Turkish expansion in Africa

Why Erdogan's so quiet about Turkish expansion in Africa

Pinar Tremblay August 20, 2018

As the diplomatic tug-of-war between the United States and Turkey escalates, Turkish President Recep Tayyip Erdogan is lining up new friends. In early August, Erdogan’s 100-day action plan identified new markets in China, Mexico, India and Russia. It did not mention Africa, despite the “African continent opening” Erdogan sought in the early 2000s.

Frequent headlines in the mainstream media have celebrated Erdogan as "the best friend of Africa.” As president he has visited 21 African countries on more than 30 trips.

In February, Turkey's state Anadolu Agency reported on impressive progress from 2003 to 2017. For example, Turkey’s investment has increased from $100 million to $6.5 billion, the number of its embassies from 12 to 41. Turkish Airlines flies to 52 destinations in 33 African countries. Construction companies have invested in several projects worth $55 million.

Somalia hosts not only Turkey’s largest foreign military base but also a hospital named after Erdogan, roads constructed by a Turkish company through Turkey’s state-funded aid organization and garbage collection by the Turkish Red Crescent. More plans are in the making, such as the million cataract surgeries to be performed by 2022 in partnership with Islamic Development Bank in 12 African countries.

Almost all of Erdogan’s rallies feature numbers, such as the miles of roads constructed or the number of classrooms built. Erdogan once gave the number of MRI machines purchased during his administration. But not a word about Africa. With such impressive numbers, why doesn't Erdogan brag about his achievements in Africa more frequently, particularly today, when the challenges and risks facing the Turkish economy are worrying the public?

How do the rewards Turkey is reaping from its projects in Africa actually look when we deduct the costs?

A Nigerian businessmen and consultant who works in Europe and Middle East told Al-Monitor on condition of anonymity, “I have been following Erdogan’s growing reach and influence in Africa. I understand there are three categories of interests that are vital for Turkey: economic, security and cultural. Within the security interests, I do not only mean the military base in Somalia and the 99-year lease of Sudan’s Suakin Island but also minimizing the influence of [exiled cleric Fethullah Gulen] on the continent. Turks have been working relentlessly to convert Gulen schools and arrest Gulenists. These schools will have a significant impact in two decades for the future of these countries. Turkey has performed successful humanitarian missions but it is a mixed blessing. Turkish government here is mired in contracts that were received through back-door channels, without proper transparency. I frequently observe that cutting corners, not having to meet high standards and lack of obligation to report back to agencies is what makes Africa so attractive to Turkey.”

Turkish involvement had the initial goal of expanding its soft power to justify its claim to emerging power status. The high risks are countered by lack of competition for projects in several cities. Erdogan and his travel companions must also have liked the warm welcome they found. When Erdogan visits an African country, the prime time news provide wide coverage of how the public loves Erdogan and Turkey. Turkish flags, cheering crowds and all the extravagant celebrations “must make Erdogan feel like a king,” a senior bureaucrat from Ankara told Al-Monitor on condition of anonymity.

Speaking to business consultants in Istanbul who work for companies operating in Africa, it is easy to conclude that doing business in Africa has been lucrative. One from an Istanbul firm that is heavily invested in the continent, particularly Somalia, said, “Money begets money. People love Erdogan and Turkey because we have no colonial baggage, plus we started with projects that are visible and useful to people like hospitals, water sanitation. These affect their everyday life. We work directly, with cash, which is unusual in the Western world. There are few records without banks. So we get profits, but locals earn as well. We do not get involved in their business, we keep to ourselves. That minimizes risk and we both win.” All the businessmen agreed Turkey has given millions of dollars in aid and investment to Africa, but they could not say how much. Turkish aid to Somalia from 2011 to 2012 alone was in excess of $350 million, according to one credible estimate.

Sedat Aybar, a professor of economics and finance at Istanbul Aydin University and the director of the Africa Research Center, told Al-Monitor, “Turkey’s pursuits in Africa can be summarized around the idea of an ensuring a perpetual “win-win” situation for both Africa and Turkey. This requires an enabling business [environment]. Hence, Turkey’s long-term interest in Africa is not limited to bringing aid to the continent but it also aims at developing economic and diplomatic collaboration on an equal basis with equal partners, which would foster mutual economic development and growth.”

Aybar explained that one of the reasons behind Turkish success in Africa was “Turkey’s new policy” that is “based on promoting bilateral business interactions that will help to find “African solutions to African problems.”

When asked why Turkish accomplishments in Africa are not commonly discussed in the public domain, Aybar commented, “Unfortunately, the importance of Africa and what it means for Turkey’s future have not been recognized by the Turkish intelligentsia and academia. However, there exists some fledgling academic research and interest on African affairs in Turkey. There are 17 Africa research centers associated with an academic institutions. There also exists a sizable African community living in Turkey. All of these help increase awareness of Turkey’s involvement with the continent.”

Aybar emphasized business interests as well. “Now Turkey’s fast-growing electronics sector can gain access to raw materials directly from the African market. It should be noted that some of the fastest growing economies of the world are located on the continent. Demand from the middle classes of those countries on commodities can be counted as the main source of faster-growing Turkish exports to Africa.

