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China’s Digital Silk Highway and Malaysia’s Technological Neutrality – The Diplomat


The continued tech struggle between the US and China is more and more pushed by ideological, normative, and political tensions. The event of 5G applied sciences and the strategic hedging of third international locations symbolize an ideal working example.

In Could of this 12 months, the information broke that American and European Union diplomats had warned the Malaysian authorities about potential nationwide safety dangers ought to the Chinese language agency Huawei be concerned in constructing the nation’s second 5G community. There has since been heated dialogue within the Malaysian media concerning the knowledge of the 5G rollout. Southeast Asian international locations usually have interaction in processes of hedging between nice energy initiatives, hewing to a so-called “third means.” Within the context of the tech struggle, members of the Affiliation of Southeast Asian Nations (ASEAN) have tended to place themselves as technologically impartial. Nevertheless, mounting stress from each the US and China is shrinking their room for maneuver, pushing them towards the purpose the place they could have to select sides.

Coincidentally, we discovered ourselves in Kuala Lumpur as these debates unfolded and the beneath evaluation attracts from the various formative conferences we had with a variety of actors. These conversations mirror Malaysia’s particular state of affairs, however in addition they mirror bigger debates over the usage of Chinese language expertise worldwide.

Nuancing China’s Export of Digital Authoritarianism

In 2015, the Chinese language authorities launched the Digital Silk Highway (DSR) because the digital arm of the Belt and Highway Initiative (BRI) that had been introduced two years earlier. The framework has since expanded to greater than 160 international locations worldwide. Chinese language firms concerned within the DSR have diversified into collaborating with recipient states on a wider set of points, together with international locations’ AI capabilities, telecommunications networks, surveillance expertise, Sensible Metropolis packages, and cloud computing, in addition to e-commerce and e-health initiatives.

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The rising use of AI and different important applied sciences in our on a regular basis lives has sparked debate over the totally different programs shaping the makes use of of such applied sciences, what is usually seen as a competitors between digital authoritarianism and liberal democracy. Certainly, the challenges posed by rising applied sciences to the present worldwide order have a robust normative thrust, as developments on this subject might result in the redefinition of the world’s guidelines, norms, and establishments of governance. On this context, China is claimed to be utilizing tech investments to advertise digital authoritarianism and unfold intolerant norms. Conversely, the U.S. and its allies are related to types of expertise which might be imbued with liberal norms reminiscent of democracy, freedom, and privateness.

Signage for Chinese language apps Alipay and DianPing at a well-liked durian retailer in Kuala Lumpur, Malaysia. Picture by Ilaria Carrozza

There may be certainly the likelihood that sure applied sciences might include normative parts, and Chinese language firms in addition to the federal government have been eager on selling a “mannequin” of techno-authoritarianism in step with directives from President Xi Jinping. Huawei’s coaching packages, for instance, increase considerations about China’s export of its Golden Protect Challenge, also called the Nice Firewall of China. On the similar time, analysis performed in different Southeast Asian international locations reminiscent of Indonesia means that the safety dangers posed by Huawei expertise pale subsequent to priorities reminiscent of upskilling future generations of tech staff and digitalizing the home economic system. Earlier analysis has additionally proven that “the demand for these applied sciences and the way they’re used rely extra on native political circumstances than Chinese language grand technique,” as Jessica Chen-Weiss has argued. Viewing these exports of Chinese language firms solely as a one-way avenue is thus limiting and takes consideration away from key points, reminiscent of recipient international locations’ company and the political agendas and self-interests that related actors pursue when participating with China.

The Digital Know-how Ecosystem in Malaysia

Our go to to Malaysia got here shortly after a letter that the EU and U.S. despatched to the Malaysian authorities, warning it of potential dangers to its nationwide safety if Huawei have been concerned in constructing the nation’s second 5G community. In 2021, the Malaysian authorities established Digital Nasional Berhad (DNB) underneath the Minister of Finance to undertake the deployment of 5G infrastructure and networks nationwide. Upon a public tender, DNB entered a 10-year partnership with the Swedish firm Ericsson to ship a single wholesale 5G community. The crux of the matter, on this case, is that the present authorities has determined to reverse its nationwide coverage in direction of an open market strategy through which Huawei is allegedly lobbying to play a task. Virtually, because of this the community that DNB is presently rolling out will probably be privatized upon completion of 80 p.c nationwide protection and a brand new tender will probably be opened to assemble a parallel community. Our conferences with totally different stakeholders knowledgeable us about varied dynamics at play on this difficulty.

First, China’s involvement within the provision of telecommunication expertise to Southeast Asian international locations predates and expands past the DSR. China’s tech giants have been energetic within the area lengthy sufficient to be thought-about as dependable companions by governments and native firms alike. In Malaysia, firms reminiscent of Huawei, ZTE, Alibaba, and Hikvision are an integral a part of the technological ecosystem. Hikvision’s surveillance cameras dot the streets of Kuala Lumpur. WeChat Pockets, Dianping, and Alipay are widespread digital fee platforms throughout the nation. Huawei’s gear tops recognition rankings, even inside authorities businesses.

The affect of Chinese language firms within the each day lifetime of many Malaysians expands far past flag-ship tasks reminiscent of Alibaba’s digital world commerce platform (eWTP) and its logistics middle close to the Kuala Lumpur Worldwide Airport. Their long-term presence has helped create mutual belief between Chinese language firms and the Malaysian authorities and telcos, thus paving the way in which for future engagement. In a current interview, Communications Minister Fahmi Fadzil declared that Malaysia will stay a free market and that native telcos will probably be allowed to resolve on whether or not to collaborate with Chinese language gear makers through the rollout of the second 5G community. The choice to not exclude Huawei from collaborating in build up Malaysian 5G networks was subsequently portrayed to us as based mostly primarily on the corporate’s long-standing financial relations with native municipalities and companies.

