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Tech & Digitalisation

The Open Internet on the Brink: China, Emerging Economies and the Spread of the Authoritarian Model

Report30th September 2021

Key Points

  • China has developed an effective strategy to export its domestic internet model, which combines standards, domestic regulations and international infrastructure financing designed to expand the influence of its tech champions globally.

  • So far, the US, EU and other D10 countries have done little to resist this strategy. Infrastructure offerings from these countries have become uncompetitively slow and expensive – leaving little room for low- and middle-income countries (LMICs) to make decisions based solely on the values they prefer.

  • With 3.7 billion people still without internet access, LMICs will come to play an increasingly important role in internet geopolitics. But they face a tipping point in deciding which internet model to pursue: for many leaders grappling with fragile development pathways, demographic challenges and minimal digital economies, the internet is seen more as a source of social disruption than economic growth.

  • LMICs working to leapfrog legacy systems and deliver more effectively, however, must adopt technology infrastructures and policy frameworks that support open innovation, rather than curtailing it.

While liberal democracies have turned inwards, stepping back from global leadership on internet policy, China has come forward. It has been able to execute a strategy to expand its global influence and export its domestic, authoritarian internet model that, from its perspective, is entirely rational and coherent. Unfortunately, it has faced little opposition in the process.

China’s Authoritarian Playbook

The growth of China’s digital economy may have initially been defined by imitation – with key domestic champions protected by the government as they adopted insights from Western firms – but today innovation and investment are its key characteristics. China is now taking an increasingly active role in technical-standards bodies and promoting New IP, AI, smart cities and facial-recognition tools. In the process, it is abusing the principle of digital sovereignty to allow states to break the internet’s fundamental openness.

Given that the internet’s distributed “network of networks” architecture acts as a selection mechanism, actors such as China have limited ability to impose changes from the top down. However, standards do still matter even if they are not adopted globally. As Dominique Lazanski, Stacie Hoffman and Emily Taylor set out in the Journal of Cyber Policy, standards agreed in governance fora such as the International Telecommunication Union (ITU) gain international protections via the World Trade Organisation, which can help China avoid bans on importing technologies from its domestic champions (e.g. Huawei). It is also able to internationalise its domestic technologies via infrastructure projects that are part of the Belt and Road Initiative including, for example, the requirement that domestic exports use Chinese-origin standards.

While China has not set out an explicit, publicly available description of its international strategy, we can piece together the evidence above to describe a repeatable playbook on internet standards and infrastructure, as set out below:

Figure 1

China has been executing a long-term strategy on technical standards and internet infrastructure

1. Set technical standards in governance forums (e.g. ITU, IETF) 1a. Gain votes in governance forums. 2. Prevent Huawei/5G-style import bans, 2a expand foreign influence. 3 Require domestic export to user Chinese-origin standards, 3a Support Chinese champions. 4 Use Belt & Road funding to increase international export market, 4a Gain TWO protection for international standards. Return back to 1.

Source: TBI adaptation from strategies identified in Standardising the Splinternet

Chapter 1

Why a Progressive Response Matters

So far, the US, EU and G7 nations – plus any others that would support an open, liberal internet model – have had no comparable strategy to China’s approach. While recent steps towards transatlantic tech cooperation offer grounds for cautious optimism, it remains a long way from a comprehensive strategy.

As this develops, many advocates of internet freedom are concerned about geopolitics co-opting internet governance even further. Indeed, the global internet will not be well-served by the US and others imitating China’s level of interventionism, but as a geopolitical contest is no longer avoidable, liberal democracies must face up to the challenge.

What’s clear is that the next step must be proactive and competitive on the merits – cost, speed, and minimal bureaucracy – rather than reliant on minimalist containment strategies. For example, US sanctions on Iran prevented GitHub, a US software company rooted in internet openness, from making its services available to developers there. Meanwhile, China stepped in to establish a partnership based on improving technology infrastructure and capability. Hostility between the US and Iran goes far deeper than a particular set of sanctions, and Iran makes it hard for US companies to operate in Iran anyway. However, this case indicates the limits of a containment approach against internet authoritarianism, given China’s willingness to step in. This lesson will be important in deciding how to support the growth of an open internet model among the large group of non-aligned states – the so-called Group of 77 (now actually 134 countries) – which are at a tipping point in deciding which path to follow. To win the race for the future of the internet, liberal countries will need to compete – and make the case – on the merits.

Emerging Economies Trending Towards Restrictive Models

Currently, 3.7 billion people around the world have no access to the internet. This means developing countries will play an increasingly important role in shaping internet governance and geopolitics in years to come. Yet, on the present trajectory, LMICs seeking to build this connectivity are likely to access the necessary financing from China rather than the US, EU or affiliated development organisations.

