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<p>I hardly ever post to these lists now-a-days, because rarely are
substantive issues posted here in any case, but thought of
forwarding this because this refers to my - by now, favourite :) -
issue of pointing to the culpability of civil society actors in
the IG space over the last one decade or so in being partisan to
narrow US led western interests and having considerably forgotten
to promote global public interest, and the interests of the
weakest sections, groups and countries. And, as often happens in
the mid to long term, such partisanship is no longer serving even
western interests that well. <br>
</p>
<div class="moz-forward-container">My posting and engagement on this
issue are aimed at proposing and promoting an effort at a
collective rethink and re-orientation among the IG civil society
about its politics and role, as we enter a digital society where
Internet or digital governance is one of the most important
political subjects. <br>
<br>
parminder<br>
<br>
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<td>[JNC - Forum] US-China digital cold war is well and
truly under-way</td>
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<th valign="BASELINE" align="RIGHT" nowrap="nowrap">Date: </th>
<td>Mon, 30 Apr 2018 12:34:50 +0530</td>
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<th valign="BASELINE" align="RIGHT" nowrap="nowrap">From: </th>
<td>parminder <a class="moz-txt-link-rfc2396E" href="mailto:parminder@itforchange.net"><parminder@itforchange.net></a></td>
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<td>Internet governance related discussions
<a class="moz-txt-link-rfc2396E" href="mailto:forum@justnetcoalition.org"><forum@justnetcoalition.org></a></td>
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<th valign="BASELINE" align="RIGHT" nowrap="nowrap">To: </th>
<td>Forum@Justnetcoalition. Org
<a class="moz-txt-link-rfc2396E" href="mailto:forum@justnetcoalition.org"><forum@justnetcoalition.org></a></td>
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<p><br>
</p>
<p>As in the earlier times, cold war alignments were determined
by, or determined, where a country acquired its armaments from,
in the digital cold war there is going to be a similar schism in
terms of whose digital security equipment you finally trust and
buy, as everything gets underpinned by the 'digital'.... Coupled
with the "digital security" based polarisation will be data
flows polarisation -- EU is determining adequacy tests about
where its data can flow to, the new US CLOUD Act is determining
adequacy test about which countries can access data residing in
the US for regulatory and law enforcement purposes..... <br>
</p>
<p>We were headed towards such a polarisation when, over the last
decade or so, we rejected global institutions and agreements for
Internet and digital governance... What is significant is the
role that civil society groups played in such rejection, and
thus must share the blame of the oncoming digital polarisation
which leaves all countries that are not the US and China at the
abject mercy of these digital super powers ... parminder<br>
</p>
<p><br>
</p>
<p><br>
</p>
<p><a id="reader-domain" class="domain"
href="https://www.internetgovernance.org/2018/04/29/a-chinese-perspective-on-the-growing-high-tech-cold-war/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+internetgovernance%2FabwE+%28IGP+Blog%29"
moz-do-not-send="true">internetgovernance.org</a> </p>
<h1 id="reader-title">A Chinese Perspective on the Growing
High-Tech Cold War</h1>
<div id="reader-credits" class="credits">by Jinhe Liu</div>
<div id="meta-data" class="meta-data">
<div id="reader-estimated-time">9-12 minutes</div>
</div>
<hr>
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<div id="moz-reader-content" class="line-height4"
style="display: block;">
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<div class="entry-content">
<p><span>In Chinese online discussions, many people are
using the expression “one sword throat-slashing
strike.” [一剑封喉] This forbidding term refers to the
United States’ seven-year export ban on China’s </span><a
href="https://www.commerce.gov/news/press-releases/2018/04/secretary-ross-announces-activation-zte-denial-order-response-repeated"
moz-do-not-send="true"><span>second-largest telecom
supplier, ZTE</span></a><span>, which threatens its
very existence and has put the company “</span><a
href="http://www.scmp.com/tech/article/2142557/zte-calls-us-government-ban-extremely-unfair-vows-fight-its-rights"
moz-do-not-send="true"><span>in a state of shock.</span></a><span>”
In the Chinese language, the “one sword
throat-slashing strike” means that in battle a master
swiftly strikes a death blow before the victim has a
chance to resist. Chinese use of this idiom with high
frequency in the context of the Sino-US trade war
shows that there is both a feeling of helplessness and
a fighting atmosphere dispersing though the Chinese
society.</span></p>
<p><span>In January this year, the United States blocked
Chinese tech company Alibaba’s acquisition of American
remittance company MoneyGram; also in the name of
national security it forced AT&T to end
cooperation with Huawei. At the same time, the Trump
administration ordered high tariffs on imported steel
and aluminum and threatened several rounds of tariffs
on China. On March 22nd, Trump signed the presidential
memorandum and announced the Section 301 investigation
of China, which was widely regarded as the focus of
the outbreak of trade disputes between China and the
United States. In April 16th, the United States
launched its “throat-slashing strike” on ZTE. While
some analysts are still discussing whether a Sino-US
trade war will happen, on the other side of the
Pacific the war fire has already begun to burn, as a
sense of economic conflict develops between the two
largest economies in the world. The </span><i><span>New
York Times Chinese version</span></i><span>
characterized the Sino-US dispute over technology and
trade as a “</span><a
href="https://cn.nytimes.com/business/20180326/trump-china-tariffs-tech-cold-war/"
moz-do-not-send="true"><span>New Cold War Era</span></a><span>.”</span></p>
<p><span>After the news of the US sanctions on ZTE came on
April 16, all of China is engaged in a big discussion
of this event. A large number of articles about it
emerge in the mainstream media and social media
platforms every day. The strength of the reaction have
probably exceeded the expectations of American
society, and even China’s own. On the whole, Chinese
society has discovered that its high-tech industry is
weak and unable to resist the US punch, especially
because of its dependence on US semiconductors. It has
been pointed out that none of the 20 top semiconductor
companies in the world is in mainland China (see the
table below, which shows only the top 10). Civil
society, academia, industry, and even the government
are contemplating the fragility of China’s industrial
development and trying to provide effective solutions.
