The Digital Silk Road in a Cash-Limited Society: A Critical Analysis of Chinese Fintech Expansion and its Impact on Financial Sovereignty in Malawi
DOI:
https://doi.org/10.55578/jedip.2603.002Keywords:
Digital Silk Road, Financial Sovereignty, Technological Lock-in, Path Dependence, Infrastructural Power, MalawiAbstract
China’s Digital Silk Road (DSR) promises to bridge profound financial inclusion gaps in cash-limited societies like Malawi, yet its implications for financial sovereignty remain critically underexamined. This article employs a qualitative case study methodology, framed by global governance and development economics perspectives, to analyze the expansion of Chinese fintech in Malawi. The findings reveal that Malawi’s structural vulnerabilities create a permissive environment for the adoption of integrated Chinese digital ecosystems. This process initiates a form of technological integration characterized by path dependence through technological lock-in, which creates high switching costs that constrain future options, and the transfer of financial data to servers outside national jurisdiction (data externalization), limiting domestic governance capacity. These dynamics reflect contemporary core-periphery dynamics in the digital economy. Concurrently, the DSR serves as a tool of infrastructural power, defined as the ability to project influence by controlling the critical networks on which other states depend, thereby extending China’s geopolitical leverage by integrating its technology into the heart of Malawi’s financial system. The study concludes that the DSR, while offering developmental benefits, simultaneously presents challenges to financial sovereignty by creating structural dependencies that may constrain Malawi’s policy autonomy and embed external strategic interests within its economic governance framework. It underscores the necessity for strategic digital governance to navigate the sovereignty-technology trade-off, which is a universal challenge for developing nations navigating digital integration. By framing the DSR through platform capitalism and global governance perspectives, this study contributes to understanding technological statecraft in the Global South and offers empirically grounded analysis to inform policy development.
References
1. Amin, S. (1974). Accumulation on a world scale: A critique of the theory of underdevelopment (Vol. 1). Monthly Review Press.
2. Arthur, W. B. (1989). Competing technologies, increasing returns, and lock-in by historical events. The Economic Journal, 99(394), 116–131. https://doi.org/10.2307/2234208
3. Avant, D. D., Finnemore, M., & Sell, S. K. (Eds.). (2010). Who governs the globe? Cambridge University Press.
4. Baniya, S., Rocha, N., & Ruta, M. (2020). Trade effects of the New Silk Road: A gravity analysis. Journal of Development Economics, 146, 102467. https://doi.org/10.1016/j.jdeveco.2020.102467
5. Barnett, M., & Duvall, R. (2005). Power in international politics. International Organization, 59(1), 39–75. https://doi.org/10.1017/S0020818305050010
6. Brown, W. (2012). A question of agency: Africa in international politics. Third World Quarterly, 33(10), 1889–1908.
7.Carmody, P. (2021). The new scramble for Africa. Polity Press.
8. Chipaike, R., & Bischoff, P. H. (2019). Chinese engagement of Zimbabwe and the limits of elite agency. Journal of Asian and African Studies, 54, 947–964. https://doi.org/10.1177/0021909619848783
9. Cohen, B. J. (1998). The geography of money. Cornell University Press.
10. David, P. A. (1985). Clio and the economics of QWERTY. The American Economic Review, 75(2), 332–337. http://www.jstor.org/stable/1805621
11. de Kluiver, J., & Neethling, T. (2024). The digital Silk Road: Implications for Africa’s digital governance and transformation. In G. Onyango & G. Karuri-Sebina (Eds.), Digitalisation and public policy in Africa. Palgrave Macmillan. https://doi.org/10.1007/978-3-031-75079-3_15
12. Digital Watch. (2024, September 11). Huawei to boost Malawi’s digital transformation. Geneva Internet Platform. https://dig.watch/updates/huawei-malawi-digital-transformation
13. Drezner, D. W. (2007). All politics is global: Explaining international regulatory regimes. Princeton University Press. https://doi.org/10.2307/j.ctt7st6p
14. Easterling, K. (2014). Extrastatecraft: The power of infrastructure space. Verso Books.
15. Eguegu, O. (2022). The digital Silk Road: Connecting Africa with new norms of digital development. Asia Policy, 17(3), 30–39. https://www.jstor.org/stable/27227215
16. Frank, A. G. (1966). The development of underdevelopment. Monthly Review Press.
17. Gabor, D., & Brooks, S. (2017). The digital revolution in financial inclusion: International development in the fintech era. New Political Economy, 22(4), 423–436.
