February 22, 2023

In a series of posts over the past couple weeks (LINKS), we have documented how China has been successfully carrying out a concerted and multi-faceted digital program designed to re-make the post-WWII world order and redirect it toward China. The Chinese campaign is well conceived, integrated, generously supported, and largely covert, which is consistent with traditional Chinese thought as illustrated by Sun Tzu to Mao Tseung.

The campaign began with China (like many others) using the vulnerabilities in digital systems to steal western digital intellectual property, enabling them to leap-frog generations of expensive western R&D. On this western base, China invested heavily in their emerging tech companies using both substantial government funds, as well as western venture capital.  The result was a world class Chinese IT technology industry. China then leveraged its substantial financial system to cross subsidize Chinese technology by offering sweetheart deals to countries as an incentive to buy Chinese. Naturally, these loans were to be repaid using Chinese currency – a not too subtle wedge to eventually replace the US dollar as the world’s dominant currency.

China then leveraged these assets through a series of ongoing programs, such as the Belt and Road Initiative, the Civil-Military Fusion, and the Digital Silk Road, to achieve world-wide geo-political and military goals. A realistic assessment of these efforts would conclude that, although there have been missteps and inefficiencies, overall, the program has been a massive success. Domestically, the World Bank has said China’s economic progress, since its opening in the 70s, is the most dramatic in world history.

Internationally, China has already established itself as the backbone communications system throughout most of the world, complete with mandates for the tech companies to assist the CCP. Their influence over Asia matches that of the USSR over Eastern Europe in the 60’s and 70s.  They have made substantial gains in Africa and Latin America Europe.  In response to US policy proposals to “rip and replace” Huawei 5G technology Vodafone, the west’s largest telecommunication carrier has noted that Huawei also provides the basis for their 3G and 4G systems making Rip-&-Replace quickly both economically and practically infeasible.  Even Australian experts have acknowledged that China is now central to their recovery from the COVID-19 pandemic. 

Notwithstanding China’s initial success in remaking the 21st century, the US and its western allies have ample recourses to recover lost ground.  Among the advantages the west has are nearly a century of close trade and diplomatic ties, a far larger economy – especially, combining the US and Western Europe. However, the biggest advantage is the free-market system that rewards innovation, entrepreneurship, and free thought.  This system is a far better match for the speed and flexibility the modern digital world demands, and the US and West are well positioned to capitalize on them – if we don’t screw it up.

Just as we would be wise to develop a national digital strategy matching China’s success in terms of thoughtfulness, integration, and financial support (which would be more than a limited cybersecurity strategy).  We should also learn from China’s mistakes. 

Specifically, China has, in recent times, chosen to ratchet up the degree of government control over its technology companies and in so doing has impeded its own success.

A thoughtful article in the NYT this week analyzed the question of why China didn’t invent ChatGPT? The author, Li Yuan concludes, “Heavy-handed censorship has tamed the industry’s ambition and blunted its innovative edge. It wasn’t always that way.”

As we await a new cybersecurity strategy from the Biden White House, we should be hoping for a strategy that leverages the entrepreneurship and innovation that has catapult the US back int the lead in major technology innovation such as AI.  Ratcheting up regulation in our critical tech sector, as the Chinese have done to their detriment, in the name of cybersecurity would be counterproductive. To compete we need government working with industry not curbing it.

Ironically, China’s recent intensified government control over tech is rooted in their security concerns.  However, to the CCP, “security” means pretty much the polar opposite to how it is understood in the US.   In the US, we think of security largely in terms of protecting individual privacy and free thought.

For the CCP, the “security” issue is that individuals will expose themselves to new thinking, which is dangerous to the state.  Yuan in his NYT article even cites a recent job posting for China’s Pengcheng Laboratory for a mid-level position working on Chinese digital infrastructure. The top requirements for the job are “possessing high ideological and political qualities adhering to the guidance of XI Jinping’s new era of socialism with Chinese characteristics.”

Regardless of which definition of security spawns increased government control, the impact in terms of limiting needed innovation and progress is clear.  What we need in a new digital strategy is one that appreciates the issue as more than technical cybersecurity.  The foundational characteristic of the digital age is its massive interconnection and interrelationships.  A US national digital strategy needs to forthrightly address the economics and geo-political aspects of the impact of digitalization in an interconnected world and matches the degree of sophistication and support our adversaries are implementing in their own strategies.

Subsequent posts will now turn from analyzing our adversaries’ strategies to how we can best build our own.

(Post based on Fixing American Cybersecurity: Creating a Strategic Public Private Partnership.)