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South Korea’s Growing 5G Dilemma

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With Sungmin Cho, CSIS Commentary, 6 July, 2020

Recent developments in the information and communications technology (ICT) competition between the United States and China are likely to have caught the attention of South Korea’s Blue House. As a close U.S. ally with a stake in the 5G debate, it has been watching the UK 5G debate very closely. After all, if a close U.S. ally such as the United Kingdom could incorporate Huawei in its 5G network without damaging its alliance with Washington, it would provide Seoul with support for its own inclusion of the Chinese tech company into its networks. However, all of this has changed in the wake of the U.S. announcement on May 15 that it would restrict Huawei’s ability to design and manufacture semiconductors using U.S. technology, with both the United Kingdom and Canada suddenly shifting their apparent willingness to include the Chinese company in their 5G networks.

First, Bell Canada and Telus, two of Canada’s largest telecoms, announced they would be awarding contracts solely to Ericsson and Nokia, Huawei’s Scandinavian rivals, studiously avoiding any mention of the Huawei bid. In London, the shift has been even more prominent, with Boris Johnson calling for a “major rethink” on China. According to media accounts, discussions at the Cabinet Office level began last week looking at ways of replacing Huawei in the country’s 5G network by 2023. As the United Kingdom already has a mixed supplier system incorporating Ericsson and Nokia, they are now searching for a third supplier to replace Huawei and are apparently in discussion with Japan’s NEC and South Korea’s Samsung. The United Kingdom is also leading discussions on the formation of a “D10 Club,” a telecommunications supplier group consisting of the G7 members plus India, Australia, and South Korea, which it hoped to put forward at the U.S.-hosted G7 summit in September. South Korea has already accepted an invitation to the summit, though as of writing the summit’s details have yet to be finalized

Its inclusion in the D10 and in the United Kingdom’s consideration of Samsung as a replacement for Huawei raises South Korea’s profile in the wider 5G ICT supply chain debate, something that the Blue House has, until now, sought to avoid for two reasons. First, this ICT “decoupling” is driving a wedge between technology supply chains, which are deeply integrated for South Korean companies. The growing bifurcation between the PRC and the United States in this new “technology cold war” puts South Korea squarely between its main security provider and its main trading partner: an unsustainable position over the long run. Second, while Samsung is itself a competitor of Huawei—particularly in the space of 5G patents and equipment—there are many South Korean companiesthat still wish to collaborate with Huawei and other leading Chinese technology firms who will resist the growing pressure to decouple in ICT.

This “security-trade dilemma” facing Seoul is not unique. Many U.S. allies are similarly dependent on China for trade and investment—Australia is a major example, having suffered an economic downturn, partly due to Covid-19 and partly due to a deterioration in relations with China. For South Korea, proximity is a serious factor, as 27 percent of South Korea’s exports in 2018 went to China, while only 12 percent went to the United States. As a result, the costs of a Chinese retaliation on South Korea’s economy are larger and have shaped Seoul’s low-profile approach to the debate thus far. Indeed, Chinese authorities have already sent warning signals to South Korea through multiple channels. In June 2019, China’s

National Development and Reform Commission allegedly “called out” Samsung Electronics and SK Hynix with warnings not to block trade with Huawei. China’s tourism boycott of South Korea for hosting the U.S. deployment of the Terminal High Altitude Area Defense system (THAAD) was said to have cost the country $5.1 billion in lost revenues. Therefore, it is not surprising that South Korea’s former Minister of Science and ICT You Young-min has asserted that the 5G issue is not even up for discussion: “Huawei security issues in 5G should not be discussed because China is sensitive to it. I’m afraid that there would be a dispute.”

The issue is hardly simple for South Korea, as it has mixed interests, particularly from companies such as Samsung which could increase market share in smartphones at Huawei’s expense. More importantly, Samsung can become a dominant 5G network supplier if Huawei’s global business in 5G equipment is effectively diminished. However, supply chain integration also means that Huawei is one of Samsung’s biggest customers for SK Hynix’s memory chips. Huawei alone accounts for 17 percent of South Korea’s electronics parts exports to China in 2019. Huawei not only buys parts from South Korea but also provides 5G-related equipment to South Korean companies such as LG U-plus. As a result, South Korean companies are torn. South Korean companies stand to gain long term from Huawei’s lost global market share in 5G-related off-shoots, such as wearable devices, smart infrastructure, and the Internet of Things (IoT), but this will be at the expense of short-term business and growth from Huawei and other PRC tech firms.

