The report argues that as the India-Australia bilateral relationship continues to grow and evolve, both governments should invest in the construction of a new India–Australia partnership on technology. The foundation for such a partnership already exists, and further investment areas of complementary interests could stimulate regional momentum in a range of key critical and emerging technology areas including in 5G, Artificial Intelligence, quantum technologies, space technologies and in critical minerals. The report contains 14 policy recommendations that will help build this new technology partnership.
Australia’s High Commissioner to India, Barry O’Farrell, joined a number of the report co-authors including Aakriti Bachhawat, Danielle Cave, Dr Rajeswari Pilla Rajagopalan and Trisha Ray to discuss the current India-Australia relationship, how it continues to evolve and expand and how the two countries can better leverage their competitive advantages in the technology sector.
This report by ASPI’s International Cyber Policy Centre and India’s Observer Research Foundation argues that as the India-Australia bilateral relationship continues to grow and evolve, both governments should invest in the construction of a new India–Australia partnership on technology.
The foundation for such a partnership already exists, and further investment areas of complementary interests could stimulate regional momentum in a range of key critical and emerging technology areas including in 5G, Artificial Intelligence, quantum technologies, space technologies and in critical minerals. The report contains 14 policy recommendations that will help build this new technology partnership.
This new report outlines what this new India-Australia technology partnership could look like. It examines the current state of the India–Australia relationship; provides an overview of current technology cooperation and where challenges and roadblocks lie; analyses each state’s competitive and complementary advantages in selected technology areas and highlights opportunities for further collaboration across the areas of 5G, Artificial Intelligence, Quantum technologies, Space technologies and in critical minerals.
https://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/12/15192535/PB39-Critical-technologies_banner.jpg4501350nathanhttp://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/10/16232551/ASPI-CMYK_SVG.svgnathan2020-10-15 06:00:002024-12-15 19:29:58Critical technologies and the Indo-Pacific: A new India-Australia partnership
China’s central bank digital currency, known as ‘DC/EP’ (Digital Currency / Electronic Payment), is rapidly progressing and, if successful, would have major international implications that have not yet been widely considered by policymakers.
DC/EP would have ramifications for governments, investors, and companies, including China’s own tech champions.
It has the potential to create the world’s largest centralised repository of financial transactions data and, while it may address some financial governance challenges, such as money laundering, it would also create unprecedented opportunities for surveillance. The initial impact of a successful DC/EP project will be primarily domestic, but little thought has been given to the longer term and global implications. DC/EP could be exported overseas via the digital wallets of Chinese tourists, students and businesspeople.
Over time, it is not far-fetched to speculate that the Chinese party-state will incentivise or even mandate that foreigners also use DC/EP for certain categories of cross-border RMB transactions as a condition of accessing the Chinese marketplace.
DC/EP intersects with China’s ambitions to shape global technological and financial standards, for example, through the promotion of RMB internationalisation and fintech standards-setting along sites of the Belt and Road Initiative (BRI). In the long term, therefore, a successful DC/EP could greatly expand the party-state’s ability to monitor and shape economic behaviour well beyond the borders of the People’s Republic of China (PRC).
What’s the solution?
To date, policymakers in the democratic world have taken a whack-a-mole approach to the security challenges presented by Chinese technologies, if they have taken action at all.
Those actions—such as those pertaining to Huawei and 5G over several years and TikTok and WeChat more recently—have been taken long after the relevant brands and technologies have entered the global marketplace and established dominant positions, and they don’t solve root problems.
The potential for DC/EP to be successful enough to have a disruptive impact on the global economic system might be far into the future, but it’s important to consider what impact DC/EP could have on the global economy. Liberal democracies should act now to deepen analysis, develop standards and coordinate approaches to the risks inherent in DC/EP, including unconstrained data collection and the creation of powerful new tools for social control and economic coercion. By acting now to build a baseline analysis of the DC/EP project, decision-makers have an opportunity to anticipate challenges and build a consistent and coherent policy framework for managing them.