Through the Digital Silk Road (DSR) component of its Belt and Road initiative (BRI), China has become a valuable partner to emerging economies seeking technology-infrastructure financing and support. While its overseas lending has been scaled back since 2018, between 2008 and 2019 a total of $462 billion had been lent overseas by just two state-controlled Chinese banks – the China Development Bank and the Export-Import Bank of China. Of this, an estimated $79 billion has been committed to Digital Silk Road projects globally.

The Significance of Infrastructure Support

Meanwhile, Western infrastructure support has become uncompetitively slow and expensive, especially in Africa, the last frontier for the internet. As we have set out previously, development programmes run by organisations such as the World Bank and International Monetary Fund (IMF) are often too bureaucratic and risk-averse for African governments trying to create jobs quickly, given “youth bulges” (large increases in the proportion of a population’s youth) and risks of manufacturing automation.

As such, even if China’s loan terms may pose some long-term risks, if it is the only partner willing to provide such affordable financing, then choices about values are secondary – even for those African countries that may be sympathetic to liberal norms. Recent G7 announcements of a Build Back Better World (B3W) initiative indicate some ambition here, but they fall short of an effective, practical plan with financial commitments on the scale required.

Figure 2

Maps showing greater Chinese influence in 2020 vs 2000

Source: IMF Direction of Trade Stats

While China’s economic contribution to global internet connectivity should not be overplayed as an existential threat to liberal countries, it is worth noting that the country has also sought to use this infrastructure support in order to further its geopolitical aims. Indeed, as set out previously, it is executing a long-term, coherent strategy to expand its influence via standards bodies and infrastructure projects financed via the Digital Silk Road. The criticism that China is using the BRI to create client states can be overblown, but Beijing is using this route to open new markets while, at the same time, expanding the global influence of its domestic tech giants such as Huawei.

Figure 3

Huawei’s pitch is still finding success globally, despite US ban in May 2019

Source: Australian Strategic Policy Institute (ASPI) – International Cyber Policy Centre (Although there is a drop in recorded global Huawei projects in 2020, due to the coronavirus economic shock it is not possible to attribute this solely to the US’s May 2019 ban. Chart also only includes projects categorised by ASPI as: cable; cable terrestrial; R&D lab; telecommunications or ICT; facial recognition; data centre; 5G relationship; manufacturing facility; “Smart City” public security project; health; and surveillance equipment. All projects with missing data for “year commenced” also excluded)

Chapter 2

Digital Silk Road and Expanding Authoritarianism

While the attraction of these deals is often about cheap financing for much-needed infrastructure, these projects can also present significant national-security risks and enable relationships where China is dominant.

For example, in 2018, the African Union (AU) accused China of hacking the IT systems at its headquarters in Addis Ababa, Ethiopia. For five years, every night between midnight and 2am, data from the AU’s servers had reportedly been transferred to Shanghai while listening devices were also allegedly found during a security sweep. The AU’s headquarters had been funded by China and built by a Chinese state-owned constructor while Huawei had supplied the IT system. Despite this, Huawei and the African Union renewed their relationship in 2019, possibly reflecting China’s dominance in the relationship.

For the international community, there are also concerns that infrastructure projects may enable leaders to impose greater censorship and shutdowns – or even technically decouple from the global internet. Often part of broader “smart and safe” city initiatives, many of these projects are presented as helping states to “identify threats to public order” by using technologies such as facial recognition, CCTV and crime-monitoring systems. Similarly, China’s New IP proposal – which could enable fragmented, sovereign internets with greater state censorship and surveillance – is now undergoing a pilot domestically and could then be exported internationally, potentially following the pattern of other domestic standards and technologies.

It is important to recognise that African states have as much right as any sovereign country to protect the security of their societies. Similarly, there is rarely a “smoking gun” that conclusively demonstrates the motivations of either China or its partners around the world; the technical ability to impose an internet shutdown cannot alone signal intent. International interpretations of the plans of African states are nevertheless influenced by the precedent of China’s domestic internet authoritarianism, including its widespread censorship and apparent "social credit" system.

The result is that while the majority of the connected world currently benefits from a relatively free and interoperable internet, there is a very high risk that, as the rest of the world becomes connected, it will experience a much more restrictive internet model. In closing one digital divide, another may open: between those who can meaningfully access the internet’s freedoms and opportunities, and those who cannot.

Chapter 3

A New Digital Divide Beyond Access

On current trends, many emerging economies globally are moving towards a restrictive internet model, as shown by data from Freedom House. In Africa, only South Africa is listed as “free” according to an “internet-freedom” score, though the limited data set – with some notable omissions – constrains the story that can be told about the continent.

Figure 4

Scoring internet freedoms globally

Map showing Internet Freedom and Trend 2019-2020

Source: Freedom House

Given its perceived limited benefit, and growing capacity for disruption, the internet sector in many emerging countries does not get the political protection it warrants over the long term from an economic point of view. Rather, the internet in emerging countries is often subject to shutdowns and disproportionate restrictions. The recent impasse between Nigeria’s government and Twitter is indicative of this.