As South Korean policymakers are beginning to realize—as indeed many other nations are realizing in the wake of Covid-19—trade dependency on the PRC is increasingly becoming a national security vulnerability. As a result, a shift toward “diversification” is not unwelcome. Like their Japanese counterparts, South Korean firms have been gradually withdrawing from China as Chinese competitors absorb their intellectual property and establish cheaper rival products. This long-term trend became even more pronounced after the 2017 THAAD crisis showed how vulnerable Seoul was to Beijing’s economic coercion. Shortly thereafter, Samsung started to downsize its Chinese manufacturing presence, closing the Shenzhen production line in May 2018, followed by its Tianjin factory in December. As the trade war between the United States and China began to heat up, South Korean firms continued their exodus from China, going to replacements such as Vietnam, where South Korean FDI ($1.97 billion in the first half of 2018) actually exceeded FDI into China ($1.6 billion over the same period).

The prospect of increased South Korean visibility on this issue is not relished by President Moon Jae- in. After all, the overriding issue for the U.S.-ROK relationship has been base support, an issue with sensitive connotations domestically. However, there may be growing realization among South Korea’s leaders that the U.S. position on Huawei—and Chinese ICT supply chains in general—is a bipartisan one across Washington DC. This was the primary message during the Munich Security Conference in Germany held this past February, with senior Democrats such as House Speaker Nancy Pelosi and House Intelligence Committee Chairman Adam Schiff showing a rare example of bipartisanship by echoing the administration’s warnings about the Chinese company in their remarks. Slowly but surely, U.S. allies are beginning to realize that this issue is one where there is little daylight between the two parties in Washington.

While it is true that to date U.S. efforts to pressure their allies have only been reluctantly accepted, there are increasing signs that states wish to avoid the supply chain vulnerability that comes with dependence on China. The recent prospect of a British “D-10 Club” of countries at the next G7 provides a potential breakout for Seoul, Canberra, Tokyo, and other allies from the security-trade dilemma. Speculation that India’s is considering a ban of ZTE and Huawei components from its 5G networks also supports this trend. As a member among 10 major economies, South Korea will have less to fear from a vengeful China; as a collective that includes multiple U.S. allies, it will also be able to balance U.S. policy preferences with the interests of the wider group. Either way, any diplomatic grouping looking at both trade and security in relation to China would certainly bear watching.


The COVID-19 Crisis and the Coming Cold War

Security Nexus, 30 March, 2020

The COVID-19 Crisis has been a significant global event, putting stress on states in how they respond, exasperating geopolitical tensions between great powers, and impacting manufacturing and shipping. Many are scrambling to understand the long-term consequences, with Foreign Policy’s recent review by 12 leading intellectuals being an obvious example. Notable predictions from them include the possible end of (economic) globalization, or at least the end of US-led globalization; other predictions include the rise of state power, diminishing individual liberties and highlighting the limitations of international organizations (“the state is back”); and others note the implicit ideological struggle between the authoritarian and democratic models of response to the virus.

Fundamentally, the COVID-19 Crisis has reinforced the predominant trend in the global system: the geopolitical competition of the two largest economic and military powers, the United States and the People’s Republic of China. The two have engaged in a war of words over the origins of the virus, which raises three key issues of importance. The first is that the PRC remains a brittle superpower, and in its quest to retain domestic control, it is willing to project blame on external states – including the global hegemon, its foremost competitor – in order to retain legitimacy and social control at home. Second, the ideological component that divides the two – the systemic and values differences, so speak – that so defined US-USSR competition is once more becoming a key characteristic of great power relations at the top tier. Third, that the geopolitical competition between the two is – as with the Cold War – is unlikely to lead to actual warfare. Instead, we are likely to see a discourse battle for “hearts and minds”, aimed at audiences in Europe, the Indo-Pacific, the Middle East, and Africa. This competition is likely to be the most dominant feature of the international system until the middle of this century, simply because of the size of the two countries and the resources they bring to the competition.

