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A strong tech sector will keep Xi Jinping from fulfilling his ‘Chinese Dream’

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It is time the world awakens to the threat the Chinese Communist Party (CCP) poses not only to national security but to our way of life. China’s goal of global domination is no secret. The CCP has been explicit about its vision of displacing the United States as the global hegemon and changing the international order to serve its interests. 

This vision has been well articulated by CCP General Secretary Xi Jinping — now in his historic third term as Party Secretary and very likely to be China’s leader for life. Through strategies such as the party’s Made in China 2025 policy, which seeks to achieve global dominance over the West both economically and in the tech space, and China 2049, also known as the “National Rejuvenation” policy or the “Chinese Dream,” Xi’s China aims to regain the power China lost in its “century of humiliation” and to surpass the United States and the rest of the world in all areas of national power — with the goal of replacing the liberal international order with one shaped by Chinese-style Marxist-Leninist ideology. 

The CCP fights dirty — the recent incident of a People’s Liberation Army Air Force spy balloon demonstrates this well enough. However, this is not your conventional threat measured in number of soldiers, aircraft and naval vessels, although those are also critical to Beijing’s efforts.  Xi’s China is using unconventional weapons and tools to achieve its goals, such as Huawei, ZTE and Hikvision, which demonstrated the CCP’s efforts to infiltrate our telecommunications systems.  

Beijing also has used the operation of Confucius Institutes at U.S. universities to spy on Chinese students and channel information on important research being conducted to the CCP. Expat workers in cutting-edge fields are forced to send U.S. secrets back to Beijing while working in our institutions and companies. Chinese fentanyl is killing Americans in the hundreds of thousands, while “digital fentanyl,” as some have described TikTok and other Chinese apps, are capturing, stealing and siphoning American’s personal data back to Beijing.  

During my time as national security adviser, we worked hard to counter each of these threats.  On some, we were successful. Others, the Biden administration walked back once in office.  Many still need addressing, such as banning harmful apps like TikTok, shutting down the remaining Confucius Institutes and prohibiting the sale of U.S. farmland to Chinese buyers. Not to mention U.S. companies partnering with China in ways that undermine well-meaning policies aimed at bringing manufacturing home and strengthening U.S. supply chains. Such is the case with Ford’s partnership with Chinese EV- maker CATL, which will result in U.S. taxpayers subsidizing Chinese manufacturing, a blatant perversion of the Inflation Reduction Act. Clearly, there remains much work to do to shore up our defenses against the CCP’s arsenal.

China’s unconventional weapons are trained on not only the United States; the CCP is implementing this multi-pronged strategy globally. It is time that we combine efforts with partners, allies and like-minded nations to engage in a global response using all instruments of national power — including, perhaps, unconventional tools such as our respective tech industries and digital policies, which are being shaped in many countries. 

For our part, the United States has taken some important actions in recent months that contribute to the overall strengthening of our position. On Oct. 7, 2022, the Department of Commerce’s Foreign Direct Product Rule restricted the sale of semiconductor technology to China, with the aim of crippling CCP access to critical technology needed for a wide range of applications in supercomputing and advanced weapons systems. In November, we banned the sale of new telecommunications equipment from Huawei, ZTE and Dahua, Hikvision and Hytera. And in January, the United States, Japan and the Netherlands agreed to further tighten export controls of chip manufacturing equipment technologies to China. These actions build upon a steady, if slow, cadence of actions begun under the previous U.S. administration aimed at countering CCP encroachment. It will be critical for U.S. allies and partners to take up similar policies — not only for their own protection, but also to prevent China’s advancement in these areas.

But perhaps America’s most strategic and powerful weapon in the competition against China is our domestic private-sector technology industry. As I have noted in previous articles and talks, our tech industry is the global innovation leader and we must ensure that it remains strong and capable of launching and scaling breakthrough technologies. 

While there are problems with U.S. big tech companies, the solutions require a scalpel — not a sledgehammer — in addressing them. Legislative overreach with technology runs the danger of handing a decades-long innovation advantage to China, which has invested more than $1.4 trillion (USD) to counter the United States and achieve global dominance in AI, quantum computing, and the technologies that our children and grandchildren will use.  