Case Study

Case Study: Nigerias Twitter Ban

Case Study: Nigeria’s Twitter Ban

On 4 June 2021, Nigeria’s government announced an indefinite suspension of Twitter’s operations in the country, citing “the persistent use of the platform for activities that are capable of undermining Nigeria’s corporate existence.” The suspension was announced just two days after the platform deleted a tweet by President Buhari for violating its rules.

The president’s tweet referred to the Nigerian (Biafran) civil war in a threat to deal with those “misbehaving today in... a language they will understand”. In the few weeks leading up to the ban, authorities accused banned separatists of attacks on electoral offices and prisons in southeast Nigeria. Nigeria’s minister of information said Twitter had not banned incitement tweets from other groups.

On 5 June, the Association of Licensed Telecommunications Operators disclosed a directive from the industry regulator to suspend access to Twitter. On 6 June, Nigeria’s National Broadcasting Commission (NBC) directed all TV and radio stations to “de-install” and desist from using Twitter, describing the activity as “unpatriotic”. The government also directed the NBC to immediately commence the process of licensing all perceived over-the-top (OTT) and social-media operations in what will set the stage for further regulation.

Nigeria has the highest reported number of internet users in Africa. Many of the country’s Twitter users have resorted to virtual private networks (VPNs) to access the platform where they are amplifying the call to revoke the ban by leveraging the global open internet #KeepItOn campaign. Although Nigeria’s attorney general originally vowed to prosecute those violating the directive, he has since walked back from these comments. Analysis by Top10VPN estimates that the country’s ban affected around 104.4 million internet users and cost Nigeria $366.9 million between June and July, about $6 million a day.

Chapter 4

Africa and the Restricted Internet

While openness and permission-less innovation have been the foundations of the Western internet, the pathway to an open internet is still contested in Africa. So long as the internet economy remains small, it is unlikely to receive political protection from shutdowns or disproportionate restrictions. Yet internet economies cannot grow sustainably without a stable, growth-oriented, rights- and freedoms-respecting regulatory regime.

So, bold political leadership is necessary to escape this catch-22. Where there has been political interest – such as in response to the Global South potentially missing out on $2.8 billion in tax revenues from Facebook, Microsoft and Alphabet, Google’s parent company – the response has all too often been focused on ineffective and disincentivising tax regimes. In this scenario, Nigeria’s current leading tech sector may yet pay the costs of increased political intervention.

In contrast, Ghana exemplifies the rewards of senior, political commitment to a healthier internet.

Case Study

Case Study: Ghana The Choice for Twitters Africa HQ

Case Study: Ghana – The Choice for Twitter’s Africa HQ

On 12 April 2021, Twitter announced that it was establishing its presence in Africa with an office to be headquartered in Accra, Ghana. The decision largely came as a surprise to the general public and sparked a vigorous debate about the business ecosystem for technology start-ups across the continent.

Explaining its rationale, Twitter stated that Ghana is “a champion for democracy, a supporter of free speech, online freedom, and the Open Internet.” Furthermore, Ghana’s recent appointment to host the secretariat of the African Continental Free Trade Area provided additional incentive for the social-media platform looking to tailor its service across the continent.

While internet and communications technology (ICT) services only contribute about 3.6 per cent to Ghana’s GDP, the country’s stable, growth-focused internet regulatory environment, including not a single shutdown, provided a compelling business and geopolitical case on which Twitter could build and extend its reach in Africa.

Twitter’s choice of Ghana for its expansion on the continent demonstrates how African countries with more internet users and economic might, but also greater restrictive internet policies, can end up missing out on the foreign investment needed for growth.

Chapter 5

Reversing the Trend

Over the long term, the economic cost of domestic internet authoritarianism, and fragmented internet models globally, is immense. While most internet policy debates today are focused on narrow, visible, short-term issues, reversing these broader trends will require a much greater focus on how the underlying stability and openness of the internet is threatened in the longer term.

Advocates for internet openness in emerging economies must start by understanding leaders’ priorities and frame campaigns based on those terms. Fragile development pathways, demographic challenges and small internet economies are hurdles: at best the internet might be seen as irrelevant to achieving the economic aims of leaders or, at worst, as a major barrier to social cohesion and public safety.

But the tech revolution is also enabling step changes in public services, health care, agriculture and access to markets that have turned the traditional development paradigm – Global North to Global South, incremental change, zero-sum – on its head. There is a real opportunity for states to leapfrog legacy systems and deliver far more effectively for their people than they otherwise would have. Whether they succeed will be determined by the technology infrastructure and policy frameworks they have in place – in other words, do they support this open innovation, or curtail it?

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