Understanding China's Cyber Policy
Image Credit: Chinese National Defense Ministry

Understanding China's Cyber Policy

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Joseph Nye has an interesting article in the Winter 2011 issue of Strategic Studies Quarterly that applies some of the lessons of the nuclear age to cybersecurity. It’s well worth the read, and I thought I might try the same, using what we know about the study of Chinese technology policy to shed some light on China and cyber.

Linking cyber and technology policy is a form of techno nationalism that’s widely and deeply held by Chinese policymakers. The objectives are clear: China doesn’t want to depend on other countries for critical technologies, the United States and Japan in particular. The 2006 Medium to Long Term Plan on Science and Technology (MLP) puts it plainly: “Facts have proved that, in areas critical to the national economy and security, core technologies cannot be purchased.” The Chinese tend to see the current system as, if not unfair, then stacked against them, and so commentaries often focus on competitors’ unfair advantages (U.S. firms dominate hardware and software sectors, 10 of the 13 root servers in U.S.) and China’s victimization (China is the biggest victim of cybercrime).

With both cyber and technology, outside observers have a tendency to overstate how driven by the center China really is. Yes, the MLP sets the goal of China becoming an “innovative nation” by 2020 and a “global scientific power” by 2050. Not surprising given Chinese history and national security concerns. But the document is of two minds about how to move up the value chain, including both a top-down, big-science and technology policy, as well as a bottom-up, entrepreneurial innovation strategy. In cyber, we tend to see China pursuing a coherent cyber strategy that involves pushing an Information Security Code of Conduct at the United Nations, the use of patriotic hackers, information war, and tight Internet control. Chinese analysts see the opposite, complaining that the U.S. – with the standing up of Cyber Command and promotion of the Internet Freedom agenda – has put China on the defensive and that Beijing is falling behind in cyberspace.

There’s also a question of how strategically China can implement. The world of technology policy is one of sectoral and regional differentiation, with industries and provinces interpreting national regulations to serve their own interests. Ministries, universities, and government research institutes behave similarly, and Chinese firms often identify more with their Western competitors than with their local bureaucratic partners. It’s hard to imagine that the Ministry of Public Security, Ministry of State Security, PLA, and Ministry of Industry and Information Technology play any nicer together in the sand box of cyber policy.

The prolific rate of cyber espionage – what Cyber Command head General Alexander called “the greatest transfer of wealth in history” – raises questions of China’s absorptive capacity. With technology imports, Chinese firms historically spent much less than Japanese and Korean companies did for diffusion and absorption. What is China doing with all of the IPR it’s allegedly stealing, and shouldn’t we start to see it paying off in more competitive Chinese firms? Not much public evidence exists that it’s helping Chinese companies move up the value chain (most evidence in the public domain is old-fashioned theft, see DuPont, Motorola, and American Semiconductor).

Finally, technology policy may tell us something about what might work for cyber, although progress, especially in protecting intellectual property rights, has been glacially slow and uneven. The issue must be raised at the highest level, including by the President and Vice President, something that it’s not clear has happened yet. Multilateral pressure should also be applied. China backed down from the compulsory introduction of WAPI, an alternative to WiFi, after the U.S. government, supported by Japan and the EU, threatened to take a case to the WTO.

Given the current state of the U.S.-China relationship in cyber, glacially slow and uneven might be an improvement.

Adam Segal is the Ira A. Lipman Senior Fellow for Counterterrorism and National Security Studies at the Council on Foreign Relations. He blogs at Asia Unbound, where this piece originally appeared. Follow him on Twitter @adschina.

Comments
6
Anonymous
April 13, 2012 at 23:11

John Chan, way to take your argument to a completely unrelated strain. The US and Australia are not perfectly free and competitive markets and neither have they ever been. No such ideal has ever existed. That said, both countries are far freer in both economic and political terms than the PRC (aside from Hong Kong on the economic side). It is perfectly reasonable for a government to determine which foreign technology and weapons companies can operate within their borders and/or sell its products to its citizens. There are national security implications for allowing a company such as Huawei to market its products in the US. And until the CCP and the central government in general get its hands out of Huawei’s business, don’t expect the American government to trust their products. It’s very, very easy to hide malicious code and/or bugs in telecommunications/networking equipment that can be used for espionage purposes.

a_canadian_observer
April 11, 2012 at 01:05

@John Chan: Say whatever you want, but the bottom line is, the West has pass the stage of trusting china. Anything we can do in the West to shunt china from stealing, is good for the world. Case closed!

Andrew
April 10, 2012 at 04:59

Nationalism is on the rise everywhere, and its response to China’s expansionism mirrors their own. They have had a policy of digital theft from its Western competitors for over 30 years and sympathy is the last thing they should expect from the West. It may play well at home but the rest of the world isn’t buying it…unless of course they are in-practice buying and relying on its digital products. The security of national infrastructures means sourcing from trusted sources, using systems that have real security beyond the marketing rhetoric, and not having history muddled by false persuasion. No one seems to be doing this…oh well. :P

John Chan
April 10, 2012 at 00:38

China thought US, Australia, etc. were bastions of free market capitalist economies, and they would let the market to pick the winner that could provide best value for the service they were looking for.

It seems US, Australia, etc. are not free market economies at all, and they do not practise what they preach. They are planned economy so they interfere market to suppress the competitive free market spirit at will.

China should not be surprised such contradiction from the US, Australia, etc., because they always say what they don’t meant, such like in Libya, they said they provided no-fly zone, instead they wanted to bomb and kill Libya into total destruction and left behind a society of endless civil war.

Nut Cracker
April 8, 2012 at 05:49

If China’s CCP/PLA policy stated that: “The 2006 Medium to Long Term Plan on Science and Technology (MLP) puts it plainly: “Facts have proved that, in areas critical to the national economy and security, core technologies cannot be purchased.””

Then, why does China/PLA expecting other countries like, the US, Australia, etc. to buy telecom/datacom equipments from China’s Huawei?

Australia should not exclude Huawei from NBN contracts, says China

http://www.heraldsun.com.au/news/more-news/australian-nbn-ban-on-huawei-unjust-china/story-fn7x8me2-1226321076108

Sprint axes China’s Huawei, ZTE on security grounds: WSJ

http://phys.org/news/2010-11-sprint-axes-china-huawei-zte.html

Tum.
April 8, 2012 at 02:37

Yeah, this is an artifact from having a closed political system. Because information doesn’t get fed up through the system with democracy, the top has to use intelligence agencies to find out what they need to do. So, unsuprisingly, they’ve become pretty attached to the things – and only genuine democratic reform can really fix this problem.

We cannot expect them to give up their very large agencies yet, because otherwise China would be blind. I don’t think people really understand just how much democracy gives to a country: it is much more than just a stable government. It is an information system that cannot be rivaled by even a computer.

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