China Blends Economic and Political Might for Telecom Primacy

China’s global moves to gain technological hegemony over 5G and reshape the Internet to suit its own needs offer the potential to give the Middle Kingdom control over the telecommunications market and information itself. At the very least, it would achieve market dominance. But at most, it would control both the nature of the Internet and the information that flows through it, say Internet experts.

On the economic side, flooding the global market with subsidized Chinese-made technologies offers the chance for major financial rewards as this equipment and its services become ubiquitous. On the political side, introducing Chinese standards to the Internet and cellular service will give the nation control over both services and data.

China’s high-technology communications and networking industries are proposing a host of revolutionary capabilities to come if vendors cast their lot with companies such as Huawei and ZTE. But these new technologies, once ensconced, would lead their users down a path closed to others and open to Chinese government control.

Ultimately the growth of the Internet itself may determine China’s success or failure. New capabilities incorporated into existing Internet protocol could lessen the allure of China’s proposed new Internet concept.

Melissa Hathaway, president of Hathaway Global Strategies, notes that China published its international strategy for cyberspace years ago in which it highlighted goals for cyberspace and telecommunications. These included the Belt and Road Initiative, the industries China wants to dominate in 2025 and its aims for playing a leading role in standards bodies. These goals were very transparent, Hathaway says, adding that the United States often pursues similar goals. The difference between the two countries is that China follows through and executes its strategies, she allows. China wants to be the lead provisioner of next-generation equipment, data services and applications that also meet more of their political and economic goals.

The seeds for Chinese control through telecommunications already have been sown. In 2014, 2015 and 2017, China’s Communist Party issued public requirements for companies to collaborate in gathering intelligence. This applies to both organizations and individuals, Hathaway adds. The 2017 issuance added the requirement for organizations and citizens to assist Chinese security organs carrying out “the tasks of counter-espionage.” Refusal constitutes obstruction of state security, with appropriate punishment and penalties.

Foreign products and institutions operating in China must comply with these laws, and they are subject to inspection, data localization and mentor-protégé programs providing 49 percent to local providers. “There is a lot to be worried about regarding the law,” Hathaway states. “The law is what makes us question the technology and the integrity and transparency of the companies providing the services.”

Vint Cerf, an Internet pioneer who is vice president and chief Internet evangelist at Google, notes that China’s own implementation of the Internet—“The Great Chinese Firewall”—indicates a high degree of sophistication in the ability to filter content. It has shown no reluctance to clamp down on social media viewpoints that run counter to the government’s positions.

“China is becoming a power player around the Internet in a variety of different ways,” says Laura DeNardis, interim dean of the School of Communication at American University. DeNardis is the author of several books on the Internet, including The Internet in Everything and The Global War for Internet Governance. She explains that this power comes from the rise of Chinese companies, the outsourcing of production and manufacturing by other countries’ companies into China, and its involvement and expertise in standards-setting bodies. What China is doing with Internet governance entails a collection of the activities that are necessary to keep the Internet operational.

China has made changing the rules in international standards bodies a priority for more than a decade, Hathaway notes. Again, this is not unusual for economically powerful countries and their industries establishing a market advantage, she adds. However, shaping standards to provide a broader access to data sets provides a different set of advantages through combining technologies.

The country aims to introduce a new Internet design, which it calls the New IP, for Internet protocol. The New IP would represent a radical departure from the status quo. Even if it does not subsume the entire Internet, it would cripple the interoperability that has characterized the network’s value as an economic growth engine by creating separate and unequal Internets.

Cerf relates that when a Huawei representative introduced it as an Internet Research Task Force (IRTF) development proposal, the IRTF evaluated it and stated that some aspects were not in its scope of responsibility, and it only would consider those aspects that were in its area. The Huawei representative said it was an “all or nothing” proposal and promptly went to the International Telecommunications Union (ITU) and the European Telecommunications Standards Institute (ETSI) to push for support.

“The Chinese seem to be launching a significant effort to alter the course of the development of the Internet,” Cerf says. “Where they can’t do it by those overt things, they also are populating many of the standards groups, including those that are part of the IRTF to bring as much suasion as possible to the Chinese point of view.”

The Internet’s architecture has remained largely unchanged over the past 45 years, even while protocols have been added to all layers to advance its capabilities, he adds. “I am unpersuaded that the desirable properties that the Chinese argue for are not possible to be implemented within the framework of the evolving Internet,” he declares, drawing from his pioneering experience with the Internet. “We have retrofitted a lot, and we’re doing what we’re doing now because the Internet’s capacity has increased mostly because of the speeds of optical fiber and routers that go with it have been able to keep up with the demand.” Cerf has watched this progress, sometimes with surprise at the way technology has kept up with new capabilities offered in the market.

“We don’t need to invent something brand new,” he allows. “What we need to do is ask, ‘What are the requirements, and can they be retrofitted and met within the general Internet framework?’”

DeNardis agrees. “What is the need they are trying to address?” she asks about the Chinese. “I have not yet heard a need that [the New IP] could address that’s not already being addressed in the current structure of the Internet protocol or is being worked on by the institutions of Internet governance.” She adds that the Internet has changed constantly over the decades to accommodate new capabilities.

