ARTICLE | Trade Wars, Technological Supremacy & The Need for Coordinated Network Infrastructure Standards

Oct 7

I. COVID-19 And The Acceleration Of The Digital Economy

The deadly COVID-19 outbreak that started in Wuhan, China has brought about years of change in the adoption of digital technologies in just a few months’ time, creating new market anomalies. [1] According to a McKinsey global survey of executives, companies have accelerated the digitization of their customer and supply-chain interactions as well as of their internal operations by about three to four years. [2]The share of digital or digitally enabled products in their portfolios has also accelerated by a staggering seven years.[3] In what is now a “contactless” yet digitally integrated world, the impacts of the disease beyond morbidity and mortality have become apparent since the outbreak. [4] “Amidst the slowing down of the Chinese economy with interruptions to production, the functioning of global supply chains has been disrupted.” [5] Companies globally, regardless of size, that are dependent upon inputs from China have also started experiencing attenuation in production. [6] The COVID-19 pandemic has shown the true interconnectedness of nations in our integrated global economy, emphasizing the importance of global cooperation. Despite the U.S. and China depending on one another, the pandemic has exacerbated an already tense relationship, instigating trade wars for example, between the countries, resulting in a potential technological bifurcation.

This paper discusses the complexities of the U.S.-China’s relationship and the two world leaders fight in the race to win the digital economy and assert technological supremacy. Part II of this paper will briefly describe each country’s approach to the technological trade war, looking briefly at the U.S. Clean Network Program and China’s Global Initiative on Data Security. Part III will analyze the complexities and dependencies in the race for technological supremacy, focusing specifically on broadband network infrastructure and software. It will also take a look at how these relationships play a role in each nation’s trade war approach as it relates to national security and economic espionage. Part IV will make the recommendation that a global standard needs to be established as technological fragmentation will negatively impact innovation in the long-run. Lastly, Part V, will conclude that the U.S. has lost the race for technological supremacy and needs to work with China to establish a coordinated data and network infrastructure standard.

II. Trade Wars: The Fight for Digital Dominance

Large quantities of data, supercomputing and technological advances have created a globally pragmatic and innovative environment. [7] The U.S. desperately wants to maintain its current technological and economic edge over China, safeguarding select technologies because the U.S. is fearful that China is becoming digitally dominant. [8] In turn, the U.S. has instigated a trade war in an attempt to obstruct China’s progress, especially as it relates to semiconductors and cybersecurity. [9] Although the U.S. lead the globalization[10] movement after WWII, it has regressed to taking a more nationalistic approach under the current Trump administration.[11] As the U.S. moves forward in its obdurate, nationalistic ways, with withdrawals from multilateral trade agreements, rejection of the World Trade Organization, and retreats from free trade principles, China has stepped up to fill this void. [12]

The U.S. and China rely on one another as each country has its distinct strengths and weaknesses. [13] On the one hand, China has cheap manufacturing, an expeditiously developing consumer economy with a high demand for mobile phones and internet-related products and services and a large number of STEM[14] graduates. [15] The U.S. on the other hand, has leading technology, a mature consumer economy and excellent access to global financial markets. [16] In turn, both countries benefit significantly from cross-border trade as well as collaboration opportunities directly because of their different strengths and weaknesses, so much so that they have developed a degree of reliance on one another. [17] The U.S. relies on China for most low-cost manufacturing, and China relies on the U.S. for most advanced technology. [18] While some feel the continuation of this period of technological innovation was inevitable, the future of technology as a whole, hinges on the heightened tensions in the US-China trade wars. [19]

A. U.S. Clean Network Program

On August 5, 2020, Secretary of State Mike Pompeo announced the Clean Network Program, a “comprehensive approach to safeguarding the nation’s assets including citizens’ privacy and companies’ most sensitive information from aggressive intrusions by malign actors, such as the Chinese Communist Party (CCP).” [20]The U.S. State Department created the program in response to China’s expanding capabilities in cyberspace. [21] The goal is to address “the long-term threat to data privacy, security, human rights and principled collaboration posed to the free world from authoritarian malign actors.” [22] Moreover, it represents the carrying out of a “multi-year, all-of-government, enduring strategy, built on a coalition of trusted partners, and based on rapidly changing technology and economics of global markets.” [23]

In total there are five distinct Clean Network Programs: (1) Clean Carrier,[24] (2) Clean Store,[25] (3) Clean Apps,[26] (3) Clean Cloud,[27] (4) Clean Cable,[28] (5) Clean Path[29]. [30] Mr. Pompeo described the new initiative as an effort to “protect the privacy and data of American citizens and businesses from hostile groups like China’s Communist Party.” [31] He also encouraged foreign governments and companies to participate in securing their data from the CCP’s “surveillance state and other malign entities.” [32] In May 2019, more than 30 government officials from around the world participated in discussions about the importance of national security, economic and commercial considerations that must be a part of each country’s evaluation of 5G vendors.[33]

B. China’s Global Initiative on Data Security

In response to President Trump’s Clean Network announcement, China also announced[34], a Global Data Initiative on Data Security. [35] Unlike the Clean Network, the Data Initiative on Data Security takes a more globalized approach. [36] The initiative is composed of eight[37] key points.[38] Foreign Ministry spokesperson, Zhao Lijian, suggested states handle data security in a “comprehensive, objective and evidence-based manner, and maintain an open, secure and stable supply chain of global information and communications technology products and services.” [39] Chinese diplomats have already approached several foreign governments to ask for their support in the initiative. [40] In the words of Foreign Ministry spokesperson Zhao Lijian, the new initiative is an attempt at “contributing Chinese wisdom to international rules-making” on data governance. [41]

