ChinAI #134: Weaponized Interdependence in Chinese cyberstrategy discussions

Plus, what is “independent and controllable" for semiconductors?

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Feature Translation: Chinese cyberstrategy discussions reference weaponized interdependence

In July 2019 Henry Farrell and Abe Newman published “Weaponized Interdependence: How Global Economic Networks Shape State Coercion” in International Security, a leading international relations journal. Here’s the quick summary:

Liberals claim that globalization has led to fragmentation and decentralized networks of power relations. This does not explain how states increasingly “weaponize interdependence” by leveraging global networks of informational and financial exchange for strategic advantage . . . Highly asymmetric networks allow states with (1) effective jurisdiction over the central economic nodes and (2) appropriate domestic institutions and norms to weaponize these structural advantages for coercive ends. In particular, two mechanisms can be identified. First, states can employ the “panopticon effect” to gather strategically valuable information. Second, they can employ the “chokepoint effect” to deny network access to adversaries. Tests of the plausibility of these arguments across two extended case studies that provide variation both in the extent of U.S. jurisdiction and in the presence of domestic institutions—the SWIFT financial messaging system [which was used to reinforce U.S. and European sanctions against Iran] and the internet—confirm the framework's expectations.

The article clearly tapped into something that has resonated with a lot of people thinking about the intersection between economics and security. It’s the 5th most read article from the journal in the past year. In this week’s feature translation, I look at how one Chinese scholar uses the weaponized interdependence framework to think about international technological competition.

Context: China Information Security is an influential Chinese-language journal that covers topics like cybersecurity and internet governance. In the journal’s first issue of 2021, Xu Xiujun (PhD in int’l relations, research fellow at the Chinese Academy of Social Sciences) published an interesting essay on network security governance in the “Cyberspace Strategy Forum” vertical. This section of the journal often contains big-picture thinking, such as Dr. Hong Yanqing’s piece 2018 article (links to English translation) on “Designing Risk-based Critical Information Infrastructure Protection In China.”

In a section on how information technology could reshape the landscape of international competition, Dr. Xu essentially restates the thesis of Farrell and Newman’s article on weaponized interdependence. Note how he references the same two mechanisms (panopticon/oversight and chokehold/blocking) as well as the SWIFT messaging example:

“Many scholars once believed that economic globalization has made information more dispersed and the world more flat. However, as globalized economic activities and information exchanges have increased, some "central nodes" where information gathers have become increasingly prominent, and the countries occupying these nodes therefore have ‘oversight powers’ [监视权] and "blocking powers" [阻断权] that restrict the behavior of other countries. With the increasing number of Internet users, the control of global Internet-related business activities such as cross-border payment and e-commerce is increasingly concentrated in the hands of a few countries . . . Moreover, this asymmetrical interdependence can also become a weapon for sanctions against other countries. For example, in the global financial system, the SWIFT system has this effect. Since the establishment of the SWIFT system by some European and American banks in 1973, more than 200 countries and 11,000 financial institutions have used this system. SWIFT is equivalent to the information aggregation center for global financial transactions and plays a key central node role in the global financial system. This makes it possible for countries that control this system not only to track transaction records between countries and institutions, but also to impose sanctions on specific countries and institutions by stopping the provision of financial information services.”

How should China adapt to a world of weaponized interdependence? Dr. Xu emphasizes the need to enhance China’s independent innovation capability in technologies like AI. He also highlights the importance of formulating international technical standards, noting that China accounts for less than 1% of ISO standards. He concludes:

“Only by occupying an advantageous position of interdependence in the network domain can we effectively prevent China from becoming a target of weaponized interdependence [相互依存武器]. Unlike Iran and other countries, relying on existing technologies, China has the ability to actively increase its own central nodes and network control in certain areas, and strengthen its ability to counterattack the United States with weaponized interdependence. To this end, China should rely on major breakthroughs in the development and application of core technologies in the field of network information such as high-performance computing, mobile communications, quantum communications, Beidou navigation (satellite system), core chips, operating systems, etc., to continuously improve network control and form a powerful deterrent to prevent other countries from abusing weaponized networks to generate security threats.”

FULL TRANSLATION: The international environment and countermeasures of network governance during the "14th Five-Year Plan" period

ChinAI Links (Four to Forward)

Must-read: In-depth Analysis of Independent and Controllable Chips (Mandarin)

A piece by Suny Li for SiP与先进封装技术 that analyzes the chip supply chain across nine segments, three in each of the three main phases of chip development:

• chip design (EDA, IP, and design) ->

• chip manufacturing (equipment, processing, and materials) ->

• packaging and testing (packaging design, product packaging, and chip testing)

The author compiles the top ten players in each of the nine segments. For example, below is the table for IP in chip design. The only mainland Chinese firm, Verisilicon, has 1.8% of the market share.

Should-read: How global tech executives view U.S.-China tech competition

Featured in Brooking’s TechStream, Christopher A. Thomas and Xander Wu conducted a very interesting survey of 158 senior business executives working for American, Chinese, European, Japanese, Taiwanese, and Korean global high-tech firms whom they polled about the impact of U.S-China tensions on their industry. Here’s one fascinating takeaway:

“Tensions between the United States and China pose difficult questions for tech companies headquartered outside the two countries. But based on our survey results, these firms do not plan on choosing sides. As Figure 11 illustrates, an overwhelming 98% of respondents indicate that these companies from third-party countries will align with neither China nor the United States. Two out of three respondents expect companies based outside the United States and China to play the two countries off one another to get benefits from each. As Figure 10 above shows, two out of three also said they would further invest in China or localize operations there, despite more than 95% believing multinational companies in China will face an uneven playing field there.”

Should-read: 2021 AI Index by Stanford HAI

Fourth edition of the most comprehensive report on AI measurement is out. One of the takeaways that has received a lot of media attention is: “China overtakes the US in AI journal citations.” This comes after China surpassed the U.S. in total journal publications. I don’t see this as an especially noteworthy indicator of the quality of AI research, since you can rack up more citations by publishing large amounts of derivative research. That’s why the index shows that China lags far behind the U.S. and the European Union in field-weighted citation impact of AI publications as well as conference publications, which are more relevant than journal articles for AI. For more, see my written testimony before U.S.-China Economic and Security Review Commission on why China is far from an AI superpower poised to overtake the U.S. in this domain.

Should-read: National Security Commission Final Report on Artificial Intelligence

Speaking of overhyping China’s AI capabilities…here’s p. 20 of this newly released report: “If the United States does not act, it will likely lose its leadership position in AI to China in the next decade.” But if you make it past the bluster in the beginning — or take it for what it is: obligatory marketing to cater to a DC audience hooked on a narrow vision of national security — there’s some smart moderate policy ideas in the report (e.g. chapter 7 on establishing justified confidence in AI systems).

Thank you for reading and engaging.

These are Jeff Ding's (sometimes) weekly translations of Chinese-language musings on AI and related topics. Jeff is a PhD candidate in International Relations at the University of Oxford and a researcher at the Center for the Governance of AI at Oxford’s Future of Humanity Institute.

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