"Turkey’s foreign direct investments in the continent are also creating positive returns for the Turkish economy. Some of the priority areas for investment are agribusiness, rural development, civil defense, water resource management, the development of micro- and small-scale enterprises, security, health and transportation.”

Still, Turkish involvement in Africa carries serious risks due to the lack of transparency and oversight on these major international contracts. For example, in 2013, Turkish firm Favori LLC acquired the management of Mogadishu’s International Airport. The contract was leaked, exposing a $1.5 million “initial premium fee” paid to the Somalian government. Mogadishu’s port management was given to the Albayrak group, again amid allegations that millions of dollars were paid to secure the contract. And “given all the corruption in these failed states, these charges are quite minute,” said the Nigerian consultant.

Overall, Turkey is presented as an honest broker that is able to get projects completed and running in multiple African sites without getting bogged down with local issues. And despite security challenges, such as 2013 bomb attack at the Turkish Embassy in Mogadishu, the investments remain lucrative for Turkish businesses. Considering the International Budget Partnership concluded from 2017 data that Turkey has limited budget transparency with no room for public participation, it is not possible to properly assess how lucrative the quiet expansion in Africa has been for Turkey since 2003. That might well be the reason behind Erdogan’s silence on Turkey's African accomplishments.

Found in: recep tayyip erdogan, somalia, investment, africa, turkish economy

Pinar Tremblay is a columnist for Al-Monitor's Turkey Pulse and a visiting scholar of political science at California State Polytechnic University, Pomona. She is a columnist for Turkish news outlet T24. Her articles have appeared in Time, New America, Hurriyet Daily News, Today's Zaman, Star and Salom. On Twitter: @pinartremblay

Philip H. Gordon's analysis on Trump foreign policy

Thursday, August 23, 2018 - 12:00am

The Worst Deals Ever

What Trump Misses About the Art of Foreign Policy Negotiation

Philip H. Gordon

PHILIP H. GORDON is the Mary and David Boies Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations. He served as White House Coordinator for the Middle East and Assistant Secretary of State for European and Eurasian Affairs in the Obama administration. 

The secret to U.S. President Donald Trump’s successful foreign policy, he often claims, is his knack for cutting a great deal [1]. A real estate mogul and author of several books about the art of negotiations, Trump made dealmaking a central theme of his 2016 campaign. He blasted international agreements negotiated by his predecessors as the “worst deals ever” and claimed that he could do a far better job on behalf of the American people. After decades of “losing” on trade and being cheated by free-riding allies, the United States would finally have a leader willing to “put America first.” Trump would not hesitate to make more ambitious demands and confront adversaries and allies alike. And instead of paying the bills for some notional liberal international order, he would leverage the United States’ immense financial and military power in the name of driving harder bargains that would serve the national interest. 

Many Trump supporters [2] continue to back this new approach. They applaud Trump’s confrontational style and seem to believe his repeated assertion [3] that “other countries that took advantage of us are no longer taking advantage of us.” 

What these supporters are missing, however, is that when it comes to actual accomplishments, Trump has almost nothing to show for his efforts. So far, none of his attempts at renegotiating old deals or putting together new ones have succeeded, and most have backfired badly. In fact, Trump is an ineffective negotiator not only because he is poorly versed in basic facts, inconsistent in his bottom lines, and susceptible to flattery but also because his entire approach is based on a fundamental misunderstanding of dealmaking. He wrongly views international relations as a zero-sum game and confuses punishing others with enhancing his own country’s long-term prosperity, security, and well-being.

Some defenders concede that Trump’s approach has costs but claim that the eventual payoff will outweigh them. In a recent Foreign Affairs article (“Three Cheers for Trump’s Foreign Policy [4],” September/October 2018), for example, political scientist Randall Schweller argues that “Trump’s threats of tariffs and other protectionist measures are better seen as bargaining chips designed to open other countries’ markets” and are useful tools to “pressure states to do things that Washington wants but that they otherwise wouldn’t do.” Even by that standard, however, Trump has failed miserably. Nearly two years into his presidency, other countries’ markets are not more open but more closed. Hostile foreign leaders are hardly bending to Washington’s will more than they did before. From trade to arms control to diplomacy, Trump’s dealmaking record so far is all pain and no gain.

A BAD TRADE 

Take trade policy, supposedly Exhibit A for Trump’s negotiating acumen. Trump seems to believe that the United States’ trade deficits mean that the country is “losing [5]” to other countries who are “stealing our wealth [6].” This misguided view overlooks the fact that when the United States runs a bilateral trade deficit its consumers and producers are not just sending money abroad; they are receiving the goods and services they want at the best prices available. Tariffs and other protectionist measures could theoretically reduce a trade deficit with one particular country, such as China. But this will simply lead to a trade deficit with a different country so long as the United States remains near full employment and is running foreign-financed budget deficits, which drive up the value of the dollar and make U.S. goods less competitive. 

