One side, championed in China, may be a digital landscape in which mobile payments have replaced money. Smartphones are the devices that matter, and users will search, chat, bank and surf the online with one app. The downsides: the federation reigns absolute, and it’s watching—you might be compelled to communicate with friends in code. And don’t expect to access Google or Facebook.
On the opposite side, in the rest of of the planet, the web is open to all. Users will say what they like, mo. stly, and internet developers will roll out just about anything. People familiar with China’s version complain this alternative web will appear clumsy. you need to toggle among apps to talk, shop, bank and surf the online. Some websites still don’t appear to be designed with smartphones in mind.
The two zones are setting out to clash with the advent of the superfast new generation of mobile technology referred to as 5G. China aims to be the most important supplier of gear underlying the networks, and along side that it is pushing consumer countries to adopt its approach to the web—essentially urging some to use versions of the “Great Firewall” that Beijing uses to regulate its internet and contain the West’s influence.
Battles are popping up round the world as Chinese tech giants attempt to use their market power at home to expand abroad, one thing they’ve for the most part failed to do thus far.
Some silicon valley executives worry the divergence risks giving Chinese firms a plus in new technologies like computing, partially because they face fewer restrictions over privacy and information protection.
“The Chinese approach might well cause some large-scale enhancements like better health outcomes—benefits derived from the mass capture and analysis of information,” said Nick Clegg, the previous British deputy prime minister whom Facebook Inc. employed to run its international policy and communications, during a Brussels speech last week. “But it could equally be put to more sinister surveillance ends.”
“The real selection,” he said, “is between an appropriately regulated tech sector, balancing the priorities of privacy, free speech, innovation and scale—and another within which ingenuity runs roughshod over some basic guarantees of privacy and individual rights.” He and Facebook declined to comment further.
The divide is obvious to people like Tom Pellman who straddle it. Mr. Pellman, a director in Washington, D.C., for a global risk advisory firm, spent a decade in Beijing from the mid-2000s. His company doesn’t use Slack, the messaging app, because China has blocked it. He circumvented the great Firewall by cycling through virtual private networks, or VPNs, which may disguise activity from monitors until getting discovered and then blocked, he said. “It’s Whac-A-Mole.”
Beijing’s censorship is like its contaminated air, he said: “You’re in it and it appears OK, then you leave and you notice how bad it was.”
Yet he treasured WeChat, the app that can do multiple tasks, and missed it once he left China. “When I came back to the U.S. it was like coming to the Stone Age,” he said. “Not having the ability to use WeChat , everything felt just old fashioned.”
These parallel universes have coexisted. In one, people purchase goods on Amazon; in the other, it’s Alibaba. within the West, Alphabet inc.’s Google is so popular it’s a verb, however you can’t Google in China—there’s Baidu for that. In London, Apple Pay will get you on the Tube; in Beijing, it’s Alipay. to do all this in one app in China, there’s WeChat, that lets a billion individuals also send texts, hail cabs and do several other tasks.
Beijing has blocked Google, Facebook and other services, promoting domestic champions like Alibaba Group Holding Ltd. and WeChat owner Tencent Holdings Ltd. Outside China, though, these giants haven’t had a lot of success.
The 5G collision
The collision of these universes as 5G arrives is aggravating conflict between the U.S. and China and will broaden the rift and drive more of the globe into China’s cyberspace model.
Networks using 5G technology are expected to download movies on phones in seconds, help enable self-driving cars, and connect components ranging from pacemakers to factory machines to the internet. Military futurists say 5G could alter battlefields, connecting tanks and drones with computing.
China is planning to expand its zone with 5G. it is aggressively promoting 5G networks, establishing a body in 2013 composed of regulators, corporations and scientists to design and control each aspect of the process. It built a state facility where anyone selling 5G equipment in China must test it.
