The U.S-China Technological Arms Race: 5G and the Surveillance State
President Donald J. Trump and President Xi Jinping in July of 2017. Photo by Shealah Craighead)
On December 11, 2001, China was granted accession to the World Trade Organization (W.T.O.), catalyzing the meteoric rise of the nation's economy and foreshadowing a deepening economic rivalry with the United States. The W.T.O. is an organization made up of 164 countries that all unanimously agree to facilitate trade between each other by lowering tariffs and opening up markets to foreign investors and suppliers. After integrating into the global economy in 1978, China was compelled to join the W.T.O. for access to new markets and better trade deals that would allow the state to become a major player on the global stage.
The decades prior to the accession were characterized by the U.S. promotion of China as an increasingly viable and lucrative trading partner, lending support to technological research and pushing for the acceptance of China into the Asian Development Bank. Under the Clinton administration, the U.S. prioritized making China a member of the W.T.O. in an attempt to democratize the communist nation. This move also sought to force China to adhere to the liberal economic practices enforced by the W.T.O. and strengthen trade relations between the two countries. While the U.S. succeeded in deepening trade relations, increasing bilateral trade from $125 billion to $700 billion per year between 2001 and 2017, China has largely ignored the liberal trade practices of the W.T.O. by frequently engaging in foreign intellectual property theft and employing aggressive discriminatory treatment against foreign producers.
U.S.-China economic interdependence continued to grow throughout the Bush and Obama administrations, but as China became the world’s second-largest economy, political tensions began to heighten due to the closing power gap between the two countries. Today, the current political intensity between the U.S. and China has largely stemmed from the two fateful elections of the former U.S. President Donald Trump and the President of the People’s Republic of China Xi Jinping.
President Xi was elected in 2013 with a grand vision for posturing China as the world’s leading political and economic player. Since his election, President Xi has transitioned China from a primary focus on domestic affairs to international expansion by maintaining aggressive military pressure in the South China Sea despite territorial disputes, attempting to assert more control over semi-autonomous Hong Kong, increasing their military budget from $31 billion to $239 billion from 1998 to 2018, and implementing the audacious international infrastructure project known as the Belt and Road Initiative. These political maneuvers have increasingly threatened U.S. allies and influence in Asia, intensifying tensions between the two countries.
However, President Xi is not unilaterally responsible for the deterioration of U.S-China relations in the past decade. In contrast to his predecessors, President Trump has taken a uniquely strong stance against China by initiating a tariff-based trade war, spiking unilateral tariffs to mitigate the $346 billion trade deficit between the two countries and reprimanding China for engaging in repeated intellectual property theft. The trade war has proved counterproductive to U.S. interests, leading to a loss of 300,000 U.S. jobs and a 0.2-0.7% toll on real GDP, and has hurt the global economy by slowing down foreign investment in Southeast Asia. President Trump’s “America First” stance has caused China to expand its trade involvement with other countries, most notably the European Union and the Association of Southeast Asian Nations.
The tensions between the U.S. and China have reached such great heights that a debate has emerged on whether this conflict is akin to a cold war. Some scholars have claimed that the ideological dichotomy, geographically opposing spheres of influence, and military deterrence existing between these two global superpowers is tantamount to a new cold war. However, others have noted that the overwhelmingly large gap between the two militaries, the lack of Chinese foreign allies, and the inextricable economic dependency between the two countries assuages any fears that conflict with China is a credible short-term possibility. Regardless, both sides of this debate are willing to agree that China does pose a clear threat on one front: technology.
Since President Xi’s election, China has sought out to become the world’s predominant technological superpower. In May 2015, China unveiled its “Made in China” plan, aiming to transform China into the global leader of high-tech manufacturing through funding massive government subsidies, consolidating intellectual property with the state, and financing state-owned entities. China’s MIC plan has targeted several newly emerging industries such as electric cars, artificial intelligence, aerospace equipment, and bio-medicine.
China has committed to spending over $180 billion in the next five years across 5G, Artificial Intelligence., ultra-high voltage electricity transmission (UHV), and the industrial internet. These key technologies, namely A.I., are already being utilized by the Chinese government to influence foreign policy decisions and bolster military defense systems. China is working diligently to reduce their dependence on U.S. technologies like semiconductors—which the U.S. has a 45% market share of—by offering tax cuts and large government subsidies to capable domestic producers.
