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Stakes up for US, China in 5G race amid trade war

The Straits Times by CLAIRE HUANG

The towering stakes in the race to develop and roll out the fifth generation of mobile communications or 5G have been amplified, especially for the United States and China as tensions between them worsen.

Possibly a multitrillion-dollar business, 5G technology has the potential to influence critical infrastructure such as planes, oil pipelines and power stations, analysts said.

It offers faster data transmission and processing speeds than 4G technology. This means it can be used for more functions and in a wider range of things in different sectors, for example, cars, ships, pacemakers, incubators, and critical infrastructure.

But the ubiquitous connectivity has raised security concerns and, in turn, politicised the 5G race.

Ms Abigail Grace, a research associate in the Asia-Pacific Security Programme at the Centre for New American Security, said: "In the face of counterintelligence concerns from the US and its allies, 5G leadership is becoming a proxy for a wider political discussion about the security of data and networks."

Mr Sean Pea, head of threat analysis for Asia-Pacific at cyber security firm Darktrace, said before 5G can be rolled out on a massive scale, there must be "major infrastructural overhaul" from switchers and routers to cellular towers. This will pose a challenge to security teams who will need to find ways of securing the new infrastructures and devices.

Improved connections to delay-sensitive equipment at airports, manufacturers and energy grids will also mean that "the surface for nation states or cyber criminals to exploit will widen and the potential damage they could cause will spill over from cyberspace to the physical world", warned Mr Pea.

For now, analysts said 5G development is still in the infant stage.

Even so, some of them noted that Chinese tech companies, specifically Huawei - the world's biggest supplier of telecommunications equipment - are currently leading the race.

Mr Andrew Kitson, head of Fitch Solutions' technology industry research, said: "If China develops the superior 5G technology, this potentially leaves critical connected infrastructures open to influence by Beijing, should China decide to engage in a cyberwar."

STARTING A WIDER DISCUSSION

In the face of counterintelligence concerns from the US and its allies, 5G leadership is becoming a proxy for a wider political discussion about the security of data and networks.

MS ABIGAIL GRACE, a research associate in the Asia-Pacific Security Programme at the Centre for New American Security, on the political impact of the 5G race.

Mr Michael Graham, media consulting leader for South-east Asia at PricewaterhouseCoopers, said Huawei simply cannot afford to lose.

Typically, network vendors use the transition of technology, from 2G to 3G for instance, as a way to rebalance the playing field, he said, adding that this is why "it is extraordinarily important" for Huawei to be at the cutting edge of the 5G race.

After the Canadian authorities arrested Ms Meng Wanzhou, chief financial officer of Huawei and daughter of the firm's founder, a Fitch report said Western players may have a chance at beating China in the high-stakes race if the US "can keep Huawei at bay for long enough".

Ms Meng was detained on Dec 1 on a US extradition request in connection with alleged violations of Iran sanctions.

Soon after, China detained two Canadians - former diplomat Michael Kovrig and businessman Michael Spavor. A third Canadian has also reportedly been detained.

Last week, media reports said spy chiefs from the "Five Eyes" - allies Australia, Canada, New Zealand, the United Kingdom and the US - agreed in a July meeting in Canada on the need to contain Huawei amid concerns that the Chinese giant could serve as a Trojan horse for China's security apparatus.

THREAT OF CYBERWAR

If China develops the superior 5G technology, this potentially leaves critical connected infrastructures open to influence by Beijing, should China decide to engage in a cyberwar.

MR ANDREW KITSON, head of Fitch Solutions' technology industry research, on the implications of China winning the race.

On Tuesday, Huawei rotating chairman Ken Hu slammed efforts to block the company's sale of 5G products, such as equipment for cellular towers and Internet networks. He challenged foreign officials to back up claims that the company poses a cyber security threat.

Ms Grace said the Huawei arrest is "distinct and separate" from the ongoing 5G race, adding that the implications of both the race and arrest are far-reaching.

"It is unlikely that Chinese firms with significant ties to the Chinese Communist Party and People's Liberation Army will be able to compete globally without significant counterintelligence concerns.

"For Ms Meng, and Chinese firms writ large, her arrest signifies the end of the US Department of Justice electing to overlook criminal activity for fear of foreign retaliation," she added.