Digital Cold War

Here’s one vision of the future: In half the world, driverless cars built by Baidu and connected by Huawei’s 5G wireless networks carry passengers who shop online with Alibaba and post selfies on WeChat. In the other half, those activities are dominated by companies like Amazon, Google, Facebook, Tesla and Ericsson. On one side, the internet is tightly controlled; on the other, it’s freer. For some policy makers and academics, the tensions between the U.S. and China are pointing toward a “Cold War 2.0,” one fought for technological, rather than nuclear or ideological, dominance. It’s a prospect fraught with danger, fueled by hawks on both sides. Yet it would require so complete a dismantling of the global supply chains and networks that have underpinned China’s astounding growth in particular, that many believe any new Cold War won’t end up looking like the last.

Amid an escalating trade war, U.S. President Donald Trump’s administration has begun adding Chinese technology companies to its Entity List, which blocks foreign companies deemed a security risk from buying U.S. goods. The most notable entry was Huawei Technologies Co. The move, later relaxed, threatened to cripple China’s largest technology company and accelerate the country’s drive for technological self-sufficiency. The salvo came after months of efforts by the U.S. to persuade other countries to avoid using Huawei for new 5G networks and after Canada, acting on a U.S. request, arrested Meng Wanzhou, Huawei’s chief financial officer, on U.S. charges of violating sanctions that limit trade with Iran. The arrest is widely believed to have prompted China to detain two Canadians in retaliation. While foreign companies have long complained of difficulties operating in China, now the U.S. is proposing a new, Cold War-reminiscent export control regime to restrict the transfer of cutting-edge U.S. technologies. Trump also signed an order giving priority to research on artificial intelligence amid fears that the U.S. might fall behind in a technology with military as well as commercial significance. Meanwhile, decisions by Vietnam and Thailand to adopt tough cybersecurity laws modeled on China’s appeared to confirm a gradual division of the global internet into zones of governance.