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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.


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.


Gavin Williamson’s critics miss the point. There is a strong case for resisting Chinese aggression

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The Telegraph, 17 February, 2019

China’s decision to cancel a trade summit with the UK over remarks made in a speech by Gavin Williamson seems like bad news for Britain – it is estimated that the expected deals could have been worth £10bn over five years. Former Chancellor George Osborne accuses the Defence Secretary of “gunboat diplomacy of a quite old fashioned kind”.

The insinuation of these comments is clear: Williamson has hurt the economy by angering China. Yet beneath the outrage, China’s reaction suggests that the UK is finally beginning to develop a coherent response to Chinese aggression.

China’s current diplomatic aim is to persuade foreign governments that access to its market is based on largess and nobility, rather than the rules and regulations of the World Trade Organisation – heaven forbid we expect China to play by the rules. Not only is this type of discriminatory access illegal, it is also unlikely to be effective.

As British officials confided in me last year, Prime Minister David Cameron’s meeting with the Dalai Lama sent diplomatic relations into freefall, but barely affected trade. Deals continued to be signed. Political leaders were simply deprived of photo opportunities. Similar headlines which spoke of Beijing being “enraged” overlook the clever reward-punishment strategy deployed by Chinese leaders, which leverages market access to persuade countries to overlook or accept their expansionism. We are idiots if – knowing this – we bend to their manipulation again and again.

Williamson’s speech was hardly the fire-and-brimstone some critics are suggesting. I would defy readers to find an offensive word in it. He speaks of sending Royal Naval forces to “the Pacific region”. The Sun has creatively re-branded this as “threatening to send a British aircraft carrier to China’s backyard”. Really? As well as China, the South China Sea is shared by Brunei, Malaysia, the Philippines, Taiwan and Vietnam. Parts of it are more than 1,800 km from mainland China (for context, the distance between London and Moscow). China has no legal claims to the South China Sea, beyond usual practice on the high seas.

The Government’s new Global Britain policy emphasises its support for the ‘rules-based international system’. Yet the widespread criticism of Williamson suggests that these are mere buzzwords to our foreign policy elites. The Defence Minister deserves more support. What he said would hardly have surprised the Chinese, and he was simply doing his job of putting forward a strategy for protecting Britain’s interests.

report by the Henry Jackson Society, published a week before Mr Williamson’s speech, attempted to define Britain’s interests in the South China Sea and called for the very transit that has now so angered Beijing. Of course protecting jobs and replacing access to the common market are crucial goals for this government, which must be balanced with hazy geostrategic terms like “freedom of the seas”. However, even if we were to discount our responsibility to our Asian allies and partners, it would be unwise to sell out for deals worth a mere £10bn in cosmetics and poultry. This figure is dwarfedby the £124bn of UK trade that crosses the South China Sea to southeast Asian markets. Selling out British national interests in open and free trade routes isn’t just short-sighted, but terrible fiscal arithmetic.

China has built multiple military bases, bristling with anti-ship missilesthree of them larger than the US military’s Pearl Harbour. If you wish to control something, that is exactly what you do.

Press reports also talk about British officials embarking “on a frantic round of diplomacy to try to get the talks back on track”. This humiliation is likely the only real punishment that China will end up handing out.

In all of this, we overlook China’s reasons for wanting to trade with Britain. Skyrocketing food prices – the product of Trump’s tariffs – are pushing them towards alternative sources of poultry. The poisoning of citizens by dangerous counterfeit cosmetics gives China another strong incentive to reach a cosmetics deal with the UK, where standards are higher.

For all that Treasury figures might talk down our global standing, we should not forget that Beijing needs Britain to internationalise the Chinese currency, the renmimbi. Their new London Embassy, to be built in the heart of the City, reveals a long-term interest in accessing UK finance, fintech, and computing.

Finally, there are important – though much overlooked – ethical arguments. Are we really going to continue to aggressively pursue trade deals with a state that has re-created concentration camps for the modern era? Foreign policy elites in Western nations are still grappling with the moral conundrum this presents. Whatever our ultimate conclusion, I am convinced history will judge Mr Williamson’s remarks rather more favourably in years to come.

Britain needs to steel itself for the fight – if we decide to stand up to China, there will be far worse days than a cancelled summit.


Daily Express, Marco Giannangeli, 11 February, 2019

Report authors James Rogers and Dr John Hemmings, said: “In the South China Sea, the People’s Republic of China is seeking to revise the Law of the Sea by asserting a number of unlawful and excessive claims over various international waters and low-tide elevations.

This is important because the UK, a maritime trading power, relies on maritime communication lines, which in turn depend on the cohesion of the rules-based international system.

“Maintaining a persistent naval presence in the Indo-Pacific – not least the South China Sea – comes at a cost.”