While many consultancy reports (and even some banks) breezily surmise that the PRC will surpass the United States by 2050, usually using GDP as a crude marker, the PRC’s rise is not at all clearly ordained (though PRC messaging would have us believe otherwise). Demographic, governance, and structural issues at home, mean that while the PRC will indeed become a formidable power by 2050, perhaps on a par with the US, it lacks the structural features that will continue to give the US an edge. As some have argued, the US is rich in energy resources, buttressed by two seas: its economy several times wealthier and more efficient than that of the PRC, and lacks the welfare and domestic security burdens that the PRC ageing population and system imposes. While superior PRC infrastructure gives an edge, the US’ younger and better educated workforce, drawn from all over the world – keeps it competitive technologically. By contrast, increasing political control over the private sector is reviving state-planning and control of the economy by the PRC’s least-efficient sector. As with the USSR, this will ultimately stifle innovation among the PRC’s larger number of scientists and engineers.

This battle for ideas and for framing will be enhanced by the surge toward increasing online activity of human populations. This is both due to short-term effects of the COVID-19 virus which has forced many millions to work from home and the long-term effects of the ongoing revolution in information communications technology (ICT) – 5G and its basket of attendant technologies in the Internet of Things (IoT) and the 4th Industrial Revolution. Simply put, more and more people are spending more and more time online, they are socializing there, working there, picking up their news there, and carrying out more and more of their commercial activity and both the COVID-19 Crisis and the enhanced broadband of 5G will only increase that shift from the high street to silicon valley. Indeed, the US stock market has been buffeted from the COVID-19 Crisis by heavyweight technology shares and US manufacturing. Both the United States and the PRC are implementing policies that will attempt to revolutionize manufacturing, and are in a data-led arms race that includes big data analytics, machine learning, 3D printing, and quantum computing. As is evident in the PRC’s own policies, there is an awareness that these new technologies are becoming new pillars of state power, enabling order-construction – in finance, in trade, in governance, and in shipping – and thus will be one of the primary methods of order-contestation between the two superpowers.

There are doubtless many other knock-on effects of the COVID-19 Crisis, including the possible vulnerability of states across the developing world, the slight surge of land-transport as sea-based shipping struggles with shut-down ports and over-capacity. Of course, not all of these trends can be viewed only through the lens of great power competition, but as the African proverb has it, “when the elephants fight, it is the grass that suffers”. It is very difficult for medium and smaller states to avoid becoming entangled in a geopolitical competition when (1) it is taking place between the international system’s two largest powers across most metrics; (2) it is diffused cold war-style among various social and state activities, including media, technology, and international order (3) it is based on increasingly-sharper ideological and normative differences, causing both states to advance their system as the better model. As has already been raised, global competition has defined ongoing commercial and technological trends, and it will – of course – do that in terms of responding to the COVID-19 virus itself. In 2019, Henry Kissinger, one of the US leading strategists during the Cold War and a leading architect of the rapprochement with the PRC, said that the two nations were “in the foothills of a new cold war”. As this paper has sought to argue, the COVID-19 Crisis is not halting that movement toward a new cold war, but rather accentuating it.
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The UK risks plunging the Five Eyes alliance into crisis

The Telegraph, 4 March, 2020

The Five Eyes alliance has long been a bulwark of the free world. On one level, it is simply an intelligence-sharing partnership between the US, the UK, Australia, Canada and New Zealand. Yet it is able to function as perhaps the most comprehensive espionage alliance in history because of implicit trust between its members, based on an understanding that they share the same interests and ambitions.

Now it is approaching a crisis. And although the UK’s decision to involve Huawei in its 5G infrastructure is the leading cause, this dispute is a symptom of far more fundamental differences over the alliance’s approach to China.

These disagreements have begun to spill over into the open. Last month Mick Mulvaney, the acting chief of staff to President Trump, warned British officials of a “direct and dramatic impact” on intelligence sharing with the US following the UK getting into bed with Huawei.

Meanwhile, Australian MPs on their parliament’s intelligence committee were said to have leaked details of a tense meeting with Dominic Raab, the Foreign Secretary. New Zealand and Canada have been watching from the wings in dismay – but the time is coming when they, too, will have to pick a side.

In all of this, UK discussion of the issue has focused on risk mitigation – whether the threat posed by China can be contained in the specific matter of 5G. But British efforts to reassure their allies are not working. Australia and the US aren’t impressed by London’s attempts to use technical arguments to fudge what they see as a geopolitical debate for commercial reasons. At heart, they are critical of London’s prioritisation of business as usual with China over their collective security.

They see China as a growing regional and global destabiliser – a revisionist power that must be checked. To them, the UK’s Huawei decision illustrates a wider British willingness to sacrifice security for the sake of its own narrow interests.

Of course the UK is free to ignore such worries, but there could be consequences. Britain has stated that it wishes to sign trade deals with both the US and Australia, and the response has been largely positive. Yet it is not clear that those involved can skirt around the issue for much longer.

