The front line of the tech war is in Asia
Subscribe to enjoy similar stories. A technology tussle between the two superpowers is never far away. This week the Wall Street Journal reported a breach of American telecoms networks by a Chinese hacking group known as “Salt Typhoon", which was seemingly intended to glean knowledge about American wiretapping activities.
In both countries, deep mistrust has led to a policy of shunning the other’s digital infrastructure. Uncle Sam bars Huawei, a Chinese firm, from installing its telecoms kit in America; China discourages the sale of Silicon Valley’s servers and cloud-computing products within its borders. Yet in much of the world American and Chinese infrastructure—the data centres, undersea cables and wires that underpin the internet—sit side by side, as the two countries compete for market share, profits and geopolitical clout.
The fiercest contest is in Asia. There the presence of Chinese digital-infrastructure firms is already substantial. Some 18% of all new subsea cables worldwide in the past four years have been built by a single mainland firm, many criss-crossing Asia.
Alibaba’s cloud operation is active in nine Asian countries and Huawei has built many mobile networks. China’s success partly reflects a government plan. Its Digital Silk Road strategy, a branch of President Xi Jinping’s Belt and Road initiative, aims to dominate the region’s internet plumbing.
It helps, too, that Chinese firms are innovative and cheaper than American ones, though some are aided by hidden subsidies from the government. By one estimate Chinese cloud services cost 40% less than American-run ones. If China came to dominate Asia’s digital infrastructure, the consequences would be profound.
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