[Diplomat] Global Competition for AI Regulation, or a Framework for AI Diplomacy?
Global Competition for AI Regulation, or a Framework for AI Diplomacy?
As the U.S., EU and China are taking divergent leads in new AI regulations, a new framework for AI diplomacy is emerging, all under the shadow of strategic technological competition.
By Charles Mok
November 07, 2023
Artificial intelligence (AI) has taken center stage in today’s global technology competition, especially since the commercial launch of OpenAI’s ChatGPT a year ago. Now the race to technological leadership among companies and nations has been extended to the sphere of regulations and rule-setting, with national leaders and politicians proclaiming that they do not want to repeat the same mistakes of being late to regulate the internet and social media.
Within the last few weeks, we have witnessed major announcements from the United States, in the form of a presidential executive order on AI; an advocacy framework from China on AI governance emerging from the tenth anniversary summit for its Belt and Road Initiative; and the AI Safety Summit being held in the United Kingdom. The slippery task of regulating AI, especially to do it globally, is gaining momentum, although in many ways countries still hold very divergent views and goals on AI regulatory and development issues.
It appears that a new framework for AI diplomacy is taking shape.
The United States’ AI Executive Order
First, let’s take a look at U.S. President Joe Biden’s executive order on AI, announced on October 30. Washington has long been criticized for its lack of comprehensive legislations to regulate the “big tech” companies on issues ranging from data and privacy protection to the responsibilities of social media platforms. Given the political impasse on Capitol Hill and beyond, this situation is unlikely to change anytime soon. However, ironically, this “executive-led” modus apparatus may allow the United States to take somewhat of a lead in the race to set the directions of the rules for the safe and secure deployment of AI in society, as others may be continuously caught in the mire of the details of how to regulate something as elusive and constantly evolving as AI.
The European Union (EU), long seen as the gold standard of data, privacy, and technology regulations, and with a focus on upholding principles such as human rights and consumer protection, has spent more than two years in negotiating among its 27 member states, yet reportedly is still struggling to come to a final agreement for its AI Act. The EU regulations are exemplified by their classification for risk levels associated with AI systems, and, hence, treated accordingly to varying requirements and compliances, with those systems classified as “high risk” to be tightly controlled by law.
If the EU approach focuses on legislation and regulation, the American way is much more about rule-setting for achieving the same goals of safety, security and trustworthiness, with an eye on development to maintain or even extend the United States’ technological leadership. Among the eight defined actions in the executive order, only one action is about rule-setting – albeit the longest and most substantial section – with seven other actions being more about development policies, including the federal government’s own application and usage of AI.
The most significant section of the executive order concerns “ensuring the safety and security of AI technology,” in which it calls for rules-setting over guidelines and standards, and also for developers of “potential dual-use foundation models” to report to the federal government information about training activities, ownership of such models, as well as results from red-team security tests. The success of this section of the executive order will rely mostly on the cooperation of commercial developers of AI models, built upon the “voluntary commitments” received from “top AI companies” after series of meetings and negotiations between the White House and these companies in the months preceding.
Although this one action out of the eight has received the most attention, the rest of the executive order is mostly about industry development and application strategies for the United States to maintain its lead. The remaining actions regard:
- Promoting innovation and competition: including implementing of a pilot program for the National AI Research Resource (NAIRR), enhancing intellectual property (IP) protection and combatting IP theft, and advancing AI usage for healthcare and climate change, and calling for the Federal Trade Commission (FTC) to consider exercising its rule-making authority to further ensure AI marketplace competition, etc.
- Supporting workers: further understanding the impact of AI on workers, including job opportunities, displacements or their wellbeing, in order to develop an AI-ready workforce.
- Advancing equity and civil rights: addressing unlawful discrimination possibly exacerbated by AI, in areas such as the criminal justice system, law enforcement, public social benefits, and in the broader economy, such as hiring, housing and transportation.
- Protecting consumers, patients, passengers, and students: this action calls for the “incorporation of safety, privacy and security standards” in those areas affected by AI in the health and human services, transportation, and educational sectors, using a sectoral approach to attempt to protect people from fraud or discrimination, without legislations.
- Protecting privacy: similar to the last action above, this action is not about rule-setting for a privacy regulatory regime, but rather just re-evaluating use of commercially available information already procured by government agencies, and encouraging development for privacy enhancing technologies (PETs).
