Thursday, August 24, 2023

[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

Thursday, August 03, 2023

[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