Reconstructing Order: The Geopolitical Risks in China’s Digital Silk Road

Asia Policy, NBR, 28 January, 2020

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The People’s Republic of China (PRC) is attempting to incrementally reshape the global order through the Belt and Road Initiative (BRI). To this end, it is using—among other means—new disruptive technologies that will allow it to dominate data and communications in the political, economic, and social realms across the large expanse of the initiative. The Digital Silk Road has been a part of the PRC’s approach since at least 2015, when it first appeared in a government white paper on BRI. The Digital Silk Road binds together new technologies in “bundles,” such as smart cities, smart ports, and satellite-networked communications, using 5G as a baseline for other technologies like artificial intelligence, data analytics, and the Internet of Things. Success in using this communications infrastructure to dominate markets, standards, and political elites would give China a multiregional base from which to project its norms, systems, and networks to the wider global market. In the long run, this will not only give a competitive advantage to Chinese companies but also allow them to spread more widely across remaining markets.

POLICY IMPLICATIONS
  • The Digital Silk Road has deep geopolitical implications. Building the backbone of communications infrastructure in BRI countries will allow the PRC to access, analyze, and exploit in real time the large data sets of recipient countries.
  • Through these technologies and its tech companies, the PRC is exporting its governance model, surveillance system, and financial institutions.
  • Policy elites in recipient nations could become vulnerable to even greater influence operations as Chinese tech companies administer their networks in real time and collaborate with stage actors like the United Work Front Department.
  • The PRC could use the centralization of data in smart port systems to create a deniable, surgical sanctions system by interdicting or slowing the container traffic of states or their leaders.

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Why Britain’s spooks are wrong to downplay the risks of Huawei

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The Telegraph, 14 January, 2020

Sir Andrew Parker’s assertion that incorporating Huawei components in the next stage of the UK’s 5G network would be unlikely to disrupt intelligence relations with the US or its allies is alarming for a number of reasons. It would appear that the UK’s spymasters have decided – much like Britain’s telecommunications companies – on a policy of asking the right questions in order to guarantee the right answers.

The UK needs Huawei’s 5G tech at its laughably cheap prices. And so ignored is the geopolitical context of an increasingly authoritarian China, funding Huawei’s expansion across Europe. Ignored is the company’s role in Xinjiang. Ignored is China’s place as a leading source of global cyber espionage. Ignored is the 2017 National Intelligence Law which requires Chinese companies to cooperate with China’s intelligence agencies, at home and abroad. Ignored are China’s increasing influence operations inside Western democracies.

Instead, the decisive question in Britain’s 5G debate has become a comically narrow one: will Huawei’s inclusion into Britain’s 5G networks be a threat to the network’s integrity?

The UK’s National Cyber Security Centre (NCSC) argues that it can mitigate this risk by using multiple vendors – a mixture of Huawei, Ericsson, and Nokia – and by restricting Huawei’s components to the periphery or “non-intelligent” bits of the network.

According to the National Cyber Security Centre (NCSC), the telecoms network is structured around three functional parts. The transport layer, the physical nodes that transport data; the routing layer, which works out the best transport route for the data to use; and finally, the edge, where consumers – that’s you and me – interact with it.

Huawei, they tell us, will be kept out of the core, which is a functional name for all the bits that decide who you are, where your data needs to go, and so on. That means they’ll be restricted to antennas, routers, switches, and products at the consumer end such as WiFi boxes, and away from the intelligent bits that have more access to the data.

The NCSC seems to indicate that this has long been a deciding principle, but we know that BT began ripping out Huawei components from its 4G core as late as December 2018, meaning either the principle only dates from then, or the NCSC does not keep a close eye on the network. Neither is very reassuring.

The NCSC has also said that any code used in components in the network – such as antennas and routers – will be pre-checked for backdoors and vulnerabilities at its Huawei Cyber Security Evaluation Centre (HCSEC) in Banbury, Oxfordshire. It sounds rather good, especially since Huawei has agreed to pay for it all.

The problem is that checking code will not work any better than the plan to keep Huawei out of the “core”.

5G will be a virtual network, in which components of the network are “white-boxed”, meaning that network administrators can upload patches for fixes and updates remotely. Think of 5G as something akin to your phone. When an app on your phone is updated, that is because someone in Silicon Valley pushed a button, sending updated code – a patch – to all phones with that app.

As one US cyber official recently stated, it’s what makes 5G so attractive to network administrators – site visits become increasingly unnecessary as more repairs to the network infrastructure can be done remotely. It also gives network administrators the ability to move functionality – including the intelligent bits – around the network to fit requirements.