III. A Closer Look: U.S.-China Data & Network Infrastructure

Changes in communication technologies create risks as well as opportunities as the rapid development and scale of communication technologies can increase dependency and vulnerability. [42] For example, the U.S. economy grows more slowly with a lack of adequate trade and collaboration, and China suffers severely under U.S. pressure because China currently depends on the U.S. and global markets for supplies.[43] However, the global supply chain used for telecommunications networks software and hardware, can raise security concerns including increased concern about the risks posed by the “acquisition and deployment” of communications technologies from untrustworthy suppliers. [44]

A. U.S.-China Network Infrastructure and Device Manufacturing

Despite the U.S. and China being each other’s most important trade partners, their rivalry combined with their network infrastructure and device manufacturing trade reliance, makes for a complicated relationship. [45] As the push to become the technological leader becomes greater, so too do the stakes. [46] The U.S. was the undisputed leader in 4G technology, but China is the primary supplier of 5G networking equipment and is working to expand its network technology globally.[47] More recently, China leapfrogged[48] the world with the first 6G[49] experimental satellite that launched on November 7, 2020. [50]

1. Broadband Network Infrastructure and Software Technology

China depends on the global supply of advanced technologies which places it at a disadvantage and vulnerable to U.S. policies. [51] However, China is quickly gaining leverage over the U.S. with its growing dominance of Huawei[52] which has evolved into the world’s largest supplier of telecom equipment.[53] Only a few other companies[54], like Nokia and Ericsson, both based in Europe, sell comparable equipment. [55] Although U.S. carriers like Sprint and Verizon have attempted to launch 5G services for customers, their networking equipment is heavily dependent on foreign suppliers.[56] The increased demand for broadband network equipment worldwide spotlights just how much the U.S. is absent from the wireless technology industry, despite being a technology leader in other respects.[57] Moreover, it shows the downfall of a once vibrant ecosystem of American companies that formerly went neck-and-neck with the likes of Nokia and Ericsson, but it also puts a focus on Chinese companies like Huawei, whose dominance has come at the expense of U.S. networking companies. [58]

To give another perspective on Huawei’s enormous influence, “the company’s chief rivals, Nokia and Ericsson, account for 17 percent and 13 percent of the global market for telecom equipment, respectively, according to figures compiled by the research firm Dell’Oro Group.” [59] While U.S technology giants, sell switches and routers that reside in the innermost part of a carrier’s network, they do not complete in the wireless infrastructure that allows cell sites to connect with smartphones and other mobile devices. [60] “There is no U.S.-based wireless access equipment provider today that builds those solutions,” said Sandra Rivera, a senior vice president at Intel who helps guide the chipmaker’s 5G strategy. [61] It is this part of the Internet ecosystem that is increasingly important as more devices and appliances gain wireless connectivity and smart capabilities.[62]

2. Device Manufacturing

Although China has the upper-hand when it comes to broadband network infrastructure, China’s most essential supply risk are semiconductors,[63] also known as integrated circuits or computer chips. [64] The U.S. and China may both protect and develop their own cutting-edge manufacturing capabilities, especially regarding advanced semiconductor manufacturing and 3D printing. [65] China relies on imports for 84% of its semiconductor needs.[66] In the short-term, China will most likely depend on global semiconductor supplies to put together most of their technology. [67] China comprises over half of the global semiconductor demand, but domestic manufactures can only supply around 30% of this demand, making China extremely vulnerable to changes in global supply-chain. [68]

China hope to gain semiconductor self-reliance[69] by catching up to the world’s most advanced manufacturers, but it remains years behind the U.S. [70] China wants to use 3D printing along with other manufacturing advances to become a leading supplier of high-tech components and equipment, like semiconductors. [71] However, the US, recently included semiconductor and 3D printing technologies in export restrictions because they do not want China to surpass its own technological capabilities. [72] Companies like Huawei,[73] are developing custom chips with funding from Made in China 2025[74] (MIC2025) which has been labeled as “unfair” by the current U.S. administration. [75] While this may have short-term success, China has plans for future large-scale semiconductor manufacturing, but experts say these efforts will not see success for over ten years. [76] China is aiming “to take over more and more segments of the semiconductor market,” says White House trade adviser Peter Navarro, who fears Beijing will flood the market with inexpensive products and bankrupt U.S. companies.[77]

B. National Security & Economic Espionage

National security is increasingly a component of debates over telecommunication networks and cybersecurity. [78] Therefore, there is no surprise that the ongoing competition for technical superiority between the United States and China is partly rooted in national security concerns.[79] In recent years, China has made significant strides toward positioning itself as a leader[80] in a number of important future technologies. [81] Because the wireless technology enables a vastly larger and different class of devices to enter the wireless ecosystem, network infrastructure presents new issues of cybersecurity and also potentially far-reaching military applications. [82]