- Advancing federal government’s use of AI: setting up AI management guidance within the federal government agencies, including hiring more data scientists and designating a Chief AI Officer at each agency.
- Strengthening American leadership abroad: establishing a plan for global engagement on promoting and developing AI standards, and other measures, forming the basis for an American AI diplomacy.
So we should keep in mind what the executive order is not – that is, a regulation, although it is often commonly referred to as such. Although it has established the basis for government oversight of the most advanced AI projects, especially those with dual-use implications, it does not follow the EU model with licensing or other strict compliant requirements. It is more of a set of industry development policies and directives, potentially forming the foundations for a CHIPS and Science Act 2.0 – where an actual future legislation will carry the financial appropriations and other measures to fortify the support for research and development or increasing the visa quotas for foreign talents.
In addition, as a manifestation of U.S. AI soft power, the executive order aims to continue to rely on the United States’ domestic AI governance to influence the world, beginning with the standards and guidelines to be adopted by the U.S. federal government.
China’s Global AI Governance Initiative
It is interesting to note something many may have overlooked: Less than two weeks before the U.S. executive order was announced, China in fact also announced its Global AI Governance Initiative at the Belt and Road Forum in Beijing, where the country celebrated the 10-year anniversary of its Belt and Road Initiative.
Unlike the almost 20,000 words-long U.S. executive order, the Chinese proclamation contained just about 1,500 characters, and only stuck to a number of high-level principles, such as upholding a “people-centered approach in developing AI,” adhering to “developing AI for good,” “fairness and non-discrimination,” with “wide participation and consensus-based decision-making,” to “encourage the use of AI technologies to prevent AI risks,” and so on.
But there is some subtle language in the initiative that may be more revealing about China’s true objectives. It reiterates the need to “respect other countries’ national sovereignty and strictly abide by their laws.” It opposes “using AI technologies for the purposes of manipulating public opinions, spreading disinformation, intervening in other countries’ internal affairs… and jeopardizing the sovereignty of other states.” It champions for “the representation and voice of developing countries in global AI governance,” while also maintain that they should “gradually establish and improve relevant laws, regulations and rules.”
Indeed, the Chinese objectives were more plainly on display in a People’s Daily commentary article on October 19, criticizing the G-7 joint declaration in May on AI governance for “drawing the lines based on values system,” hence architecting a “technology small circle” to exclude China’s participation in AI technology standards setting.
It is therefore somewhat ironic to see the Interim Measures for the Management of Generative Artificial Intelligence Services, jointly approved by seven ministries and agencies of the People’s Republic of China in July 2023. Article 4 calls for, as the first and foremost of a list of principles for those providing generative AI services, “upholding the core socialist values.” Indeed, China’s approach to establishing AI regulations has been hardly “gradual,” but is quite quick and decisive, although it does “improve” these laws rather frequently. In general, these laws are broad and vague, often referring to high-level principles and general terms, and leaving huge room for interpretation by the governing authorities.
From the U.K. AI Summit to AI Diplomacy
Given that the race to AI regulation has been led by the United States, China, and the EU, it was somewhat of a surprise that the U.K. government announced in June 2023, that it would host the first global summit on AI safety. Indeed, the United Kingdom has thus far been a laggard in AI regulation, with Prime Minister Rishi Sunak stating that he would not “rush to regulate” AI.
But it was the Biden administration of the United States that stole the thunder of the groundbreaking event, attended by leading government, business, and academic leaders from around the world. The United States took over the discourse by announcing its presidential executive order only two days before the start of the summit, politically also giving attending U.S. Vice President Kamala Harris a platform for a “raw show of U.S. power on the emerging technology.”
Progress was made in the summit with the signing of the Bletchley Declaration, agreed by 27 countries – including China and the United States – and the European Union. The communique focuses on tackling the risks of frontier AI to “identify AI safety risks of shared concerns, building a shared scientific and evidence-based understanding,” and “building respective risk-based policies across countries to ensure safety.”
However, it should not be overlooked that the U.S. government, in its announcement for its AI executive order, also proclaimed its efforts to build its international framework through engaging with 20 countries and the EU, covering most of the attendee countries and signees of the Bletchley Declaration. In this sense, the United States has made sure that it has dominated the discourse at the AI Safety Summit, while embracing the participation of China, forming the basis for a future framework for global AI diplomacy.
