Balkanization of internet, Balkanization of technology, and Ed Snowden



Even as the search for Snowden continues, the impact of his data bomb is rippling across continents. Bloomberg reports US company Cisco may face a backlash in China as the media urges industry to shift away from US made routers and switches in favor of locally produced ones. 

From Bloomberg: 

China should develop its own Internet technology, the Global Times newspaper wrote in an editorial this week, alleging that the U.S. can “attack China almost at will.” U.S. companies, including Cisco, represent a “terrible security threat,” China Daily reported, citing an industry source it didn’t identify. Shenzhen-based Huawei Technologies Co. is poised to benefit from any clients seeking Cisco alternatives.


And the US government has banned federal agencies from buying Huawei an ZTE equipment. Rather than a Cold War with a world divided by a wall or a political border, it’s a world with considerable cross border trade and travel. Yet the closer you get to the power blocs, the more dense the web of business and political allegiances. I imagine that circularity of the trade and trade allegiances between businesses and states will grow. And then you’ll have some countries that use both Cisco and Huawei equipment side by side.

More dust kicked up by Snowden

One of the most interesting elements is coverage of the fact that China is installing Chinese-made routers because of the threat posed by foreign equipment.

From the SCMP:

Fang Binxing, president at the Beijing University of Posts and Telecommunications and widely believed to be the father of China’s “great firewall”, which restricts access to the web, told News China in October last year that foreign equipment was a serious threat to national security.

“China should set up a national information security review commission as soon as possible,” he said.

Telecom companies have started replacing foreign-made equipment.

China Unicom quietly replaced all Cisco routers at a key backbone hub in Wuxi, Jiangsu last year, according to the National Business Daily.

The changes are being kept quiet to avoid panic and embarrassment to the government, people in the industry say.”

Sound familiar? A very similar debate is happening in the US and Australia about whether equipment created by Huawei and ZTE can be trusted from a national security standpoint in the US and Australia. The fact that both China and the US (and Australia) see this as a threat, is yet another step toward the balkanization of technology.

No one disputes there is a balkanization of the internet. But ultimately, the a large swath of the underlying equipment may become balkanized.

Australian politician asks for cyberspying regulation pact

Australia’s shadow communication minister, Liberal, Malcolm Turnbull has said he wants to propose a “new global pact to regulate cyberspying” in the wake of reports of further Chinese cyberspying in Australia and the US. 

Two things worth noting: Turnbull’s party is expected to win Australia’s federal elections in September.

The other thing is that Turnbull has previously voiced support for giving Chinese telecommunication Huawei –  blocked from national bids in Australia and the US – another chance, if and when the Liberals are returned to power. Huawei was blocked from participating in Australia’s national broadband network.

From the WSJ piece: “If the Chinese complain that they are being hacked, and they probably are, the argument is, well, we all have the capacity to hack each other, shouldn’t we be agreeing on some ground rules and it being in our mutual best interest to ensure that it doesn’t happen?” he said. 

The idea of ground rules is something the US government has long advocated for. Watch this space. 

Ideology in the China-US struggle

There is a longish piece on Foreign Policy by Harvard law professor Noah Feldman makes a couple interesting points that I would agree with about the US-China struggle. His basic point that the US and China are enemies, while also being mutually dependent on each other for economic growth, is not new. You can’t help but wonder if the struggle will be a catalyst for economic change on either side. I can imagine US inventors wanting to grow the US economy in a way far less dependent on China for imports. The author, being a law professor, seems to hold out hope for international legal norms helping shape the US-China competition. Unfortunately, I think only one side will support legal norms and it’s not going to be China, which views much of a Western law, as just that: Western law.

But the most interesting part of Feldman’s piece was his observation that the US diplomatic push in Asia wont be enough and instead ideology will become important.

The United States will also have to broaden its base of allies using the tools of ideology. The strongest argument that can be made to countries that trade freely with China is that Chinese hegemony would threaten their democratic freedoms. Sen. John McCain’s proposed league of democracies — a kind of free-form alliance of ideologically similar states designed to leave out China and Russia — is therefore likely to be revived eventually, though probably under another name.

The economics will underpin the ideological battle, which becomes all clearer as Chinese compete with each other to define the ‘Chinese Dream’, as noted by The Economist, while in the US, the broad theme is restoring the ‘American Dream’ bringing with it a heady mix of idealism and activism.

It makes me think of a line by writer Jon Savage discussing the generation gap between youth of the 1920s and 1930s: “contrasting utopias became national ideologies.” And no, people don’t think in the utopias today as they would have nearly 100 years ago. But people can’t help but think in transcendent, poetic terms – that’s humanity.

Feldman denies that we will have a rerun of the Cold War, which is worth acknowledging.

Whatever the new struggle looks like, it won’t look like the US-Soviet relationship in the 1950s, say. But the broader competition will be there.

…both sides need to cultivate allies as a component of their struggle. The Cold War’s major strategic developments, from Soviet expansion to containment, from détente to Richard Nixon’s opening to China, all clustered around the question of who would be aligned with whom.

China and the US will “struggle to gain and keep allies” but trade will be part-weapon, part-bond that forces countries being courted by the US and China to choose sides. Here, I imagine the ideology will mean a lot. And key countries, like Australia, for example, “may try to have it both ways.”

This is why many countries attempt to negotiate free trade with one or both sides, while keeping security ties with the other.

This would be a world interlinked by trade, but balkanized by ideology. And where does that leave corporations?

Global corporations will have to develop new national allegiances as part of a Cool War world [what Feldman calls the new order], but they can also provide incentives to discourage violence and associated economic losses.

Seeing as Western companies led the charge in globalization, it will be interesting to see how they begin to identify with particular nations again. Just over a decade ago, it was in vogue to malign any critic of globalization a sort of nationalist, xenophobe. I think that’s no longer the case.