It is generally accepted that American national security depends on rapid innovation in certain security-sensitive technologies, such telecommunications.[83] This is why national security experts warn, “the U.S. and its allies cannot fall substantially behind China in 5G implementation,” raising additional concerns over China’s “monopoly” in telecommunications networking. [84] In May 2020, the President invoked his authority under the “Constitution and laws of the United States,” including IEEPA[85] and the NEA,[86] to declare a national emergency with respect to this threat. [87] President Trump then prohibited transactions with foreign countries or foreign nationals that pose “an undue risk of sabotage to or subversion” of the “maintenance of information and communications technology or services in the United States” or “otherwise pose an unacceptable risk” to the national security.[88]

1. Huawei

It is difficult to discuss national security without mentioning Huawei. Founded in the late 1980s by Ren Zhengfei, a former engineer for the Chinese military, Huawei began as a technology supplier[89] for Chinese customers. [90] Huawei receives an abundance of resources and assistance from the Chinese government, raising concerns with American intelligence experts[91] The concerns raised are about Huawei and whether the company is an extension of the Chinese government, leveraging their infrastructure equipment for espionage or surveillance purposes, by installing covert backdoors in software, for example. [92] With its clear competitive advantage, Huawei has contracts all over the world despite U.S. pressures, thus many countries rely on Huawei networks. [93] President Trump has been using Huawei as a bargaining chip, further escalating tr tensions saying, “Huawei is something that is very dangerous …. It’s possible that Huawei would be included in some kind of trade deal.” [94] In February, U.S. officials further urged allies not to use Huawei equipment during bilateral meetings, at an industry conference in Barcelona. [95] U.S. officials expressed concerns that Huawei’s equipment could enable eavesdropping by authoritarian regimes.[96] Despite U.S. partners acknowledging the risk, they have asked for more concrete evidence to back up the U.S. allegations.[97] Huawei vehemently denies it is a security risk saying it is an independent firm with more than 500 carriers in over 170 nations using its technology that does not act on behalf of the Chinese government. [98]

The Trump Administration’s focus has been on the next generation of wireless technology, urging American companies to “step up” and compete to provide the next generation of high-speed, low-lag wireless services.[99] Although this ideology is noble, the execution of such reality faces a major challenge, because barely any U.S. companies manufacture the technology’s most important equipment. [100] Additionally, Huawei already provides equipment to roughly 25 percent of the U.S. smallest wireless carriers. [101] “The Rural Wireless Association, a trade group that represents 55 small carriers, estimates that it would cost its members $800 million to $1 billion to replace equipment from Huawei and ZTE, China’s other maker of networking gear.” [102]

2. TikTok

TikTok[103] is a “globally popular video-sharing smartphone application” and has become a serious competitor to American social media platforms like Facebook, Instagram, and YouTube. [104] Like Huawei, TikTok is under increased scrutiny by the U.S. government as a potential threat to national security. [105] This is because like all technology companies doing business in China, it is subject to Chinese laws[106] that require companies operating in the country to turn over user data when asked by the government.[107] On Aug. 6, under the IEEPA, 50 U.S.C. §§1701-08,[108] [109] [110] [111] the U.S. government imposed sanctions on TikTok[112] and its parent company, ByteDance, barring all ‘transactions’ with them effective 45 days later.[113] The executive orders come on the heels of the announcement to expand the Clean Network Program in an effort to protect the nation’s telecommunications and technology infrastructure. [114] The Trump administration has cited national security threats to target the platform, accusing TikTok of “sharing American user data with the CCP, spreading disinformation that benefits the CCP, and censoring content that displeases Beijing[115].” [116] Other countries have also taken action against TikTok on the grounds of security. India banned TikTok and 50 other Chinese apps in June 2020, calling them a “threat to sovereignty and integrity.” 45[117] Although TikTok denies these claims, many security and privacy advocates are skeptical.[118] The American Civil Liberties Union argues that “Chinese apps in particular have a reputation for grabbing more data than required to provide their services, often sending information to advertising networks … [they] are frequently far more abusive than others….”[119] However, the CIA has concluded that there is “no evidence” showing that TikTok has done so. [120] Despite this, politicians and lawmakers in several other countries including Australia,[121] Japan, and the UK have also voiced concerns about TikTok’s Chinese origin and have raised the possibility of a future ban.[122] Banning TikTok will further solidify the dominance and monopoly of American social media platforms. [123]

Taken together, these methods signal an all hands approach to curb the perceived threat to national security presented by weaknesses in the telecom technology and services infrastructure, and supply chain. [124] Some believe TikTok and other apps developed and owned by Chinese companies pose a serious security risk to the U.S. because of China’s Cybersecurity laws that require compliance with the government requests for data. [125] Researchers often differ over how TikTok’s collection of user data compares with other social media apps and whether TikTok actually poses a distinctive threat to the privacy and security of its U.S. users.[126] Others believe that TikTok is caught up in increasing trade tensions between China and the United States and TikTok has fallen into “the crosshairs of a global technology battle” based on technology trade protectionism. [127] For Western democracies, while banning TikTok may solve national security concerns over the platform, it is only a short-sighted solution to long-term issues. [128]