Second, inner reasonably than exterior dynamics primarily knowledgeable the federal government’s determination. These conversations have taken place in a bigger debate across the state-owned 5G community and the benefits and downsides of the single wholesale community strategy. On this sense, these discussions not solely mirror the nation’s strategic positioning between China and the U.S. and its allies, but additionally and most significantly the event of Malaysia’s digital infrastructure.

Right here, the considerations revolved primarily across the interaction between the nation’s telcos and the federal government, in addition to technical points reminiscent of protection and reliability of the community. Knowledge safety and privateness have been highlighted as one thing that traditionally had not been a major concern within the lives of Malaysians, and nationwide safety was not raised as a possible drawback when discussing the involvement of Chinese language firms.

Choices over which exterior actors needs to be concerned in supporting the nation’s shift to a extra digitalized economic system appear to be primarily pushed by financial calculations and strategic motivations. Ericsson was certainly awarded the preliminary 5G tender on the grounds of getting proposed the most affordable and most engaging bundle. In the end, Malaysia will not be choosing any aspect within the tech struggle between the U.S. and China. If something, the choice to overtly have interaction in discussions with Chinese language firms indicators that Malaysia’s high precedence stays to improve its economic system within the quickest means potential.

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Third, long-term issues about Malaysia’s function within the regional context performed a giant function within the authorities’s determination. Malaysia’s digital economic system is among the nation’s quickest rising sectors, a improvement prompted primarily by the revealing of the Malaysia Digital Economic system Blueprint in 2021 and the institution of the Digital Funding Workplace to draw extra investments in digital providers.

A wall contained in the headquarters of Malaysia’s Digital Nasional Berhad (DNB), which makes use of Chinese language firm ZTE’s gear to energy its Sensible Metropolis Growth. Picture by Ilaria Carrozza

Throughout our conferences, we have been additionally instructed that Chinese language buyers take a look at Malaysia as a gateway to the entire area, not the least because of its geostrategic place alongside the Straits of Malacca and the South China Sea. Chinese language tech firms have lengthy been energetic within the nation as a result of they see Malaysia as a promising and steady atmosphere through which to speculate. Malaysia presents way more than low cost manpower. Its expertise pool options expert personnel who usually communicate each English and Mandarin fluently, in addition to a number of different languages. Coaching packages reminiscent of these promoted by Huawei promise to additional upskill the following technology of tech staff and digitalize the home economic system.

The Malaysian political elites have, in flip, responded to China’s engagement with pragmatism and embraced Chinese language-led initiatives such because the BRI. For example, totally different stakeholders labeled Alibaba’s eWTP as instrumental in increasing the regional enterprise of Malaysian SMEs. Within the long-run, a better financial cooperation with China is believed to deliver the potential for Malaysia to grow to be a vital technological hub on the regional stage.

Navigating the U.S.-China Tech Warfare

The case of Malaysia will not be distinctive. In responding to disruptions in world provide chains because of geopolitical tensions, African international locations have exercised their company in a number of methods, reminiscent of by making an attempt to keep away from overreliance on both Western or Chinese language applied sciences and selecting from a number of suppliers along with growing native platforms. Gulf states are welcoming Chinese language tech corporations regardless of efforts from the U.S. to halt their enlargement. Latin America has equally been open to investments by Huawei and different Chinese language corporations. These developments spotlight a vital component within the competitors for rewriting the foundations of the worldwide order, be that concerning expertise or political alliances extra broadly: international locations within the World South don’t wish to choose sides.

Asia particularly has emerged as a major theater for Sino-American rivalry and it’s on this area that international locations are feeling the stress essentially the most – from each Washington and Beijing. Many leaders in Southeast Asian nations have burdened their choice for multilateral agreements that give ASEAN a central function and don’t view the U.S.-China rivalry as a matter of democracy versus autocracy; reasonably, survival is their major concern. On this context, China’s rise is perceived as regarding, but additionally as a possibility. Given these complicated dynamics, Southeast Asia has tried to steadiness between long-term dangers and short-term features, as put by Cheng-Chwee Kuik, together with by hedging towards the uncertainties led to by the rise of China. They’ve achieved so additionally by welcoming U.S. engagement in Asia, particularly following the Obama administration’s “pivot to Asia.”

Elevated engagement in Southeast Asia’s digital panorama, nevertheless, requires a deeper understanding of the strategic decisions (and the underlying motivations) of nations that depend upon China and the U.S. for the build-out of their IT networks. Fanning the flames of ideology and cautioning towards a false ethical equivalence between the 2 international locations is counterproductive. Fairly than selecting between the U.S. or China, Southeast Asian nations may need to decide on, within the phrases of Bonnie Glaser, “between a future through which there are shared guidelines and norms inside a rules-based order that everybody upholds, and a future through which energy prevails, the robust bully the weak, and guidelines are disregarded in favor of a ‘would possibly makes proper’ strategy.”

Fairly than additional escalating the rhetoric of their confrontation with China, the U.S. and its allies ought to take a practical strategy to cooperation with Southeast Asia. This strategy will bear in mind the multitude of overlapping home pursuits and actors in every context.

Analysis funding for this text was supported by the Analysis Council of Norway underneath the grant “Shaping the Digital World Order: Norms and Company alongside the Digital Silk Highway in Southeast Asia,” undertaking no.: 325129.

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