Ignoring these realities, Trump has announced multiple tariff increases on both allies and adversaries. In March, he announced across-the-board tariffs of 25 and 10 percent on imports of steel and aluminum, respectively. (An initial decision to exempt the European Union, Mexico, Canada, and other allies was later withdrawn.) Trump went on to raise tariffs on $50 billion in imports from China. When Beijing retaliated with tariffs of its own, Washington threatened to hit an additional $200 billion worth of Chinese imports, and another $200 billion—enough to cover all Chinese exports to the United States—if Beijing did not act to close its trade deficit with the United States and rein in intellectual property theft. Trump has also threatened to put up new trade barriers with Mexico and Canada unless they agree to renegotiate the North American Free Trade Agreement (NAFTA), a deal that has created hundreds of thousands of jobs and lowered the costs of goods for U.S. producers and consumers for over two decades.

Trump famously declared that trade wars are “easy to win,” but so far, the United States is losing. Already, U.S. tariffs—a tax paid by U.S. importers—apply to Chinese-made washing machines, solar panels, automobiles, canned goods, home appliances, toys, semiconductors, and a wide range of essential spare parts. Because U.S. importers often pass on the cost of this tax to consumers and manufacturers, many of these products are likely to become more expensive for Americans—a change already taking place [7] in sectors that depend on cheap aluminum and steel. 

Predictably, China’s response to U.S. pressure has not been to cut back on intellectual property theft or to mandate its citizens to buy more U.S. goods. Instead, Beijing has retaliated with higher tariffs of its own, particularly on U.S. agricultural exports such as corn, soybeans, and wheat. The damage to the U.S. farming sector has been significant. July saw the biggest drop in U.S. farm export prices in more than six years, and prices are likely to fall much further if the standoff continues and Chinese importers turn to other countries, such as Brazil, for new and more reliable suppliers. Already, the situation is dire enough that Trump has had to offer $12 billion in emergency subsidies to U.S. farmers to compensate them for the consequences of his own trade policy—at taxpayers’ expense. 

In March, Trump claimed success after his administration achieved a minor modification of an existing free trade arrangement with South Korea that would make it somewhat easier for the United States to sell cars there. But five months later, the new deal is still not ratified, in part due to South Korean fears that even this deal may not protect them against more U.S. tariffs in the future. Like other key trading partners, South Korea has also filed a challenge to current U.S. tariffs with the World Trade Organization.

Europe has also hit back hard, targeting some $3.3 billion in U.S. goods with retaliatory tariffs, including products made in key swing states such as Florida (orange juice), Kentucky (bourbon), and Wisconsin (motorcycles). In July, Trump backed off on his threats to further escalate against the EU after Jean-Claude Juncker, the president of the European Commission, made a vague commitment to “work together toward” zero tariffs and pledged to buy more U.S. agricultural products and liquid natural gas (LNG). In reality, however, such purchases are decided mainly by market forces, not EU bureaucrats. EU soybean tariffs, for example, cannot be lowered further—they’re already at zero. Likewise, although Juncker promised that the EU would build more LNG terminals, its existing terminals are vastly underutilized, so building more of them will not lead to greater U.S. exports anytime soon. Meanwhile, the U.S. steel and aluminum tariffs remain in place, and an earlier threat by the Trump administration to place tariffs on European automobiles is not off the table. So far, Trump’s strategy has reduced U.S. exports, made imports from Europe more expensive, and imperiled the biggest trade and investment relationship in the world. The net result has not been better deals but disrupted supply chains, U.S. companies shifting production overseas, new deals put on hold, and a drag on the stock market and future growth. And despite Trump’s claim [6] that tariffs are “leading us to great new trade deals,” he has yet to negotiate a single one. 

DIPLOMATIC DEAD ENDS

Trump’s diplomatic track record tells a similar story. Consider the 2015 Iran nuclear deal, the signature diplomatic achievement of U.S. President Barack Obama. After lambasting the Iran deal for years, Trump announced the United States’ withdrawal from it in May. Renewed U.S. sanctions on Iran, the first of which came into force in early August, are clearly having an impact: despite efforts by the European Union, China, and Russia to keep the deal alive, most countries are cutting their purchases of Iranian oil and companies are backing out of investments and trade in the country. But using U.S. sanctions to cause pain and disruption is the easy part. The question is whether that disruption will deliver Trump’s stated goal: a new Iran deal that would ban uranium enrichment forever, allow inspectors unimpeded access to military sites, curb ballistic missile development, and put an end to Iran’s meddling in the Middle East. Those are worthwhile goals, but so far there is no reason to think any of them will be achieved, or to expect that Iran will even agree to talk about them. 

Instead, the new sanctions have damaged the United States’ reputation as a trustworthy negotiating partner and angered important allies in Europe and elsewhere. They are also creating serious strains on Afghanistan and Iraq, which depend on trade with Iran and whose stability is in Washington’s interest. Finally, they are contributing to rising global oil prices, which undercut the impact of separate U.S. sanctions on Russia and Venezuela, increase costs for U.S. consumers, and make matters worse for already struggling emerging markets. 