The impact of the U.S.- China trade war threatens the global economy, endangers democracy, impact technological innovation and will likely cause technological bifurcation if unresolved. [129] The tumultuous relationship between the U.S and China has been referred to as the “New Cold War” in a recent New York Times editorial.[130] If the U.S.-China continue their polarizing trade wars, “[t]he world may well be headed towards a system where most commercially significant countries are pressed to align with one or another of these giants.”[131] While the damage from the trade war will have long-term repercussions, if the U.S. does not learn how to coexist in a world with a new balance of power, it will suffer the most because they have no influence in the 5G standards.[132] “It is estimated that export controls put in place by the Trump administration could cause a loss of $14 to $56 billion in sales and 18,000 to 74,000 jobs over the next five years in the U.S.” [133] On the other hand, the trade war has “positively” impacted Chinese companies who are in the process of developing their own operating systems and semiconductors for their telecommunication devices. [134] This not only provides Chinese companies the ability to “withstand a protracted trade war longer than the U.S. would be able to, “but it also brings more Chinese products into the global marketplace. [135]

IV. The Need for Coordinated, Cooperation and Data & Network Infrastructure Standards

Ultimately, the U.S. has lost the race for technological supremacy at this current time and for the foreseeable future. While there is little doubt that computer system vulnerabilities are a threat to the nation’s defenses, the U.S. needs to strategically approach China’s olive branch. [136] However, one major issue in establishing a resolution is understanding how to assess the trustworthiness and security of technologies provided by distinct suppliers. [137]Given their sensitivity for national security, telecommunications systems should only be sourced from trustworthy suppliers or manufacturers.[138] The U.S. should strongly consider joining China’s Global Initiative on Data Security, establishing clear rules for data privacy and cybersecurity. Most multinational private and public entities stand to benefit greatly from the efficiencies created by a globalized democratization of data and network infrastructure. [139] Harmonization of broadband networks, software and data infrastructure, is essential to the achievement of not only data protection and sharing, but technological growth and development. Although many difficulties remain to be overcome, data protection necessary to harmonize transatlantic data transfers and provides an important step toward the development of an international data control policy for the age of the Internet.[140]

The U.S. government has continued to show its lack of understanding of technology and has moved away from funding research and development projects leaving it to private industry.[141] China, on the other hand, has placed enormous investment in both artificial intelligence and infrastructure, not just in China, but throughout the world.[142] If the U.S. hopes to get any sort of leverage in the long-run, they need to start investing in broadband network infrastructure and incentivize technological education and innovation. Moreover, the U.S. may also consider established an overreaching legal and regulatory framework to protect the security and privacy of U.S. citizens’ data and communications, developing a uniform, transparent process to assess and mediate risks from foreign apps. [143]

V. Conclusion

The Internet, by its very nature, is international, but there is no singular legal infrastructure protecting data collection or transfers. [144] The paradox, moreover, is that the open Internet is one that disregards privacy. [145] Developing a compatible international framework to protect technological innovation and national security that enables responsible data sharing and cross-border data transfers would be beneficial to all parties.[146] As technology continues to advance, without a globalized democratization of data infrastructure and equipment, there is the threat of multiple cyberspace “checkpoints” that could fragment the Internet and worsen overall data transfers efficiency.[147]

[1] Laura LaBerge., How COVID019 Has Pushed Companies Over the Technology Tipping Point- And Transformed business forever, (June 12, 2020), https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever#

[2] Id.

[3] “The online survey was in the field from July 7 to July 31, 2020, and gathered responses from 899 C-level executives and senior managers representing the full range of regions, industries, company sizes, and functional specialties. The survey looked at the past results for the degree of digital adoption reported in each of these areas of business operations. Based on the average percentage of adoption in each survey, a trendline to represent the average rate of adoption in 2017, 2018 was calculated, and just before the crisis, which respondents were asked about in the 2020 survey. The acceleration time frame was calculated from the amount of time it would have taken to reach the current level of digital adoption respondents report if the precrisis pace of change had continued.” Id.

[4] Sophia Chen, Deniz Igan, Nicola Pierri, Andrea Presbitero, The Economic Impact of COVID-19 in Eurpose and the US: Outbreaks and Individual Behaviour matter a great deal, non-pharmeceutical interventions matter less, (May 11, 2020), https://voxeu.org/article/economic-impact-covid-19-europe-and-us

[5] Id.

[6] Id.

[7] Kimberley A. Houser, The Innovation Winter is Coming: How the U.S. China Trade War endangers the world, (November 18, 2020), https://digital.sandiego.edu/cgi/viewcontent.cgi?article=3383&context=sdlr

[8] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[9] Id.

[10] Globalization is defined as the “interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.” Id.

[11] Melina Kolb, What Is Globalization?, PETERSON INST. FOR INT’L ECON. (Feb 4, 2019), https://piie.com/microsites/globalization/what-is-globalization.html.

[12] See Office of Mgmt. & Budget, Exec. Office of the President, Analytical Perspectives: Budget of the U.S. Government Fiscal Year 2020, at 268 (2019), https:// www.govinfo.gov/content/pkg/BUDGET-2020-per/pdf/budget-2020-per.pdf

[13] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[14] STEM stands for science, technology, engineering and mathematics, but a far wider range of academic disciplines fall under this description.

[15] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[16] Id.

[17] Id.

[18] Id.

[19] Kimberley A. Houser, The Innovation Winter is Coming: How the U.S. China Trade War endangers the world, (November 18, 2020), https://digital.sandiego.edu/cgi/viewcontent.cgi?article=3383&context=sdlr

[20] U.S. Department of State, The Clean Network, (2020) https://www.state.gov/the-clean-network/

[21] David P. Fidler, The Clean Network Program: Digital Age Echose of the “Long Telegram”?, (Oct. 5, 2020) https://www.cfr.org/blog/clean-network-program-digital-age-echoes-long-telegram

[22] Id.

