National Post

CHINA SETTING GLOBAL TECH RULES,

CONFLICT WITH U. S. COULD LEAD TO A DIGITALLY DIVIDED WORLD

- JAMES KYNGE AND NIAN LIU

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.”

 ?? UNITED NATIONS / HANDOUT VIA REUTERS ?? People’s Republic of China President Xi Jinping speaks during the U.N. General Assembly, in New York City last month.
UNITED NATIONS / HANDOUT VIA REUTERS People’s Republic of China President Xi Jinping speaks during the U.N. General Assembly, in New York City last month.
 ?? FABRICE COFFRINI / AFP via Gett y Imag es files ?? China’s Zhao Houlin is the deputy secretary-general of the UN telecommun­ications agency Internatio­nal
Telecommun­ications Union.
FABRICE COFFRINI / AFP via Gett y Imag es files China’s Zhao Houlin is the deputy secretary-general of the UN telecommun­ications agency Internatio­nal Telecommun­ications Union.
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