During peak hours, cars flow smoothly through the streets with little to no congestion, directed by smart traffic lights based on Chinese artificial intelligence algorithms, and surveillance cameras installed at every corner instantly recognize faces and license plates, and send data to cloud control centers protected by Chinese encryption technologies.
Energy, water, and public transportation systems are managed via Chinese fifth-generation networks, while applications that use Chinese protocols control daily payments and government services, as every detail of daily life in this city runs through hardware and software based on Chinese technical standards.
This scene is not science fiction, but rather closer to reality in cities such as Lagos, Nairobi and Bangkok, which have concluded agreements with Chinese companies, and reflects the trend that China is trying to establish, which is to reshape the global technical system.
Technical standards are more valuable than oil
In the traditional economy that dominated the twentieth century, control was measured by the number of barrels of oil, sea lanes, and the ability to control the flow of raw materials.
In the contemporary digital economy, influence is linked to technical standards, as these detailed rules and unified technical specifications ensure the compatibility of different systems, devices and networks and their ability to work together.
When you buy a smart phone in Cairo and connect to the Internet in Tokyo and talk to someone in London, it is the “technical standards” that made this possible. Without these “technical standards,” the digital world turns into something similar to the technical “Tower of Babel,” where devices are isolated from each other.
When a company succeeds in integrating its innovations and patents into the approved global standard for a specific technology, those patents are legally classified as “standard basic patents,” as they are subject to international obligations that require licensing them to other companies to ensure non-monopoly and facilitate the flow of global innovation.
If any company in the world wants to make a product compatible with this technology, whether it is a phone, a medical device, or a self-driving car, it is obligated to pay licensing fees to whoever owns the “standard basic patent.”
The production of devices represents a lower-margin business activity compared to the constant flow of money received through licensing fees for “standard essential patents,” which has turned it into a valuable strategic commodity that outperforms traditional energy assets such as oil and gas.
Beijing is making large investments to secure its control over standards, based on the idea that whoever owns the standards owns the future, and is moving at a rapid pace driven by its desire to get rid of the burden of paying licensing fees for Western companies.
China is the second largest payer of intellectual property licensing fees in the world, after Ireland, which tops the list for tax reasons.
Moving to the legislator seat through an ambitious plan
For many years, the Chinese economic model has relied on assembling products, exporting goods, implementing designs, and labor-intensive, low-margin manufacturing. The “Made in China 2025” plan focused on raising manufacturing production and consolidating China’s position in global supply chains.
Through the new “China Standards 2035” plan, Beijing is developing a comprehensive plan that allows the government and its major technology companies to set global standards for emerging technologies, such as artificial intelligence, quantum computing, cloud computing, self-driving cars, smart cities, communications networks, the Internet of Things, and blockchain.
China aspires to establish a governance framework for future technologies, which will enhance its industrial and technical competitiveness and launch a new phase aimed at transforming the country from an implementer to a designer of global technical standards by 2035.
The “Blueprint for the Development of National Standardization”, officially known as the “Outline for the Development of National Standardization”, aims to achieve the transition towards building an integrated and internationally compatible standardization system with Chinese characteristics.
China seeks to increase the presence of its experts and companies within international standards committees, focus on “standardized core patents,” link foreign development aid to the adoption of its standards, and build an internal digital firewall through national standards.
Through this plan, Beijing wants to unify standards in strategic sectors, raise the percentage of compatibility of its standards with international standards, and increase the participation of its companies in formulating global standards, taking advantage of its dominance in manufacturing to move to impose protocols and jump to the seat of the legislator.
This ambition was transformed from a government document into a reality within international negotiating rooms by mobilizing cadres in leadership positions of international organizations and flooding these organizations with Chinese technical proposals.
China has succeeded in increasing the number of officials and private sector leaders who hold senior leadership positions within key working groups and technical committees of international standard-setting bodies.
By 2021, China was leading four out of fifteen UN agencies specializing in science and technology, compared to one agency of the United States.
The influence achieved in these organizations, such as the International Telecommunication Union, the International Organization for Standardization, the International Electrotechnical Commission, and the Third Generation Partnership Project, has become a gateway to pushing acceptance of the standards of Chinese companies as official international technical standards in many vital sectors.
