Author : Trisha Ray

Expert Speak Digital Frontiers
Published on Apr 09, 2020

In the near future, we will likely see the United States supplement domestic mechanisms to decouple from China — with systematic escalation — at key global technology norms-making bodies.

Separation anxieties: US, China and tech interdependence

On 4 April 2020, the President of the United States quietly signed the Executive Order establishing the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector. The Executive Order will in effect restrict Chinese investment into the US telecommunications sector, the newest milestone in the US’s decoupling with China.

Technonationalism on the rise

Sino-US relations have, for several decades, been tepid at best, marked by continued discordance on issues like intellectual property, cyber stability, and human rights, among many others. The precarious balance in the relations between the two have been based in interlinkages of mutual benefit: the US gradually emerged as the top destination for Chinese investment and China has leveraged ties to build its own industries and talent.

Fissures between the two were brought into sharp relief in the realm of emerging technologies. Washington is seeking to consolidate, “promote and protect” its lead, explicitly framing this as part of the ‘strategic competition’ with China, while China has enlisted its technology giants in a coordinated, nationwide bid for leadership in everything from biometrics and artificial intelligence, to 5G and semiconductors.

This move ostensibly creates further formalised roadblocks to Chinese overtures toward US 5G.

In the summer of 2018, the United States imposed the first in a long series of tariffs on Chinese imports and, by declaring technology trade a security issue, has since put in place mechanisms to systematically shut-out Chinese investments and contracts in critical industries. Many would be familiar with the Committee on Foreign Investment in the United States (CFIUS), which made headlines for its part in blocking Broadcom’s takeover of chipmaker Qualcomm.

The Telecom Committee is the latest addition to the US’s technology strategy toolbox. The Executive Order essentially formalises the erstwhile “shadowy” Team Telecom, comprising the Secretary of Defense; the Attorney General; the Secretary of Homeland Security; and the head of any other executive department or agency the President deems essential. The Committee will “assist the Federal Communications Commission in its public interest review of national security and law enforcement concerns that may be raised by foreign participation in the United States telecommunications services sector.” The Committee can review new FCC license applications as well as existing licences granted to foreign applicants.

This move ostensibly creates further formalised roadblocks to Chinese overtures toward US 5G. It follows an earlier Executive Order preventing US telecom companies from acquiring and using Chinese components and the FCC’s denial of an eight year old telecom services application by China Mobile.

A painful separation

Even as the US ramps up its efforts to decouple from China on paper, in reality the interlacing connections between the two will take years to unravel. In 2018-19, even in the midst of a trade war, Chinese entities signed USD 11.3 billion worth of investment deals with US entities.

Meanwhile, Huawei, the poster child of US-China tech discord, is so deeply integrated into the US telecom infrastructure, particularly in rural areas, that a complete ban has repeatedly been delayed as telecom providers struggle to replace Huawei equipment and services. Several US partners and allies, even after President Trump said he would hold intelligence sharing arrangements hostage, will not be banning Huawei from their 5G networks. The UK, India, France and Germany have shied away from a ban, partly because their telecommunications ecosystems are deeply dependent on Huawei, as well as the appeal of the telecom giant’s low costs. <1>

Huawei, the poster child of US-China tech discord, is so deeply integrated into the US telecom infrastructure, particularly in rural areas, that a complete ban has repeatedly been delayed as telecom providers struggle to replace Huawei equipment and services.

In the near future, we will likely see the United States supplement domestic mechanisms to decouple from China with systematic escalation at key global technology norms-making bodies. At the International Telecommunications Union, for instance, Huawei has exercised considerable influence on 5G standard-setting and China has significantly ramped up its contribution to the ITU in the last five years, taking it from the 10th largest funder to the top 5.

Just as President Trump has commented on China’s undue influence over WHO in relation to the COVID19 pandemic and threatened to cut US funding, he may threaten the same at the ITU, although it would be wise for Washington to avoid the trap of politicisation without evidence lest it alienates its allies further.

The ongoing contest over emerging technologies plays on age-old drivers: economic security, nationalism and sovereignty. In a contest with such high stakes, it is no surprise that many nations’ first instinct is to erect walls and hunker down. The ties created by globalisation will, however, be difficult if not impossible to sever.


<1> At the time of writing, there are unverified claims that the UK may pull out of its current deal with Huawei over China’s handling of COVID. There is certainly growing ire in the UK over COVID, however it remains to be seen whether this will affect Huawei. https://www.wsj.com/articles/britain-falls-out-of-love-with-china-11585955421

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Author

Trisha Ray

Trisha Ray

Trisha Ray is an associate director and resident fellow at the Atlantic Council’s GeoTech Center. Her research interests lie in geopolitical and security trends in ...

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