Advancing a Liberal Digital Order in the Indo-Pacific

To ensure digital development ultimately serves the purposes of building a liberal regional order, the United States needs to act with like-minded partners to:

Prioritize results-oriented diplomacy on digital issues.

• Follow through immediately on operationalizing the Quad working group on emerging and critical technologies.
• Increase diplomatic engagement on digital issues in both bilateral and multilateral settings, and in new purpose-built groups that focus on technology topics, such as the proposed “Technology 10” made up of the Group of Seven (G7) states plus South Korea, Australia, and India.
• Take a leadership role within international organizations involved in digital development, especially the International Telecommunications Union (ITU).

Develop digital technology investment standards and provide technology infrastructure alternatives to those offered by China.

• Catalyze the development of alternative 5G telecommunications equipment vendors.
• Forge a consensus on security standards for 5G networks by building on the process started at the Prague Conferences held in 2019 and 2020.
• Incentivize Indo-Pacific nations to invest in trusted and secure technologies and digital infrastructure.
• Develop assessment frameworks and standards to vet digital development projects.
• Assist other countries in implementing effective investment screening programs.

Shield democracy from digital threats while advancing internet freedom.

• With countries across the Indo-Pacific, enhance diplomatic engagements and assistance programs that deepen understanding about the need to balance the rule of law and prevention of violence with protecting civil rights, including that of free and peaceful speech.
• Build local resilience and capabilities of civil society, watchdog groups, and journalists to monitor digital development.
• Encourage U.S. technology companies to also engage with local civil society leaders, academics, and journalists to better understand and learn to identify disinformation.
• Draw from other countries’ experience in combating disinformation.

Define and implement a digital governance model that reflects liberal values and can keep up with technological innovation.

• Lead a multinational effort to establish digital governance guidelines.
• Support technology innovation domestically and in contested spaces.
• Ensure adequate funding and resources for U.S. agencies—such as the U.S. Agency for International Development (USAID), U.S. International Development Finance Corporation (DFC), Millennium Challenge Corporation, and U.S. Trade and Development Agency—to implement digital development programs in Indo-Pacific countries.
• Use digital technology to empower the traditionally disempowered.

Introduction

The United States and other regional democracies risk losing ground in the competition to shape Asia’s digital future. China is making rapid inroads in developing the region’s 5G infrastructure and is playing an increasingly expansive role in the broader digital ecosystems of Indo-Pacific countries. The COVID-19 pandemic has accelerated Beijing’s efforts to place digital technologies at the center of its strategy to enhance its geopolitical influence, particularly in the Indo-Pacific. In hastening the development of its Digital Silk Road, Beijing is assisting the developing economies in Southeast Asia with their digital transitions.

Beijing’s position at the center of Asia’s developing digital order poses a series of challenges to the interests of America and its democratic allies and partners—ranging from the potential compromise of critical networks to the development of new technology standards that favor Chinese companies and undermine civil liberties. The digital competition with China is occurring across multiple domains, from smart city infrastructure and telecommunications networks to video streaming websites and short form video sharing applications. Policymakers are scrambling to ascertain how to compete effectively with China in the digital space, when Chinese companies and technology are already interwoven into the digital landscape. These Chinese companies are obligated to assist China on national security, intelligence, and cyber security issues, raising the prospect that they could be employed to carry out nefarious activities, namely espionage or sabotage, in the service of Chinese Communist Party (CCP) geopolitical goals.