Meanwhile, U.S. withdrawal from the deal has not stopped Tehran from supporting terrorist groups and interfering in civil wars in Syria and Yemen. So far, Iran continues to abide by the deal, but if the agreement collapses entirely, Iran will be free to expand its nuclear program unimpeded, potentially leaving Washington with a choice between a nuclear-armed Iran and another war in the Middle East. 

Of course, Tehran could eventually come back to the table and accept a more comprehensive deal, or the current regime could collapse under the weight of sanctions to be replaced by new leaders without nuclear ambitions. If this unlikely best-case scenario comes to pass, Trump will deserve credit. In the meantime, he has thrown away a working deal for nothing in return. 

Things look no different on the North Korean front. As with Iran, Trump has upped the pressure on the regime in Pyongyang with fiery threats of preemptive military action and increased sanctions, as well as personal attacks on North Korean leader Kim Jong Un, whom he has dubbed Little Rocket Man. Trump and his supporters claim this strategy has paid off by forcing Kim to the negotiating table. Following a summit with Kim in June, Trump proclaimed [8] that “there is no longer a nuclear threat from North Korea.” Yet Kim may simply have agreed to talk to explore what he could get from a U.S. president clearly eager to announce a deal. He was rewarded with effusive praise and expressions of trust from Trump, giving him unprecedented legitimacy and reducing the very pressure that Trump had helped to build up. In exchange, Kim has suspended missile and nuclear testing—just after having reached a desired technical threshold —and begun to work with the United States to turn over remains of U.S. soldiers from the Korean War, offering Trump some “progress” to point to. But on the central issue at hand, the growing North Korean nuclear threat, Pyongyang has made no more than a vague pledge to “work towards” denuclearization, similar to many past commitments it never fulfilled. North Korea continues [9] to enrich uranium and build new missiles and has not dismantled a single nuclear warhead. Even high-level U.S. officials such as National Security Adviser John Bolton now admit [10] that North Korea has not taken any serious steps toward denuclearization. 

On the campaign trail ahead of U.S. midterm elections this fall, Trump has argued that his willingness to talk tough and confront allies has pushed European NATO members to finally spend more on their own defense. In reality, the picture is more complex, and the costs of Trump’s actions have been high. While Trump’s relentless focus on burden-sharing may have helped prod European NATO leaders to raise defense spending, his claim that he single-handedly persuaded them to spend “hundreds of billions of [additional] dollars”—close to the total amount that European NATO members spend in an entire year—is absurd. In fact, European defense spending has been rising steadily since well before Trump took office, largely because of the growing threat from Russia, which invaded Ukraine in 2014. Ironically, recent spending increases may also reflect European leaders’ growing awareness that they can no longer depend on the United States to defend them, given Trump’s repeated questioning of the U.S. commitment to NATO’s Article V defense guarantee. In that sense, Trump’s approach has hardly led to a new and better deal for the United States within NATO, but actually to a serious weakening of the alliance itself.

Then there is Turkey, where Trump has also tried to use tariffs, threats, and bluster to accomplish both economic and political goals without achieving either. Having given Turkish President Recep Tayyip Erdogan a pass when he arrested tens of thousands of suspected political enemies, purchased a Russian air-defense system in contravention of U.S. sanctions, and intervened against U.S.-backed forces in Syria, Trump suddenly decided to force a showdown over the issue of Andrew Brunson, an evangelical pastor and U.S. citizen detained in Turkey in 2016. After an apparent agreement to free Brunson broke down in early August, Trump doubled tariffs on Turkish steel and aluminum while warning of bigger sanctions to come. 

Erdogan has reacted defiantly, calling for a boycott of U.S. electronic products, imposing counter-tariffs on U.S. exports of passenger cars, tobacco, and spirits, and threatening to ditch decades of strategic partnership with the United States in favor of Russia and China. As the Turkish currency has taken a nosedive in recent weeks, Erdogan has blamed the United States for the results of his own economic mismanagement, calling U.S. sanctions a “stab in the back” and appealing to patriotic Turks to defend their currency. Ironically, the collapse of the Turkish currency is likely to encourage a rush to U.S. dollar assets, driving up the value of the dollar and making it harder for the United States to export the very products that Trump claims his tariffs are designed to save.

Finally, consider Washington’s approach to the Israel-Palestine conflict, the stage for Trump to negotiate what he has called the “ultimate deal.” For more than a year, Trump’s Middle East team has been putting together a detailed plan that they hoped could form the basis for serious talks. Before launching those talks, however, Trump decided to unilaterally recognize Jerusalem as the capital of Israel and to move the U.S. embassy there from its former site in Tel Aviv, thus taking sides with the Israelis over the Palestinians in one of the most serious issues at stake in any future negotiations. When the Palestinians protested by cutting off talks with the United States, Trump lashed out at them, cutting some $300 million in security assistance, threatening to withdraw U.S. contributions to the UN agency that supports Palestinian refugees and to close the Palestinian Authority’s offices in the United States. Trump’s Jerusalem move has made it impossible even for his friends among regional Arab states to support his peace plan. As a result, the prospects even for getting talks started—let alone concluding them successfully—are almost nil. 

AIM HIGH AND PUSH?

