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The great ‘techtonic’ shift: why now?

On the east bank of the brimming Pearl River rests Shenzhen, a southern Chinese city neighbouring Hong Kong. This little fishing town was only brought to life in 1979 when it became the first Special Economic Zone in China. Eight years later, it became the place that incubated Huawei, the world’s largest telecom equipment supplier and the second-largest smartphone producer, which started by producing telephone switches for premises in Hong Kong.

Fast forward to 2014, a lip-syncing app called Musical.ly was created by two bohos in Shanghai, a bustling metropolis in China. Four years later, the app was acquisitioned by ByteDance, a Beijing-based internet technology company, and merged with TikTok, a video-sharing app which then rose to become a global phenomenon available in over 150 markets and 75 languages.

Huawei and TikTok are companies in two completely different worlds. The former is a diligent hardware manufacturer, whose name people outside China could barely pronounce two years ago. The latter is a flashy social media app with teenagers around the world sharing their 15-second videos. The only thing that they have in common is their country of origin, and yet it is because of their “Chinese root” that they recently found themselves together in a significant geopolitical showdown.

Huawei and TikTok are facing sanctions in different parts of the world on the ground that they pose serious national security threats to other countries. In late June, TikTok was banned in India, its largest market with 125million active users. The app is also facing a potential ban in the US. Meanwhile, Huawei has been enduring US sanctions since 2018, seeing itself on the US blacklist and its CFO arrested under the warrant of a court in New York. The latest sanction introduced in May this year constitutes an even larger blow to Huawei, barring the telecom giant from using any American technologies, including types of machinery and software currently indispensable for the production of its chips.

While fighting vehemently against the allegations that they work for the Chinese Communist Party, the spokespersons for both companies appeared to be baffled by the situation—Tiktok has kept people around the world entertained, and Huawei has been a critical supplier of 3G and 4G networks on different continents; why was the world turning on them now?

What seems to be a sudden eruption of hostility towards the two tech companies right now is the effect of a ‘techtonic’ movement in a longer run. Since the turn of the century, the technological advancements made in different parts of the world have played a significant role in shaping and reshaping the global order. As a nation’s backbone, technology is the means to maintain security and prosperity, and a necessity in order to gain a foothold in the international arena. Therefore, whoever leads in the tech race tends to champion the game of politics—just think about the British Empire in the First Industrial Revolution, which saw the creation of steam engine and the mechanisation of production, and the US in the second and third, which led to the massification of electricity and automation.

Now, a new seismic wave is sweeping across the world with the advent of Industry 4.0, marked by the breakthroughs surrounding Information and Communication Technology (ICT). This carries great implication for the distribution of military and political power across the globe. Primarily, the advances in ICTs and the digitisation of information have enabled more pervasive intelligence collection and made it available to a broader range of actors. While it used to be the National Security Agency of the US who could provide actionable intelligence in real-time, any state with a telecommunication agency can now potentially develop the kind of signals intelligence collection capability, by capturing data including emails, texts, phone calls and more. Moreover, social media platforms are reservoirs of personal information that allow for the collection of intelligence in large databases, which means that intelligence gathering will no longer be the privilege of a few governments in the developed world, like the Five Eyes—an intelligence alliance between Australia, Canada, New Zealand, the UK and the US.

With such strategic importance, the competition to become the next global technology leader is getting more intense, where countries rival with each other in areas ranging from the Internet of Things to robotics and artificial intelligence. China has made it explicit that global leadership in Industry 4.0 is a major objective of the Xi Jinping regime. The state has devoted $300 billion to “Made in China 2025”, a government’s grand scheme to develop strategic areas, such as semiconductors. China’s plan to become the world’s next tech leader is mirrored by a ‘Made in India’ vision put forward by India’s Prime Minister, Narendra Modi, who made a speech last year announcing his country’s readiness to lead the future of technology. Meanwhile, in the UK, the call for finding “homegrown alternatives” to foreign telecoms and nuclear power stations has become louder from Labour under the new leadership of Sir Keir Starmer. In short, because of the great potentials of the ICT-related technologies, it would not be surprising if the up-and-coming fourth industrial revolution paves the way to a new chapter of techno-nationalism.

While the global tech race might have previously focused on grooming national tech champions, countries are now readier to take the offensive. The thought of China getting ahead, in particular, unnerves Washington. With a hawkish turn on foreign policy, the US-China fallout has steered the global competition in technology into a more treacherous lane.

President Trump started a trade war against China in 2018, levying tariffs on Chinese goods. At the same time, the Trump Administration began to blacklist many Chinese firms and institutions that are perceived as “threats to the US national security”. While imposing sanctions on Chinese tech giants Huawei and ZTE since 2018, the Administration has also begun to call on US allies to follow its suits. By the end of 2019, Australia, Japan and New Zealand have banned Huawei from rolling out 5G in their countries.

