The Battle for World Supremacy

China’s rapid growth over the past few decades has positioned it as a global economic and technology leader. As the world’s second largest economic power, China has the capital to invest in its technology sector. These investments have proven to come at a cost to China’s homegrown companies. Huawei, a Chinese telecommunications firm, provides the Chinese government with “backdoors” to its networks. These backdoors provide China with intelligence about the countries in which the networks are operational. While it’s easy to point the finger at China for these practices, Eric Snowden showed that the US has been engaged in similar practices as well.

The US has understandably sharpened its anti-China rhetoric following this discovery of government espionage. However, the US is likely less concerned with the espionage than it is with the the threat of China’s domination of 5G technology. Huawei is one of the few companies that has commercialized the cutting edge 5G telecommunications networks. 5G technology will revolutionize the way in which data is transferred. Verizon claims that 5G wireless communications will be 200 times faster than those of its 4G predecessor. It will serve as the underlying infrastructure upon which smart cities, artificial intelligence, and other innovative technologies are built. 5G networks are a massive business opportunity; one which the US wants to take the lead on.

From Internet to Intranets

Back in 1997, the major telecommunications companies carved the US into regional monopolies. A single telecom provider has sole control over all but four geographic regions of the US. This practice is of course bad for consumers, but it pales in comparison to the dangers that will emerge in the race for control over 5G networks. As Huawei lays down the fiber optic cables necessary for 5G connectivity, they are working to achieve complete territorial control. In China, as an example, Huawei is building 5G infrastructure as part of China’s Belt and Road Initiative. Huawei will then have discretion in choosing which companies have access to the Chinese market, which could complete bar the US from accessing it.

As the rest of the globe undertakes 5G infrastructure projects, countries won’t just be choosing which telecom company will lay down fiber optic cables. Rather, they’ll be choosing which country will dictate access to the country itself.

“In effect, each 5G carrier will be able to define its network from moment to moment, charge whatever it wants for heavily marketed levels of service differentiation, and act as a gatekeeper for applications seeking entry. This allows for unlimited pricing power and deeply undermines the internet protocol’s basic premise—that any computer could speak to another using the same basic language. Instead, transport of bits will be completely software-defined and virtualized: Think proprietary cable network instead of internet access.”

Wired

With the economic and geopolitical stakes as high as they are, competition between the US and Chinese telecom firms is escalating into full scale government trade and cyber conflicts. A peaceful agreement between the US and China must be reached in order to prevent further escalation.

Will the Cold War End in Peace or Bloodshed?

Time will tell how the US and China ultimately settle what has become a Cold War. For bloodshed to be avoided, the US and China must discontinue the cutthroat competition for 5G telecom contracts. Rather than denying either country with access to regional markets, agreements must be reached such that both the US and China can peacefully cooperate. The implementation of a global 5G technology infrastructure does not have to be zero-sum for the two major superpowers. If, however, they continue with their current approach, this Cold War will heat up very quickly.

Do you want to discuss the Cold War between the US and China? Leave a comment below or contact me directly.

Cold War

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