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Special Edition Magazine, Spring 2020: Beyond the Techlash

The Great 5G Fracture

Over the past few years, the US has stepped up its efforts to contain China's technological ambitions and global influence, not least by attempting to block the Chinese 5G giant Huawei from global markets. But, on the whole, this effort has failed, suggesting that global bifurcation of network technology is in the offing.

SYDNEY – “Vote for Europe! Vote for a smarter future with 5G!” boasts the Huawei public-relations campaign aiming to convince Europeans to allow the company into their 5G market. These messages were designed to combat US efforts to engineer a backlash against the Chinese telecommunications giant, which has been placed at the center of a new great-power competition.

Following similar decisions in Japan, Australia, and Taiwan, the United States formally banned Huawei from its communication network last May. But other US allies in Southeast Asia and Europe have not followed suit. While the United Kingdom has placed restrictions on all “high-risk” 5G vendors and excluded Huawei from core sections of its network, it did not submit to US demands for an outright ban.

The countries that have banned or restricted Huawei are worried that it and other Chinese tech giants could be subject to directions from the Chinese government either now or at some point in the future. In weighing this risk, Australian intelligence officials asked themselves what they would do if they had powers, like those enshrined in China’s 2017 National Intelligence Law, to access Australian 5G providers’ networks. According to one former senior official, “We concluded that … no one would know and, if they did, we could plausibly deny our activities, safe in the knowledge that it would be too late to reverse billions of dollars’ worth of investment.” Best of all, he adds, “our targets would be paying to build a platform for our own signals intelligence and offensive cyber operations.”

There is some precedent to justify skepticism of Huawei. In 2018, Le Monde found that the Huawei engineers who installed the IT system for the African Union’s headquarters had intentionally left a vulnerability, allowing for up to five years’ worth of sensitive information to be copied to servers in Shanghai.

Nonetheless, concerns over China’s espionage activities and industrial policies have not translated into a broader backlash against Chinese technology overseas. On the contrary, many countries around the world have ignored US warnings and allowed Huawei to build their 5G networks. Most of these countries – particularly developing economies in Southeast Asia, Latin America, and Africa – are motivated by pragmatism and a reluctance to antagonize China. Moreover, China itself has framed the issue in stark terms. “On the Huawei issue,” states an editorial in the state-owned newspaper Global Times, “there are two types of countries: those that follow the US and boycott Huawei and those that do not. China’s attitude toward these countries should be different.”

In any case, the US has a trust problem of its own. US officials argue that “Huawei and 5G are today’s poster child for … nefarious activity,” and that Chinese technology companies are “Trojan horses for Chinese intelligence.” But from many other countries’ perspective, the US is just as likely as China to use American-made technology as a conduit for mass surveillance and political manipulation.

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After all, the CIA contractor Edward Snowden’s leaks revealed that the US uses its diplomatic missions across Southeast Asia to monitor communication networks and conduct other forms of espionage. And Australia – another member of the “five eyes” intelligence-sharing community – was found to be spying on Indonesian dignitaries.

The point is not lost on China, whose Ministry of Foreign Affairs recently tweeted: “The US has been the biggest state actor of espionage in the cyber space while painting itself as a victim. What hypocrisy!” Faced with the similarly fraught choice between American and Chinese networks, many countries have simply based their decisions on cost and other factors. As Singaporean Prime Minister Lee Hsien Loong recently pointed out, “It does not matter whom you buy it from; it can be a friendly country, it can be a hostile country, or you can design it yourself – every system will have vulnerabilities.”

Moreover, Huawei’s 5G hardware is widely considered to be more cost-effective than that of its Western competitors (though this may be a function of industrial espionage and the state subsidies it receives). It also offers potential solutions to long-term challenges in many countries. To Westerners, Huawei surveillance is synonymous with repression in Xinjiang, where up to 1.5 million Uighurs are being detained without trial. But in developing countries that are still working to establish the rule of law and struggling to contain extremism and terrorism, a surveillance system with Chinese characteristics is valuable to have. Hence, Chinese technology companies have been proactive in providing much-needed training, education, and even real-world results. In Ecuador, for example, the introduction of Chinese surveillance systems has been credited with a fall in crime rates.

To be sure, some abuses have sparked a backlash within China itself. Just as Americans have become disenchanted with large technology companies, China’s netizens have voiced complaints about the dominance and possible malpractice of their own country’s tech giants.

For example, Robin Li, the founder of Baidu (China’s version of Google), once provoked a backlash online when he remarked that, “I think Chinese people are more open and less sensitive about the privacy issue. If they are able to trade privacy for convenience, for safety, for efficiency, in a lot of cases they’re willing to do that.” Similarly, Ant Financial, a subsidiary of the e-commerce giant Alibaba, was forced to apologize to users after it automatically enrolled them in its social-credit-scoring app. And WeChat, China’s most popular social-media platform, has had to respond to accusations that it stores and data-mines users’ personal conversations.

But much like their Western counterparts, Chinese netizens have few alternatives. The Chinese tech giants remain profitable, indicating that US efforts to exclude them from the global market have not yielded results. In fact, Huawei posted record revenue in 2019. And while many countries do fear falling into a state of digital bipolarity, their actions speak for themselves: Thailand and the Philippines may be US treaty allies, but both have agreed to let Huawei build their 5G infrastructure.

Whatever happens in the Sino-American trade war, China will continue to pursue digital self-reliance in earnest. While Chinese Foreign Minister Wang Yi recently issued a plea against decoupling, the global response to Huawei’s 5G overtures suggests that a “splinternet” may be closer than we think.

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