[23] U.S. Department of State, The Clean Network, (2020) https://www.state.gov/the-clean-network/

[24] “To ensure that People’s Republic of China (PRC) carriers are not connected with U.S. telecommunications networks. Such companies pose a danger to U.S. national security and should not provide international telecommunications services to and from the United States.” Id.

[25] “To remove untrusted applications from U.S. mobile app stores. PRC apps threaten our privacy, proliferate viruses, censor content, and spread propaganda and disinformation. Americans’ most sensitive personal and business information must be protected on their mobile phones from exploitation and theft for the CCP’s benefit.” Id.

[26] “To prevent untrusted PRC smartphone manufacturers from pre-installing—or otherwise making available for download—trusted apps on their apps store. Huawei, an arm of the PRC surveillance state, is trading on the innovations and reputations of leading U.S. and foreign companies. These companies should remove their apps from Huawei’s app store to ensure they are not partnering with a human rights abuser.” Id.

[27] “To prevent U.S. citizens’ most sensitive personal information and our businesses’ most valuable intellectual property, including COVID-19 vaccine research, from being stored and processed on cloud-based systems accessible to our foreign adversaries through companies such as Alibaba, Baidu, China Mobile, China Telecom, and Tencent.” Id.

[28] “To ensure the undersea cables connecting our country to the global internet are not subverted for intelligence gathering by the PRC at hyper scale. We will also work with foreign partners to ensure that undersea cables around the world aren’t similarly subject to compromise.” Id.

[29] “The 5G Clean Path is an end-to-end communication path that does not use any transmission, control, computing, or storage equipment from untrusted IT vendors, such as Huawei and ZTE, which are required to comply with directives of the Chinese Communist Party. The 5G Clean Path embodies the highest standards of security against untrusted, high-risk vendors’ ability to disrupt, manipulate or deny services to private citizens, financial institutions, or critical infrastructure.” Id.

[30] Id.

[31] Chung Han Wong, China Launches Initiative to Set Global Data-Security Rules, (Sep. 8, 2020), https://www.wsj.com/articles/china-to-launch-initiative-to-set-global-data-security-rules-11599502974

[32] Id.

[33] Robert D. Atkinson, Why Limiting U.S. Tech Exports to Chinese Companies Like Huawei Is a Risky Strategy, INFORMATION TECHNOLOGY & INNOVATION FOUNDATION (May 23, 2019), https://itif.org/publications/2019/05/23/why-limiting-us-tech-exports-chinese-companies-huawei-risky-strategy

[34] In September 2020

[35] Chun Han Wong, China Launches Initiative To Set Global Data-Security Rules, (Sep. 8, 2020) https://www.wsj.com/articles/china-to-launch-initiative-to-set-global-data-security-rules-11599502974

[36] Id.

[37] The initiative as outlined by Wang, involves eight key points:
(1) Approach data security with an objective and rational attitude, and maintain an open, secure and stable
global supply chain.

(2) Oppose using ICT activities to impair other States’ critical infrastructure or steal important data.

               (3) Take actions to prevent and put an end to activities that infringe upon personal information, oppose abusing ICT to
                     conduct mass surveillance against other States or engage in unauthorized collection of personal information of other
                     States.

(4) Ask companies to respect the laws of host countries, desist from coercing domestic companies into storing data generated
and obtained overseas in one’s own territory.

(5) Respect the sovereignty, jurisdiction and governance of data of other States, avoid asking companies or individuals to
provide data located in other States without the latter’s permission.

(6) Meet law enforcement needs for overseas data through judicial assistance or other appropriate channels.

(7) ICT products and services providers should not install backdoors in their products and services to illegally obtain user
data.

(8) ICT companies should not seek illegitimate interests by taking advantage of users’ dependence on their products.

Shannon Tiezzi, China’s Bid to Write the Global Rules on Data Security, (Sep. 10, 2020) https://thediplomat.com/2020/09/chinas-bid-to-write-the-global-rules-on-data-security/

[38] China Daily/ANN, China Proposes Global Initiative on Data Security, (Sep. 9, 2020), https://www.nationthailand.com/news/30394226?utm_source=category&utm_medium=internal_referral

[39] Id.

[40] Robert Chesney, Will TikTok Win Its Lawsuit Against Trump, LAWFARE, (August 25, 2929, 9:17PM), https://www.lawfareblog.com/will-tiktok-win-its-lawsuit-against-trump

[41] Shannon Tiezzi, China’s Bid to Write the Global Rules on Data Security, (Sep. 10, 2020) https://thediplomat.com/2020/09/chinas-bid-to-write-the-global-rules-on-data-security/

[42] Id.

[43] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[44] James Andrew Lewis, Criteria for Security and Trust in Telecommunications Networks and Services, (May 1, 2020), https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/200511_Lewis_5G_v3.pdf

[45] NETWORKING & INFO. TECH. RESEARCH & DEV. SUBCOMM., NAT’L SCI. & TECH. COUNCIL, THE NATIONAL ARTIFICIAL INTELLIGENCE RESEARCH AND DEVELOPMENT STRATEGIC PLAN (2016), https://www.nitrd.gov/pubs/national_ai _rd_strategic_plan.pdf

[46] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[47] David Makichuk, China Leapfrogs World With First 6G Experimental Satellite, (Nov. 7, 2020) https://asiatimes.com/2020/11/china-leapfrogs-world-with-first-6g-experimental-satellite/

[48] According to a white paper published by Finland’s University of Oulu, the 6G technology is still in its infancy and must overcome several technical hurdles in basic research, hardware design, and its environmental impact before the technology becomes commercially available. Id.

