A gripping account of China’s rise as a tech superpower

The town of Glasgow, Montana, which promotes itself on T-shirts with the words “Middle of Nowhere”, might seem a strange place to highlight in a book about the global expansion of Chinese tech. But it was here that Jonathan Hillman grasped how Chinese communications technology companies were sweeping the world.

Struggling to afford western telecoms kit, Glasgow made do with inadequate links until Huawei came to its aid in 2010. Undercutting competitors by up to 30 per cent, the Chinese communications equipment group won a contract from Nemont, the local telecoms operator, for a modern 3G system. Nemont was aware of the political complications of installing gear from communist China. But when it wrote to the US government raising its concerns, it received no reply. So it went ahead, and had Huawei install its system, to the satisfaction of local residents.

As Hillman writes, Huawei won the business because it was cheap and effective, and because the US authorities — and US industry — had paid too little attention to security issues and neglected the digital needs of the country’s vast rural districts.

Everything changed with the dramatic shift in policy triggered by President Donald Trump. After years of betting that economic collaboration would lure Beijing on to the path of democracy and co-operation, Washington decided that this approach had failed in the face of an increasingly authoritarian China under Xi Jinping.

Longstanding concerns about the security risks involved in opening US markets to Chinese tech companies have become paramount. Instead of promoting deals and joint ventures, American policy now focuses on reducing China’s presence. Huawei and others have been banned. Nemont faces the costly job of replacing its existing equipment.

In The Digital Silk Road, Hillman, who won the FT’s Bracken Bower Prize in 2019, sets out how China has come from nowhere in digital technology in the past 30 years to pose a strategic threat to the US and its allies. A security specialist at the Washington-based Center for Strategic and International Studies, he catalogues America’s failure to take the risks seriously or to curtail the flow of knowhow that Chinese companies sucked out of the US, via everything from flawed technology transfers to theft.

Hillman looks at digital networks, electronic surveillance, data storage, international links and satellite communications. He charts how key Chinese companies compete with each other and simultaneously benefit from state support, including from the military.

Drawing on Chinese sources as well as western, he shows how Chinese leaders from the 1990s backed digital technology, recognising its core military and security applications as well as its commercial role. From the outset, they grasped how it could control a population. Where Ronald Reagan once saw the communications revolution as “the greatest force for the advancement of human freedom the world has ever seen”, Beijing took a different view.

As Jiang Zemin, one of Xi’s predecessors, told Communist party officials as early as 2000: “The basic policy concerning information networks is to actively develop them, strengthen our supervision over them, seek their advantages, avoiding their disadvantages, use them for our own purposes, and strive for a position where we always hold the initiative in the global development of information networks.” Hillman rails at the lost opportunities. But he is also, rightly, admiring of the determination of Chinese companies and of their staff. And he bemoans the divides in the US, where in 2019 a quarter of the rural population still lacked basic broadband.

Perhaps the sharpest chapter is on surveillance, where Chinese companies provide the state with the technology of repression — notably for use in Xinjiang — while selling it abroad to maximise revenues. Hillman says: “If the market for surveillance equipment were a gun show, Chinese firms would be the dealers who do not ask for background checks.”

It is a shame that Hillman’s fine prose and telling case studies are not supported by charts, maps or pictures. While everything costs money, his publishers could have done better, perhaps using some of that ubiquitous Chinese digital technology.

Hillman falters somewhat when he sets out his remedies. Faced with authoritarianism “on the march”, he calls for a US-led alliance of democracies to counter China and take non-Chinese digital technology to the world. This was important before Vladimir Putin’s invasion of Ukraine. And it is even more important now. But there is little on the economic policies that could support such a geopolitical tech drive. Curiously so, as earlier chapters have plenty on the commercial elements of Chinese tech’s rise and the west’s naive response.

This book might not satisfy those who read first and last chapters and skim the bits in between. Instead, take the time to dive deep into this well-written account of the biggest technological transformation of the 21st century.

The Digital Silk Road, China’s Quest to Wire the World and Win the Future, Jonathan Hillman, Profile Books, £20, pp351

Source: Financial Times