In fairness, Trump has been in office for less than two years, and perhaps the great benefits of his strategy are still to come. Any successful negotiation requires a willingness to stake out tough positions, stand firm, and demonstrate that you are willing to walk away if your objectives are not achieved. Maybe the better deals Trump has been promising may just be a matter of time. 

But that seems unlikely. What the record so far suggests instead is that Trump’s approach to deal making is fundamentally flawed. In contrast to Trump’s instinct to attack everyone at once, successful diplomacy requires picking your battles, maintaining alliances, and putting together coalitions to achieve carefully determined priorities. It’s hard to win support from China and Europe on Iran, for instance, when you’re relentlessly attacking them on trade. Sound diplomacy also recognizes that other leaders have nationalistic populations and domestic constraints, too, and that bashing them personally and publicly can actually make it harder for them to back down. 

Trump also has a dangerous tendency to visibly oversell mostly hollow agreements and minor victories, such as North Korean “denuclearization,” EU commitments to buy U.S. food exports, or South Korea’s willingness to buy cars. This leads other leaders to think that they, too, can buy him off with symbolic gestures, empty assurances, or pompous summit declarations while they resist actual concessions. 

Finally, Trump is discovering the tough reality that, in a complicated world, all international agreements require some degree of compromise. For all their flaws, imperfect deals—like the nuclear deal with Iran, the trading relationship with Europe, or NAFTA—are often far better than no deal at all. 

In his book The Art of the Deal, Trump described his own deal-making style as “quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.” He has certainly aimed very high, and he has been pushing and pushing and pushing. Whether he’ll ever get what he’s after–especially after all the damage he has caused–is far more in doubt. 

Monday, August 13, 2018 - 11:00am

When China Rules the Web

Technology in Service of the State

Adam Segal

ADAM SEGAL is Ira A. Lipman Chair in Emerging Technologies and National Security at the Council on Foreign Relations.

 

For almost five decades, the United States has guided the growth of the Internet [1]. From its origins as a small Pentagon program [2] to its status as a global platform that connects more than half of the world’s population and tens of billions of devices, the Internet has long been an American project. Yet today, the United States has ceded leadership in cyberspace to China. Chinese President Xi Jinping has outlined his plans to turn China into a “cyber-superpower.” Already, more people in China have access to the Internet than in any other country, but Xi has grander plans. Through domestic regulations, technological innovation, and foreign policy, China aims to build an “impregnable” cyberdefense system, give itself a greater voice in Internet governance, foster more world-class companies, and lead the globe in advanced technologies.

China’s continued rise as a cyber-superpower is not guaranteed. Top-down, state-led efforts at innovation in artificial intelligence, quantum computing, robotics, and other ambitious technologies may well fail. Chinese technology companies will face economic and political pressures as they globalize. Chinese citizens, although they appear to have little expectation of privacy from their government, may demand more from private firms. The United States may reenergize its own digital diplomacy, and the U.S. economy may rediscover the dynamism that allowed it create so much of the modern world’s technology. 

But given China’s size and technological sophistication, Beijing has a good chance of succeeding [3]—thereby remaking cyberspace in its own image. If this happens, the Internet will be less global and less open. A major part of it will run Chinese applications over Chinese-made hardware. And Beijing will reap the economic, diplomatic, national security, and intelligence benefits that once flowed to Washington.

XI’S VISION

Almost from the moment he took power in 2012, Xi made it clear just how big a role the Internet played in his vision for China. After years of inertia, during which cyber-policy was fragmented among a wide array of government departments, Xi announced [4] that he would chair a so-called central leading group on Internet security and informatization and drive policy from the top. He established a new agency, the Cyberspace Administration of China, and gave it responsibility for controlling online content, bolstering cybersecurity, and developing the digital economy. 

Cyberpower sits at the intersection of four Chinese national priorities. First, Chinese leaders want to ensure a harmonious Internet. That means one that guides public opinion, supports good governance, and fosters economic growth but also is tightly controlled so as to stymie political mobilization and prevent the flow of information that could undermine the regime. 

Second, China wants to reduce its dependence on foreign suppliers of digital and communications equipment. It hopes to eventually lead the world in advanced technologies such as artificial intelligence, quantum computing, and robotics. As Xi warned in May, “Initiatives of innovation and development must be securely kept in our own hands.”

Third, Chinese policymakers, like their counterparts around the world, are increasingly wary of the risk of cyberattacks on governmental and private networks that could disrupt critical services, hurt economic growth, and even cause physical destruction. Accordingly, the People’s Liberation Army has announced plans to speed up the development of its cyber-forces and beef up China’s network defenses. This focus on cybersecurity overlaps with China’s techno-nationalism: Chinese policymakers believe they have to reduce China’s dependence on U.S. technology companies to ensure its national security, a belief that was strengthened in 2013, when Edward Snowden, a former contractor with the U.S. National Security Agency, revealed that U.S. intelligence services had accessed the data of millions of people that was held and transmitted by U.S. companies. 

