Tech, ICT and 5G will Stay Under Bipartisan Scrutiny in the Senate: Minority Report on Chinese “Digital Authoritarianism”

On July 21, U.S. Senate Foreign Relations Committee Ranking Member Bob Menendez (D-N.J.) released a minority staff report following an investigation into China’s efforts to “establish, expand, internationalize, and institutionalize a model for digital governance” described as “digital authoritarianism.” This report, called The New Big Brother, demonstrates the bipartisan nature of concerns about emerging technology, both in terms of supply chains and permissible uses. It comes amidst a backdrop of increasing regulatory scrutiny by the United States of information and communications technologies (ICT), which has created compliance and business challenges for multinational companies.

The report argues that China is shaping the future of the internet. It concludes that the “United States is now on the precipice of losing the future of the cyber domain to China. If China continues to perfect the tools of digital authoritarianism both domestically and abroad, then China, not the United States and its allies, will shape the digital environment in which most of the world operates.”

While calling the Trump Administration’s efforts “deficient” in countering China’s rise, the report shows bipartisan support for addressing China’s growing influence in telecom and cyber, especially in the development of 5G networks. It states “[w]ithin Congress and the Administration there is a bipartisan understanding that the threats posed by Chinese firms building the base layers of radio equipment and other telecommunications infrastructure upon which 5G operates.” The Senate’s Permanent Select Committee on Investigations last month released a bipartisan report on concerns about Chinese telecom companies’ operations in the United States. These issues will remain relevant no matter what happens in November’s election. 

The Report Describes A Surveillance State and Strategic Investor at Home

First, the report describes how China implements digital authoritarianism domestically, describing use of facial recognition, other biometrics, surveillance cameras networks, and internet monitoring, in particular to target ethnic and religious minorities, including the Muslim Uyghurs.

It discusses China’s censorship apparatus, highlighting how the “Great Firewall,” which includes DNS poisoning, IP addresses blocking, bars on virtual private networks (VPNs), and emerging technologies such as AI, ensures that citizens are unable to access information about their government. The report addresses the proliferation of Chinese alternatives to U.S. platforms such as Alibaba, Tencent, and Baidu and how China has started using offensive tools, such as Distributed Denial of Service (DDoS) attacks to extend its censorship.

The report lays out the use of authoritarian cyberlaws to further tighten the Chinese Communist Party’s (CCP) grip on cyberspace under the guise of national security, effectively barring anonymity online and restricting foreign companies operating in China through onerous data localization requirements.

The section ends by discussing Chinese investment in emerging technology through industrial policies such as Made in China 2025, which drives subsidies into emerging technologies. The report states that for CCP leadership, the internet “must be controlled by the Party. As such, development of new digitally enabled technologies must operate in line with Party principles. Without such control, CCP leaders fear these technologies could weaken the CCP’s hold on its citizens.”

The Report Says China is Exporting Digital Authoritarianism Abroad

The second chapter explains that China is exporting its model of digital governance, through for example, its Belt and Road infrastructure initiative. It states that the Chinese telecom – led by China Telecom Group (CTG), Huawei, and ZTE – is willing to enter underserved markets by offering financial support and cost-effective equipment, which is enabled by massive government subsidies.  

“By building out so much of the digital infrastructure in the developing world, China could end up dominating a large portion of the global communications market, positioning it to potentially pressure other governments or conduct espionage,” the report notes. It argues that U.S. allies have overlooked security in determining whether to allow this technology into their infrastructure.

What further advances these efforts, the report concludes, is China’s providing foreign governments with “social control systems that run on exported digital technologies, including relevant training and expertise” such as Chinese government hosted seminars on its system of censorship and surveillance.

Standardizing Surveillance and Censorship 

The report next shifts to China’s perceived influence on global standards bodies that shape international digital standards. After discussing China’s efforts to push autocratic priorities at the UN, its success in stalling digital trade initiatives at the WTO, and attempts to drive norms through its own internet conferences, the report turns to claims about China’s influence in international standards-setting bodies, such as the 3rd Generation Partnership Project (3GPP) and International Telecommunications Union (ITU).

China’s influence has increased in both bodies in recent years, according to the report. Interoperability is critical to global telecom and ICT, so it makes sense for the entire global ecosystem to be actively engaged in standards work.  But the report raises concerns about the number of Chinese representatives serving in leadership positions in the 3GPP and the ITU. U.S. companies dispute that the global standards process is tilted in favor of Chinese companies, and have urged the U.S. government to support more private engagement in standards work. 

The Report Suggests A Path Forward

Is it too late to course correct? Observers for years have been calling for “major, strategic overhaul of information security within democracies is required. It is time for a strategic renaissance in information security.” The report’s final chapter asserts that despite China’s gains, there is opportunity for the United States to adopt a competitive strategy to remain the global leader on cyber-governance. Chief among the recommendations is a call for the United States to push U.S. 5G by funding R&D, creating an 5G industry consortium, and investing in radio access network (RAN) innovation. These ideas have been discussed for a while and were among key recommendations recently made to the National Telecommunications and Information Administration by numerous private sector leaders in its proceeding on 5G security.

Looking Ahead

The U.S. ICT and telecom sectors continue to grapple with an onslaught of new regulations, from procurement restrictions to supply chain demands, Team Telecom reform, investment review, and FCC activity. This latest report confirms that these issues are not likely to recede if there is a change in political leadership in Washington. Whether ongoing efforts lead to the “decoupling” from China that some think inevitable, global business will have to navigate these challenging issues day by day in front of a bevvy of agencies and Congress.

Nicole Hager, a Law Clerk at Wiley Rein LLP, contributed to this article.

Before becoming a Law Clerk at Wiley, Nicole worked for the U.S. House Homeland Security Committee Ranking under Ranking Member Mike Rogers, the U.S. Senate Finance Committee under Chairman Orrin Hatch, and U.S. Senator Jim Inhofe.