Indeed, there have been frequent calls to develop an international regulatory framework for AI governance by academics and business leaders, such as the advocacy for a new agency similar to the International Atomic Energy Agency. The AI Safety Summit in the U.K. can be a first step in that direction.
And it was not surprising that the remarks of the leader of China’s delegation – Wu Zhaohui, vice minister of Science and Technology – at the summit focused on the “equal rights” in “accessing advanced AI.” Wu was indirectly protesting the barriers erected by the United States and its allies to China’s AI development, especially the export controls on chips and other leading edge technologies. But such calls were clearly overshadowed by the fact that countries were at least able to gather to share views on AI risks at a high level, although the discourse is still dominated by the U.S. and its allies.
In this sense, China’s present participation should reflect their desire to be at least “in the room,” and their “wait and see” attitude toward this particular push toward global AI governance.
Published by The Diplomat on November 7 2023
https://thediplomat.com/2023/11/global-competition-for-ai-regulation-or-a-framework-for-ai-diplomacy/
[Nikkei] Bit by bit, the internet is getting smaller in Hong Kong
Bit by bit, the internet is getting smaller in Hong Kong
City authorities are trying out new methods to eliminate 'undesirable' content
Many observers have wondered whether China's Great Firewall might be extended to Hong Kong.
The good news is that since the Chinese legislature imposed a new national security law on the city in July 2020, there has been no attempt to bring in the country's system for the wholesale filtration and blockage of foreign websites and global internet platforms.
The bad news, though, is that internet controls are increasingly being applied in a target-specific manner in Hong Kong, alongside widespread self-censorship that is even affecting the city's growing diaspora.
To understand where things may go from here, it is imperative to first understand where the Hong Kong government's legal power to block internet content and services originates. Two recent cases demonstrate how the Hong Kong authorities are making censorship happen.
The first involves the unlicensed cryptocurrency exchange JPEX. In recent weeks, Hong Kong police have arrested more than 25 people for involvement in alleged fraud on the exchange that is said to have cost more than 2,500 victims some $180 million in losses. JPEX is fighting the crackdown and seeking to revive its business, but its website is now blocked in Hong Kong.
This is the first such incident to come to a light for a business that until now was treated like any other company operating openly in Hong Kong -- and has brought attention to a new power the government has quietly given itself.
It turns out that last year when Hong Kong residents were hit with a massive wave of telephone and online scams like neighboring economies, the Hong Kong Communications Authority discreetly added a new clause to the Unified Carrier Licenses under which phone networks, internet service providers and other telecommunications companies operate in the city.
The new language on "blocking transmission or delivery of calls or messages and suspension of service due to fraudulent use" mandates that licensees must carry out "necessary actions" upon request by the authority or "any relevant law enforcement agency."
The vagueness of terms like "fraudulent use," and the broad scope of power vested to any "law enforcement agency" to initiate content removal could easily lead to abuse. The public and the media have no way of knowing whether or how many times this power has actually been invoked.
The second example concerns the protest song, "Glory to Hong Kong." After a series of incidents at international sporting events in which the song was played instead of the Chinese national anthem by organizers referencing Google search results for "Hong Kong national anthem," Hong Kong's secretary for justice applied for a court injunction to ban the song from being stored, played or broadcast on the internet.
The authorities apparently wanted to avoid the negative repercussions for businesses if it indicted a global internet platform operator like YouTube under the Hong Kong National Security Law, an option the court suggested the government could take when it rejected the injunction request. The government is now appealing that rejection to a higher court.
Common to the authorities' approach in both the JPEX and "Glory" cases is a strategy of bypassing normal administrative and legislative processes that might give more room for public discussion and input.
Since the enactment of the Hong Kong National Security Law, internet freedom has become a top risk concern for global technology companies like Google and Meta which employ hundreds of people in the city, as well as for other multinational companies and financial institutions.
Free access to data and information has long been viewed as a key element of the "One Country, Two Systems" paradigm that makes Hong Kong a unique attractive investment destination in China and Asia's leading financial center.
The government is clearly aware of these concerns and seems to be trying to minimize negative impacts on investor confidence while simultaneously maintaining national security as its top priority.
The recent cases, though, suggest that the authorities intend to increase their power to order the removal of "undesirable" content and services. Alleged scams like JPEX and incidents such as ransomware attacks on public bodies such as Cyberport and the city's Consumer Council will undoubtedly be used to justify the need to give citizens "more protection" from online dangers.