 

But it is this flexibility that makes the trustworthiness of telecoms vendors so important when it comes to 5G. In a virtual network, an untrustworthy vendor can send the good as well as the bad.

In order to stop such malware, the NCSC would have to watch hundreds of thousands of antennae and components across an entire national network. As with terrorism, we’d have to be lucky every time, but a cyber hacker would have to be lucky only once.

In a report released last March, the HCSEC Oversight Board, tasked with overseeing the Huawei centre in Banbury, noted that it “continued to identify concerning issues in Huawei’s approach to software development, bringing significantly increased risk to UK operators, which requires ongoing management and mitigation”.

The report continues that they can only give “limited assurance that the long-term security risks can be managed in the Huawei equipment currently deployed in the UK”. Imagine if they were discussing airline safety instead of just critical national infrastructure.

Even more damning was a report by Finite State – a private tech consultancy – that sought to replicate HCSEC’s review of Huawei source code. However, instead of using code provided by Huawei, it used code found in Huawei products already on the market. Alarmingly, not only did it find significantly more vulnerabilities than other brands, it found efforts to disguise those vulnerabilities.

This past year, Chinese diplomats have threatened economic retaliation against Germany and Denmark if they exclude Huawei in their 5G networks. One wonders what type of pressure Beijing has exerted on the UK behind the scenes. Certainly, Liu Xiaoming, China’s Ambassador, has already openly said that future investment could be at risk.

However, Britain does not and should not do business at gunpoint. Before this Government makes a very costly mistake, it must thoroughly explain its technical mitigation measures, both to the public, and to its allies.

Anything less smacks of bowing to Chinese pressure. And that’s something we can’t mitigate against.


Exploring China’s Orwellian Digital Silk Road

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With Patrick Cha, The National Interest, 7 November, 2020,t,

The past decade has been difficult for political leaders in Kenya. Terrorist attacks at Westgate Mall in 2013 and Garissa University College in 2015 had left hundreds of people injured or dead. Additionally, rising crime figures in rapidly-growing cities like Nairobi and Mombasa left the impression that Kenyan security forces were losing control of Kenyan cities. Worse still, a series of carjackings and tourist robberies began to effect a major source of revenue. It was with relief then that the Kenyan government received an offer to build a new Smart City program by the prominent Chinese tech company, Huawei. Partnering with Safaricom, Kenya’s largest mobile network provider, Huawei promised to build a network architecture, utilizing big data analysis, a large number of connected devices and sensors, to help give Kenya “new tools to improve public services such as crime-fighting, and to keep an eye on what is going on generally.” Working closely with Kenyan officials, Huawei created a command center and public surveillance system linking 1,800 surveillance cameras with 195 police bureaus and 7,600 police officers across Nairobi, with a further 200 cameras at city checkpoints.

While the centralizing of data on crime and municipal services will be a great boon to rapidly-growing cities across Africa, the Indian Ocean, and Central Asia, they are not without their dangers. As we will discuss in this and a follow-up piece, Beijing’s rapidly expanding influence over the digital space of the Indo-Pacific will have real-world effects on the people who live inside such systems, impacting how comprehensively states are able to surveil their citizens. They may also have an impact on the geopolitical landscape as states that fall under the People Republic of China’s (PRC) digital system, may be aligning to a new type of political, digital and economic order, analogous to that built by the United States and its allies after World War II. While looking at a map of the Smart Cities growing across the Central Asian landscape, it is possible to imagine that a new type of political order is arising. As Western experts begin to understand the inner workings of how the Chinese state uses various technologies in packages like the “Integrated Joints Operations Platform” (IJOP), used by the Xinjiang Bureau of Public Security to persecute and monitor the Uighur—understanding China’s use of technology for political effect is of the utmost importance.

The primary conduit and driver for the PRC’s digital strategy is the Digital Silk Road—a supporting pillar of the Belt and Road Initiative—which was first developed in March 2015 in a White Paper jointly issued by the PRC Ministry of Foreign Affairs, the National Development and Reform Commission, and the Ministry of Commerce. In it, the three ministries advocated for “countries along the Belt and Road . . . [to] improve the connectivity of their infrastructure construction plans and technical standard systems . . . and form an infrastructure network connecting all sub-regions in Asia, and between Asia, Europe, and Africa, step by step.” And so various parts of the Chinese state and private sector have driven themselves into the task with gusto and enthusiasm. Only five years later, nearly a quarter of the 4.2 billion people living in urban environments now live under PRC Smart City and Safe City network and surveillance technologies. Huawei and ZTE have developed contracts or have built Smart City technologies around the world, in Africa, Southeast Asia, and the Middle East, with Huawei building smart cities in over 200 cities across forty countries and regions, and ZTE building smart cities in over 170 cities across sixty countries.