[49] The 6G technology is expected to be more than 100 times faster than 5G, allowing for lossless transmission in space to achieve long-distance communications with a smaller power outputs. Id.

[50] Id.

[51] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[52] Huawei sells various types of technology, such as smartphones, but the bulk majority of its revenue comes from sales of equipment that moves data through broadband networks and to devices. Huawei is essential for several wireless carriers that serve sprawling, sparsely populated areas because its equipment for transmitting cell signals usually costs a lot less than other options. Brian Fung, How China’s Huawei took the Lead Over U.S. Companies in 5G Technology¸(April 10, 2019) https://www.washingtonpost.com/technology/2019/04/10/us-spat-with-huawei-explained/

[53] Id.

[54] four companies, Sweden’s Ericsson, Finland’s Nokia and China’s Huawei and ZTE, account for two-thirds of the global market for telecom equipment, according to analyst estimates

[55] Id.

[56] Cecilia Kang, Huawei Ban Threatens Wireless Services in Rural Areas, (May 25, 2019), https://www.nytimes.com/2019/05/25/technology/huawei-rural-wireless-service.html

[57] Brian Fung, How China’s Huawei took the Lead Over U.S. Companies in 5G Technology¸(April 10, 2019) https://www.washingtonpost.com/technology/2019/04/10/us-spat-with-huawei-explained/

[58] Id.

[59] Id.

[60] Id.

[61] Stefan Pongratz, Key Takeaways – Worldwide Telecom Equipment Market 2018, DELL’ORO GROUP (Mar. 4, 2019), https:// www.delloro.com/telecom-equipment-market-2018-2/; see also Gisela Grieger, European Parliamentary Research Serv., 5G in the EU and Chinese Telecoms Suppliers, at 1, PE 637.912 (Apr. 2019), https://www.europarl.europa.eu/Reg Data/etudes/ ATAG/2019/637912/EPRS_ATA(2019)637912_EN.pdf

[62] Id.

[63] Semiconductors perform the main processing of phones, computers, smart cars, and so on—you cannot make such devices without them—and these chips are China’s Achilles’ heel because the US, Taiwan, Korea, Japan and Europe are the only areas in the world capable of designing and manufacturing the most advanced semiconductors, that is, microprocessors

[64] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[65] Id.

[66] Puja Tayal, China Accelerates Its Semiconductor Self-Sufficiency Efforts, (June 6, 2019), https://marketrealist.com/2019/06/china-accelerates-its-semiconductor-self-sufficiency-efforts/

[67] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[68] China Inside: Chinese Semiconductors Will Power Artificial Intelligence. 2018. Deloitte Insights, December.

[69] Huawei, Xiaomi and Alibaba Funding are developing custom chips with funding from MIC2025.

[70] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[71] Id.

[72] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[73] Xiaomi and Alibaba Funding

[74] In 2015, Prime Minister Li Keqiang launched “Made in China”, an initiative which sets to modernize China’s industrial capability. This 10-year, comprehensive strategy focuses heavily on intelligent manufacturing in 10 strategic sectors and has the aim of securing China’s position as a global powerhouse in high-tech industries such as robotics, aviation, and new energy vehicles such as electric and biogas.

[75] Institute for Security and Policy, Made in China 2025¸ (June 2018), https://isdp.eu/content/uploads/2018/06/Made-in-China-Backgrounder.pdf

[76] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[77] Bob Davis, China’s Next Target: U.S. Microchip Hegemony, (July 27, 2017), https://www.wsj.com/articles/chinas-next-target-u-s-microchip-hegemony-1501168303

[78] 36 Santa Clara High Tech. L.J. 369, 374-377

[79] Id.

[80] The MIC2025 2015 report identified several key technology fields, including pharmaceuticals, aerospace, information technology, and robotics, in which the Chinese government intended to make strategic pushes through policy and funding.

[81] 36 Santa Clara High Tech. L.J. 369, 374-377

[82] Id. at 372

[83] Id. at 375.

[84] Patricia Moloney Figliola, TikTok: Technology Overview and Issues, (Nov. 17, 2020) https://crsreports.congress.gov/product/pdf/R/R46543

[85]International Economic Emergency Powers Act (IEEPA) contains a broad grant of authority to declare national emergencies and to prohibit certain transactions with foreign countries or foreign nationals that pose risks to the national security of the United States. But IEEPA also contains two express limitations relevant here: the “authority granted to the President . . . does not include the authority to regulate or prohibit, directly or indirectly” either (a) the importation or exportation of “information or informational materials”; or (b) “personal communication[s], which do not involve a transfer of anything of value.” 50 U.S.C. § 1702(b)(1), (3) (emphasis added); See also Tiktok Inc. v. Trump, Civil Action No. 1:20-cv-02658 (CJN), 2020 U.S. Dist. LEXIS 177250, at *13 (D.D.C. Sep. 27, 2020)

[86] National Emergencies Act

[87] U.S. WeChat Users All. v. Trump, No. 20-cv-05910-LB, 2020 U.S. Dist. LEXIS 172816, at *10 (N.D. Cal. Sep. 19, 2020)

[88] Id.

