Securing the global digital economy beyond the Chinese challenge – TechCrunch
The TechCrunch Global Affairs project examines the increasingly intertwined relationship between the tech industry and global politics.
The push by countries at all levels of development to modernize their information and communication networks has created an unprecedented demand for technological infrastructure. Governments and industry are investing billions of dollars to expand digital connectivity around the world. New deployments of 4G, 5G, satellites and fiber optic cables could create huge opportunities for host countries, but would pose significant risks if networks are built without adequate safeguards. The United States has a role to play in securing the future of the internet and the global digital economy, but it will need to move beyond confrontation with China to be successful.
China’s network effects
Digital access is the foundation of digital services, such as fintech and e-commerce, that connect communities with commerce and financial resources. As startups in Latin America and Sub-Saharan Africa attract billions of investments, their services require a strong and far-reaching information and communication technology (ICT) backbone to thrive.
China, through its Digital Silk Road, Belt and Road Space Information Corridor, and other state-led initiatives, has become a leading supplier of ICT infrastructure practically everywhere, in particular by financing projects in less wealthy countries. But these investments come at a price: cybersecurity and manipulation risks due to the influence of the Chinese government on its suppliers.
Due to legal obligations to the Chinese state – including sharing customer data at its request – Chinese tech companies cannot guarantee that they will put their customers first. Many companies also host internal Party organizations that influence decision-making. The Chinese Communist Party (CCP) is not omnipotent – some companies have been slow to comply with requests for information – but the CCP’s continued crackdown on tech companies diminishes their ability to circumvent guidelines.
But because network modernization is an economic imperative, and Chinese companies often offer lower prices than their global competitors, many countries choose to source technology despite these political and security risks.
While the risks posed by companies like Huawei may not be evidence of collaboration with the Chinese government, these legal and institutional pressures, combined with the engineers’ track record of spying for other national governments, as in Uganda and Zambia suggest that even the most powerful ICT companies may be susceptible to co-optation. As the digital economy grows and diversifies, more and more types of data, from personal communications to financial, business, health and other sensitive information, will become vulnerable to a ‘data trap’.
Although state intervention is not guaranteed, the CCP’s approach to foreign affairs increases this likelihood. Beijing wants the international public to adapt to its priorities and activities and pursues “information domination” for this purpose. Data is important for understanding the information environment and shaping perceptions of CPC, so access to and influence over ICT infrastructure – the vehicle of modern communications – makes the companies that provide it a pivot of Chinese foreign policy.
Information dominance also means a preference for CPC-compatible content and platforms, hampering opportunities for local populations. For example, StarTimes, a Beijing-based media company that has upgraded and operates television networks in 30 African countries, has received hundreds of millions of dollars from China’s EXIM bank to enter African markets. It offers state-owned media channels in its cheapest or even free subscriptions that “tell the story of China well” to local audiences, at the cost of excluding bandwidth dedicated to local perspectives or media devoid of propaganda. of the CCP.
America’s Response: Still Loading
In response to the spread of network projects in China, US policymakers have started grappling with vendor security assessments and expanding government mechanisms to fund ICT. Buried under the Trump administration’s ‘us or China’ rhetoric, the State Department’s Clean Network initiative included country-independent criteria to assess vendor-based cyber risks and support for Prague’s multilateral proposals , which emphasized the non-technical aspects of 5G security. The administration also reorganized the American International Development Finance Corporation (DFC) to better support digital modernization and network building. In a first victory for DFC, Ethiopia selected a Vodafone-led group over an offer linked to China’s Silk Road Fund, despite long-standing relationships with Huawei and ZTE to provide telecommunications.
These developments highlight the United States’ commitment to generate alternatives, in collaboration with other countries. But these measures alone may be insufficient to deal with the scale of China’s approach. In addition to large government investments in overseas projects, China has subsidized its tech giants to such an extent that Huawei has already offered a 5G project at “a price that would not even cover the cost of parts.”
The United States, while motivated to counterbalance China’s influence, should not seek to overtake it or emulate its approach. Instead, US leadership should mobilize a variety of sustainable investments, find technology solutions to make technology adoption cheaper, and deliver neutral infrastructure that will provide fair opportunities for local economies.
The White House should spearhead the creation of a multilateral digital development bank to make more resources available to states wishing to modernize their networks. It would also add weight to the commitments the Biden administration has made as part of the G7’s Build Back Better World initiative.
In coordination with Congress, the Biden administration should also support efforts to reduce the cost of the equipment itself to compete sustainably with China’s low-cost kit. One solution is the interoperability of technological standards; Open RAN for 5G networks is an example of how this approach has already proven to be cheaper than traditional network architecture.
Another way to reduce costs is to invest in research and development of network technologies that can replace more expensive legacy components. For example, fiber optic cables are expensive to deploy on land; workarounds can include wireless optical solutions or the integration of satellite mesh networks with terrestrial systems.
Finally, the White House should explore ways to integrate net neutrality principles into network funding projects managed by agencies such as DFC. Net neutrality could offer economic benefits to host countries by keeping the digital playground open for local media and innovation. Neutral networks would lay the groundwork for a third way forward from what has been criticized as digital colonization by the Chinese government and similar critiques of the US private sector.
A digital network is ultimately a means to an end: infrastructure for interpersonal communications, content, services, industry and innovation. While few countries, at least for now, provide ICT infrastructure to the majority of the world, this majority should have full access to the opportunities it can offer. A revised path to digital modernization, based on open participation, can not only offset the local costs of China’s cyber power and influence, but pave the way for a fair internet for all.