Indeed, the government remains keen to enact a cybersecurity law and a misinformation law, as well as local national security legislation against treason, theft of state secrets and other offenses in the next year or two.
Hong Kong may yet prove a shining example of how new-era Chinese censorship can thrive without a Great Firewall. But selective purges of online content will do no favors for the city's efforts to remain economically competitive or to promote a "good Hong Kong story" to improve its image on the world stage.
Foreign investors should watch this space carefully. Internet companies should also look beyond legal compliance and push back against attempts to maneuver them into playing a role in the restriction of online freedoms. The companies can be assured that they still hold some leverage as Hong Kong needs and wants them around as much as ever.
Charles Mok is a visiting scholar at Stanford University's Cyber Policy Center and former legislative councilor in Hong Kong. George Chen is a managing director in Hong Kong for The Asia Group, a Washington-based business and policy consulting firm. He was previously head of greater China public policy for Meta.
Published by Nikkei Asia, October 10, 2023
https://asia.nikkei.com/Opinion/Bit-by-bit-the-internet-is-getting-smaller-in-Hong-Kong
[Diplomat] The Party Rules: China’s New Central Science and Technology Commission
The Party Rules: China’s New Central Science and Technology Commission
The new commission is likely to follow the path of the Cyberspace Administration of China.
In March 2023, the Central Committee of the Chinese Communist Party and the State Council of the People’s Republic of China jointly issued the “Reform Measures of the Party and State Organizations.” Among the initiatives to be taken was the establishment of the Central Science and Technology Commission (CSTC). The new commission would take over the strategic planning and policy setting for China’s science and technology development from the Ministry of Science and Technology, which will be relegated to handling administration duties for the Commission. That stated reason for the change was to “unify leadership” in order to “advance the establishment of national innovation system and technology structural reforms.”
On August 21, state media reported the first meeting of the CSTC had been held more than a month prior, on July 10.
The CSTC is clearly central to the Xi Jinping administration’s focus on building China’s self-reliant technology ecosystem, one that Xi hopes would be the most advanced in the world. While China’s government has long aimed at achieving global leadership in science and technology excellence, autonomous innovation and self-dependency, results have been mixed. Now with the U.S.-led targeted sanctions against China’s semiconductor, generative artificial intelligence, and other critical and emerging sectors – including the most recent White House executive order, proposing to ban U.S. investment in China on “national security technologies” – China’s leaders must be far from satisfied with its current performance. Increasing frustration could be one reason for setting up a new body to handle science and technology policy.
The CSTC will dedicate much of its reform efforts to China’s research and development infrastructure, as the country has not been able to reap proportional results in industrial success from its statistical achievements in matters such as patent filings and scientific journal publications. Also, in spite of its ability to attract leading overseas Chinese researchers to return to their homeland to contribute, conversion of research results to markets is alarmingly low, with high levels of wasted resources and under-production, found even by some of the country’s own audits. But problems also exist on the industry side, where top state-owned semiconductor investment fund executives had been arrested in crackdowns since last year.
The setting up of the new commission also follows a formula often used by Xi to emphasize political leadership over administrative systems. Xi insists on a “working style” for officials that encompasses “enhanced political theory learning,” taking an “elevated political standpoint” in all their endeavors. By superseding the Ministry of Science and Technology, the CSTC is also consistent with the trend under Xi’s China that prioritizes party function over governmental ministries’ power, and political motivation over administrative considerations. Most of all, this makes it easier for Xi to centralize his control through an opaque party apparatus and enables him to make rapid policy adjustments – which he must believe to be of critical importance as he tries to face mounting challenges from all directions, domestic and foreign.
It may be useful for observers to compare the new Central Science and Technology Commission with the Cyberspace Administration of China (CAC), another high-profile administrative institution under the Chinese Communist Party. The CAC, set up in 2014, has evolved over the last nine years into what is known today as the “super-regulator” of all of China’s broadly-defined “cyber” related policies. The body has gradually gained regulatory and statutory law-enforcing authority through powerful legislations such as the Cybersecurity Law, Data Security Law, and Personal Information Protection Law.
The CAC gained global notoriety for ruthlessly driving China’s massive and ongoing tech crackdown since July 2021, when Didi Global’s New York initial public offering was derailed. Since then, whether for national security or child protection reasons, China’s major digital platforms – from social media to online education, digital finance to online games, as well as emerging fields such as artificial intelligence – were all effectively put under the close, direct control of the CAC.