Even though the technological gap between the U.S. and China is still quite large, the U.S. has made a comparatively lackluster push towards increased innovation. The U.S. has increased its spending at a rate nearly four times less than China, has tax subsidy rates almost three times smaller than China’s, and has fallen behind China in global research publications. Instead of prioritizing technological development, the Trump administration has focused more on counter-measures to China, placing foreign investment restrictions to protect American firms, filing numerous cases for I.P. theft, and restricting the sale of U.S. manufactured hardware to China. Many academics and engineers in Silicon Valley are worried that the U.S. is not doing enough to maintain its technological lead over China and may risk conceding being the leader and benefactor of the next wave of technological innovation.
China has already taken the lead in developing 5G technology and infrastructure. 5G is the latest generation of telecommunication networks, promising speeds up to 100 times faster than 4G and easy integration into products with secondary internet capabilities such as smart cars. The value of 5G’s low latency and high speeds have been demonstrated by Ericsson, the European telecommunications giant, which was able to reduce a factory’s error rate in producing disks for jet engines from 25% to 15% just by attaching 5G sensors to their manufacturing machines. 5G is speculated to be the bedrock of the advanced technologies produced in the next two decades, which according to Verizon, will net $12.3 trillion of global economic output and 22 million jobs worldwide.
Currently, the 5G infrastructure market is dominated by Chinese companies Huawei and ZTE, and European companies Nokia and Ericsson, making up around 80% of the market. The U.S. absence from this list incentivizes countries to buy technological equipment from Huawei, manufactured and sold at comparatively cheap prices. Huawei has direct ties to the Chinese government and can be impelled by China's 2017 National Intelligence Law to “support, cooperate with and collaborate in national intelligence work,” potentially forcing companies to hand over user data. The U.S. has demonstrated numerous privacy concerns about Huawei, banning U.S. companies from using their networks and influencing other countries like the UK and Sweden to do the same. The overall deceleration of U.S. technological development allows China to expand its global technological foothold, potentially risking the privacy and user data of millions of people.
Infringement on privacy rights would not be a new development under President Xi’s China. China is undoubtedly the most powerful and vast surveillance state seen in the modern world. With over 200 million cameras spread across the country, the Chinese government has been able to catalogue the faces of nearly all of its 1.4 billion citizens. This vast stream of user geographical and identity information allows the government to automatically fine citizens and publish their faces on public billboards for offenses as small as jay-walking.
The Chinese government is attempting to export their facial recognition technology to foreign countries such as Zimbabwe, which has signed an agreement to build a national database of faces in partnership with China, giving the state the opportunity to further analyze data and develop their technology on millions of users from a completely distinct sample population. The misuse of this technology has egregious consequences, already materializing with the systematic imprisonment of millions of Uighur muslims, an ethnic minority in China. Utilizing their cutting-edge facial recognition technology, China tracks hundreds of thousands of Uighurs across the Xinjiang province, blacklists them from public facilities such as hospitals and shopping malls, and, in worse cases, detains them in “reeducation” camps.
The global spread of this high degree of surveillance is one of the many risks in ceding U.S. technological hegemony to China. With strong ties to the Chinese Communist Party, Chinese technological giants like Huawei may exchange foreign user data with the central government. The U.S. has a strong interest to preserve its lead over China to reduce the risk of privacy infringement and totalitarian surveillance systems.
With the recent election of the U.S. President Joe Biden, the U.S. is rapidly approaching a crossroads with respect to its stance on China. Although the U.S. remains the global hegemon, President Biden must consolidate a plan to increase the U.S. growth rate relative to China. Two solutions are to increase tax credits for research and development, and to restructure the U.S. patent system to expedite intellectual property protections for technology. Instead of focusing on retaliation, the U.S. should facilitate innovation to maintain its economic might on the global stage and protect privacy rights both domestically and abroad.
Sebastian Preising is a staff writer at CPR and a sophomore in Columbia College majoring in computer science and mathematics. He is most interested in exploring the intersection of advanced technology and politics.