Early efforts to establish and coordinate norms, rules and standards will reduce any subsequent need to resort to blunt and arbitrary measures that are economically, socially and diplomatically disruptive. Governments should also act to address existing vulnerabilities that DC/EP could exploit, for instance by introducing stricter laws on data privacy, by regulating the way that any entity can collect and use individuals’ data and by improving due diligence aimed at mitigating data security risks.
Executive summary
Globally, there’s increasing interest in the development of central bank digital currencies, driven by a wide range of policy motivations. A survey published by the Bank for International Settlements in January 2020 found that, out of 66 central banks, 80% were engaged in the research, experimentation or development of a central bank digital currency.1
The PRC is a significant actor in this space, not least because it’s years ahead of the world in research into the development of its central bank digital currency known as ‘digital currency / electronic payment’ or simply ‘DC/EP’ (see Figure 1). China’s market-Leninist approach to innovation, personal data and industry policy makes it possible to conceive that over a billion Chinese consumers could be transacting in DC/EP before a central bank digital currency becomes mainstream in any other country.
At the technocratic level, DC/EP is designed to ensure visibility and traceability of transactions and establish greater control over China’s financial system and capital accounts while displacing anonymising cryptocurrency alternatives that can’t be readily controlled. Recent reporting has also indicated that the People’s Bank of China (PBoC) aims for DC/EP to erode the dominance of Alipay and WeChat Pay in the digital payments space, levelling the playing field between the technology duopoly and commercial banks.
At the leadership level, DC/EP is being driven by the financial ‘risk management’ and ‘supervision’ imperatives of Chinese Communist Party (CCP) General Secretary Xi Jinping. DC/EP will offer no true anonymity, as the PBoC will have both complete visibility over the use of the currency, and the ability to confirm or deny any transaction. There are also no express limits on the information-access powers of the party-state’s political security or law enforcement agencies, such as the Central Commission for Discipline Inspection (CCDI), which has a keen interest in the technology. While DC/EP could enable more effective financial supervision and risk management that any government might seek to embed in a central bank digital currency, the PRC’s authoritarian system embeds political objectives within economic governance and otherwise reasonable objectives. Terms such as ‘anti-terrorist financing’, for instance, take on a different definition in the PRC that is directed at the CCP’s political opponents.
DC/EP is being developed and implemented domestically first, but could allow China to shape global standards for emerging financial technologies. It also creates opportunities for the PRC to bypass the US-led financial system, which it perceives as a threat to its security interests, potentially disrupting existing systems of global financial governance. Through DC/EP, Beijing could over time move away from the SWIFT system and bypass international sanctions.
The purpose of this policy brief is to improve baseline understanding of DC/EP’s structural mechanics and place the project in its political and bureaucratic context. The aim is to catalyse and contribute to an informed conversation about what the rollout of DC/EP may mean for China and for the world.
This policy brief is organised as follows: Section 1 is a general overview of digital currencies; Section 2 focuses on the policy drivers behind DC/EP; Section 3 examines DC/EP’s architecture based on patents in order to assess the surveillance capabilities it would embed; Section 4 describes the institutional ecosystem behind DC/EP; Section 5 looks at how DC/EP would affect domestic digital payment systems Alipay and WeChat pay; and Section 6 looks at the implications DC/EP could have for global financial governance.
Figure 1: What is DC/EP?
Source: Created by ASPI
1. Two sides of the digital-coin: freedom and control
Elise Thomas
A fundamental question at the heart of all digital currencies is one of control, but the ways in which the dynamics of control and power play out differ between different types of digital currencies.
There is a difference between private digital tokens (for example, cryptocurrencies) and central bank digital currencies (such as DC/EP). A primary goal behind many cryptocurrencies (such as bitcoin, a decentralised, anonymised blockchain-based digital token) is to evade the controls of any single actor, and in particular the control of governments.2 In this sense, the technology behind cryptocurrencies was devised as a challenge to the power of states over the finances of individuals. For a centralised, state-controlled digital currency, however, the inverse may be true. A centrally controlled digital currency could enable a level of financial surveillance, economic power and societal control that was previously impossible. Such tools present tantalising opportunities for authoritarian states, financial institutions and corporations in the absence of effective controls.
