequent surge was orchestrated by the United States, home to major Big Tech players. This led to a push for Information and Communication Technologies for Development (ICT4D) and set the stage for democratic transformations globally. However, recent events indicate a shift in this narrative, as the U.S. withdraws from key digital trade positions, reflecting a complex interplay between digital expansionism, global geopolitics, and the rise of China.


GS – 3 (Growth & Development)



Dimensions of the Article:

  • The U.S.-China Dynamics
  • Dimensions of the U.S. Declaration

The U.S.-China Dynamics:

  • Digital Trade Proposals: The U.S., aiming for a dominant role in digital globalization, crafted digital trade proposals seeking binding commitments from nations to deter future regulation of Big Tech. This approach faced staunch resistance from developing countries like India and South Africa.
  • A Change in Course: Surprisingly, in late October, the U.S. withdrew from its pivotal digital trade positions at the WTO, citing the need for domestic policy space to regulate Big Tech and Artificial Intelligence (AI). The move, while addressing concerns raised by developing nations, also underscores a significant shift in the global digital landscape.

Dimensions of the U.S. Declaration:

  • Unstated China Factor: A hidden motive behind the U.S. withdrawal is the ascent of China in the digital realm. The once “flat” world, under singular U.S. digital hegemony, has become more complex with China emerging as a digital superpower. The U.S. fears China’s potential global dominance in digital markets and its influence over the world’s digitalization.
  • Digital Exclusions and Security Concerns: The declaration hints at Cold War-like economic and security-driven exclusions, forming blocs with U.S. allies. Economic challenges and security threats arising from China’s pervasive digital presence globally contribute to this stance.

Way Forward:

  • Developing countries, including India, should capitalize on the emerging global consensus favoring robust digital regulations to rein in Big Tech and manage AI. The U.S.’s acknowledgment of the importance of national policy space around data, source code, and computing facilities is a positive development.
  • While embracing the need for strong digital regulations, developing nations must resist falling into a new trap of a digital Cold War, aligning with either the U.S. or China. A new paradigm for digital regulation should be coupled with robust digital industrial policies to foster domestic digital industry growth.


The historic U.S. declaration marks a turning point in global digital dynamics, acknowledging the necessity of national policy space. While it opens doors for developing countries to shape digital regulations, caution is warranted to avoid succumbing to a new digital Cold War. The focus should be on creating open global standards and infrastructures, fostering digital interoperability, and preventing undue dependencies on either the U.S. or China. Developing nations stand at a crucial juncture to navigate the evolving digital landscape with strategic foresight.