Internet giants want in to China’s massive market

As a rising China seeks a bigger say in how global rules are shaped, to match its weight as the world’s second largest economy, no area is as vexed or as crucial as the internet.

Just how vexed was on display this week as senior executives of the United States’ biggest technology companies shared the limelight at China’s World Internet Conference with the Communist Party’s top authoritarian theorist, Wang Huning.

Google and Facebook are banned in China, and Microsoft’s Skype was recently blocked. Yet the companies got star billing at a conference where government and police speakers from Iran, Russia and Turkey also compared notes on how to restrict the free flow of information.

So why were Google president Sundar Pichai and Facebook vice-president Vaughan Smith there? Simply because the Internet’s old order wants access to the world’s biggest e-commerce market – 700 million Chinese with smartphones.

China’s online behemoths – Baidu, Alibaba and Tencent – have gained rapidly on Silicon Valley. Tencent, maker of social media app WeChat, last month eclipsed Facebook with a $US522 billion ($693 billion) market value.

Apple chief executive Tim Cook gave a keynote speech, declaring: “Technology itself doesn’t want to be good. It doesn’t want to be anything.

“It is up to all of us to make sure technology is infused with humanity.”

At the Chinese government’s request, Apple has removed Chinese access to Virtual Private Networks, apps that allowed iPhone users to leap the Great Firewall that cordons off China’s 750 million internet users.

Did Silicon Valley’s turnout at the Wuzhen conference show that other companies are also prepared to “follow the rules” to make it in China, as Alibaba founder Jack Ma advised?

The annual conference is a showcase for how Xi Jinping’s goal of China becoming “an influential country in cyberspace” and world leader in IT is progressing.

A benchmark study soberly reported that the US continued to lead the world in internet development and innovation, spurred by Silicon Valley, but China was a close second, and spending big.

China’s world-first photonic Quantum computer, and world-beating supercomputing team, were acclaimed and Wang, newly installed to the Politburo Standing Committee, said in his first public speech that China’s digital economy is “on the fast train”. Cross-border e-commerce reached a value of $13.5 trillion last year.

But Wang also laid out the key rule that China applies as the gatekeeper to its parallel universe of the internet, where great leaps in digital convenience for consumers come with the tradeoff of constant population surveillance and censorship. China’s term for it is “cyberspace sovereignty”.

This was the link to the Wuzhen conference’s second purpose: China and Russia want an international treaty – a big global rule – to stop other countries interfering with their restricted national internet regimes.

The push is being made in the name of “cyber security”, against a scary backdrop of wild global cyber attacks.

Kaspersky Labs founder Eugene Kaspersky says he expects his anti-virus company to find 90 million malicious samples this year.

But the biggest threat to global infrastructure was the growth of “complicated, professional projects”, of which 80-90 per cent are state-sponsored attacks, he said. Kaspersky, a Russian, would not say which states were responsible.

The issue of cyber security has become crucial for the major powers. Harvard University Professor Joseph Nye, best known for coining the term “soft power”, compared cyber conflict to nuclear weapons.

“The two technologies are different but [both are] highly disruptive,” he said. It took 20 years for major states to agree to cooperative “norms” to avoid conflict on nuclear weapons, and said the norms to restrain cyber conflict were following a similar, difficult timetable.

Frederick Douzet, of France’s Insitute of National Defence Studies, said that as the advent of global cyber crises like Wannacry should be drawing nations closer together to stop malicious actors, instead old geopolitical distrusts about the state use of cyber crime for intelligence and warfare was having the opposite effect.

The Brookings Institution’s Professor Cheng Li said: “There is no equivalent to mutually assured destruction in cyberspace. Major powers must work together now before it is too late.”

A cyber crime convention the US and the Council of Europe signed in 2001 allows parties to conduct digital cross-border investigations without seeking the other nation’s permission for data access. Multiple Russian ministry speakers at Wuzhen expressed fierce opposition to that convention.

China is funding a United Nations Inter-governmental Expert Group on Cybercrime to draft an alternative: the world’s first cyber security convention.

But the group’s South African chairman conceded on Monday the members would struggle to find agreement, and Nye said progress was “likely impossible” as the group focused on state sovereignty and had sidelined human rights and internet content.

Meanwhile, China’s massive digital growth is pulling private technology companies away from the question of values in favour of wanting to play in this massive market – should they ever be allowed in on Beijing’s terms.

Google, Microsoft and Apple were eager in Wuzhen to dismiss public fears and talk up the potential of Artificial Intelligence and big data, two technologies that have been prioritised by Xi.

Google’s Pichai declared there had been “an important shift from a mobile-first world to an AI-first world”. Microsoft said its chat bot XiaoIce was “born in China”.

But in the absence of Western privacy concerns, Chinese competitors have made their products pervasive through the untrammelled use of big data.

Facial recognition software has begun to be used by Chinese police to identify “criminals” in a public crowd, and the artificial intelligence technology was proudly on display. Telecommunications network China Unicom explained its use of big data collected from monitoring the texts and internet browsing of mobile phone subscribers could help marketing companies, in addition to the government.

Tencent’s Pony Ma said WeChat was using Artificial Intelligence to allow public transport users in Chinese cities to scan a barcode on their smartphone at subway turnstiles instead of queuing for a ticket.

“It also gives [authorities] access to the real identity of the passengers. It can alleviate congestion and increase safety and security,” Ma said.

This story Administrator ready to work first appeared on Nanjing Night Net.

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