As with infrastructure, China has understood what local and regional governments need and catered to those needs in expert fashion. The world’s urban population is predicted to grow by an additional 2.5 billion people in the next thirty years, with a doubling of the global middle class taking place in and around China and India, providing a huge expanse in the region’s urban space. The building of so many new cities and the hyper-growth of so many current cities will require a major outlay in infrastructure, energy, and transportation hubs. It will also require the efficient allocation of resources, energy, and—as the mainstay an increasingly digital global economy—access to digital networks and the internet of things. Just as the British Government helped promote Cable and Wireless’s expansion across its empire in the late half of the nineteenth century, so the PRC is helping to fund its companies in this new digital infrastructure expansion across the Eurasian landmass with the Silk Road Fund (dominated by the People’s Bank of China) taking the lead. It is, as many observers have already noted, a strategy with deep geostrategic implications. It is also a strategy that has security implications for the West, for the United States, its allies, and for other rising powers—such as India, South Africa, and Brazil.

The most visible signs of this digital infrastructure are the fiber cables, the network base-stations, the satellite networks, and the Smart Cities provided at the “consumer” end. Smart Cities coalesce data, connecting, and computing service platforms with existing information sources under one roof in Intelligent Operation Centers (IOC). These centers integrate disparate information from different sources to create—in the jargon—a real-time, comprehensive, and actionable image of city operations. IOCs provide a centralized data-exchange platform critical to day-to-day operations of administrative, industrial, environmental, energy, and security systems. In layman’s terms, the IOC acts as a living organism that continuously assesses citywide operations and identifies requirements through sensors and cameras that are distributed around key nodes allowing for real-time monitoring and predictive analysis. Powered by the expanse in data provided by 5G technologies, multiple sensors can be deployed from street lamps tell electric companies that they’ve gone out, to buildings can regulate their own heating and ventilation. Smart Ports provide the additional capabilities of device automation, intelligent scheduling, and trade surveillance to improve resource allocation and ship transfers. The premise is that a better-integrated and effectively-operated city boosts economic activity, and promotes sustainable growth into the future.

And therein lays the rub. Centralized access to personal, commercial, and political data carries with it a huge centralization of data that is at odds with concepts of the rights to privacy. On the Digital Silk Road, this centralization of data benefits China as much as it benefits host nations, introducing vulnerabilities into the host nations that could be utilized if they were to ever come into conflict or suffer diplomatic tensions with Beijing. By acting as network architects and administrators, Beijing will be privy to data streams in real-time across a large portion of the world, enabling them to develop influence and power across a number of different matrixes. In the first instance, that power and influence would be over the foreign policy elites of host nations, including civil servants, political and military leaders, journalists, the legal and commercial sectors in the form of information. This might be used as kompromat—to leverage key individuals in critical moments of internal discussion—on issues Beijing judges central to its interests. The IJOP in Xinjiang combined information gathered from multiple data sets—including CCTV, banking, employment, and health records, Wi-Fi sniffers, security checkpoints, and facial recognition—to monitor the details of people’s daily lives at the level of minutia. Whether or not the smart city programs incorporate these functions in given states will be of critical importance to the lives of their inhabitants. Second, it enables Beijing to expand its legal and political norms and values—albeit, bundled as part of these technological packages. As Tin Hinane El Kadi has written for Chatham House, many countries sign deals with Chinese tech companies that install these systems with little or no oversight or adopt repressive cybersecurity laws that resemble China’s. Third, it is likely to be used to further China’s economic expansion across developing economies, providing massive amounts of raw consumer and market data, giving Chinese firms advantages that their competitors—local and Western—will be unable to challenge. This will be particularly true in sectors that China has judged to be of national security interest, such as biotech, new materials, wearable devices, information communications technology, AI, and the internet of things. It might be used to coerce foreign policy elites “downstream” from the port host nation by applying pressure on the supply chain. A Southeast Asian state at odds with Beijing, for example, could find critical goods held up in ports in Pakistan or Sri Lanka—in a deniable and unofficial sanctions system.