Finally, China has promoted “cyber-sovereignty” as an organizing principle of Internet governance, in direct opposition to U.S. support for a global, open Internet. In Xi’s words, cyber-sovereignty represents “the right of individual countries to independently choose their own path of cyber development, model of cyber regulation and Internet public policies, and participate in international cyberspace governance on an equal footing.” China envisions a world of national Internets, with government control justified by the sovereign rights of states. It also wants to weaken the bottom-up, private-sector-led model of Internet governance championed by the United States and its allies, a model Beijing sees as dominated by Western technology companies and civil society organizations. Chinese policymakers believe they would have a larger say in regulating information technology and defining the global rules for cyberspace if the UN played a larger role in Internet governance. All four of Beijing’s priorities require China to act aggressively to shape cyberspace at home and on the global stage. 

THE END OF THE OPEN INTERNET

The Xi era will be remembered for putting an end to the West’s naive optimism about the liberalizing potential of the Internet. Over the last five years, Beijing has significantly tightened controls on websites and social media. In March 2017, for example, the government told Tencent, the second largest of China’s digital giants, and other Chinese technology companies to shut down websites they hosted that included discussions on history, international affairs, and the military. A few months later, Tencent, the search company Baidu, and the microblogging site Weibo were fined for hosting banned content in the run-up to the 19th Party Congress. Officials ordered telecommunications companies to block virtual private networks (VPNs), which are widely used by Chinese businesses, entrepreneurs, and academics to circumvent government censors [5]. Even Western companies complied: Apple removed VPNs [6] from the Chinese version of its App Store. Beijing also announced new regulations further limiting online anonymity and making the organizers of online forums personally accountable for the contributions of their members.

Chinese censors are now skilled at controlling conversations on social media. In 2017, as the dissident and Nobel Peace Prize laureate Liu Xiaobo became increasingly ill, censors revealed [7] that they could delete his image from chats. In an even more Orwellian move, authorities have rolled out a sophisticated surveillance system based on a vast array of cameras and sensors, aided by facial and voice recognition software and artificial intelligence. The tool has been deployed most extensively in Xinjiang Province, in an effort to track the Muslim Uighur population there, but the government is working to scale it up nationwide.

In addition to employing censorship and surveillance [8], China has also created an interlocking framework of laws, regulations, and standards to increase cybersecurity and safeguard data in governmental and private systems. The government has enacted measures to protect important Internet infrastructure, it has mandated security reviews for network products and services, and it has required companies to store data within China, where the government will face few obstacles to accessing it. Beijing has also introduced new regulations concerning how government agencies respond to cybersecurity incidents, how and when the government discloses software vulnerabilities to the private sector, and how ministries and private companies share information about threats. 

Different agencies and local governments could interpret and implement these policies in different ways, but at the least, the regulations will raise the cost and complexity of doing business in China for both domestic and foreign technology companies. Draft regulations published in July 2017 were particularly broad, defining “critical information infrastructure” to cover not only traditional categories such as communications, financial, and energy networks but also the news media, health-care companies, and cloud-computing providers. Baidu, Tencent, and Weibo have already been fined for violating the new cybersecurity laws. Foreign companies worry that an expansive interpretation of the requirements for inspections of equipment and storing data within China will raise costs and could allow the Chinese government to steal their intellectual property.

MADE IN CHINA 

Chinese policymakers believe that to be truly secure, China must achieve technological self-sufficiency. Small wonder, then, that support for science and technology is front and center in the country’s most recent five-year plan, which began in 2016. China’s investment in research and development has grown by an average of 20 percent a year since 1999. It now stands at approximately $233 billion, or 20 percent of total world R & D spending. More students graduate with science and engineering degrees in China than anywhere else in the world, and in 2018, China overtook the United States in terms of the total number of scientific publications. Western scientists have long ignored Chinese research, but they are now citing a growing number of Chinese publications.

Three technologies will matter most for China’s ability to shape the future of cyberspace: semiconductors, quantum computing, and artificial intelligence [9]. For years, Beijing has tried and failed to build an indigenous industry producing semiconductors, that is, the integrated circuits (or microchips) found in nearly every technological device. In 2016, China imported $228 billion worth of integrated circuits—more than it spent on imported oil—accounting for over 90 percent of its consumption, according to the consultancy McKinsey. The risk of relying on U.S. suppliers was brought home this April, when the Trump administration sanctioned ZTE, the world’s fourth-largest maker of telecommunications gear. ZTE relies on U.S.-made components, including microchips to power its wireless stations. When the sanctions cut the company off from its supplies, it ceased major operations. In June, Trump reversed course on the sanctions, but the move did little to assuage Chinese concerns about dependence on foreign suppliers. Soon after the sanctions were announced, Xi called on a gathering of the country’s top scientists to make breakthroughs on core technologies.

In 2015, China issued guidelines that aim to get Chinese firms to produce 70 percent of the microchips used by Chinese industry by 2025. Since then, the government has subsidized domestic and foreign companies that move their operations to China and encouraged domestic consumers to buy from only Chinese suppliers. The government has committed $150 billion over the next decade to improve China’s ability to design and manufacture advanced microprocessors. China has also acquired technologies abroad. According to the Rhodium Group, a research firm, from 2013 to 2016, Chinese companies made 27 attempted bids for U.S. semiconductor companies worth more than $37 billion in total, compared with six deals worth $214 million from 2000 to 2013. Yet these attempts have run into problems: many of the high-profile bids, including a $1.3 billion offer for Lattice Semiconductor and a $2.4 billion deal for Fairchild Semiconductor, were blocked by the U.S. government on national security grounds.