By submitting thousands of proposals to these organizations and succeeding in approving various standards, Chinese companies have strengthened their ability to lead, win contracts, and secure international supply chains against political shocks and trade fluctuations.
Exporting rules via the “Digital Silk Road”
China is applying its new influence practically on the ground through the “Digital Silk Road” initiative, which is the technical and digital aspect of China’s strategic “Belt and Road” initiative, and aims to build advanced digital infrastructure in the participating countries and export Chinese technologies.
The initiative brings advanced infrastructure, including optical cables, fifth generation networks, data centers, satellites, e-commerce nodes, and smart cities, with the aim of deepening digital cooperation, developing common technical standards, and improving the efficiency of security systems across the initiative countries.
Chinese foreign digital investments through the “Digital Silk Road” initiative are estimated at tens of billions of dollars, which were spent on building fifth generation communication networks, cloud data centers, submarine cables, and smart city projects in dozens of countries.
Thanks to generous government financial support provided by China’s sovereign banks, national technology companies, such as Huawei, ZTE, Hikvision, Dahua, Cloudwalk, Alibaba, and Tencent, are able to offer competitive prices that are significantly lower than their closest Western competitors.
Regardless of commercial profits, Western researchers believe that this expansion in the field of infrastructure creates a state of long-term technical dependence on the state dependent on Chinese systems, as it becomes forced to adopt Chinese standards and specifications to ensure the modernization, maintenance and integration of projects, which prevents it from changing devices or adopting alternative protocols.
American anxiety and the specter of balkanization of the digital world
This Chinese rise raised a state of concern in Washington, which realized that this relentless pursuit of setting the rules of the digital future constitutes a direct strategic threat to its commercial, security and military superiority, with its concerns centered around national security, commercial dominance and governance of the global Internet.
On the national security front, Washington has been leading a diplomatic campaign for years to exclude Chinese equipment from its allies’ fifth generation networks through initiatives such as the “Clean Network” initiative, based on fears of espionage and the possibility of exploitation by the Chinese government.
On the commercial level, the potential loss is deeper than the numbers, as Beijing seeks to obtain broad commercial and security advantages at the global level, while this new strategy creates risks and poses a challenge to the global commercial priorities of facilitating technical interoperability.
Washington also seeks to stop Beijing’s attempts to use international committees and organizations to weaken the role of American companies and their Western allies and limit their competitive ability to pioneer tomorrow’s technologies.
These attempts became clear when Huawei – with the support of China Mobile, China Unicom, and the Chinese Academy of Information and Communications Technology affiliated with the Ministry of Industry and Information Technology – presented a research and technical initiative to develop a new framework for network protocols.
The company presented its proposal called the “New Internet Protocol” as a possible development or alternative to the current protocol, based on the hypothesis that the current protocol lacks the technical flexibility required to support future requirements.
The proposal sparked great controversy, especially in light of the presence of features that facilitate comprehensive oversight and monitoring, and the radical changes that may increase complexity and gaps, in addition to seeing it as part of China’s strategy to control future standards, and that it is linked to long-term Chinese industrial goals.
Huawei responded that the proposal is purely technical to support future uses, and that it addresses real problems in the current Internet and aims to stimulate scientific research, while renaming it in order to calm the controversy, but the content remains similar.
Official discussions were halted because the proposal was not sufficiently accepted by the two ITU study groups.
This prompted Huawei to develop and deploy related technologies that are considered an advancement or a practical alternative that carries some of the characteristics of the proposed protocol in a way that allows building an infrastructure that is partially compatible with the vision of the “New Internet Protocol.”
This polarization portends an accelerated scenario of balkanization of the digital world and its disintegration into two camps, Western and Eastern, with the United States leading the first camp that adopts open standards, while China leads the second camp that adopts closed standards.
This division hinders global innovation, increases costs, forces countries to choose between two camps, and ends the idea of a unified global Internet that has changed human history and connected societies over the past decades.
In conclusion, the struggle over technical standards represents a new arena for geopolitical competition, as the party that sets the technical standard determines what is allowed and what is prohibited at the societal level, manages the details of people’s daily lives, and writes the rules on which the global digital economy is based for decades to come. As China seeks to strengthen its technical sovereignty, the West warns of the dangers of dependence and censorship.