The fact that ZTE violated American law has not been
evaded in China. But China fears that just as a few
days ago America launched a precise strike against
Syria, the United States is now launching an accurate
and fatal strike to Chinese national enterprises.</span></p>
<p><br>
</p>
<p><span>After ZTE’s violation of the embargo two years
ago, it has paid 892 million US dollars for its
mistakes and has reached a settlement agreement with
the US government. Because this strong penalty against
ZTE was closely followed by the fierce Sino-US tariff
war, Chinese people do not believe that America’s main
concern is just ZTE’s violation of the sanctions.
According to the </span><i><span>Wall Street Journal</span></i><span>,
the US Trade Representative Office (USTR) is </span><a
href="https://www.wsj.com/articles/u-s-is-examining-ways-to-retaliate-against-chinese-restrictions-on-u-s-tech-companies-1523910784?"
moz-do-not-send="true"><span>considering actions
against the business of Alibaba Cloud</span></a><span>
in the US. </span><a
href="https://www.uscc.gov/sites/default/files/Research/Interos_Supply%20Chain%20Vulnerabilities%20from%20China%20in%20U.S.%20Federal%20ICT.pdf"
moz-do-not-send="true"><span>A US congressional report
</span></a><span>also accuses other Chinese companies,
such as Huawei and Lenovo, of facilitating commercial
espionage. The latest news shows that the US Justice
Department </span><a
href="https://www.wsj.com/articles/huawei-under-criminal-investigation-over-iran-sanctions-1524663728"
moz-do-not-send="true"><span>has launched an
investigation</span></a><span> into whether Huawei
breaks the Iran embargo. This series of actions make
the Chinese worry that ZTE is just the first step in a
bigger war.</span></p>
<p><span>Americans may not realize that these actions can
be counterproductive. They provoke nationalistic
sentiment in Chinese society. In history, whenever
China has encountered damaging and perceived unfair
treatment from outside, there was always a strong
nationalistic reaction. Signs of this familiar pattern
are appearing again. On April 6, China’s central news
agency used very tough words and phrases after the
extra tariff on China’s $100 billion exports to the US
was announced, such as “the Chinese will struggle
resolutely! And do not blame us for not having
forewarned you!” [勿谓言之不预！] These words are generally
used for the announcement of a war in Chinese
diplomatic rhetoric. The ZTE chairman said that “we
have the support of 1.3 billion (Chinese) people, and
we have the ability and determination to tide over
this difficulty,” after Hou Weigui, the founder of
ZTE, retired and at 76 years old, rushed to the United
States to plead but without any fruit, which aroused
huge empathy by </span><a
href="https://m.21jingji.com/article/20180419/herald/2778441bb91bbbe0189f188b09405445.html"
moz-do-not-send="true"><span>a picture </span></a><span>spread
widely in WeChat, the biggest social media in China .
Then ZTE further issued </span><a
href="http://www.zte.com.cn/global/about/press-center/news/201804CZY/20180420-1"
moz-do-not-send="true"><span>a statement </span></a><span>that
the sanction was “unacceptable.” Subsequently, a
spokesman for China’s Ministry of Commerce also made a
strong statement, saying that China is “ready to take
necessary measures to safeguard the legitimate rights
and interests of Chinese enterprises.” Chinese
netizens even began to discuss whether the country
should take corresponding measures on Apple, widely
quoting an </span><a
href="https://www.forbes.com/sites/jeanbaptiste/2018/04/18/study-what-if-china-bans-apple-to-retaliate-for-u-s-sanctions-against-huawei-zte/#49d1bf0b1e5d"
moz-do-not-send="true"><span>article in Forbes</span></a><span>
which suggests that if China retaliates against Apple,
it will cause massive layoffs and crash in its stock
price. </span></p>
<p><span>The US moves have also encouraged high-level
political leaders in China to push for abandoning
American products and developing their own high-tech
industries. Chinese President Xi Jinping stressed on
April 21</span><span>st</span><span> that “core
technology is the pillar of the country” at the
national network security and information conference.