It is highly probable that the new CSTC will follow the CAC’s precedent and be transformed over the coming years into a super-agency with power across a variety of science and technology research and industry functions, from lab to market, from classroom to the trading floor. We can expect the CSTC to eventually cover rule-making in areas such as education, intellectual property, government investment fund operations, industry adoption of research results, and even countermeasures against foreign sanctions, all in the name of “national security.”
While its success in terms of outcomes is still unsure, some things are certain. For one, the CSTC will operate in an extremely opaque manner. Second, it will still face huge challenges in countering the U.S.-led containment measures, as there are only limited meaningful retaliatory measures that can be taken, given China’s relatively passive positions in global competition in most advanced technology areas. And if the CAC’s example is any indication, the Central Science and Technology Commission will promptly seek to enlarge its influence through administrative actions and legislation to exert full and direct control over research and industrial development of critical science and technology sectors.
Finally, we can expect that the Commission will not be the last effort by Xi’s China to put party rule above government administration. Indeed, also announced in the same “Reform Measures of the Party and State Organizations” document of March were the establishment of the Central Finance Commission and the Hong Kong and Macau Work Office, and the re-establishment of the Central Finance Work Commission – all likewise in centralizing administrative power directly under Xi’s party control. Xi continues to blur and erase any remaining lines separating the party and the state, in his third term of rule.
Although many may think that for a one-party dictatorship like China, administrative demarcation between the party and the state may have little significance, the continuing downgrading of the state bureaucracy does matter. As the CCP gains even more direct administrative power, there will be even fewer means for anyone in China, as well as any foreign players in China or in global markets, to seek public accountability or administrative remedies for any of the Chinese party-state’s decisions.
Published by The Diplomat, August 23, 2023
https://thediplomat.com/2023/08/the-party-rules-chinas-new-central-science-and-technology-commission/
[Nikkei Asia] Hong Kong must choose between its economic and security goals
Hong Kong must choose between its economic and security goals
Judge's decision on protest anthem puts ball back in government's court
Charles Mok is a visiting scholar at Stanford University's Cyber Policy Center and former legislator in Hong Kong.
Amid a comprehensive overhaul of Hong Kong's political, educational and social institutions to emphasize patriotism toward China, the city government has been embarrassed by a series of incidents over the past year involving overseas sporting competitions.
In each case, organizers of events featuring local competitors mistakenly broadcast "Glory to Hong Kong," a popular song written during the city's 2019 social unrest, instead of the Chinese national anthem. In response to indignant complaints from the Hong Kong government, the organizers usually apologetically referenced Google search results for "Hong Kong national anthem" that spotlighted "Glory."
This led the government to demand that Google alter its search results to ensure that the Chinese national anthem, "March of the Volunteers," would show as the top result, but the U.S. technology company rejected the idea of interfering with its normal global search algorithm.
After months of outcry from pro-Beijing legislators and media outlets and some partially successful moves to boost the Chinese anthem's popularity in Google's search results, the government asked a Hong Kong court last month to issue an injunction against the broadcast, performance, publication, sale or distribution of the "Glory" song or any derivatives.
The court application included over 30 links to videos involving the song on Google's YouTube service, making clear the company would be an early target of the injunction.
The decision to go to court exemplified the delicate political balance that the authorities have been trying to strike between what are seen as national security issues and Hong Kong's global economic image and interests. Beijing has underscored its expectations that Hong Kong will safeguard national security but has also made clear that it does not want to see the city's role in the national and global economy diminished. (And while Beijing permits the city its own flag, currency, border controls and separate representation in international sports, no city anthem has been allowed.)
The anthem case is not the first in which the government sought an injunction to try to limit access to or remove online content.
Amid the unrest in 2019, the authorities won an injunction against online content advocating violence. Those found to be in violation of the order can be charged with contempt of court. This injunction is even more broad and vague than the one sought for "Glory."
After the government filed for the injunction on "Glory," companies that would be affected -- such as Google, iTunes owner Apple and Meta, parent of Facebook and Instagram -- stayed quiet. None filed a response in court to the injunction request as they would often do in democratic jurisdictions like the U.S. or Canada. Instead, the song disappeared for days from iTunes and other prominent audio platforms.