[89] But by the early 2000s, Huawei had begun selling globally, and now does a robust business not only in network equipment but also in consumer smartphones and enterprise services. See also Brian Fung, How China’s Huawei took the Lead Over U.S. Companies in 5G Technology¸(April 10, 2019) https://www.washingtonpost.com/technology/2019/04/10/us-spat-with-huawei-explained/

[90] Id.

[91] ARTICLE: OF MONOPOLIES AND MONOCULTURES: THE INTERSECTION OF PATENTS AND NATIONAL SECURITY, 36 Santa Clara High Tech. L.J. 369, 385

[92] Cecilia Kang, Huawei Ban Threatens Wireless Services in Rural Areas, (May 25, 2019), https://www.nytimes.com/2019/05/25/technology/huawei-rural-wireless-service.html

[93] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[94] Cecilia Kang, Huawei Ban Threatens Wireless Services in Rural Areas, (May 25, 2019), https://www.nytimes.com/2019/05/25/technology/huawei-rural-wireless-service.html

[95] Ellen Nakashima, Brian Fung, U.S. Allies Differ on Difficulty of Containing Huawei Security Threat, (March 6, 2019). https://www.washingtonpost.com/technology/2019/03/06/us-allies-are-skeptical-trump-administrations-huawei-argument/

[96] Id.

[97] Brian Fung, How China’s Huawei took the Lead Over U.S. Companies in 5G Technology¸(April 10, 2019) https://www.washingtonpost.com/technology/2019/04/10/us-spat-with-huawei-explained/

[98] Cecilia Kang, Huawei Ban Threatens Wireless Services in Rural Areas, (May 25, 2019), https://www.nytimes.com/2019/05/25/technology/huawei-rural-wireless-service.html

[99] Brian Fung, How China’s Huawei took the Lead Over U.S. Companies in 5G Technology¸(April 10, 2019) https://www.washingtonpost.com/technology/2019/04/10/us-spat-with-huawei-explained/

[100] Id.

[101] Cecilia Kang, Huawei Ban Threatens Wireless Services in Rural Areas, (May 25, 2019), https://www.nytimes.com/2019/05/25/technology/huawei-rural-wireless-service.html

[102] Id.

[103] TikTok is owned by ByteDance Ltd., a privately held company headquartered in Beijing, China. Id.

[104] Jufang Wang, From Banning to Regulating TikTok: Addressing Concerns of National Security, Privacy, and Online Harms, (October 2020), https://www.researchgate.net/publication/344584442_From_banning_to_regulating_TikTok_Addressing_concerns_of_national_security_privacy_and_online_harms

[105] Patricia Moloney Figliola, TikTok: Technology Overview and Issues, (Nov. 17, 2020) https://crsreports.congress.gov/product/pdf/R/R46543

[106] The Cybersecurity Law of the People’s Republic of China was passed in November 2016 and went into effect in June 2017. It was updated in November 2018 by the Regulations on Internet Security Supervision and Inspection by Public Security Organs. These laws (1) strictly control online activities, (2) mandate the local storage of user data and the mandate the local storage of user data and the registration of certain network assets; and (3)allow the government to conduct onsite and remote inspection of computer networks. The law requires Chinese companies to cooperate with government intelligence operations if so requested30 and may allow the Chinese government access to user data collected by any company doing business in China. One analyst notes that “by demanding access to any data collected and stored in China, the updated regulations force [domestic and] foreign companies based in China to comply with its investigative measures, leaving intellectual property and private information vulnerable to government abuse. Id.

[107] Id.

[108] For the purpose of this paper, only shorter statues have been included as footnotes to reference.

[109] 50 U.S.C. § 1701- Unusual and extraordinary threat; declaration of national emergency; exercise of Presidential authorities

states:

(a) Any authority granted to the President by section 203 [50 USCS § 1702] may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.

(b) The authorities granted to the President by section 203 [50 USCS § 1702] may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this title [50 USCS §§ 1701 et seq.] and may not be exercised for any other purpose. Any exercise of such authorities to deal with any new threat shall be based on a new declaration of national emergency which must be with respect to such threat.

50 USCS § 1701.

[110] 50 U.S.C. § 1704- Authority to issue regulations:

The President may issue such regulations, including regulations prescribing definitions, as may be necessary for the exercise of the authorities granted by this chapter.

50 USCS § 1704.

[111] 50 U.S.C. § 1705- Penalties states:

(a)Unlawful acts

It shall be unlawful for a person to violate, attempt to violate, conspire to violate, or cause a violation of any license, order, regulation, or prohibition issued under this chapter.

(b)Civil penaltyA civil penalty may be imposed on any person who commits an unlawful act described in subsection (a) in an amount not to exceed the greater of—

(1) $250,000; or

(2) an amount that is twice the amount of the transaction that is the basis of the violation with respect to
which the penalty is imposed.

(c)Criminal penalty

A person who willfully commits, willfully attempts to commit, or willfully conspires to commit, or aids or abets in the commission of, an unlawful act described in subsection (a) shall, upon conviction, be fined not more than $1,000,000, or if a natural person, may be imprisoned for not more than 20 years, or both.

50 USCS § 1705.

[112] TikTok is a popular video-sharing smartphone application owned by ByteDance Ltd., a privately held company headquartered in Beijing, China.

