China's Play for 5G Dominance: Standards and the Digital Silk Road
China is actively seeking to lead in setting technical standards across a range of emerging industries, from ultra-high voltage (UHV) transmission to artificial intelligence. For China, the development of indigenous standards and their subsequent internationalization can enable Chinese companies to achieve greater market share, even dominance, globally, often leveraging advantages of scale. China’s highly strategic approach to standardization, including seeking greater ‘discursive power’ (话语权) in relevant international organizations, reflects an understanding of the competitive advantage that influence in this domain can confer. Going forward, the Standardization Administration of China will issue the plan “China Standards 2035” (中国标准2035) to promote the popularization of Chinese technical standards across a range of industries. So too, in its quest for 5G dominance, Beijing is actively engaged at this intersection of the abstruse and the geopolitical, recognizing the nascent and emerging technical standards in new technologies reflect a “golden opportunity” that Chinese national champions are poised to take advantage of, including through their promotion of a new ‘Digital Silk Road.’
China’s Strategic Objectives in 5G Development
China is positioning itself at the forefront of 5G, recognizing that fifth-generation mobile communications will be a vital “information expressway” (信息高速公路) that can enhance future national competitiveness. 5G promises much higher speeds, greater capacity, and lower latency. Such next-generation connectivity will enable the deployment of the Internet of Things (IoT) and AI technologies, including self-driving cars and smart cities. As such, 5G is seen as critical to the future growth of China’s vibrant digital economy, not to mention its national ambitions in AI. Indeed, Chinese AI plans include a focus on 5G and call for the improved low-latency, high-throughput transmission capabilities that these technologies will deliver. Anticipating its economic benefits, China has taken a very proactive approach to the testing and commercialization of 5G, on track to start its rollout in 2019, and China’s 5G industry is expected to become a market of 1.15 trillion RMB ($180.5 billion) by 2026.
China seeks to shape new standards for 5G, thus ensuring its centrality in shaping this new ecosystem. After the International Telecommunications Union started in 2012 a program for International Mobile Telecommunication (IMT) systems, aiming for 2020 and beyond, China’s Ministry of Industry and Information Technology (MIIT), National Development and Reform Commission (NDRC), the Ministry of Science and Technology (MOST) jointly established China's IMT-2020 (5G) promotion group in February 2013. Its members include the China Academy of Information and Communications Technology, which is directly under MIIT, and major players like ZTE, Huawei, and Datang. This promotion group is intended to “organize and coordinate Chinese participants” in the process of standard setting, while supporting the implementation of a national major project on 5G.
At this point, 5G is still taking shape, based on a complex and rather abstruse process of standards setting, convened by the 3rd Generation Partnership Project (3GPP), a collaboration among groups of telecommunications standards associations that are coordinating in the development of technical standards. The China Communications Standards Association (CCSA, 中国通信标准化协会), established by the Ministry of Industry and Information Technology (MIIT), is a partner to 3GPP, while acting in accordance with “guidance and supervision” from MIIT in its activities. At 3GPP, representatives from Chinese companies and institutions reportedly have 10 of 57 chairman and vice chairman positions, including representation on key decision-making institutions. For instance, Wang Zhiqin, deputy head of the China Academy of Information and Communications Technology, a think-tank under the aegis of MIIT, serves as the vice chairman of a technical specification group (TSG) working group.
5G and the “Digital Silk Road”
In 5G, China’s commercial and geopolitical objectives are closely aligned. China’s One Belt, One Road (一带一路) strategy, which is a signature initiative of Xi Jinping, reflects the grand scope and scale of Beijing’s ambitions to leverage such Eurasian integration and engagement to advance national interests on a global stage, reshaping the current regional order in the process. Beyond its signature infrastructure projects, the concept of the “Digital Silk Road” (数字丝绸之路) has emerged as a key aspect of this strategy, particularly as China makes this major play to become the world leader in 5G and to shape the 5G standardization process. As “national champions” such as Huawei become central players in 5G standardization and commercialization, their “going out” (走出去) to pursue ventures and partnerships worldwide will advance this agenda.
Throughout the process, Huawei has become a self-described “key architect and contributor” to these new 5G standards, standing out for its level of participation and engagement on these issues. However, its engagement in 3GPP has been criticized at times for “flood[ing] the process.” In particular, Huawei has trialed and backed a Polar Code standard, a particular approach to encoding data, for 5G control channels. Although the standards process is intended to be collaborative and technocratic, its outcome is starting to be perceived in China as a matter of national significance. Strikingly, when Chinese tech company Lenovo voted for a standard developed by the American company Qualcomm, rather than a Huawei alternative, the incident provoked an outcry online, with Chinese netizens condemning the company as a “traitor.” In response, its founder released a public statement on the topic to defend Lenovo’s brand and ‘honor,’ in which he highlighted Lenovo’s support of Polar Code in the second round of voting and mentioned he had spoken to Huawei founder Ren Zhengfei, saying “we both agree that Chinese companies should be united.”
The leadership of Chinese companies in the deployment of 5G technologies worldwide will support and enable the creation of this “Digital Silk Road,” which will also be leveraged to promote preferred indigenous standards. In the process, Huawei is partnering closely with Europe, including to pursue engagement on issues of standardization. Notably, the Standardization Administration of China (中国国家标准化管理委员会) has released the “Standards China Unicom Joint Construction “One Belt, One Road” Action Plan” (标准联通共建“一带一路”行动计划) (2018-2020), which calls for promoting the implementation of national standards for 5G and smart cities in “One Belt, One Road” countries, while supporting the expansion of the infrastructure of China Unicom, a state-owned telecommunications operator that has emerged as a major player in 5G, including partnering with Huawei. As a “5G pioneer,” ZTE has also committed to supporting the development of the Digital Silk Road, including through leveraging its 5G trials and partnerships in Europe and the Asia-Pacific.
The Future of 5G
China’s promotion of the Digital Silk Road—and particularly the deployment of 5G infrastructure—may often be greeted with enthusiasm yet is also provoking intense controversy. Inherently, the construction of this new critical infrastructure by a Chinese national champion that could be required by law (or coopted beyond the law) to support and participate in Chinese intelligence raises concerns about the implications for China’s future espionage capabilities, while also creating potential leverage that could be exercised for coercive purposes. While there are reasons to welcome the potential benefits of China’s leadership in 5G, this global agenda also raises questions of risk. Will Chinese 5G infrastructure prove to be a gift horse, or a Trojan horse?