Most observers expected the court to grant the injunction without fuss, after which it seemed likely that Google and others might hide the song from Hong Kong search results. But instead, High Court Judge Anthony Chan last week rejected the government's request.
He cited concern about a possible "chilling effect" on the freedom of expression of innocent people who "might be discouraged from legitimate activities involving the Song for fear of the severe consequences of breaching the Injunction."
But the judge made clear that this was not the reason for his rejection of the injunction request, as he embraced the government's view that national security should be prioritized. Rather, Chan said that the Hong Kong National Security Law, adopted by China's legislature in 2020, already gave the government the power to prosecute offenses related to "Glory," making an injunction unnecessary.
Yet the government has pointedly not prosecuted Google or other platforms under the National Security Law. It did lobby Google privately, but officials may have concluded that a criminal case would have drawn too much negative attention from the U.S. and other foreign nations.
Hong Kong may now choose to appeal Chan's decision but may find it difficult to find solid ground to challenge his ruling. The authorities may also seek again to persuade Google and its peers to take action, but the platforms may be even more recalcitrant in the wake of the court decision.
Alternatively, officials could seek to indict Google but this would damage the already-feeble confidence of international companies in Hong Kong and China, which both are keen for the economic support of foreign business.
For now, the American Chamber of Commerce in Hong Kong, among other such organizations, has said it "welcomes the court decision on the injunction, which shows that judicial independence is in place to underpin the global competitiveness of Hong Kong."
This shows how the unexpected turn of events may have helped the government's case for spinning a "positive Hong Kong story" and highlights its dilemma in further pursuing the case.
The government may still decide to take the path of seeking legislation, or intervention from China's National People's Congress, to specifically ban "Glory." For this reason, the suggestion that the court decision is a victory for internet freedom could be shortsighted.
At this point, the matter is more than a legal issue, and instead an illustration of the hard choices the Hong Kong authorities are having to make under the pressure of slowing economic momentum in the city and in mainland China. Indeed, economic needs may be the only thing really holding Hong Kong back from the unlimited expansion of its national security drive.
Published by Nikkei Asia, August 2, 2023
https://asia.nikkei.com/Opinion/Hong-Kong-must-choose-between-its-economic-and-security-goals
[FNF] The Everything Everywhere Censorship of China
The Everything Everywhere Censorship of China
https://www.freiheit.org/publikation/everything-everywhere-censorship-china
[Nikkei Asia] Taiwan's island internet cutoff highlights infrastructure risks
Taiwan's island internet cutoff highlights infrastructure risks
Region has to improve security and resiliency of critical undersea cable networks
By Jason Hsu and Charles Mok
Jason Hsu is a senior research fellow at Harvard Kennedy School and a former legislator in Taiwan. Charles Mok is a visiting scholar at Stanford University's Cyber Policy Center and former legislator in Hong Kong.
In early February, the two cables that connect the Matsu Islands at the north end of the Taiwan Strait to Taiwan itself were each broken by Chinese ships in separate incidents over the course of a week.
Quick relief was unavailable. No undersea cable repair ship could reach the islands, which are controlled by Taiwan but just offshore from Fuzhou, a coastal Chinese provincial capital, until late April.
While it is unclear whether the cables were cut intentionally, the incidents serve as a warning of the vulnerability of Taiwan's digital infrastructure.
The threat of cyberwarfare has gotten a lot of attention in Taiwan. The island's government, civil society and public are well aware of the need to combat disinformation, especially in relation to elections, and to build defenses against millions of daily cyberattacks.
A particular intense wave of cyberattacks, some targeting critical infrastructure, came last August in the wake of a visit to Taipei by then-U.S. House Speaker Nancy Pelosi. But a complete loss of Taiwan's connection to the internet would be particularly devastating.
Looking more broadly at East and Southeast Asia, it is clear that critical digital infrastructure is under increased threat and uncertainty due to U.S.-China tensions and Beijing's belligerence in the South China Sea.
Since 2020, Washington has been refusing to license American companies to invest in undersea cable consortia with Chinese companies or in new cables that would connect directly to China, including Hong Kong.
This has undermined Hong Kong's previous role as a premier hub of regional internet traffic.
Due to Washington's change of policy, the much-touted Pacific Link Cable Network, which was to be the first to link California and Hong Kong directly and has backing from both Google and Facebook parent Meta Platforms, had to be rerouted to terminate in Taiwan and the Philippines.
