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How China’s Digital Silk Road Is Leading Countries Away from the United States

Even if Washington succeeds in keeping allies and partners from importing Huawei telecom gear, that’s just one of the many ways China is working to burrow into these countries’ economies and infrastructure, creating dependencies that may ultimately weaken these partners’ U.S. ties, a new report finds. And many of these countries may not even know all of the different ways Beijing is building influence, much less have a plan to confront it.

The February report from the International Institute for Strategic Studies, or IISS, looked at China’s “Digital Silk Road” strategy, which includes technology investments, bilateral agreements to conduct research together, funding for students to learn about Chinese tech, the provision of security tech to autocratic regimes, and more. They looked specifically at Indonesia, South Korea, the United Arab Emirates, Israel, and Poland but the issue touches nearly every country. 

They found that at least 16 countries had signed memorandums of understanding with with China on projects related to the Digital Silk Road, meaning that that the two countries had reached some sort of formal understanding about, say, allowing Chinese tech in the marketplace, China hosting an education program, or launching a research program together. But the scope of Chinese tech infiltration goes well beyond those formal agreements. IISS’s research showed that China had carried out projects related to the DSR, be it gaining market foothold, education, etc. in 137 countries worldwide. 

They found many governments were willing, to various extents, to entertain partnerships with China under the assumption that changing political winds (and changing U.S. leadership) would lead the United States to abandon its pressure campaign to urge countries to eschew Chinese technology. But they found that this hedging strategy didn’t affect the countries’ defense and intelligence cooperation with the United States.

“The decision to exclude or limit the integration of Chinese technology by any of the governments analysed was based purely on the hypothetical consequences of not doing so for defence and intelligence cooperation with the US and allies,” the report said.

In Indonesia, the report noted, the past two decades have seen Huawei become “deeply, if not inextricably, embedded” in the country’s information communications ecosystem, “from fibre-optic cable networks thousands of kilometres long to the latest smartphones. Chinese-designed localised apps are prevalent among Indonesian smartphone users, whose communications are transmitted and relayed by Chinese-designed base-station technology and data centres. Much of the Indonesian cloud is apparently Chinese.” China is also playing a big role in Indonesia’s AI research efforts. 

In South Korea, China uses foreign direct investment as a “carrot-and-stick tool” to influence policy. South Korean tech imports to China have “been centre stage in the Sino-US silicon-chip war,” they write, referring to the jockeying between U.S. and Chinese chip makers to get their chips in more electronics. That reveals “an intricate, complex and enormously lucrative national asset which the Korean establishment will apparently defend at some cost to ROK–US relations.”

Huawei has also given China an important foothold in the United Arab Emirates, or UAE. But the relationship deepened by the UAE regime’s purchases of surveillance cameras and facial recognition software to police its own citizens. 

In Poland, China poured money into training and education, such as prize programs at a dozen Polish universities whose winners received a week of workshops at Huawei headquarters in Shenzhen, a second week in Beijing, and a smartphone. They found that Huawei had an agreement with a major Polish university just last June, which is significant because it comes after the United States had ramped up efforts to turn allies away from the Chinese telecom giant and around the same time that Polish efforts to secure a permanent U.S. base in the country failed. 

Even Israel, one of the United States’ closest security partners, occupies “a special place along China’s Digital Silk Road,” having signed a… research and development agreement with Beijing. The Israeli Ministry of Defense, more attuned to US concerns, has been monitoring and raising concerns about China’s activities since the early 2000s.” 

Those agreements and partnerships give China more than a foothold in markets and a toe in government policymaking. They also secure access to civilian and corporate data that can be of use to China’s tech companies — and help Beijing’s intelligence operatives more effectively target citizens with disinformation. 

“Even if it is assumed that the risk posed by Chinese technologies to intelligence security is low, the ability to harness big data should be of concern to defence industries as it has relevance to future competitiveness in machine learning and artificial intelligence (AI),” they write. 

The biggest problem, IISS found, is that governments are taking no steps to determine how much or what kind of Chinese investment posed a possible risk. “Debates also focused largely on whether to accept toplevel Chinese physical infrastructure and did not, for example, seem to delve into debates around whether to rely on imports of copper wire from China, or whether to permit Chinese investment into local start-up industries. It would thus seem from this research that it is difficult for national-level governments to precisely determine what level of integration of Chinese ICT technologies should be considered significant.”

source: NextGov