China’s Digital Silk Road

The next phase of technology competition between the US and China is going to be characterised by a geo-political dispute about  global telecommunications infrastructure and digital technologies. 

As this competition grows, so too does the likelihood of a potential split between the US and its allied democracies on the one side and countries dependent on Chinese-based information and communications technology (ICT) on the other.  The impact of this competition reaches beyond telecommunications companies and those involved in their supply chains with implications for international security. 

In the past year a number of countries have decided to exclude Chinese equipment in their 5G networks, principally targeting Huawei.  Exports of Huawei telecoms equipment is one of the many ways that China is working to creating dependencies in customer countries' economies and infrastructure that may ultimately weaken these allies links to the US. 

Attracted by the technological edge and discounted pricing that Huawei offers, numerous national network operators have eagerly adopted Huawei's telecoms  platform. 

A report from the International Institute for Strategic Studies (IISS) examines China’s “Digital Silk Road” strategy, which includes technology infrastructure investments and has found that at least 16 countries had signed memorandums of understanding with with China on projects related to the Digital Silk Road.

The IISS looked closely at at Indonesia, South Korea, the United Arab Emirates, Poland and Israel:-

  • In Indonesia, the report noted, the past two decades have seen Huawei become “deeply, if not inextricably, embedded” in the country’s information communications ecosystem, “from fibre-optic cable networks thousands of kilometres long to the latest smartphones. Communications are transmitted and relayed by Chinese-designed base-station technology and data centres. China is also playing a big role in Indonesia’s AI research efforts. 
  • In South Korea, China uses foreign direct investment as a “carrot-and-stick tool” to influence policy. South Korean tech imports to China have “been centre stage in the Sino-US silicon-chip war,” they write, referring to the competition between US and Chinese chip makers to get their chips in more electronics. 
  • Huawei has also given China an important foothold in the United Arab Emirates ( UAE) and the UAE government has bought surveillance cameras and facial recognition software to police its own citizens. 
  • In Poland, China has spent money to fund training and education, including award programs at a dozen Polish universities whose winners received a week of workshops at Huawei headquarters. The IISS  found that Huawei has an agreement with a major Polish university agreed after the United States had made efforts to turn allies away from the Chinese telecom giant and around the same time that Polish efforts to secure a permanent US base in the country failed.
  • Israel, one of the United States’ closest security partners, occupies “a special place along China’s Digital Silk Road,” having signed a research and development  agreement with Beijing. The Israeli Ministry of Defense, more attuned to US concerns, has been monitoring and raising concerns about China’s activities since the early 2000s.” 

The scope of Chinese technology penetration goes beyond those formal agreements and the IISS research has found that China had carried out significant  infrastructure projects in 137 countries worldwide.

Even if it if the US successfully discourages its allies from importing Huawei telecom equipment there are other ways China is working to creating dependencies in these countries' economies and infrastructure that may ultimately weaken links with the US. 

Technology and infrastructure partnerships give China a position in markets and an influence in government policy making. They also secure access to civilian and corporate data that can be of use to China’s tech companies and provide Chinese  intelligence operatives channels to target national populations with fake news and disinformation. 

The biggest problem, according to the  IISS, is that governments are taking no steps to determine how much or what kind of Chinese investment posed a possible risk. 

China’s global digital investments can be expected to keep expanding in technological and geographic scope and the intersection between technologies, alliance structures and defence cooperation will likely come the principal focus of competition with the US. 

CSIS:         PG-Intel:         Defense One:       IISS:       Science Focus

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