Another cable project that would have linked California to Hong Kong, the Bay to Bay Express Cable System, backed by Amazon.com and Meta, also dropped Hong Kong in favor of the Philippines. Indeed, the Philippines has emerged as a winner in the reconfiguration of the region's critical digital infrastructure.
New undersea cable projects connecting the U.S. West Coast to Singapore that might previously have been routed through Japan and Hong Kong, such as the Echo Submarine Cable System and the Bifrost Cable System, are instead taking paths past Guam, the Philippines, Indonesia and Malaysia to bypass the South China Sea to avoid possible disruption from China's maritime claims there. At the same time, China has begun to forcefully demand a say over projects to lay and maintain undersea cables in the South China Sea, causing significant delays in the work.
This is why the Matsu incident should not be viewed as an isolated event, or just about the disruption of a small portion of Taiwan's connectivity. Rather, the incident highlights the need to focus on the security and resiliency of the critical digital infrastructure of Taiwan, East Asia and Southeast Asia more broadly.
It was thus no surprise that concerns about secure and resilient digital infrastructure were a key focus of discussions at the Group of Seven digital ministers' meeting in Takasaki, Japan, last month.
The action plan adopted then urged particular attention to the need for data route diversity and redundancy, ensuring that undersea cable routes are secure and working with the World Bank and other international institutions to facilitate critical digital infrastructure projects for the underserved regions in the world.
Similarly, after a short meeting of Quad leaders on the sidelines of the G-7 summit in Hiroshima this month, the grouping jointly announced the new Quad Partnership for Cable Connectivity and Resilience to strengthen and support quality undersea cable systems in the Indo-Pacific area. The four Quad nations each have strategic maritime interests that stretch from the Pacific to the Indian Ocean, including through the contentious South China Sea.
Taiwan itself needs to do more to shore up its digital resiliency. The government is investing around $130 million to build and launch two satellites in 2025 and 2026 to explore the use of low-Earth orbit communications systems. However, this effort is too little, too late. Such satellites may be viable as supplementary backup systems but cannot replace the stability and capacity of fiber-optic cables.
Taiwan should also seek to coordinate with the new Quad cable initiative. Such efforts are especially important to Taipei's ability to assure investors that the island has enough redundancies to keep its networks up and running even if China imposes a blockade.
Taiwan should also team up with Japan and South Korea, two of its closest regional and democratic neighbors, to co-invest in advanced, high-capacity undersea cable projects to sustain bandwidth growth for their digital economies to continue to thrive. An East Asian digital trade and technology pact among these economies would go a long way toward leveraging their markets to create more opportunities in digital transformation and data trade.
The trio could further collaborate by allocating capacity for shipbuilding and providing services for undersea cable laying and repair. This would be a boon not just in case Matsu is cut off again, but could ensure expedited repair assistance for the whole region.
Published by Nikkei Asia, May 31, 2023
https://asia.nikkei.com/Opinion/Taiwan-s-island-internet-cutoff-highlights-infrastructure-risks
[Diplomat] Facing Pressure From China, Can the US Recreate Silicon Valley?
Facing Pressure From China, Can the US Recreate Silicon Valley?
The Biden administration’s plan to establish tech hubs across the U.S. can only succeed with effective private-public-academic partnership.
For decades, metropolitan regions all over the world and their respective governments have unleashed numerous initiatives to remake themselves to be the “next Silicon Valley.” Within the U.S., labels such as Silicon Alley, Silicon Beach, Silicon Bayou, Silicon Desert, Silicon Hills, Silicon Holler, Silicon Peach, Silicon Prairie, Silicon Shire, Silicon Slopes and so on have come, and gone. Overseas, there are Silicon Wadi (Israel) and Silicon Roundabout (East London), as well as frequent questions about whether Singapore, Taiwan, or India is the real Silicon Valley of Asia. In China, Zhongguancun in Beijing, as well as the southern city of Shenzhen, vying to be the equivalents of Silicon Valley.
For many years, those who have been studying how Silicon Valley came about in the San Francisco Bay Area would point to a wide range of success factors: the role of universities, early pioneering entrepreneurs and venture capital investors in the region, and propitious timing, from the transformation from the defense industry in the 1930s to the emergence of the semiconductor industry in the 1950s, followed by the computer industry and then the internet. Even the weather and the culture in the area are identified as favorable factors that became magnets for talents from across the country and the world.