In the meantime, the UK government has made a U-turn, by reversing its decision in January this year to cap Huawei 5G’s involvement at 35%. On 14 July, the government declared that Britain is to phase out Huawei by 2027, on the ground that Huawei may have to compromise security when constructing its 5G network under the current US sanctions. Such a decision could potentially lead to more countries in Europe, shutting their doors on Huawei.

The UK government’s change of mind signifies the increasing role of geopolitics in shaping a country’s strategy in the global tech race. The Hong Kong National Security Law enacted by the Chinese central government on 30 June prompted the UK to re-evaluate its relationship with China—or at least, the law justifies the belief that China is a real security threat. Despite the immense notoriety of the law, Beijing introduced a legal framework to criminalise the act of secession, subversion, terrorism and collusion with external forces. For most of the international public, the law constitutes an encroachment on the fundamental civil rights of the people in Hong Kong and suggests the extent to which China would go to assert its authority. With such ideas in mind, the debate around Huawei in the UK was no longer about whether Britain can adequately manage the potential security risks of Huawei, but whether it is willing to do business with China, a “hostile state”, as described by the UK government.

Ironically, those who have been garrulous in accusing Huawei of spying for the Chinese Communist Party are the politicians and social influencers that understand little about cybersecurity. Dr Greg Austin, a senior fellow at IISS, a London-based think tank, commented that “powerful countries like China and the United States do not need nationally-based companies for globally effective espionage. The US case against Huawei always had more to do with exaggeration of the espionage gains to China from it than with any sober assessment on that front”. However, when the debate escalates into one on values, any sober analysis on the situation is likely to be swamped by the emotional speech that reduces the issue to a choice between commercial benefits and national security and integrity.

Similarly, India’s recent ban on Tiktok, along with 58 other Chinese apps after a border clash it had with China in mid-June represents another episode of the politicised tech race. The Indian government’s spokesperson said that these apps are “prejudicial to the sovereignty and integrity of India, defence of India, security of state and public order”. This decision was subsequently followed by the announcement of Mike Pompeo, the US Secretary of State, on the possibility of a Tiktok ban in the US.

Granted, the concern over data privacy on social media platforms is and will always remain a valid one, given that social media apps are capable of gathering a large amount of personal information, such as users’ IP addresses, in-app messages, geolocation information, and much more. However, the kind of information that TikTok can access to is far less valuable, say, than those stored in government agencies that manage civilian workforce, including personal information gathered in background checks along with records of fingerprints. Security and data privacy could be more effectively addressed by improving government’s own capability to prevent infiltration to these databases. Rather, the authorities did not make serious effort to investigate in the specific security issues, before singling out one app, threatening it with an outright ban, and branding it as a “puppet of the Chinese Communist Party”. All of these suggest that TikTok is being used as a bargaining chip for broader geopolitical leverage.

It should also be noted that the systematic attacks on Huawei and Tiktok are being launched against a backdrop of a post-COVID-19 world, where socially responsible technology firms are becoming an essential pillar of the society, while globalisation may face a major backlash as people realised what it might take to be interconnected.

On the one hand, the pandemic has made a case about technology firms’ capabilities in the provision of public goods. Governments around the world relied on leading technology firms to develop coronavirus tracing apps to help them inform their citizens and monitor the spread of the virus. Remote working and online schooling are only made possible with reliable telecommunication networks, while social media platform providers can play a central role in spreading information and fighting fake news and hate speech surrounding the pandemic.

On the other hand, the pandemic has further eroded people’s faith in globalisation, which had already come under fire with nationalism and populism on the rise. Countries will soon start to seek greater self-sufficiency, after bearing the brunt of a highly contagious pandemic enabled by international travels and the economic costs resulting from the disruptions in the global supply chain. At the same time, the pandemic might also have been a watershed moment for people from different countries to realise how different they are from each other. While some countries were quick to enforce total lock-downs and expected full co-operation from citizens, some other countries were stauncher in terms of maintaining the maximum sphere of individual freedom. In other words, COVID-19 has created a new context for people to highlight their old ideological difference again.

These two implications combined mean that the world, in general, could potentially become less inter-dependent, while countries hasten to invest more to develop their own technologies. This, in turn, could mean that national governments would be more prepared to rein in foreign tech giants, especially when they are perceived as unmitigable risks to the domestic society or national integrity in one way or another. After all, in an increasingly politicised global tech race that might descend into a zero-sum game sooner or later, raising homegrown technology leaders while side-lining the foreign ones seems to be the safest bet—but it would not make the world more innovative, nor safer.