18. Gagliardone, I. (2019). China, Africa, and the future of the internet. In The Chinese internet. Routledge.
19. Gonani, O. (2025). Why Malawi should invest in FinTech: Unlocking savings and financial inclusion. International Journal of Research Publication and Reviews, 6(10), 900–905. https://ijrpr.com/uploads/V6ISSUE10/IJRPR53580.pdf
20. Government of Malawi. (2016). Electronic transactions and cyber security act. Government Printer. https://malawilii.org/akn/mw/act/2016/33/eng@2017-12-31
21. Government of Malawi. (2024). Data protection act, 2024 (Act No. 7 of 2024). Government Printer.
22. Heeks, R., Foster, C., Gao, P., Han, X., Jepson, N., Schindler, S., & Zhou, Q. (2024). China’s digital expansion in the Global South: Special issue introduction. The Information Society, 40(2), 65–68. https://doi.org/10.1080/01972243.2024.2315868
23. Heeks, R., Ospina, A. V., Foster, C., Gao, P., Han, X., Jepson, N., Schindler, S., & Zhou, Q. (2024). China’s digital expansion in the Global South: Systematic literature review and future research agenda. The Information Society, 40(2), 69–95. https://doi.org/10.1080/01972243.2024.2315875
24. Hirawan, F. B., Atje, R., Saraswati, V., & Teguh, R. (2023). Digital Silk Road and inclusive development in Indonesia. Centre for Strategic and International Studies. http://www.jstor.org/stable/resrep49619
25. Johnson, H. G. (1969). A dynamic theory of international economic relations. The Pakistan Development Review, 9(1), 15–33. https://www.jstor.org/stable/41258004
26. Karppi, T., & Crawford, K. (2016). Social media, financial algorithms, and the hack. Theory, Culture & Society, 33(1), 73–92.
27. Krippendorff, K. (2018). Content analysis: An introduction to its methodology (4th ed.). Sage Publications.
28. Krugman, P. R. (2012). International economics: Theory & policy (9th ed.). Pearson Addison-Wesley.
29. Kwet, M. (2019). Digital colonialism: US empire and the new imperialism in the Global South. Race & Class, 60(4), 3–26.
30. Ly, B. (2020). Challenge and perspective for digital Silk Road. Cogent Business & Management, 7(1), 1804180. https://doi.org/10.1080/23311975.2020.1804180
31. Mann, M. (1984). The autonomous power of the state: Its origins, mechanisms and results. European Journal of Sociology, 25(2), 185–213. https://doi.org/10.1017/S0003975600004239
32. Maurer, B. (2012). Payment: Forms and functions of value transfer in contemporary society. Cambridge Anthropology, 30(2), 15–35.
33. Morgenthau, H. J. (1978). Politics among nations: The struggle for power and peace (5th ed.). Alfred A. Knopf.
34. Nie, W., Li, Y., Zhang, X., Hu, J., Zhou, H., & Wu, Q. (2024). International economic relations. Tongji University Press.
35. Pierson, P. (2000). Increasing returns, path dependence, and the study of politics. American Political Science Review, 94(2), 251–267. https://doi.org/10.2307/2586011
36. Reserve Bank of Malawi. (2020). National payment system act. Government Printer.
37. Reserve Bank of Malawi. (2023). Annual report and financial statements. RBM.
38. Rodrik, D. (2016). Premature deindustrialization. Journal of Economic Growth, 21(1), 1–33. https://www.jstor.org/stable/48700561
39. Rodrik, D. (2020). Why does globalization fuel populism? Economics, culture, and the rise of right-wing populism. Annual Review of Economics, 13, 133–170. https://doi.org/10.1146/annurev-economics-070220-032416
40. Rolland, N. (2020). China’s vision for a new world order. The National Bureau of Asian Research.
41. Rosenau, J. N. (1995). Governance in the twenty-first century. Global Governance, 1(1), 13–43. http://www.jstor.org/stable/27800099
42. Schwandt, T. A. (2015). The SAGE dictionary of qualitative inquiry (4th ed.). Sage Publications.
43. Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations (Vol. 1). Liberty Fund. http://oll.libertyfund.org/EBooks/Smith_0141.02.pdf
44. Spero, J. E., & Hart, J. A. (1997). The politics of international economic relations (5th ed.). St. Martin's Press.
45. Srnicek, N. (2017). The challenges of platform capitalism: Understanding the logic of a new business model. Juncture, 23, 254–257. https://doi.org/10.1111/newe.12023
46. Stake, R. E. (1995). The art of case study research. Sage Publications.
47. Stiglitz, J. E. (2002). Globalization and its discontents. W. W. Norton & Company.
48. Strange, S. (1996). The retreat of the state: The diffusion of power in the world economy. Cambridge University Press.
49. Suri, T., & Jack, W. (2016). The long-run poverty and gender impacts of mobile money. Science, 354(6317), 1288–1292.
50. Waltz, K. N. (1979). Theory of international politics. Addison-Wesley.
51. Wang, Y., Gao, H., & Wang, H. (2024). The digital Silk Road and trade growth – A quasi-natural experiment based on Silk Road e-commerce. Research in International Business and Finance, 67, 102140. https://doi.org/10.1016/j.ribaf.2023.102140
52. Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). Sage Publications.
53. Zhang, X., Wu, Q., & Nie, W. (2015). International economic relations. Tsinghua University Press.
54. Zhou, L. (2009). Introduction to international economic relations. Machinery Industry Press.
55. Zuboff, S. (2019). The age of surveillance capitalism: The fight for a human future at the new frontier of power. PublicAffairs.
Downloads
Published
Data Availability Statement
The data that support the findings of this study are available on request from the corresponding author.
Issue
Section
License
Copyright (c) 2026 Jani Grey Kasunda (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.