Through the development of this “network-of-networks” across the Indo-Pacific region, the PRC will be able to access and monitor large swathes of data running through the national networks of scores of host nations across the Indo-Pacific space, using big data and artificial intelligence logarithms for analysis. It is possible that this age is witnessing the building of the largest intelligence-collecting program in human history, giving China real-time access to the digital economies, finances, crimes, and personal lives of the citizens of three-quarters of the world. It is unquestionably a defining moment in the history of data. As we continue our own Western debate on the role big data companies will have in liberal democracies and tensions between privacy and the political and economic exploitation of data, we would do well to look at the world that China’s tech industry is seeking to remake in its own image. It is not a world we have lived in before.

Through the development of this “network-of-networks” across the Indo-Pacific region, the PRC will be able to access and monitor large swathes of data running through the national networks of scores of host nations across the Indo-Pacific space, using big data and artificial intelligence logarithms for analysis. It is possible that this age is witnessing the building of the largest intelligence-collecting program in human history, giving China real-time access to the digital economies, finances, crimes, and personal lives of the citizens of three-quarters of the world. It is unquestionably a defining moment in the history of data. As we continue our own Western debate on the role big data companies will have in liberal democracies and tensions between privacy and the political and economic exploitation of data, we would do well to look at the world that China’s tech industry is seeking to remake in its own image. It is not a world we have lived in before.


This is Money, Lucy White, 12 July, 2019

Dr John Hemmings, director of the Asia Studies Centre at foreign policy think tank the Henry Jackson Society, said: ‘China has put a million Uighurs in camps and is building an Orwellian surveillance society.

‘Anyone who thinks a million people in camps are being served well needs to reflect on their moral compass.’


South China Morning PostKinling Lo,  4 July 2019

John Hemmings, director of the Asia studies centre at the British think tank the Henry Jackson Society, said that Brexit and the Conservative leadership contest had made Britain “vulnerable” to “displays of anger” from China.

“[Beijing] has noticed that because of Brexit and the oversize importance that London attaches to threats to investment, it can improve its leverage by showing strong emotions against the UK,” Hemmings said.

He said Beijing had been “introducing a rather toxic approach” in its approach towards London with Liu regularly threatening Britain in domestic newspaper articles and accused him of “interfering” in domestic politics.

“I think it is inevitable that the UK will also become more defensive toward Beijing if it continues this high-profile, strong-arm tactics approach towards both its people in Hong Kong and its economic partners,” Hemmings said.


‘People power victory’ in Hong Kong looks more like a tactical retreat

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The Telegraph, 18 June, 2019

Carrie Lam’s apology over the extradition bill would appear to be a victory of democracy and “people power”. People 1: Beijing 0. 

However, it’s worth looking a bit further into why the Hong Kong government apparently backed down in order to understand the wider implications of China’s impact on the city, and by extension the West’s relationship with Hong Kong and China.

There are a number of possible reasons for Lam’s climb down, which broadly fall into three categories: the democratic victory, external pressure and tactical retreat. In the first instance, it does seem that the government of Hong Kong was completely unprepared for the huge outpouring of dissent.

While it’s difficult to confirm that one million people did protest on June 9, as the organisers claim, the scenes of people marching to the Legislative Council are impressive and the shift to violence revealed a weak hand on the part of the Hong Kong government.

Furthermore, arguing the case for the rule of law with Beijing has become increasingly tenuous. One need only think of the booksellers – Gui Minhai, Lui Bo and Lam Wing-kee – all kidnapped or taken by Chinese forces in acts of extraordinary rendition.

The second reason, that of external pressure, also bears scrutiny – and if true, should have an impact on UK thinking and policy in future. The US move to reintroduce the Hong Kong Human Rights and Democracy Act in the wake of the protests was notable, as it threatens to remove Hong Kong’s special treatment afforded by the US Hong Kong Policy Act of 1992, putting it squarely in front of the Trump administration’s US-China trade war.

Combined with statements made by the UK, Germany and the EU, this indicated that the tide of international public opinion was firmly with the protesters. And there are those like Grant Newsham, a former US government official with a long stint in Asia, who claim that the backdown is in fact a strategic retreat.

He notes: “Chances are they will wait and then punish who they believe are the ringleaders, just as they did with the ‘umbrella movement’ in 2014; jail time for ridiculous reasons; constant and pervasive harassment.”

As the controversy dies down, we will discover exactly which of the three of these played the largest part. For the UK, knowing which was the most important – particularly if it was the second factor – should play a driving force in future policy.

Jeremy S. Maxie

Energy & Political Risk Consultant

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