This is for three reasons. The first is Donald Trump. Although he views renegotiating the US trade posture as a cornerstone of his presidency, he has not taken the Huawei decision well.

Second, the UK has still not fully understood the scale of the diplomatic damage. Continuing to treat this as a solely Huawei-related problem rather than a broader China issue has annoyed American and Australian foreign policy experts, particularly in their security communities. From their perspective, Britain is ignoring an assumption, built into Five Eyes, that all five are to defend themselves and each other from authoritarian states.

Third, there are troubling signs that China is developing a strategy which draws on the UK’s resources to achieve its ambitions. Consider its investment in the UK fintech and hi-tech sectors and the calls for a “Golden Era” relationship.

It is only becoming more obvious to Washington and Canberra that, while they have adjusted to Beijing’s aggressive stance, the UK – and to a lesser extent, New Zealand and Canada – have not. Such divergence is unsustainable if Five Eyes is to function smoothly – and this on top of the UK’s belief that it should focus more on Russia than on China.

Britain now faces a difficult choice. It can continue its current approach towards China and attempt to reap the economic gains. Alternatively, it might craft a more careful approach, similar to those of the US, Australia and Japan.

Neither option is without cost. The latter means giving up some of those commercial benefits, insisting on scaling back the non-standalone 5G infrastructure which Huawei has already deployed, and realigning foreign policy more broadly. Going ahead with the former, however, risks much graver consequences. The Five Eyes partners are not about to stop working together – but such a deep and special partnership will not last unless all its members trust that they are working for the same ends.


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.


The Times, 16 May, 2019

In a strongly worded foreword to the report from the Henry Jackson Society, the conservative think-tank, the former chief of MI6, Sir Richard Dearlove, branded the government’s strategy a risk “we simply do not need to take”. He called on the government to “reconsider the Huawei decision” and not to “worry about giving offence to China” or “be influenced by the threat of the economic cost”.

The report said it was quite possible that UK cyber experts would be unable to find any “Trojan horses” that existed in Huawei’s equipment even if they searched for years. One of the report’s authors, the Conservative MP Bob Seely, warned that Huawei risked becoming a “cyber-Hydra we cannot control”.

The Times, Charlie Parton, 16 May, 2019

If the smokescreen of a “golden era in UK-China relations” befuddles them, they could do worse than read the report put out today by the Henry Jackson Society. It sets out, with great lucidity, why allowing Huawei a role in the UK’s 5G would be a massive mistake, both for technological reasons and to avoid putting long-term trust in a company so closely bound up with the Chinese Communist Party (CCP). American and Australian contributors to the report explain why their governments have banned Huawei.

5G will be a critical part of national infrastructure over the next 30 years. The report lays out how Huawei’s ownership (far from transparent, but despite its claims not a private company), its ties to and support from the CCP, as well as an obligation under Chinese law to help Chinese intelligence add up to a threat our national security. Ministers should read the report.

 

The Telegraph, Harry Yorke, 16 May, 2019

Huawei argues that these are “hypothetical scenarios” which misunderstand its role as a manufacturer rather than operator in the network, insisting that its founder has made clear it would never install backdoors.

However, Mr Turnbull has endorsed a wide-ranging report published on Thursday by the Henry Jackson Society think tank, which claims the UK’s risk assessment of Huawei is so “narrow” in scope and definition that it is effectively “useless”.

The report, co-authored by Dr Varnish, Dr John Hemmings, director of Asia studies at HJS, and the Conservative MP Bob Seely, claims the “purely technical mandate” used to assess Huawei fails to consider the “wider issue of trust” and the political and legal climate in which it operates.

The trio have urged the Government to block Huawei from the 5G network unless it can demonstrate a “very high degree of insulation” and to work with its Five Eyes allies to create a new system which considers a firm’s “ownership, legal environment and transparency”.

Their concerns are echoed by Sir Richard Dearlove, the former head of MI6, who in a foreword to the report warns that however “remote” the threat may seem, it is one “we simply do not need to take”.

 

Daily Mail, 16 May, 2019

In its report, co-authored by Conservative MP Bob Seely, the HJS said that while Huawei claims to be a private company, in China it acts like – and is treated like – a state-owned enterprise.

It said the company’s organisational structure is “opaque” and it is subject to China’s National Intelligence Law, which means it could be required to assist China’s intelligence agencies in their operations and research and development.

