CHINA SETTING GLOBAL TECH RULES,
CONFLICT WITH U. S. COULD LEAD TO A DIGITALLY DIVIDED WORLD
NOWADAYS IN THE DISCUSSION OF RELEVANT ITU STANDARDS, CHINA’S TECHNICAL STRENGTH IS ALREADY IN THE FIRST ECHELON AND THE INTERNATIONAL COMMUNITY EXPECTS CHINA TO PLAY A GREATER ROLE IN THE UN SYSTEM. — ZHAO HOULIN
Zhao Houlin is head of the U. N.’s telecoms agency, an independent international arbiter that sets some of the rules shaping the modern technology industry. But that does not stop him from letting his patriotism burst into the open. A former government official in China, Zhao has repeatedly lionized the Belt and Road Initiative, the pet project of Chinese president Xi Jinping to invest in overseas infrastructure. He has also defended Huawei Technologies Co. Ltd., the controversial Chinese telecoms champion, against U. S. accusations that its equipment can be used for espionage.
“Those preoccupations with Huawei equipment, up to now there is no proof so far,” Zhao, who is secretary- general of the International Telecommunication Union, told reporters in Geneva last year. “I would encourage Huawei to be given equal opportunities to bid for business.”
But it is in his unabashed support for Chinese technology standards that Zhao’s loyalty to Beijing is most striking. Although he was sworn into his ITU role with a pledge to act “with the interest of the union only in view” while avoiding influence from any one country, he regularly celebrates China’s growing presence in the telecoms and Internet industries.
“Nowadays in the discussion of relevant ITU standards, China’s technical strength is already in the first echelon and the international community expects China to play a greater role in the UN system,” Zhao was quoted by the People’s Daily, an official Chinese newspaper, as saying last week. In other statements carried by the Chinese media he has praised the role of the country’s telecoms companies in setting new industry standards.
Zhao declined to comment on his statements. His advocacy of China’s interests, however, throws light on the intensifying geopolitical battleground of technological standards, a much overlooked yet crucial aspect of a new struggle for global influence between China and the U.S.
Such standards might seem obscure, but they are a crucial element of modern technology. If the cold war was dominated by a race to build the most nuclear weapons, the contest between the U. S. and China — as well as the EU — will partly be played out through a struggle to control the bureaucratic rule- setting that lies behind the most important industries of the age.
GEARING UP
The commercial and geopolitical power of industrial protocols has long been recognized. Werner von Siemens, the 19th- century German industrialist and innovator who gave his name to the Siemens conglomerate he founded, said: “He who owns the standards, owns the market.”
Standard- setting has for decades largely been the preserve of a small group of industrialized democracies. Everything from the width of train tracks, to software, satellites, the frequencies that mobile phones use and a whole gamut of rules about how electronic gadgets work and process data have been decided by western- dominated standards organizations. But China now has other ideas. “Industrial standards are an important area of contestation in the new cold war, with both Beijing and Washington gearing up to shape the development and implementation of global standards,” says Adam Segal, director of the digital and cyber space policy program at the Council on Foreign Relations, a New Yorkbased think-tank.
He and other experts say an intensifying U. S.- China battle to dominate standards, especially in emerging technologies, could start to divide the world into different industrial blocs. In the same way that rail passengers who travel from western Europe to some former Soviet bloc countries must to this day change trains to accommodate different track widths, strategic competition between the U.S and China raises the spectre of a fragmentation of standards that creates a new technological divide.
Segal says it is possible, for example, that 5G mobile telecoms — a bedrock technology that enables the “Internet of things” — may be divided into two competing stacks to reflect U. S. and Chinese influence. Some measure of division is also possible in semiconductors, artificial intelligence and other areas where U.S.- China rivalry is intense, he adds.
“In some sectors, there will be two stacks that are relatively incompatible,” says Segal. “But in others, there is likely to be some demand that they co-operate.
It is possible that large markets that make it clear they do not want to choose between China and the U. S. may be able to pressure Chinese and U. S. tech firms to ensure some degree of compatibility.”
In Washington, the battle for influence over technology standards is seen in some quarters as crucial to defending democracy from the influence of China, which Madeleine Albright, a former secretary of state, describes as “the world’s leading pioneer of what we call techno-authoritarianism”.
Mark Warner, Democratic vice- chair of the U. S. Senate intelligence committee, sees the threat from China in equally unambiguous terms. Beijing is intending to control the next generation of digital infrastructure, he says, and, as it does so, to impose principles that are antithetical to U. S. values of transparency, diversity of opinion, interoperability and respect for human rights.
“Over the last 10 to 15 years, ( the U. S.) leadership role has eroded and our leverage to establish standards and protocols reflecting our values has diminished,” Warner told a webinar in September. “As a result others, but mostly China, have stepped into the void to advance standards and values that advantage the Chinese Communist Party.”
“Communist party leaders are developing a model of technological governance that … would make Orwell blush,” Warner added, referring to George Orwell, the British writer of the dystopian novel 1984.
Such issues are exercising others in Washington too. Two congressmen, David Schweikert and Ami Bera, introduced bipartisan legislation called the Ensuring American Leadership Over International Standards Act in June to commission a study on China’s influence in the setting of global technology standards.
DIGITAL SILK ROAD
Crucial to the goal of popularizing Chinese standards overseas is the Belt and Road Initiative, which Zhao described in a blog on the ITU’S website as holding “so much promise”.
The BRI is generally seen as a huge Chinese program to build roads, railways, ports, airports and other forms of infrastructure in mostly developing countries. But this portrayal overlooks a key point. The BRI is also a means of diffusing Chinese technologies — and the standards they operate on — across the developing world by constructing what Beijing calls a “digital silk road.”
“The Chinese government has been actively promoting its Internet and cyber governance playbook in many developing countries, most recently by leveraging 5G connectivity and smart city projects along the digital silk road,” says Rebecca Arcesati, an analyst at Merics, a Berlin-based think-tank.
“Smart cities” are a focus of this standards diffusion effort because they incorporate so many emerging technologies. The facial recognition systems, big data analysis, 5G telecoms and AI cameras that go into creating smart cities are all technologies for which standards remain up for grabs. Thus smart cities, which automate multiple municipal functions, represent a big prize for China’s standards drive.
“China is setting standards from the bottom up through widespread export and foreign adoption of its technology,” says Jonathan Hillman, an analyst at CSIS, a Washington- based thinktank. “A country such as Serbia might not sit down and decide they want to adopt Chinese standards, but after enough purchases and deals, they might end up with Chinese standards. There is the risk of lock-in, a point after which switching becomes too costly.”
Indeed, the smart city package is proving immensely popular for governments that wish to automate services such as traffic management, sewage systems and public safety while keeping a close eye on what its people are up to.
According to research by RWR Advisory, a Washington- based consultancy, Chinese companies have done 116 deals to install smart city and “safe city” packages around the world since 2013, with 70 of these taking place in countries that also participate in the Belt and Road Initiative.
The main difference between “smart” and “safe” city equipment is that the latter is intended primarily to surveil and monitor the population, while the former is primarily aimed at automating municipal functions while also incorporating surveillance functions.
Andrew Davenport, chief operating officer at RWR Advisory, says smart cities open the door to a series of risks. “Smart cities essentially increase the downside risk considerably of cyber intrusions or abuses, both in terms of data security and cybersecurity,” he says. “The cyber risk that is associated with entities that are subject to Chinese laws and governance structures is amplified in this environment.”
Davenport warns that trying to confront Chinese influence over standard- setting bodies “could lead China to explore creating parallel alternatives. This could ultimately result in a more bifurcated arena on industrial standards.”