Unfortunately, rather than challenging China, we are in the midst of an unprecedented effort by some of America’s key partners to dismantle the U.S. technology system. Many of these partners are so focused on decoupling from U.S. technology players that they are turning a blind eye to China’s tech abuses — and are even using their regulatory systems to subsidize Chinese tech firms.

Foreign digital regulations increasingly have two things in common: They target U.S. tech companies and they force the transfer of U.S. data, revenue and intellectual property to foreign interests.

Nowhere is this clearer than in Europe. As CSIS recently found, Europe’s approach on the Digital Markets Act and other regulations “risks tilting the playing field in favor of Chinese competitors” and “enabling China to run parts of Europe’s critical infrastructure.”

Regrettably, even some American policymakers have “EU envy” regarding the European Union. They spend taxpayer dollars to travel to conferences in Brussels that blame American tech for everything and aim for a “post-neoliberal world order.” Leaders at the Federal Trade Commission and Department of Justice appear to believe that the EU can do no wrong from a regulatory perspective — and have been shown to be colluding with the EU and other foreign authorities.

But if the EU regulatory model prevails, this would have disastrous consequences for innovation, security and America’s competitiveness with China.

We’ve seen how this plays out in U.S. congressional efforts to dismantle U.S. tech companies, such as the American Innovation and Choice Online Act (AIACOA), Open Apps Markets Act (OAMA), and Journalism Competition and Preservation Act (JCPA) — failed in part because of concerns that they would weaken U.S. companies competing with China’s subsidized entities that aim to displace the United States and dominate the global tech industry. For example, the JCPA would require U.S. media companies to carry and subsidize content and messages from foreign powers, opening the United States up to increased foreign influence over U.S. political and social movements and increased exposure to damaging foreign propaganda. If we are going to be able to counter China’s challenge and win this era of great power competition, we need stronger, not weaker, tech companies.      

In addition to making the United States vulnerable to our rivals and adversaries, these bills put American consumers at risk. Many have warned against the kind of provisions that allow downloading apps from third-party vendors — or “sideloading” — including the Federal Trade Commission, the National Institute of Standards and Technology, the UK’s National Cyber Security Center, the European Union’s Agency for Cyber Security, and the Cybersecurity and Infrastructure Security Agency. Others have warned against the increased security risks that come when platforms are forced to grant foreign entities access to hardware, software and other infrastructure. These practices make users vulnerable to attack and exploitation. Both AIACOA and OAMA would alter this ecosystem and create an open door for foreign app and content developers to get their content on our phones and tablets, removing the safeguards and vetting that companies have used to protect consumers over the years. In reality, these bills will do more harm than good. 

The CCP’s strategy aims to take advantage of vulnerabilities. Beijing would like to see nothing more than a U.S. tech industry weakened by antitrust bills and Americans’ personal information and data further exposed for exploitation. However, the United States is not the only target. There are a number of countries and regions where governments have proposed or passed regulations that damage their ability to resist CCP efforts to achieve global domination.

The European Union’s Digital Markets Act starts an unfortunate trend. The European Commission’s move requiring staff to ban the TikTok app from work devices was a positive step with respect to setting protections against CCP surveillance and influence efforts. With everything we know about TikTok, it is baffling to see companies such as Germany’s Mercedes-Benz pre-installing the app in its vehicles, as will be the case with the 2023 Mercedes-Benz E-Class. Perhaps this is another result of the warming trend between Germany and China sparked by Chancellor Olaf Scholz’s visit to Beijing last fall. The move is one of many decisions taken across Europe that could make its citizens more vulnerable to the CCP. 