In the case of 5G telecommunication network development, the United States will need to expand its campaign to promote additional trusted vendors that can provide safe, reliable, and cost-effective alternatives to Chinese offerings. The United States must push back against efforts to discourage new 5G market entrants and ensure that Indo-Pacific countries have greater freedom of choice about their digital network decisions. The Chinese government has provided an estimated $75 billion in state subsidies to Chinese telecommunications equipment manufacturer Huawei and has unduly influenced the 5G standard-setting process. The only other companies offering alternatives to Huawei in radio access network equipment are Sweden-based Ericsson, Finland-based Nokia, and South Korea–based Samsung. Several countries in addition to the United States have already restricted Huawei’s participation in their 5G ecosystems, including Japan, Australia, Sweden, and, more recently, India and the United Kingdom.¹ In a CNAS report published last year titled, “Open Future: The Way Forward on 5G,” CNAS Senior Fellow Martijn Rasser makes the case for open radio access networks (OpenRAN) systems as a solution to the 5G conundrum. The idea behind OpenRAN is to establish an open architecture interoperability standard that allows operators to choose from multiple vendors, rather than having to depend on a sole vendor for hardware and software.² This is important, since it changes marketplace dynamics and restructures the industry around open interfaces that will stimulate competition. Shaping the 5G ecosystem now sets the stage for how the broader U.S.-China technology competition will play out over the next decade.

Another area of technology infrastructure that is being contested between China and the United States is the use of undersea fiber-optic cables. Given the enormous role of undersea cable infrastructure in facilitating the flow of growing amounts of data and information, it is imperative that undersea cables be treated and protected like other critical technologies and infrastructure. Ninety-five percent of intercontinental global data transmissions rely on undersea cables. The effort to protect and secure undersea cables is complicated by the fact that they are often constructed by multinational consortiums with no single legal framework to govern their use, because the cable lines join different continents and traverse international waters.³

A further challenge to ensuring that digital development remains aligned with democratic principles is the growing number of Chinese officials playing leading roles in technology standard-setting bodies, which provides China influence in shaping digital policy norms.⁴ Chinese companies also often vote in blocs in favor of Chinese standards.⁵ Fifty-five companies from the United States and allied countries participate in technology standard-setting bodies, compared to 128 Chinese companies.⁶

As Chinese companies entrench themselves at the heart of regional and national technology ecosystems, they bring with them Chinese conceptions of authoritarian governance as well as leverage and influence for the CCP. China’s lack of transparency about the origins and spread of COVID-19, along with its military and political aggression toward its neighbors, both highlight the need for the United States and its allies and partners to ensure that global digital advancement facilitates prosperity and reinforces a liberal political order in this vital region.

The United States will need to help assemble overlapping coalitions with like-minded partners and allies to offer concrete alternatives to Chinese technology. The Quad will play a key role in ensuring protection of emerging and critical technologies through its newly formed working group, announced following the firstever leaders-level Quad summit in mid-March. Working closely with other technologically advanced Indo-Pacific allies and partners, such as South Korea and Taiwan, on digital development initiatives will also be important.

The U.S. strategy to meet the challenges from China’s expanding digital footprint will also require working closely with the American private sector, as well as civil society leaders, when it comes to setting standards and protecting civil liberties. These dialogues began to take shape under the previous U.S. administration, and the Biden team must intensify and elevate them as part of its strategy to compete more effectively with China in developing the digital economies of the Indo-Pacific.

Washington must recognize that many issues in digital development are ambiguous, and it must craft policies that account for the field’s complexity. For example, some countries, such as Indonesia, will seek to maintain a relatively liberal political environment while also embracing Chinese technology for economic development purposes. Other countries, for instance Vietnam, will seek out alternatives to Chinese suppliers as a means of maintaining their own security and independence, but might still employ those technologies in illiberal ways in order to suppress dissent and maintain political control at home. Moreover, the fast-moving nature of innovation in digital technologies means that technological development will often outpace the creation of liberal political, legal, and regulatory regimes—even in the United States and other wealthy democracies. The development of democratic norms and best practices to combat disinformation, restrict surveillance technologies such as facial recognition, and give individuals the right to control their own data is still at a nascent stage. In other words, much of what constitutes a liberal digital order is still being defined.

The technology future of the region will directly impact the national security of the United States. Washington will not outspend Beijing dollar for dollar. Instead, America will have to leverage its private sector and civil society and allied and partner coalitions, while encouraging local, national, and regional efforts focused on building a more secure digital future that fosters democratic development and institutions.