July 9, 2021 – Stealth War 45: Chinese Data Security; Acquisition of UK Semiconductor Firm; China in Afghanistan

By: Jamestown Foundation

Fri July, 2021, Age: 2 years



View this email in your browser

July 9, 2021

Welcome to the Stealth War Newsletter, a collection of the top 5 recent news items, collected on The Jamestown Foundation’s new website, stealth-war-org.cdn-pi.com. To continue to receive this weekly collection, click the button below to subscribe.  

Subscribe Today

Strategic Indicator
This issue’s number to watch

$10 billion

The target amount that Swiss agrichemicals company Syngenta aims to raise at its IPO listing in Shanghai, making it possibly the largest listing this year. This dovetails with the Chinese state’s goal to improve food security through advances in agricultural technology, which has been highlighted as a growing priority.

This Week:

* Acquisition of British Semiconductor Firm Highlights China’s Drive for Self-Sufficiency

* Chinese Data Security Impacts Foreign Citizens and Multinational Companies

* Advances in Senegal and Tanzania Show Chinese Influence Stems from Geoeconomics

* China Promotes New General to Lead PLA Forces in Sino-Indian Border Dispute

China Finds Investment Opportunities, Security Concerns in Afghanistan 

Top Stories

Acquisition of British Semiconductor Firm Highlights China’s Drive for Self-Sufficiency

On July 6, British Prime Minister Boris Johnson directed his national security advisor to review the $87 million purchase of Newport Wafer Fab—the United Kingdom’s largest chipmaking plant—by the Dutch company Nexperia, which was acquired by the Chinese WingTech Technologies in 2018. 30 percent of Wingtech’s shares can be traced to the Chinese government, resulting in some British analysts’ concern at the lack of governmental resistance to the acquisition of a company that produces eight thousand chips a week for use in automobiles. Although a recently passed National Security and Investment Act prevents state-back firms from acquiring firms sensitive to UK national interests, the Newport Wafer sale still occurred without any friction within the government.

The Wingtech sale is the latest semiconductor acquisition by a major state-backed enterprise in China as the country embarks on a campaign to achieve self-sufficiency in the highly integrated sector. Only 16 percent of the chips that China currently uses are produced domestically; Beijing’s “Made in China 2025” plan calls for that amount to increase to 70 percent by 2025. But this goal might be stymied by China’s inability to access leading-edge chipmaking technologies, such as photolithography equipment produced by the Dutch firm ASML Holdings, sales of which have been heavily restricted by the Dutch government. China’s progress in semiconductor design has been similarly limited by foreign restrictions on chip design software and IP.

Newport Wafer Fab may become a formidable asset in China’s mission for chipmaking self-sufficiency. But with dwindling access to the international chipmaking market, it is an open question of whether or not China will ever complete that goal that is gradually closing off its technology exchange based on national security concerns.

Chinese Data Security Impacts Foreign Citizens and Multinational Companies

Ripple effects from China’s nascent data security regime have spread around the world. Days after the Chinese ride-share company Didi Chuxing went public on the New York Stock Exchange, the Cyberspace Administration of China (CAC) launched a cybersecurity review into Didi’s collection of user data. This marked one of the first official uses of the CAC’s powers, mandated under a 2015 Cybersecurity Law. The CAC subsequently announced similar investigations into three other companies recently listed in the U.S., sparking concern that, alongside ongoing anti-trust campaigns, data security may be the next focus for the Chinese government’s efforts to control the country’s long free-wheeling tech sector amid increasing national security concerns.

Privacy researchers have noted that China’s data security regime appears to have been crafted partially in response to the Chinese public’s demand for more rights and control over their data, and that new Chinese regulations have paralleled similar efforts in Europe, Africa and India. At the same time, it is an open question whether these data regulations will apply in any meaningful way to state surveillance—even as the Chinese state has cracked down on Big Tech’s growing societal influence, it has often worked in concert with those same companies to develop an expansive and opaque system of techno-authoritarianism. One recent investigation found that BGI, the Chinese company which owns the world’s most popular prenatal genetic test, has rapidly expanded its role in other nations’ health systems and helped to create the world’s largest gene bank inside China. Beijing has made clear that it sees gene data (along with other personal information) as a national security matter, and since 2015 has restricted foreign researchers from accessing Chinese citizens’ gene data. At the same time, access to the world’s largest, most diverse set of human genomes gives it a strategic edge in biotechnology research. Although BGI has not been found to violate any patient privacy agreements or regulations, the recent revelations show the increasingly blurry line between modern healthcare, privacy ethics, and national security.

Relatedly, technology firms have raised concerns about new data protection laws in Hong Kong—specifically, an anti-doxxing legislation that could make internet companies criminally liable for user-posted content. One industry coalition argued that the proposed amendments’ broad language could potentially criminalize “innocent acts of sharing information online” and stifle free speech. The free flow of information—alongside a permissive business atmosphere and a robust judiciary—has long been seen as an integral part of ensuring Hong Kong’s competitiveness as a global financial hub. It is likely that the Chinese government will continue to expand its controls on information in Hong Kong. Multinational companies may grow wary of continuing to work in the city as many of its once-inviolable factors for success are weakened.