[113] Robert Chesney, Will TikTok Win Its Lawsuit Against Trump, LAWFARE, (August 25, 2929, 9:17PM), https://www.lawfareblog.com/will-tiktok-win-its-lawsuit-against-trump

[114] Caroline E. Brown, Trump’s TikTok, WeChat Orders May Yield Different Results, Law360, (August 12, 2020), https://www.law360.com/articles/1300599

[115] Some media reports revealed that leaked TikTok documents instructed its moderators to suppress content that Beijing deemed politically sensitive. Id.

[116] Jufang Wang, From Banning to Regulating TikTok: Addressing Concerns of National Security, Privacy, and Online Harms, (October 2020), https://www.researchgate.net/publication/344584442_From_banning_to_regulating_TikTok_Addressing_concerns_of_national_security_privacy_and_online_harms

[117] Patricia Moloney Figliola, TikTok: Technology Overview and Issues, (Nov. 17, 2020) https://crsreports.congress.gov/product/pdf/R/R46543

[118] Id.

[119] Id.

[120] Jufang Wang, From Banning to Regulating TikTok: Addressing Concerns of National Security, Privacy, and Online Harms, (October 2020), https://www.researchgate.net/publication/344584442_From_banning_to_regulating_TikTok_Addressing_concerns_of_national_security_privacy_and_online_harms

[121] Australia ruled out a possible ban after a security review on TikTok this August. Id.

[122] Jufang Wang, From Banning to Regulating TikTok: Addressing Concerns of National Security, Privacy, and Online Harms, (October 2020), https://www.researchgate.net/publication/344584442_From_banning_to_regulating_TikTok_Addressing_concerns_of_national_security_privacy_and_online_harms

[123] Id.

[124] Caroline E. Brown, Trump’s TikTok, WeChat Orders May Yield Different Results, Law360, (August 12, 2020), https://www.law360.com/articles/1300599

[125] Amitrajeet A. Batabyal, Rules-based Trade Made the World Rich. Trump’s Policies May Make It Poorer, (June 10, 2018), https://theconversation.com/ rules-based-trade-made-the-world-rich-trumps-policies-may-make-it-poorer-97896

[126] Id.

[127] Id.

[128] Jufang Wang, From Banning to Regulating TikTok: Addressing Concerns of National Security, Privacy, and Online Harms, (October 2020), https://www.researchgate.net/publication/344584442_From_banning_to_regulating_TikTok_Addressing_concerns_of_national_security_privacy_and_online_harms

[129] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[130] Id.

[131] Craig VanGrasstek, The Trade Policy of the United States Under the Trump Administration, 16 (Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2019/11, Feb. 2019), https://ssrn.com/abstract=3330577

[132] Jackson Barkstrom, Implications of the Technology Race: What is the Technology Race; Why is it Important, (May 24, 2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7244942/pdf/978-3-030-39204-8_Chapter_4.pdf

[133] Id.

[134] US-China Trade War Risks Global Technology Split, FIN. TIMES (June 12, 2019), https://www.ft.com/content/0e6c322e-8c4e-11e9-a1c1-51bf8f989972

[135] Id.

[136] See, e.g., DONALD J. TRUMP, NATIONAL CYBER STRATEGY OF THE U.S. OF AMERICA 6 (Sept. 2018), https://www.whitehouse.gov/wp-content/uploads/2018/09/National-Cyber-Strategy.pdf (“Protecting American information networks, whether government or private, is vital to fulfilling” the objectives of “the National Security Strategy.”).

[137] James Andrew Lewis, Criteria for Security and Trust in Telecommunications Networks and Services, (May 1, 2020), https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/200511_Lewis_5G_v3.pdf

[138] Id.

[139] Nancy Scola, On Democrats’ Wish List: Tech Help for a Clueless Congress, POLITICO (Dec. 29, 2018, 7:05 AM), https://www.politico.com/story/2018/12/29/democratstechnology-congress-1074187

[140] Anna Johansson, The Internet Is Due for a Split. Here’s What You Need to Know, NEXT WEB (Oct. 4, 2018), https://thenextweb.com/contributors/2018/10/04/the-internetis-due-for-a-split-heres-what-you-need-to-know/

[141] Google, for example, spent three times as much on the development of AI alone as the federal government’s entire spending in 2017. Bess Levin, Everyone in the White House Thinks Trump’s Trade War Sucks, VANITY FAIR: HIVE (Aug. 15, 2019), https://www.vanityfair.com/news/2019/08/donald-trump-trade-war-white-housedetractors

[142] Walter Isaacson, How America Risks Losing Its Innovation Edge, TIME (Jan. 3, 2019), https://time.com/longform/america-innovation/ (“In the 1960s, around 70 percent of total R&D was federally funded, with 30 percent coming from the private sector. Now those figures are reversed.”)

[143] Patricia Moloney Figliola, TikTok: Technology Overview and Issues, (Nov. 17, 2020) https://crsreports.congress.gov/product/pdf/R/R46543

[144] See 71 Fla. L. Rev. 365, 432.

[145] Michael Hiltzik, Column: Trump’s Trade War Is Politically Motivated, yet Hurts Consumers and GOP Voters, Study Shows, L.A. TIMES (Mar. 4, 2019, 12:35 PM), https://www.latimes.com/business/hiltzik/la-fi-hiltzik-trump-trade-war-20190304- story.html

[146] Id.

[147] Id.

Mona Hariri