And the Premier Li Keqiang also spoke at the Executive
meeting of the State Council to promote a national
innovation system aiming at science and technology
development. In fact, Chinese are concerned not only
about the economic losses of the US sanctions, but
also about inadequate self-protection, and, what is
more, about the future of international trade.</span></p>
<p><span>In a more profound context, these actions of
China and the United States are not only solutions to
the trade deficit, but an abandonment of
globalization. Since the end of the US-Soviet Cold
War, the world entered a golden age of “neoliberal”
globalization. International trade promoted the growth
of the world economy. According to </span><a
href="https://www.wto.org/english/res_e/statis_e/wts2017_e/WTO_Chapter_03_e.pdf"
moz-do-not-send="true"><span>the statistics of the
World Bank</span></a><span>, whereas the average
growth rate of world trade in goods was 1.5 times that
of the world’s GDP since the end of World War II, and
in the 1990s trade grew more than twice as fast as
GDP. Trade exchanges between China and the United
States have brought great benefits to both sides. The
low-cost manufacturing industry in China provides a
continuous supply for the high consumption society of
the United States. The huge demand and advanced
industrial technology of the United States have
brought a strong pull to the Chinese economy. While
the order of economic globalization was established by
the United States, it is now the United States who
destroys it. Today’s trading system is so closely
intertwined that it is not all beneficial for the US
to undermine the order it built. The share prices of
ZTE’s U.S. suppliers fell on the news of the ZTE ban.
</span><a
href="https://www.brookings.edu/blog/the-avenue/2018/04/09/how-chinas-tariffs-could-affect-u-s-workers-and-industries/"
moz-do-not-send="true"><span>Research by Brookings </span></a><span>also
points out that China’s proposed tariffs would affect
about 2.1 million jobs spread across 2,783 US
counties.</span></p>
<p><span>The damage wrought to the Sino-US economy and the
global economy by a trade war will be huge, but it is
even more worrying that the global free trade order is
being disrupted. On the Boao Asia Forum on April 10th,
</span><a
href="https://www.nytimes.com/2018/04/11/business/xi-jinping-china-trade-boao.html?mtrref=www.google.com&gwh=D31A11675F599E1C6551FFB29003BCA7&gwt=pay"
moz-do-not-send="true"><span>Xi Jinping announced
further opening up </span></a><span>of the Chinese
market and strengthening the protection of
intellectual property to integrate China deeper into
the world trade system. But the Trump administration
seems to ignore this deliberately. As mentioned above,
Chinese society is worried mainly about the prospect
of its national development in the context of the
times. Therefore, if more trade wars happen, it is not
only likely to lead to China’s aggressive
self-protection measures but also is likely to have a
far-reaching impact on how Chinese understand
international rules. Solving the impartiality of trade
rules is a process that requires stakeholders to sit
down and negotiate. A direct blockade might well
backfire.</span></p>
<p><span>If we look at the Sino-US trade dispute from the
perspective of Internet governance, it can be found
that the Internet seems to be splitting up. A
one-world Internet should be interconnected across the
borders of states, but now territorial governments are
trying to strengthen their control by aligning the
Internet with national jurisdictions. China has
selectively rejected the products of some American
Internet giants, and now, the United States has also
begun to block China’s products. </span><a
href="https://www.internetgovernance.org/2018/01/05/cfius-blocks-deal-u-s-becoming-chinese/"
moz-do-not-send="true"><span>The United States is
becoming Chinese</span></a><span>. The state has
labeled Internet equipment one by one and excludes it
from its own territory in the name of national
security or the protection of its own industries. Some
commentaries assert that the actions by the United
States against Huawei and ZTE are trying to keep the
US the leading position in the 5G technology. But the
establishment of walls to exclude competition deviates
from liberalism. The United States is a strong
advocate of the freedom of the Internet. It developed
the multi-stakeholder model, advocated bottom-up
technical autonomy and open industrial competition; it
has resisted giving governments too much control of
the Internet. But now, on the contrary, the government
of the world’s most powerful Internet country is
holding high the banner of national security to expel
market actors who place it at a competitive
disadvantage. </span></p>
<p><span>When the advocates of rules break the rules,
global confidence is badly damaged. But it is still
hopeful that United States Secretary of the Treasury
Mnuchin is on his way to China to negotiate. So the
rule of free trade and Internet openness has not been
completely abandoned yet.</span></p>
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