A technology battle between the two superpowers is never far away. This week, the Wall Street Journal reported on the infiltration of American telecommunications networks by a group of Chinese hackers known as “Salt Typhoon.” The group’s purpose appears to be to gather information about American eavesdropping activities. Deep mistrust in both countries has led to policies that shy away from the other’s digital infrastructure. Uncle Sam bans Chinese company Huawei from installing communications kit in the United States. China has blocked Silicon Valley servers and cloud computing products from being sold within its borders.
But in many parts of the world, the infrastructure of the United States and China—the data centers, undersea cables, and power lines that support the Internet—exist side by side, and both countries seek market share, profits, and geopolitical influence. are competing with each other. Asia is where the fiercest competition will take place. Chinese digital infrastructure companies already have a growing presence there. Approximately 18% of new submarine cables built around the world in the past four years were built by companies from many continents, across Asia. Alibaba’s cloud business is active in nine Asian countries, and Huawei has built many mobile networks.
China’s success partly reflects government planning. The Digital Silk Road Strategy, an arm of President Xi Jinping’s Belt and Road Initiative, aims to control the region’s internet plumbing. It helps that Chinese companies are more innovative and cheaper than American companies, but some are supported by hidden government subsidies. According to some estimates, Chinese cloud services cost 40% less than U.S.-operated cloud services.
If China were to dominate Asia’s digital infrastructure, the impact would be significant. The ruling Communist Party wants to set norms governing data and the internet. China’s influence in the world’s technology standard-setting bodies is growing, promoting a vision of “data sovereignty” in which governments control information and ensuring that it is kept within the borders of countries. cannot escape from its grasp.
digital dilemma
Worse, digital infrastructure run by China could expose Asian countries to the risk of prying eyes and sabotage. Some governments are happy with this. It shouldn’t be that way. Chinese hackers stole information about the South China Sea from the Philippines and targeted Malaysia’s Kasawali gas field in waters claimed by China.
When mobile phone communications networks were being built in the 2000s, two Chinese companies, Huawei and ZTE, successfully defeated their American and European rivals in Asia. But that doesn’t mean Chinese companies will necessarily win the battle to supply the next generation of digital infrastructure. The investment cycle has just begun. Tech companies will invest tens of billions of dollars a year in data centers in Asia over the next few years. And the picture is far from uniform. According to a study, China dominates cloud computing hubs in five out of 12 Asian countries, with the US leading in five and tied in two. Some countries, including India, have recently become increasingly wary of the security risks posed by Chinese companies.
To win, the United States must focus on three priorities. The first is to take a tougher stance against treaty allies, particularly Thailand and the Philippines, which have become completely dependent on China. The latter has strengthened its military ties with the United States despite its weak digital infrastructure, but this makes little sense. Some countries, such as Pakistan and Cambodia, are losing cause by ceding digital sovereignty to China.
Second, the United States should seek to develop an Asian alliance for cybersecurity and artificial intelligence. In 2017, Donald Trump abandoned the Trans-Pacific Partnership, an ambitious regional trade pact that was supposed to govern digital commerce, among other things. Although it is impossible to revive it due to the protectionist turn of the United States, narrower agreements have been concluded with some countries, in exchange for which the United States guarantees increased vigilance against China’s security risks. It seems likely that access to this technology will be granted.
Finally, U.S. intelligence agencies could shed more light on Chinese cyber fraud. Public knowledge about the scale of China’s snooping and hacking is limited. It’s time to raise awareness that China’s cheap digital infrastructure is sticking in its tail. ■
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