BRI Roundup

Advances in Senegal and Tanzania Show Chinese Influence Stems from Geoeconomics

Senegalese President Macky Sall announced on June 22 that Senegal will move all government data and digital platforms from foreign servers to a new national data center run by the Chinese telecommunications company Huawei. The center was financed through a Chinese loan and built with Huawei equipment and technical assistance. Critics have raised concerns that Senegal’s data and cyber infrastructure will be entirely reliant on Chinese technology. Senegal is an influential nation within West Africa, long a center of democratic stability, with free elections and peaceful transitions of power. That Senegal fully signed on to China’s model of data governance can be seen as a blow to U.S. efforts to push back on Huawei in Africa.

On the other side of the continent, Tanzanian President Samia Suluhu Hassan said on June 26 that the country will look to revive its $10 billion port development project. The project, first signed in 2013 with China Merchant Holdings International, was suspended in 2019 under the prior president John Magufuli, who argued that the proposed port was commercially unviable. Magufuli, however, died in March from COVID-19. Her successor, President Hassan has been more willing to work with Chinese investors and partner nations in the region.

The recent Chinese successes in Senegal and Tanzania highlight a newly published report by the RAND Corporation. The report argues that the foundation of China’s influence is the weight of attraction of its economy. The report recommends that to counter this influence, the US must provide alternative sources of funding for countries. Not doing so would risk more countries following the path of Tanzania and Senegal.

China Promotes New General to Lead PLA Forces in Sino-Indian Border Dispute

Chinese President Xi Jinping, acting in his role as chairman of the Central Military Commission ((CMC), has replaced the head of the People’s Liberation Army’s (PLA) Western Theater Command (WTC), which has overseen the border confrontation with India. On Monday, Xu Qiling, alongside three other senior military officers, was appointed to the rank of general, and placed in command of the WTC.

Xu’s predecessor, General Zhang Xudong, was only promoted to the position in December 2020, and his seven month tenure is comparatively short. Zhang’s predecessor, General Zhao Zongqi, served for four years. It is not yet clear why he was replaced, and speculation is likely premature. The best-case scenario for General Zhang is that he is to be promoted to the CMC, China’s top military policymaking body. The CMC will likely soon have two openings, as two of the commission’s vice chairman are over the retirement age of 70. Observers predict that Xi will want to reshuffle the CMC before the Communist Party’s National Congress next year, and former theater commanders will be top candidates. President Xi has been trying to create a younger, nimbler force amid ongoing military reforms. The other three senior officers promoted alongside General Xu were also all in their 50s and were promoted earlier than normal.

Alternatively, General Zhang’s ouster could signal Beijing’s displeasure at his performance in the WTC role. Little ground has been made in the Sino-Indian border conflict since January, with the exception of ground being lost at Pangong Tso as a result of a negotiated withdrawal.

General Xu will be the third head of the WTC to oversee the confrontation at the border with India, which began in May 2020. He was previously the Deputy Commander of the Western Theater Command and concurrent commander of the Western Theater Command Army,  which he was assigned to in June 2020, just before the Galwan Valley clash that killed 20 Indian and at least 4 Chinese soldiers last year.

Xu enters his position as a 12th round of border negotiations with Indian officials will soon begin. According to former US army attaché to Beijing Colonel (ret.) Dennis Blasko, “It’s unlikely he will be involved directly in the next round of negotiations, unless both sides have decided to increase the level of participation…While the WTC oversees the Theater (region), the actual headquarters controlling operations along the border in the disputed area with India is the Nanjiang (South Xinjiang) Military District, led by Major General Liu Lin. Nanjiang Military District is a corps-level organization which is why Major General Liu attends the corps-level meetings with India.”

Both India and China have settled into their positions, creating new infrastructure and posts to support an influx of new forces. Despite not being directly involved in negotiations with India, Xu will remain a key player in the region, though it is questionable what part, if any, he will play in breaking the stalemate at the border.

China Finds Investment Opportunities, Security Concerns in Afghanistan 

The U.S. military withdrawal from Afghanistan has heightened concerns among the country’s neighbors, including China. Since the last of U.S. troops withdrew from Afghanistan on July 6, China has evacuated 210 citizens from the country as the security situation has rapidly worsened. As the Taliban has rapidly expanded its territorial gains amid the ongoing exit of American troops, China has expressed support for the existing fragile government, and offered to host intra-Afghanistan peace talks.

In accordance with its close ally Pakistan, however, China has also signalled its willingness to collaborate with the Taliban and has even hosted talks with the group. Although few details have been disclosed, early reporting indicates that China is interested in developing Afghanistan’s infrastructure with the Taliban by providing funds through Pakistan. China has also raised concerns about the East Turkestan Islamic Movement (ETIM), a group of Uyghur terrorists operating in Afghanistan, which China claims is responsible for carrying out acts of terrorism in Xinjiang over the last two decades. Regional stability is crucial for the development of China’s all-encompassing Belt and Road Initiative (BRI); Beijing has reportedly offered to expand its BRI investments into Afghanistan in exchange for peace with the Taliban. But even though China appears pragmatically willing to work with all sides in order to ensure a conducive environment to economic development, the unstable security situation may threaten to jeopardize its existing projects in the region.

Copyright © 2020 The Jamestown Foundation, All rights reserved.
Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

The Jamestown Foundation 
1310 L St. NW, Suite #810, Washington, DC 20005
202-483-8888 (phone) – https://www.jamestown.org.



Huawei "sales and profits stabilize after more than 3 years of US sanctions"- Asia Times

Globally, China's campaign to influence global media is intensifying https://www.voanews.com/a/china-s-global-media-influence-campaign-growing-says-freedom-house-/6736696.html