Then there is quantum computing, which uses the laws of quantum mechanics—essentially the ability of quantum bits, or “qubits,” to perform several calculations at the same time—to solve certain problems that ordinary computers cannot. Advances in this area could allow Chinese intelligence services to create highly secure encrypted communications channels and break most conventional encryption. High-speed quantum computers could also have major economic benefits, remaking manufacturing, data analytics, and the process of developing drugs. In 2016, China launched the world’s first satellite that can communicate using channels secured by quantum cryptography and constructed the world’s longest quantum communications cable, connecting Beijing and Shanghai. It’s not clear how much China spends on quantum computing, but the sums are certainly substantial. It is spending $1 billion alone on one quantum computing laboratory.

More than its investments in semiconductor research and quantum computing, it is China’s ambitious plans in artificial intelligence that have caused the most unease in the West. At an artificial intelligence summit last year, Eric Schmidt, the former chair of Google, said of the Chinese, “By 2020, they will have caught up. By 2025, they will be better than us. And by 2030, they will dominate the industries of AI.” China is racing to harness artificial intelligence for military uses, including autonomous drone swarms, software that can defend itself against cyberattacks, and programs that mine social media to predict political movements.

In 2017, the Chinese government outlined its road map for turning itself into the “world’s primary AI innovation center” by 2030. The plan is more a wish list than a concrete strategy, but it does provide direction to central ministries and local governments on how to invest to achieve breakthroughs by highlighting specific fields for research and development. The government has singled out Baidu, Tencent, the e-commerce giant Alibaba, and the voice recognition software company iFLYTEK as national champions in AI, identifying these companies as the first group to develop systems that can drive autonomous cars, diagnose diseases, act as intelligent voice assistants, and manage smart cities, that is, urban spaces that use a wide variety of sensors to collect data on how people live and then analyze that data to reduce cities’ environmental impact, spur economic development, and improve people’s quality of life.

China is also striving to define international standards for the next wave of innovation, especially in fifth-generation mobile network technology, or 5G, which will offer much faster Internet speeds to mobile users and enable new uses for Internet-connected devices. To many Chinese leaders, China’s current place in the global division of labor looks like a trap: foreign firms reap high profits from the intellectual property they own, and Chinese companies survive on the thin margins they make by manufacturing and assembling physical products. If China can control technology standards, it will ensure that its firms receive royalties and licensing profits as others develop products that plug into Chinese-owned platforms. 

Over the last decade, Beijing has increased the skill, sophistication, and size of the delegations it sends to standards organizations. China was essentially absent for the discussions about third- and fourth-generation mobile network technologies, but things have changed. In 2016, Huawei, China’s largest telecommunications company, sent twice as many representatives as any other company to the meeting in Vienna that defined the specifications for the coming fifth generation of mobile networks. 

GOVERNING THE INTERNET

Under Xi, China has also tried to shape the international institutions and norms that govern cyberspace. For much of the last decade, Chinese hackers de facto set those norms by engaging in massive cyber-espionage campaigns designed to steal military, political, and, worst of all in the eyes of the United States, industrial secrets. The Obama administration pressed Beijing on the subject, publicly attributing attacks on U.S. companies to state-backed hackers and threatening to sanction senior officials. In 2015, the two sides agreed that neither would support digital theft for commercial advantage. China went on to sign similar agreements with Australia, Canada, Germany, and the United Kingdom. There was a marked downturn in activity in the wake of these agreements, but the decline seems to have been as much a result of a reorganization within the Chinese military as of U.S. diplomatic efforts. Now that the People’s Liberation Army has consolidated control over its cyber-forces, industrial espionage has shifted to more sophisticated hackers in China’s intelligence agencies. 

China’s more visible efforts at writing the rules of the road for cyberspace have centered on the UN. Washington and its allies have promoted a distributed model of Internet governance that involves technical bodies, the private sector, civil society, and governments, whereas Beijing prefers a state-centric vision. In 2017, for example, China called for “a multilateral approach to governing cyberspace, with the United Nations taking a leading role in building international consensus on rules.” Beijing believes a multilateral approach located at the UN has two immediate benefits. It would prioritize the interests of governments over those of technology companies and civil society groups. And it would allow China to mobilize the votes of developing countries, many of which would also like to control the Internet and the free flow of information.

Beijing has resisted U.S. efforts to apply international law, especially the laws of armed conflict, to cyberspace. A forum at the UN known as the Group of Governmental Experts has identified some rules of behavior for states in a series of meetings and reports from 2004 to 2017. Although in the 2013 report, Chinese diplomats accepted that international law and the UN Charter apply to cyberspace, and in 2015, they agreed to four norms of state behavior, they dragged their feet on discussions of exactly how neutrality, proportionality, the right of self-defense, and other concepts from international law might be applied to conflict in cyberspace. They argued instead that discussing international law would lead to the militarization of cyberspace. Chinese diplomats, along with their Russian counterparts, stressed the need for the peaceful settlement of disputes.In 2017, the participating countries in the Group of Governmental Experts failed to issue a follow-on report in part because China and Russia opposed language endorsing the right of self-defense.

