On China: We Won’t Be Fooled Again
Earlier in June, Huawei Chairman Liang Hua offered to sign a “no-spy” agreement with the United States, similar to proposals made to the United Kingdom and Germany. Ignoring for the moment the unusual nature of a corporate entity making a “no-spying” commitment, we must confront the fact that Chinese telecommunications companies and the closely intertwined Chinese Communist Party (CCP) seem to have had trouble keeping their word.
In 2017, ZTE admitted to 380 violations of U.S. sanctions and committed to complying with U.S. export laws, a promise which barely lasted one year. In 2018, the Department of Commerce issued a stinging denial order blocking ZTE’s acquisition of U.S. components in response to “a pattern of deception, false statements and repeated violations.” President Trump later pulled back on the denial order in a negotiated settlement.
There are also now numerous public accusations of Huawei committing espionage, including a massive hack of the African Union after “gifting” the network years earlier, and the more recent arrest of a Huawei employee for espionage in Poland. A 23-count U.S. federal indictment found that Huawei employees received cash bonuses for committing industrial espionage, which we suppose at least highlights Huawei’s capacity to commit spying if not the credibility to forswear it.
The reality of Chinese law is that even if Chinese companies wish to act in good faith, they are compelled to cooperate with the military and intelligence services. Suffice it to say, there is no Fourth Amendment nor FISA Court in China.
After years of U.S. concerns, the Administration ultimately added Huawei to the Commerce Department’s Bureau of Industry and Security (BIS) Entity List, which effectively blocks any U.S. companies from selling or transferring them U.S. technology. President Trump simultaneously issued an Executive Order that will likely lead to a banning of telecommunications equipment imports from Huawei, ZTE, and others posing a national security risk.
Unfortunately, this playbook is also all too familiar when dealing with the CCP—the ultimate power behind the throne of these two “National Champions.”
Four years ago, following the first indictments of Chinese People’s Liberation Army members for hacking, a historic agreement was reached between the United States and China, establishing an explicit commitment prohibiting cyber-enabled espionage and intellectual property theft for commercial gain. By early 2018, a U.S. Trade Representative Report detailed how China frequently violated the agreement.
In other words, we've been here before. The U.S. takes a step to block or deter Chinese activities that are harmful to U.S. national and economic security, China promises to change behavior, and within a short period of time, those practices continue.
Whether it’s violating the anti-commercial hacking agreement, breaking its promise not to militarize islands, failing to meet its WTO ascension commitments or end its “consistent pattern” of broken trade promises, chipping away at Hong Kong’s promised autonomy, or backtracking on the most recent trade negotiations in the face of accountable enforcement mechanisms, steps toward cooperation and compromise eventually regress back to the status quo or even an amplification of prior provocations.
Instead of continuing to believe this time is different, the U.S. government and the business community must accept that significant shifts are occurring in the global system and prepare for the impending decoupling accordingly. While we nobly sought to incorporate China into the fold, authoritarian regimes like China are now seeking to manipulate technology into surveillance states.
This does not imply seeking conflict. Instead, the U.S. must build coalitions and partners with commitments to democracy, the rule of law, and respect for fair and mutually beneficial economic practices. This will entail a combination of decoupling and engagement driven by national and economic security imperatives, but guided by a renewed commitment to our longstanding aspirations toward a rules-based international system.
With China deploying its inevitable economic heft across every economic and security sphere, the U.S. must grasp the opportunity to define a coherent and attractive alternative.
As the old proverb says: "fool me once, shame on you; fool me twice, shame on me." While past behavior does not always predict future outcomes, in the case of China's broken promises, numerous data points do make a trend, and there is simply too much at stake to be naive about the global aspirations of China and their expanding push toward an authoritarian techno-dystopia. We must accept this reality for what it is rather than what we wish it would be.
Andrea Little Limbago is a Senior Fellow at NSI and Chief Social Scientist at Virtru. Andy Keiser is a Fellow at NSI and a Principal at the consulting firm Navigators Global.