In other words, Silicon Valley did not happen because of a top-down government policy design, but because of natural and even coincidental convergences of people, capital, research, and, yes, public policy.
So, it may not come as a big surprise that none of the other wannabes from all over the world have been able to truly rival Silicon Valley, although some countries or regions may have gained significant leadership and success in certain areas, such as semiconductors for Taiwan.
For China in particular, the second largest technology producer and market in the world, its main tech centers of Beijing, Shenzhen, and Shanghai, and other hubs such as Hangzhou and Chengdu, are very much the creation of government policies, directives and financial support. This of course can be expected as the norm in a country like China, with the planned economy nature of its government. While these Chinese tech hubs have been able to take advantage of China’s enormous domestic market in the last few decades, they simply cannot come close to the international reach and global influence of Silicon Valley. Their fates continue to be highly susceptible to manipulation from government policies, such as the Chinese government’s crackdown on the tech sector in the last two years, directly leading to the severe downturn for the entire tech sector in China.
In recent years, with soaring costs in California, other tech hubs have indeed gained grounds in the United States, such as the Austin, Texas, and Seattle, Washington, areas. But so far, no other location has been able to match Silicon Valley’s eminence in terms of scale, depth, breadth, or scope – whether in the U.S. or abroad.
Despite that history, last week, the Biden administration announced a $500 million tech hub funding scheme (formally known as the Regional Technology and Innovation Hub Program). As part of the $10 billion CHIPS and Science Act, the program sets a goal of identifying about 20 U.S. cities or regions as prospective tech hubs, and eventually selecting 10 for funding. The obvious question is: Can the U.S. succeed where so many have largely failed? Indeed, the broader question that has been asked and debated by many since the passage of the CHIPS and Science Act is how to make sure that a return to government industrial policy provides the right answers to the global challenges faced by the U.S. in terms of geopolitics and competition, particularly with China.
To support the new tech hubs, the Biden administration’s scheme aims to bring together “industry, higher education institutions, state and local governments, economic development organizations, and labor and workforce partners to supercharge ecosystems of innovation for technologies that are essential to our economic and national security.” Each applicant region must focus on one of the 10 key tech areas identified in the tech hub statute: artificial intelligence, high performance computing and semiconductors, quantum technology, robotics, natural and anthropogenic disaster handling, advanced communications, biotechnology, data management and cybersecurity, energy technology, and advanced materials science.
The $500 million authorization of this fund is actually relatively small, even though the administration has committed to seeking further appropriation from Congress in the next two years. But the modest financial incentive may be a blessing in disguise. While sustained and long-term policy consistency is crucial, on the other hand, no local or state governments, private companies or even universities should be lured to the scheme just because they see a big check being handed out. Every participant – private or public – in the partnership must be committed to invest with its own resources.
Compared with other countries, the United States enjoys one particularly important advantage – having many outstanding teaching and research universities across the nation that can serve as anchors for tech hubs in conducting research, training talents, and acting as the bases for technology transfer and incubating new startups. Already, several recent examples showcase the viability and vibrancy of even the existing regional private-public-academic collaboration. In Arizona, TSMC’s new facility has a partnership with Arizona State University. In Ohio, Intel’s “Silicon Heartland” project includes a role played by The Ohio State University. In Indiana, U.S. foundry SkyWater Technology moved to an industrial park affiliated with Purdue University.
In addition, community colleges are increasingly enlisted in an effort to train an even broader base of skilled workers, with the support from tech enterprises, to supply them with skilled manpower to fill the new jobs created, which of course will be also welcomed by state and local governments.
So, whether the United States can duplicate Silicon Valley in one or more new locations may be the wrong question to ask. There are some success stories that market and natural forces can create through sheer luck, and others fostered by dedicated, targeted nationwide efforts, with the right mix of ingredients of policy, innovation, investment, and resources. Each tech hub will not need to do everything, but must do enough to maintain and extend U.S. global tech competitiveness in its focus area, meanwhile fostering more regional economic equity.
As U.S. Commerce Secretary Gina Raimondo said, “You shouldn’t have to move to Silicon Valley if you’re a scientist with a great idea.”
Published: The Diplomat, May 18, 2023
https://thediplomat.com/2023/05/facing-pressure-from-china-can-the-us-recreate-silicon-valley/
