What The West's Caution Over Chinese Tech Really Means

The expansion of the Internet of Things (IoT) market is a security concern. If every washing machine in the UK switched on simultaneously, it could overload the National Grid while also causing a temporary water shortage.

Fear of digital attacks is at an all-time high, with China in particular portrayed as a huge threat to the global West.

Multiple government and legislative bodies have banned TikTok usage by its employees based on fears of profiling and tracing technologies. And earlier this year, the US House Energy and Commerce Committee took a look at Chinese ownership of TikTok. ByteDance (TikTok’s parent company) shared details of a $1.5 billion project with Oracle Corp designed to safeguard data and content from its 150million American users from Chinese influence, but the congressmen were unmoved. Ranking member Frank Pallone said: “I still believe that the Beijing communist government will still control and have the ability to influence what you’re doing.” 

But it is not just data spying and possibility of Internet of Things (IoT) devices being used as trojan horses for attacks that concerns the West. Security is simply the tip of the iceberg, with issues of power and money lying below; cyber security is really about cyber politics and cyber economics.

China Is Changing

A few decades ago, China became the world’s factory, developing its economy using cheap labour and a wealth of natural resources. The trade-off for cheap, innovative products has been a reduction in security. As standards became globalised, imports were less closely monitored. 

However, China has now reached the stage of being an affluent country with a thriving middle class. In fact, they are now the largest single market in the world, making China less interested in the global economy. 

As such, there is a move away from globalisation. Prices are rising and China is starting to dominate both economically and technologically. Feeling threatened, the Western world is seeking greater protection of its economy and technology.

The current Western concern around securing networks and devices will extend outward to cover the entire supply chain, allowing countries to secure economic and political power while still sharing in technological advances.

While it's unlikely that we’ll return to the protectionist policies of the early 20th century, we will see a greater bifurcation of technology. We are already seeing it when it comes to things like semiconductors and applications ─ there is one set of technologies operating in the West, one in China, another in Russia, and so on.

Slowing Pace Of Innovation

The world moves in big cycles, shifting back and forth between protectionism and globalisation. In the coming, more protected, cycle, consumers will still enjoy a lot of the benefits of technology but things like 6G will take longer to roll out and likely cost much more.

The growing bifurcation of technologies and protection of national interests will likely lead to a slowing of innovation. We are already seeing tech giants cutting jobs in anticipation of things slowing down, readjusting the levels of investment that delivered the tech boom of the past two decades.

And with China no longer serving as the world’s factory, products will also become more expensive. Shifting manufacturing out of China will likely cause a lot of friction and disruption of supply chains in the near future. In the longer term, however, this shift may help rebalance job creation and wealth distribution, especially in developing regions like Africa.

The good news is that the learnings and development will still be shared; the global market won’t be closed just yet. Rather, organisations, like the Mobile Ecosystem Forum (MEF), will step in to become facilitators of collaboration and development, helping manufacturers, software engineers and application developers work closely together to create technologies that work seamlessly across different regions, networks and devices.

Summary

The focus on China as a malicious security threat is somewhat of a distraction. The real battle is in military and economic power. Security, in this lens, is about protecting the entire supply chain in order to be able to protect national interests. 

This end-to-end protection of service delivery will likely lead to a bifurcation of technologies and standards, potentially creating localised services tied to particular nations, regions, and/or technology providers, and a shift away from globalisation.

It will be interesting to see how this plays out on a geopolitical stage. 

Dario Betti is CEO of the Mobile Ecosystem Forum 

References: 

CBN:      Gov.UK :    BBC

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