Commentary: China’s Digital Investments Help to Reshape Connectivity Across the Global South

China's evolution from a technology importer to a major investor in global digital infrastructure has significantly transformed how developing economies access advanced digital technologies associated with the Fourth Industrial Revolution. Less than ten years ago, China played a minimal role in cross-border digital investment, but by 2024, Chinese firms accounted for nearly 22% of cross-border digital greenfield projects globally, trailing only behind the United States, which led with 36% [para. 1][para. 2][para. 3]. China now partners actively with countries aiming to bridge connectivity gaps and boost innovation.

UNCTAD's World Investment Report 2025 highlights the expanding scope of digital investment, particularly within South-South flows, which now represent 40% of all greenfield digital economy investments entering developing countries. This is almost double their share compared to overall sector investment. Chinese capital is driving much of this expansion, reaching markets often neglected by traditional investors. Southeast Asia stands out, having attracted a 9% increase in foreign direct investment (FDI) to a total of $224 billion in 2024—the region's second-highest on record—as companies seek out more favorable emerging markets [para. 4][para. 5]. However, investment remains heavily concentrated: just ten developing economies captured four-fifths of digital greenfield investment between 2020 and 2024, while the world’s least developed countries (LDCs) received only 2%. This is especially concerning given that 2.6 billion people, largely in LDCs and rural areas, still lack internet access [para. 6].

Sectoral trends are shifting, with fintech projects in developing economies tripling over five years, driven by surges in mobile payments and digital ID systems. In 2024, Asia outpaced developed economies with 206 fintech project announcements, while Africa lagged behind with only 18. FDI in the digital economy rose 14% in 2024, making it the fastest-growing sector globally. Meanwhile, investment in data centers is accelerating too, with 80% of such projects between 2020 and 2024 going to middle-income countries, and 15 LDCs now hosting their first-generation data centers. But severe infrastructure deficits persist—some African countries face over 50 hours of monthly power outages, discouraging essential investment [para. 7][para. 8].

Geopolitical tensions increasingly affect digital capital flows. According to UNCTAD, 30–60% of investment screening cases in developed economies now involve digital assets, pushing many Chinese firms toward more open emerging markets. Over 40% of new restrictions target technology industries, mostly imposed by developed countries. These protectionist moves, alongside tightening regulation, have contributed to an 11% global decline in underlying FDI, excluding conduit economies [para. 9][para. 10].

Digital technologies have the potential to advance more than 70% of the Sustainable Development Goals (SDGs), supporting areas such as precision agriculture, e-health, and smart energy grids. Yet between 2020 and 2024, just ten countries attracted 80% of greenfield projects, risking entrenched inequality. Most digital strategies remain unaligned with industrial or investment policy, and governance frameworks are lagging. UNCTAD calls for more integrated policy approaches, stronger regulations, multilateral de-risking, and investment agreements that support developing-country priorities [para. 11][para. 12][para. 13].

Low-income economies face five major obstacles: fragmented digital strategies, weak governance, underdeveloped infrastructure, unreliable power, and skill shortages. Partnerships with multilateral development banks and private investors, along with expanded guarantee and blended-finance mechanisms, are proposed solutions [para. 14][para. 15]. Global FDI to LDCs, however, only rose 9% to $37 billion in 2024, representing a mere 2.5% of global flows.

Looking ahead, China is set to be a core player in building digital infrastructure across the Global South, but success hinges on promoting open, interoperable governance and targeting investment to LDCs. Failure to act would deepen global inequality, but coordinated, multilateral digital investment could pave the way for a more inclusive and secure digital future [para. 16][para. 17][para. 18][para. 19][para. 20].