Daily Express, Harvey Gavin, 9 February, 2019

But despite the risks, the HJS report says the UK should project its power into the South China Sea and uphold the law of the sea by carrying out its own freedom of navigation exercises in conjunction with allies.

The authors conclude: “The South China Sea may seem like a distant geopolitical theatre to the UK and therefore largely peripheral to core British national interests.

“However, nothing could be further from the truth: aside from its economic significance to British trade, which is considerable and growing, it marks a sort of litmus test for the durability of the rules-based system.”


UK Defence Journal, Henry Jones, 30 January, 2019

The report, published by The Henry Jackson Society and entitled ‘The South China Sea: Why It Matters to Global Britain‘, claims China’s “unlawful and excessive claims” in the area pose a significant “threat to British interests”. The UK must continue to “reject Chinese claims over international waters”.

It recommends establishing a policy of Royal Navy vessels cruising through to the sea to deter China, in addition to sending HMS Queen Elizabeth to the area when fully operational in 2020-21.


China now appears ready to use execution as a weapon of diplomacy

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CapX, 17 January, 2019

The recent decision by a Chinese court to sentence Canadian Robert Schellenberg to death has led many international observers to claim that the decision is a political one, part of Beijing’s ongoing diplomatic pressure campaign against Canada over its detention of Meng Hanzhou, a senior Huawei executive and daughter of the company’s founder.  Schellenberg’s sentencing comes after two other Canadians, Michael Kovrig and Michael Spavor, were arrested in December.

If this were true, it would add to the horrific realisation that the People’s Republic of China is fundamentally changing for the worse. It would – as Donald Clarke, a professor of Law at George Washington Law School has stated – indicate that “China views the holding of human hostages as an acceptable way to conduct diplomacy”. Now it appears that it is willing to sentence one to death.

According to his analysis, a number of features stand out that support the idea that the retrial of Schellenberg is related to Ms Meng. These include the original delay in trial and sentencing – he was arrested in 2016, after all – which might indicate that the evidence was weak, but that courts didn’t want to embarrass the police by throwing it out. Second, it is very rare for a retrial to find heavier punishment was merited (Schellenberg appealed after being handed 15 years in the first trial). Third, the retrial was rescheduled very hastily, with the punishment being handled down in only 20 minutes. Finally, it is odd that of all the individuals indicted in the original case of drug smuggling, Schellenberg had the smallest supposed role. It makes his sentencing particularly repugnant.

Naturally, China has used just enough legal cover to maintain the fiction that Schellenberg’s case is a legitimate example of the fair workings of its legal system, but few are convinced. Even those with strong links to the state have openly said China would take revenge.

Hu Xijin, editor of the virulently nationalist English-language propaganda outlet the Global Times recently published a video in which he warned that Canada should expect “far worse” retaliation from Beijing if it did not free Ms Meng. “Meng Wanzhou was released on bail, but Canada must do more to restore her freedom and put an end to this incident.” He stated. “Otherwise China will definitely take retaliatory measures against Canada.” Ms Meng is currently on bail, living in one of her luxury homes in British Columbia. The contrast with her situation and the three Canadians now in Chinese prisons could not be more stark.

To some extent, travel to China has always come with risks. Ten years ago, if someone working in government or business went to China, they tended to leave their electronic devices at home. There was a realisation that the state has a very aggressive attitude toward information, both proprietorial and strategic. According to cyber expert Peter Varnish, a visiting professor at the University of Coventry, Chinese police and security personnel are able to access the data of unwary travellers within hours of arriving in the country. Now, it seems that personal safety must be added to data security. One hopes that travel warnings will be added to the pages of Western diplomatic websites.

The fact is that the world is going through a major overhaul of its thinking on China. Much of this has been accelerated by the leadership of Xi Jinping, under whom party control and influence have grown, and authoritarian policies and traits have flourished – including the suppression of human rights groups, religious minorities, and free media. The use of diplomatic hostages now adds China to a list of countries such as Iran, Iraq, and, most recently, NATO ally Turkey, which took an American pastor hostage. Unfortunately, China’s turn toward authoritarianism also comes as it arrives on the global stage as a preponderant power, one capable of re-shaping the global order.

We can no longer treat China as a country just like any other. Its leadership has decided that the party must be protected at all costs, and this requires a super-nationalistic approach toward domestic and foreign policy. “Face” is more important than law. It is this desperate need for status and rank that is beginning to drive its relations with the Uighurs, driven to detention camps in the millions, and with the West, driven by the party mantra of historic humiliations. Its concentration camps and its take-over of large parts of the South China Sea are reminiscent of the rise of other authoritarian powers in the 20th century.

It is this same desperate need for face which could see China execute Robert Schellenberg, a 36-year-old Canadian citizen, a man who still protests his innocence, a man whose biggest mistake may have been to travel to a country in the midst of change.

Jeremy S. Maxie

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