Xi’s tech crackdown could alter China’s course

Christina Burjan | China Fellow

Image credit: Markus Winkler

“Standards are the commanding heights, discourse power, and the power to control”, wrote then deputy director of the Policy Research Office of the Zhejiang Provincial Party Committee in 2015. “The one who obtains the standards gains the world”. China’s rise to great power status has been accompanied by an effort to challenge existing norms within the liberal democratic order of the international system. From matters of territorial sovereignty to human rights, President Xi Jinping has demonstrated a determination to forge new and often contentious standards of acceptability within the international arena. One domain within which this effort has become particularly apparent is that of cyberpower and technological innovation.


The cyber domain serves as one of the critical frontiers of the ever-intensifying Beijing-Washington superpower rivalry. Whilst the United States has long maintained a distinct edge within the field of research and development (R&D), the gap is fast closing. The Chinese government has played a key part in promoting the development of its country’s now booming tech sector such that for the first time in 2019, China overtook the US for the number of global patents filed. Similarly, Shenzen city, located in the south of the Guangdong province, has attained a Silicon Valley-esque status as the world’s largest electronic market, housing the headquarters of a number of Chinese tech giants, including Huawei and Tencent.


The growing strength of China’s tech sector has the potential to dramatically influence the appearance of the global technological ecosystem writ large. Blocked off from the rest of the world via the so-called ‘Great Firewall’, China has developed its own Internet system, which utilises a host of platforms distinct from and non-compatible with their Western counterparts-the Baidu search engine in place of Google, WeChat in place of Facebook, and Alibaba in place of Amazon. As China’s technological capability and thus clout increases, it gains the leverage required in order to export this system to the rest of the world. Ultimately, companies and, by extension, nations may soon need to choose between the two.


Strengthening its own Internet system enables China to not only export its developed platforms but also, and perhaps more significantly, propagate its accompanying set of values and norms. In contrast to the liberal, transparent conceptualisation of Internet usage championed by the US and the western world more broadly, China advocates for Internet control as a tool to be utilised in the maintenance of political stability. Indeed, Beijing has already endeavoured to forge and consolidate this interpretation within the international sphere. It has, for example, provided guidance regarding Internet governance as an element of the bilateral exchanges carried out within its Digital Silk Road initiatives. Moreover, it has submitted a host of internet sovereignty documents through United Nations forums, such as an ‘International Code of Conduct for Information Security’ (2015), in an effort to sway international opinion in favour of its internet credo. Perhaps most explicitly, in 2020 the CCP laid out its ‘China Standards 2035’ plan which outlined a 15-year blueprint for its government and technology companies to set the global standards for key emerging technological fields.


It is by no means hyperbolic to argue that the strength of China’s tech sector has the potential to appreciably influence the appearance of the future. Within recent years, however, the CCP has initiated a clampdown on a number of the leading R&D behemoths, which have stood at its forefront. In July of this year, the Cyberspace Administration of China issued a ban on the ride-sharing app DiDi from all Chinese app-stores, just days after its listing on the New York Stock Exchange. The edict, charged on account of alleged violation of users’ personal data, prompted a 5.3 per cent fall in the company’s share price. In October 2020, an offshoot of Alibaba, ANT, stood to launch the world’s biggest Initial Public Offering. A week after its founder Jack Ma made incendiary comments regarding China’s banking rules, however, regulators, at the behest of the government, killed the float and proceeded to subsequently fine Ma $US2.8 billion for anti-competitive behaviour. The list continues–Tencent Holdings, Kuaishou Technology and shopping platform Meituan, have all incurred the wrath of government authorities. In total, the CCP’s efforts against private enterprise have wiped out more than $1.2 trillion in market value.


Limited communication from the Chinese government leaves the rationale behind the crackdowns unclear. However, it would seem that, for Xi, the enormous strength, popularity and wealth of these tech giants poses a manifest threat to the uncontested power of the CCP. The approach speaks to a far more orthodox socialism than that pursued by his predecessors and has the potential to significantly thwart the capacity of China’s prolific tech sector, which the government has hitherto sought to bolster. It is clear that Xi is determined to establish uncompromising standards within his domestic political front. It is somewhat ironic that this determination could in fact prove to be the Achilles heel of his attempt to do the same within the international system.


Christina Burjan is the China Fellow for Young Australians in International Affairs.