It also questioned claims the risks to UK security could be “mitigated” by excluding it from the “core” elements of the network and restricting it to “dumb” components like antennas.

The report said: “Our technical advisers have indicated that antennas can be modified at both the hardware and software level.

“Indeed, as 5G means moving more and more to software-networking, the ability of a manufacturer to re-purpose an antenna without detection will increase.”

 

BBC News, 16 May, 2019

In a foreword to a new report by the Henry Jackson Society think tank, Sir Richard said: “The fact that the British government now appears to have decided to place the development of some of its most sensitive critical infrastructure in the hands of a company from the People’s Republic of China (PRC) is deeply worrying.

“The PRC uses its sophisticated technical capabilities not only to control its own population (to an extreme and growing degree), but it also conducts remotely aggressive intelligence gathering operations on a global scale.

“No part of the communist Chinese state is ultimately able to operate free of the control exercised by its Communist Party leadership.

 

The Guardian, Dan Sabbagh, 16 May, 2019

In a report from the Henry Jackson Society (HJS), the authors go on to claim Huawei “has long been accused of espionage” – a claim denied repeatedly by the firm – and notes that “while there are no definitely proven cases”, a precautionary principle should be adopted.

The document is co-authored by the Tory MP Bob Seely, who has already raised concerns about Huawei, and the expert academics Prof Peter Varnish and Dr John Hemmings. It adds to pressure heaped on the British government to reconsider letting Huawei participate in the UK’s 5G network from the US and Australia, whose intelligence agencies share information with the UK

 

Graeme Burton, Computing, 16 May, 2019

Huawei has lashed out at a report by the Henry Jackson Society, co-authored by a Conservative MP and a former scientific advisor to the Ministry of Defence, that argues that Huawei should be barred from every aspect of the UK’s 5G networks.

“The People’s Republic of China uses its sophisticated technical capabilities not only to control its own population (to an extreme and growing degree) but it also conducts remotely aggressive intelligence gathering operations on a global scale,” wrote former head of MI6 Sir Richard Dearlove in the foreword.

He continued: “No part of the Communist Chinese state is ultimately able to operate free of the control exercised by its Communist Party leadership… China’s military strategists perceive a world in which the military and the civilian will be fused into a single plane of conflict. The ability to control communications and the data that flows through its channels will be the route to exercise power over societies and other nations.”

While Huawei claims that it is employee-owned, the report points out that it is, in reality, 98 per cent owned by a trade union committee and that, in China, trade unions are subordinate to the state – effectively making it state controlled.

In addition, China’s government treats the company like a state-owned enterprise, lavishing it with up to $77bn in lines of credit to underwrite its rapid expansion in China and overseas.


Australian Financial Review, Hans van Leeuwen, 9 May, 2019

The Five Eyes partnership is extremely robust but not entirely unbreakable, said John Hemmings, director of the Asia Studies Centre at the London-based Henry Jackson Society.

“If the technical vulnerabilities are such that they threaten US and Australian national interests or security then inevitably there will be a gradual degrading of what is shared, and that will be a tragedy for Britain and for the other four,” he said.


Huawei’s link to Chinese state agencies ‘high to certain’, says security report

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The Sunday TimesCaroline Wheeler, 28 April, 2019

The Chinese telecoms giant at the centre of a row over plans to allow it to supply technology for the UK’s new 5G network almost certainly acts on behalf of its national intelligence agencies, according to a report co-authored by a former government security adviser.

The report, by the Henry Jackson Society (HJS) think tank, concludes that the probability range is “high-to-certain that Huawei acts on behalf of China’s intelligence organs”.

It also asserts that Huawei’s inclusion in the creation of the UK’s 5G network is “highly prejudicial to UK network integrity and entails a medium-to-high risk that Huawei network access would be utilised in pursuit of Chinese state security goals”.

China’s ambassador to the UK Liu Xioming urged Britain over the weekend to resist external “pressure” and “interruptions” on decisions regarding Chinese companies. Writing in the Sunday Telegraph, he said Huawei had enjoyed a “good track record on security”.

The disclosure follows the leak of a decision by the normally top-secret UK National Security Council to allow Huawei to supply “non-core” parts of the 5G network after a meeting last week in which five cabinet members raised objections.

The report, co-written by Peter Varnish OBE, a former government security adviser, Dr John Hemmings, director of Asia studies at the HJS, and the Conservative MP Bob Seely, will cast fresh doubt on claims that Huawei is a private company.

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