Ted Hardie, self-described Internet boffin at Google, concurs. “You [incorporate new advances] in a way that remains interoperable with the existing system in order to make sure that what you’re doing is growing the system rather than creating a fork,” he states. “Once you start forking a system, the user base goes off into the two different forks. They have to be managed separately, and you end up with higher costs if you’re trying to service both of them. And, in a lot of cases, the interoperability after that point becomes extraordinarily fragile, and it only works in a limited number of cases for a limited amount of time.”

A gateway would be needed to transition between the two forks, and this indicates the deployment pattern, Hardie says. First will be New IP in China, followed by the gateway system that links the two. Eventually, all the traffic that flows through those gateways will need to undergo a translation process.

Hardie points out that this gateway takes the place of a firewall system or other method of monitoring. It has access to all the traffic that is translated between the two systems, thus adding “a very competent point of control,” he warns. “It’s important for us to recognize that this consequence is something that would be a result of the success of such an approach.”

Above all, this type of configuration records a contract. The format described in Huawei offerings displays a new set of IP headers, a contract between the network and the packet sender, and the user payload. The network and the individual requesting the traffic have a new relationship, unlike that existing today. “The idea that you could go into a coffee shop and browse, and the network wouldn’t know who you were, kind of goes away,” Hardie states. “If you go into a coffee shop and set up a contract with a network, then of course at that point they would know who’s the signatory to each side of the contract. That is a really very fundamental change in the social dynamics of how a network works.”

Similarly, someone could be deemed socially ineligible for a network contract. That person would have no ability to get on the network at all. “We’ve reached about half the world in terms of IP networking, and we really want to reach the other half,” Hardie says. “Creating systems that make it much more difficult to do that is problematic for reaching that goal.

“What they’re building is an Ultranet,” Hardie charges. “The result of that could be that we lose interoperability between the parts of the network that follow along this [current] path, and those that follow along the evolution that is sort of managed by the IRTF and processes like those.

“Losing interoperability is losing the Internet itself,” he declares.

“This is the worst possible outcome,” Cerf declares. “Ending up with a non-interoperable system where you have to build translating gateways wrecks end-to-end security, exposes everything that is going on to the translating gateway, and so it destroys the global interoperability of the system we have today.”

He is blunt about the consequences of this approach. “If you fork, you’re forked,” he declares.

Yet controlling the Internet is only half the picture. China is charging full speed to dominate 5G, the next generation of cellular technology. Building on financial and political support from China, Huawei is leading the charge with advanced equipment and technologies that would create a new architecture for 5G.

Cerf’s biggest issue with China’s 5G approach is the architecture of the 5G control plane. It offers a wide range of functionality, which would be attractive to providers who want to charge differentially for various types of service. The problem with this approach is that it bleeds control away from the Internet layer of protocol and instills it in the hands of the 5G service providers.

“You can’t even get access to those functionalities of 5G without having physical access to that control plane,” he points out. “So, it offers more control of service to the communications and telecoms service providers while at the same time leeching control away from the Internet layer.”

Several countries, particularly the United States, are eyeing Huawei’s proposed 5G technologies suspiciously. Europe analyzed its telecommunications systems last year in which it mapped and identified the increased security concerns over the availability and integrity of networks, the confidentiality and privacy of data flowing over them, and key innovations needed for 5G to enable European economic competitiveness, Hathaway relates.

In 2020, the European Union published its 5G Toolbox with cybersecurity requirements, noting that each state must take appropriate security measures to manage the risk posed by the advanced mobile networks. This includes each operator having a multivendor strategy, Hathaway continues. The diversity of suppliers is an issue, she allows, saying that the only major companies positioned for that end-to-end role are Erickson, Nokia and Huawei.

The Australian Signals Directorate conducted a study on how a foreign adversary could attack a 5G network, Hathaway notes. The study reported that a state-directed company, such as Huawei with China, could be coerced by its government to insert a complex code during a system update. The software-defined network might then fall under the control of that government and its intelligence service, and that control would not be detected. Ultimately, when Australia banned Huawei from taking over its telecommunications, China resorted to retaliatory diplomacy by ending purchases of Australian food products.

Japan also banned Huawei, but it took a different approach by providing tax incentives to spur innovation at home. The country also signed a bilateral agreement with the United States to work together on 5G development.

“When you do a tour around the world of our allies, it appears some of the decisions they are making underscore the concerns,” Hathaway says. “The reason that all of our democracies in all of our countries are talking about this is that we’re dangerously close to not having options—and having a Chinese telecommunication backbone of our digital economy for the next decade.”

The United States is late to the game in terms of competing with Huawei in 5G, she says. It is a 10-year issue that must be addressed with mitigating and business incentives to spawn greater competition. But 5G networks are being fielded today through the next five years, and new players are not likely to appear during that time. Efforts are underway to have the Open Radio Access network standard versus the proprietary standard to allow greater innovation of applications on the edge—in effect, make it more of an application programming interface (API) that opens up the marketplace, she observes.

But the key may lie in the future. Conceding 5G, the United States should accelerate the development, and leadership, of the 6G standard, Hathaway says. “If we can accelerate that and not have to wait a decade for it, then perhaps you can limit the risk by providing a new technology in a shorter period of time while still in a minimal rollout of 5G,” she suggests.

“That might be a smarter path.”

Additional information on Chinese telecommunications efforts can be found in a four-part report in SIGNAL Online at https://www.afcea.org/content/related-content/chinese-telecom-series