China’s 5G goal is to “win primacy,” said China’s leading advocate of the effort, Wu Hequan of the Chinese Academy of Engineering, last month, according to a transcript conference organizers posted. The government’s information office and also the Cyberspace Administration, an internet regulator, didn’t respond to requests for comment.
That Chinese challenge has suddenly come to the fore because one giant has leapt the divide between the parallel universes. Huawei Technologies Co. is currently the world’s biggest supplier of the equipment that goes into mobile-computing networks.
The 5G equipment itself won’t tilt the playing field—the gear is the plumbing of the internet, based on world standards that are agnostic as to what web developers and users run on it.
But many in Washington, from Congress to members of the national-security and intelligence communities, warn that Huawei’s Chinese ownership means that Beijing might use the gear to spy on the world and more broadly be a camel’s nose under the tent to expand its influence.
Huawei has in public rejected the accusations. Founder Ren Zhengfei during a media appearance last month said “I personally would never harm the interest of my customers…And my company wouldn’t answer to such requests.”
Chinese officers and cybersecurity consultants point to former National Security Agency contractor Edward Snowden’s allegations the agency put in surveillance backdoors in U.S.-made routers designated for export. The NSA didn’t answer requests for comment. In the past, it has said in response that it takes care to make sure that innocent users of such technologies aren’t affected by U.S. intelligence gathering.
The U.S. has additionally accused Huawei of stealing trade secrets and violating sanctions, raising the likelihood the Trump administration might cut its access to critical U.S.-made components. Huawei denies wrongdoing.
If that happens, said Paul Triolo, a former federal government analyst who heads up global technology analysis at risk consulting firm Eurasia Group, China could build a version of 5G that isn’t compatible with the U.S. network. “If the global supply chain for 5G really falls apart,” he said, “we would be in totally new territory.”
Huawei Deputy Chairman Ken Hu said it has amassed 13,000 suppliers and that: “If any link in this global industry chain is blocked in an unusual way, that would have major impact on the development of the industry chain and even the economic development of nations involved.” Huawei declined to comment further for this article.
Deploying 5G widely at home before the West does may benefit Chinese tech corporations, said David Chao, general partner at DCM Ventures, a Silicon Valley venture-capital firm that invests in China. Chinese corporations might have a leg up by using their immense domestic market to develop new apps and hardware that flourish with the faster speeds. “It could sprout an entire generation of mobile services that take advantage of that,” he said, “and they’ll be exported to the western world.”
At the heart of the divide are differing views on how to manage the internet. The U.S. pushes the open model on which the web was designed. Beijing and like-minded countries such as Russia say states ought to be able to censor, spy on or otherwise control internet traffic within their borders.
Beijing has sold its internet model alongside Chinese-made telecommunication equipment in countries as distant as Vietnam and Tanzania as a part of an endeavor to build what it calls a “Digital Silk Road.” Last year, Tanzanian officials followed up public praise for Chinese internet censorship by approving rules that threaten online content providers with fines and jail if they don’t take down “prohibited content” at government request.
Tanzanian information minister Harrison Mwakyembe said the government backs China’s vision of strict internet policing to safeguard national security and to prevent “moral degeneration.”
Government officials in India are considering ways to shelter domestic tech corporations from american corporations like Amazon.com Inc. and Facebook, much as China has protected its own startups. India’s telecommunication secretary, Aruna Sundararajan, said the concept is to promote Indian companies “to become global champions.”
To promote its notion of “cyber sovereignty,” China has lobbied at the United Nations for discussion of internet regulation to be limited to states, with industry and civil society relegated to the sidelines. In 2017 at a conference in China attended by Apple CEO Tim Cook and Google chief Sundar Pichai, the Communist Party’s top official in charge of ideology and propaganda, Wang Huning, praised Chinese President Xi Jinping for advancing China’s vision of the internet, saying it had “gained broad approval and positive responses from international society.”
At first, with the internet’s unfold, foreign firms were welcome in China and technology evolved quicker than the government’s censorship capabilities. Google unrolled a expurgated Chinese-language version of its computer programme. Amazon entered the market, and Chinese users flooded onto Facebook, YouTube and Twitter.