The same is true about the European Union’s attempts to implement a digital competition policy.  With the Nov. 1, 2022, start of a six-month implementation phase, the Digital Markets Act (DMA), which targets a few U.S. tech companies with prescriptive regulations without a serious assessment of national security risks, makes Europe more exposed than ever to malign cyber activity by the CCP, as well as other state and non-state actors. While the DMA should have represented a cautionary tale, instead of deterring other regions and countries from following its lead, the EU seems to have set an unfortunate trend. As it was the first piece of legislation to seek to address issues related to competition in the digital market space, several countries have viewed the DMA as a kind of template for their respective policies, developing their own version without first conducting a rigorous impact assessment. 

Turkey is considering a DMA-style bill developed by the Turkish Competition Authority. Like the EU, it appears that there has been little work done to assess the ultimate impact on national security, even though it will be the most comprehensive amendment of its type in Turkey to date.  Similarly, Saudi Arabia is developing a set of competition regulations for digital content platforms and considering a DMA-like approach. Given its goal of developing the kingdom’s digital content sector and providing an enabling environment to achieve a globally-leading role by 2030, it is critical that Riyadh consider the long-term impact of these policies on its national security and the security of its citizens. 

The Japanese government faces a similar dilemma. On the one hand, Tokyo wants to bolster competition in the tech space but is considering steps that would actually make Japanese citizens more vulnerable to malware, spyware and CCP data-harvesting of their information. As with AIACOA and OAMA in the United States, Japan’s Digital Market Competition Headquarters (DMCH), an entity established by Japan’s Cabinet to manage policy in the digital arena, is weighing whether to regulate app stores more strictly, including through the introduction of “side-loading,” which increases vulnerabilities. 

As my friend and former colleague, Shigeru Kitamura, former Secretary General of Japan’s National Security Secretariate, argues in his November editorial, “While it is true that the promotion of competition contributes to economic revitalization, if unrestricted competition affects the nation’s security and citizens’ safety, it cannot be overlooked.” Kitamura is right.  National security and citizen safety come first, especially with motivated adversaries such as the CCP.  

Japan’s new National Security Strategy, released in December, highlights the importance of enhancing cyber resilience and defense capabilities because of the growing China threat. While the DMCH’s proposed way forward seems at odds with this enhanced emphasis on cybersecurity, it is an encouraging sign that Japan’s leaders are seriously considering how to counter the CCP on all fronts. Tokyo’s decision will have a direct impact on the United States — as one of our most important allies in Asia, Japan plays a critical role in defense against the CCP’s coercive and aggressive behavior. If Japan’s cyber defense is weakened, it will mean a vulnerability for the United States as well. 

In India, Delhi took the bold and prudent step of banning more than 250 Chinese apps, including TikTok, in 2020 following China’s lethal attack on Indian soldiers along the Line of Actual Control on the India-China border. This unprecedented and decisive move sent a clear message to Beijing that Delhi considered these apps a national security risk. However, more recently, as with Japan, the desire to pursue industrial policy in the tech arena may create national security vulnerabilities that negate the positive impact of the app bans and expose India and its citizens to its greatest geopolitical threat, the CCP. 

For example, recent rulings from the Competition Commission of India against the Android operating system and other U.S. players seem as if they are intended not to foster competition but to reduce the market presence of U.S. companies. These actions could force U.S. companies to hand over proprietary technology, data and IP to foreign rivals while empowering Chinese operating systems, such as Huawei’s Harmony OS, to grow in Asia and around the world. 

Rather than limiting or even breaking up tech companies in the name of competition, there is great potential for the United States and India to increase our technology exchange, which would both strengthen and expand India’s tech sector and provide jobs for Indian citizens. As an increasingly important player on the international stage, ensuring India’s national security is imperative for countering the CCP’s global domination strategies. 

As we have seen in recent years, the CCP and its leader, Xi Jinping, cannot be trusted to lead the world’s tech sector, not to mention reshape the international order. The United States, our allies, partners and like-minded friends have a responsibility to mobilize all instruments of national power, including a strong tech sector, to make sure that Xi’s version of the Chinese Dream does not come to pass. 

Robert C. O’Brien served as the 27th U.S. national security adviser. He is chairman of American Global Strategies. Follow him on Twitter @robertcobrien.

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