In addition to working through the UN, Chinese policymakers have created their own venue to showcase their vision for the Internet and strengthen their voice in its governance: the World Internet Conference, held annually in Wuzhen. In 2017, Tim Cook and Sundar Pichai, the chief executives of Apple and Google, respectively, attended for the first time. Cook, a vocal defender of privacy and free speech at home, stated that Apple shared China’s vision for “developing a digital economy for openness and shared benefits.” By echoing Chinese officials’ language on openness despite the tight controls on the Internet in China, Cook was signaling Apple’s willingness to play by Beijing’s rules. 

Beijing is likely to have its biggest impact on global Internet governance through its trade and investment policies, especially as part of the Belt and Road Initiative, a massive effort to build infrastructure connecting China to the Indian Ocean, the Persian Gulf, and Europe. Along with the more than $50 billion that has flowed into railways, roads, pipelines, ports, mines, and utilities along the route, officials have stressed the need for Chinese companies to build a “digital Silk Road”: fiber-optic cables, mobile networks, satellite relay stations, data centers, and smart cities. 

Much of the activity along the nascent digital Silk Road has come from technology companies and industry alliances, not the Chinese government. Alibaba has framed its expansion into Southeast Asia as part of the Belt and Road Initiative. It has acquired the Pakistani e-commerce company Daraz and launched a digital free-trade zone with the support of the Malaysian and Thai governments, which will ease customs checks, provide logistical support for companies, and promote exports from small and medium-sized companies in Malaysia and Thailand to China. ZTE now operates in over 50 of the 64 countries on the route of the Belt and Road Initiative. As well as laying fiber-optic cables and setting up mobile networks, the company has been providing surveillance, mapping, cloud storage, and data analysis services to cities in Ethiopia, Nigeria, Laos, Sri Lanka, Sudan, and Turkey.

The Chinese government hopes that these enterprises will give it political influence throughout the region. But private firms are focused on profit, and Beijing has not always succeeded in converting business relationships into political heft, even when the projects have involved state-run enterprises, since these firms also often pursue commercial interests that conflict with diplomatic goals. In the short term, however, the presence of Chinese engineers, managers, and diplomats will reinforce a tendency among developing countries, especially those with authoritarian governments, to embrace China’s closed conception of the Internet. 

THE FUTURE IS CHINESE

Beijing’s vision of the Internet is ascendant. According to the think tank Freedom House, Internet freedom—how easily people can access the Internet and use it to speak their minds—has declined for the last seven years. More countries are pushing companies to store data on their citizens within their borders (which companies resist because doing so raises costs and reduces their ability to protect the privacy of their users) and to allow the government to carry out security reviews of their network equipment. Each country pursues these policies in support of its own ends, but they all can turn to China for material, technical, and political support. 

The United States’ position at the center of the global Internet brought it major economic, military, and intelligence benefits. U.S. companies developed the routers and servers that carry the world’s data, the phones and personal computers that people use to communicate, and the software that serves as a gateway to the Internet. In a similar way, the Chinese Communist Party sees technology companies as a source of economic dynamism and soft power. And so it is increasing its political control over Chinese technology giants. As those companies come to supply more of the world’s digital infrastructure, China’s spy services will be tempted to collect data from them.

Chinese technology companies have several advantages: access to a lot of data with few restrictions on how they can use it, talented workers, and government support. But the country’s legacy of central planning may lead companies to overinvest, build redundant operations, and stifle their employees’ creativity. And Chinese technology firms have become the targets of political pressure in Australia, the United States, and Europe. The Australian government is considering banning Huawei from supplying equipment for Australia’s fifth-generation mobile networks. Washington is working to limit Chinese investment in U.S. technology companies and has made it more difficult for Chinese telecommunications firms to do business in the United States: it has blocked China Mobile’s application to provide telecommunications services in the United States, banned the sale of Huawei and ZTE smartphones on U.S. military bases, and sought to prohibit U.S. telecommunications companies from spending critical infrastructure funds on equipment and services from China.

Yet none of these challenges is likely to deal a fatal blow to China’s digital ambitions. The country is too large, too powerful, and too sophisticated. To prepare for greater Chinese control over the Internet, the United States should work with its allies and trading partners to pressure Beijing to open up the Chinese market to foreign companies, curb its preferential treatment of Chinese firms, and better protect foreign companies’ intellectual property. U.S. policymakers should shift from simply defending the bottom-up, private-sector-led model of Internet governance to offering a positive vision that provides developing countries with realistic alternatives to working solely through the UN. Washington should talk to Beijing directly about norms of state behavior in cyberspace. The two countries should work together on setting global standards for government purchases of technology, determining how companies should secure their supply chains against cyberattacks, and planning government inspections of critical communications equipment. Yet these efforts will only shape trends, not reverse them. Whatever Washington does, the future of cyberspace will be much less American and much more Chinese.