Chinese leaders took more control when the 2008 Beijing Olympic Games, reflecting fear of political dissent and concern Chinese businesses were struggling to compete on-line. Facebook, Twitter and YouTube were blocked in 2009. the next year, Google said it was no longer willing to censor search results, and it was blocked. The websites of many foreign news organizations, including The Wall Street Journal’s, are also blocked.
That left China’s search market to Baidu inc. Alibaba vanquished eBay inc., and its Alipay payment system gave it a lock on online payments, with foreign corporations from PayPal Holdings inc. to Visa inc. blocked from providing payment services.
Outside China, Alibaba was an afterthought in several markets. Baidu shut down search engines in Japan and Egypt after investing in local-language products. An Alibaba spokesperson said the company remains “fully committed to realizing our mission of creating it simple to do business anywhere in this digital era.” A Baidu spokeswoman said the company still provides advertising and other services in Japan.
The U.S. unveiled sweeping charges against Chinese tech firm Huawei in late January. WSJ’s Shelby Holliday breaks down the indictments.
Despite an aggressive marketing push featuring celebrities like football star Lionel Messi, Tencent has struggled to expand WeChat overseas. Since January 2012, WeChat has been downloaded about 350 million times from Apple’s App store world-wide, according to analysis firm Sensor Tower inc. about 83 of those downloads come from users in China and 17 from outside, according to Sensor Tower. Tencent didn’t answer requests for comment.
Some Chinese tech champions have struggled overseas because they came late to markets where competitors like Google and Facebook have a foothold.
Another issue is suspicion the companies could have links to the Communist Party. Ant Financial Services group, owned by Alibaba founder Jack Ma, made a 2017 bid to enter North american financial services by acquiring Texas-based MoneyGram International INC. The Committee on Foreign Investment in the U.S. rejected the deal last year. It also blocked Broadcom INC.’s planned purchase of Qualcomm INC., citing considerations it would weaken Qualcomm, a major competitor to Huawei in 5G patents.
In September, Mr. Ma recanted a pledge to create a million U.S. jobs, citing trade hostilities. He didn’t respond to a request for comment sent through Alibaba, which pointed to an interview Mr. Ma did in which he said “trade should be a propeller of peace.”
Washington’s effort to push back on the equipment side started years ago. It blacklisted Huawei and China’s rival ZTE corp. in 2012, when the House intelligence committee concluded they weren’t free of Beijing’s influence. ZTE and Huawei have repeatedly said they aren’t a threat. The U.S. pushback escalated last month with a U.S. indictment against Huawei’s chief financial officer for allegedly playing a role in breaking Iran sanctions. Separately, prosecutors accused Huawei of stealing trade secrets. Huawei has denied wrongdoing in both cases and said it was unaware of any wrongdoing by the CFO, who has denied the allegations.
Europe’s eastern flank is a particular battleground. In December, the Czech Republic’s top cybersecurity agency warned that sensitive information probably shouldn’t be carried over Huawei gear. however the country’s president, Milos Zeman, has criticized those findings. Last month, he took two senior Huawei executives on a tour of Prague’s castle and during a televised interview called Huawei spying allegations hysteria. His prime minister, Andrej Babis, has taken a differing view, saying Czech agencies and European Union leaders ought to take such allegations seriously. A spokesman for Mr. Babis confirmed his views. Mr. Zeman’s office declined to comment.
For now, motivated consumers in China can span the two internet worlds using workarounds like smartphones with foreign SIM cards that connect to the outside internet, said Li Zhen, a Hong Kong market-research analyst who travels to China for business.
She senses the rift in the paranoia her Chinese contacts exhibit while talking on WeChat about potentially sensitive topics. “My friends in the government and media will talk in code, and it can take a long time to work out what they’re saying,” she said. “Sometimes the subject is probably not so sensitive, but you never know.”