NZ Should Not Buy into Trump’s tech war with China

The article below appeared on the Daily Blog on 2 September 2020

Most New Zealanders don’t trust Donald Trump. By and large they oppose his “America First” stance, which is making effective cooperation between nations very difficult.

Why then are so many people fooled by Trump’s attacks on China’s most advanced technology companies, like Huawei and TikTok? Surely, we can see that in banning TikTok and trying to strangle Huawei, Trump is trying to ensure that America’s “big tech” companies (like Microsoft, Google and Facebook) dominate the global landscape.

Why do we buy Trump’s cover story that it is about “national security” and protecting our privacy? Surely, we’ve learnt by now, following the revelations by US National Security Agency contractor Edward Snowden, that the main threat to the privacy of citizens around the world is the NSA itself. Few of our communications are out of reach of its global collection system, which far exceeds any current Chinese capability. Of course, this doesn’t mean we take any potential breaches of our privacy from China lightly. After all, domestically, the Beijing government runs a pretty tight surveillance state.

If we are worried about social media companies intruding on our privacy, then Facebook should be a bigger target than TikTok. Facebook’s business model requires it to hoover up masses of information to target advertising and to on-sell to third parties.

We’re told that Huawei and TikTok will hand over private information to the Chinese government. Maybe they will, but there is no evidence they have so far. Their corporate self-interest is also at play. As global companies, Huawei and TikTok are well aware they would lose many millions of customers outside China if they were proven to be a tool of the Beijing government.

What we do know, however, is that American social media and telecommunications companies regularly respond to secret requests from the FBI and other US agencies. This has become public as a consequence of the Edward Snowden revelations.

Accusing Chinese firms of doing the bidding of Beijing somewhat hypocritical when the Trump administration is repeatedly forcing American companies to do its own bidding. Trump is issuing Presidential edict after Presidential edict forbidding US tech firms from doing business with the likes of Huawei. US Secretary of State Mike Pompeo has launched a Clean Network campaign to exclude all Chinese telecom firms from the United States.

To the extent that this is successful, it will only divide the telecommunications world up into two spheres of influence, one American, the other Chinese. This would not be good for global communications, common IT standards, and an effective and open internet.

Trump’s efforts are also counterproductive. In the short-term they will weaken Huawei but they will also speed up China’s efforts to become technologically self-sufficient.

In addition, US firms are taking a big hit from the sanctions on US firms supplying Huawei. Roger Entner, from Recon Analytics, has estimated that Huawei accounts for a quarter of US annual semi-conductor exports, about $32 billion out of $120 billion. But the loss of sales will go beyond the China market. SEMI, a semi-conductor industry association with 2,400 members, is worried that other non-US customers will perceive the supply of US semi-conductors as “unreliable” and “design-out of US technology”. These non-US customers could include Kiwi tech firms now supplying the Chinese market who now have an incentive to use non-US software or components in their products.

Sadly, the US moves against Chinese technology serve to strengthen, not weaken, the grip of China’s authoritarian leaders. Because they are so obviously aimed at slowing China’s technological advance, they stir up nationalist sentiments among ordinary Chinese people, which the regime then uses to its advantage, by presenting itself as defender of the nation.

New Zealand has an additional reason for not buying into the American campaign.
China is our biggest trading partner. The Trump administration’s talk of “de-coupling” from China makes no sense in New Zealand’s case. Yet this is the road that our Government Communications Security Bureau has started to move down. Some time ago the GCSB turned down a Spark/Huawei proposal to build a 5G network here. More recently it asked parliamentary staff to delete the TikTok app from their phones on the grounds that it might be used to access private information. Of course, our privacy is eroded by many social media apps, and in particular, Facebook. But by singling out TikTok the GCSB demonstrated once again its loyalty to the US administration, and Donald Trump. If we are talking about threats to our national security, we should start with the threat from the GCSB which in so accommodating the United States, really does threaten our security.

Of course, we should do everything we can to protect our privacy and to optimise New Zealand’s cyber defenses. Such measures include closing any “back-doors” into our communications networks, storing data locally, and making sure Kiwi managers are in charge of critical infrastructure. We can do this without buying into Trump’s war on Chinese technology.