While many digital currency projects have been announced by both state and non-state actors, none has managed to attain a level of widespread adoption or to operate at scale as a medium of exchange.3
In Venezuela, the aggressive support of the Maduro government hasn’t been enough to make the nation’s ‘petro’ currency a success.4 Even the Facebook-backed Libra project—with its potential to leverage Facebook’s 2.6 billion users—has changed course towards integrating fiat currency payments into its existing platforms.5
Despite the failure to date of any digital currency to achieve mass adoption or widespread use as a medium of exchange, many central banks around the world have demonstrated an interest in the concept of developing their own digital currency. Beyond the PRC, central banks in Canada, Sweden, the Bahamas, Japan and many other countries are at different stages of research on and development of central bank digital currencies.6 They provide a range of policy justifications. The Bank of Canada, for instance, has said its research is contingency planning, and the bank doesn’t currently plan to launch a central bank digital currency. It has said that, alongside a potential decline in the use of bank notes, a key reason to potentially launch a central bank digital currency is the widespread use of alternative digital currencies, probably by private-sector entities that could ‘undermine competition in the economy as a whole because the company might use its dominant market position in one industry to control payments and competition in other industries’.7
Existing digital currencies have provoked mixed regulatory responses from states and financial institutions, and those responses have focused largely on the risks arising from cryptocurrencies (see Figure 2). There’s a tendency to approach them as speculative assets or securities, rather than as actual currencies.
Figure 2: Global regulatory framework for cryptocurrencies
Source: Created by the Law Library of Congress based on information provided in the report, Regulation of cryptocurrency around the world, online.
The goal of decentralised cryptocurrencies is to disperse power across the network and away from any one actor. Central bank digital currencies are fundamentally different. They are, as the Bank for International Settlements defines it, ‘a central bank liability, denominated in an existing unit of account, which serves both as a medium of exchange and a store of value’.8 DC/EP, for example, is a form of legal tender that’s issued and backed by a liability of the PBoC. It introduces the digital renminbi, an encrypted string that holds details about that individual bill and additional fields for currency security and tracking.
In a world increasingly driven by access to data, that granular detail about how money moves through the economy, through specific companies and industries, and through the personal accounts of individuals presents both a promise and a threat. The promise is a vastly greater understanding of how the economy operates and the ability to respond where needed for the benefit of all. The threat is the ability to consolidate power in the hands of authorities, to enable persecution and surveillance and to reshape society as the authorities want it to be. Centralised digital currencies have the potential to turn financial surveillance into a powerful tool that could be wielded by authoritarian states inside, and potentially even outside, their own borders.
2. Drivers of the PRC’s digital currency project
John Garnaut and Dr Matthew Johnson
At the leadership level, the DC/EP project has been driven by the financial ‘risk management’ and ‘supervision’ imperatives of CCP General Secretary Xi Jinping. At the technocratic level, it’s designed to ensure the visibility of all financial flows and establish greater control over China’s financial system and capital accounts while displacing anonymising cryptocurrency alternatives that can’t be readily controlled. Statements from the CCP and financial insiders indicate that a key driver of DC/EP is the party’s need for a financial architecture which exists outside the SWIFT network 9 and other US-dominated alternatives. The imperative of operating beyond the reach of US monitoring and law enforcement has come to the fore in recent months, as the US targets financial sanctions against CCP officials and entities in response to human rights and national security concerns. ‘We must make preparations to break free from dollar hegemony and gradually realise the decoupling of the RMB from the dollar,’ said Zhou Li, a former deputy minister of the International Liaison Department, in a June 2020 article.10
What problems would DC/EP solve?
PBoC official statements and documents give no clear answer to the basic question: What is the policy problem that China’s digital currency project is trying to solve? Nobody is claiming a consumer experience that’s superior to the already impressive convenience accessible through Alipay and WeChat Pay. The answer, however, becomes clear in statements emanating from higher up in the CCP organisation chart, where CCP leaders and Politburo-level organs describe a need to use technology to enhance the party-state’s visibility and control over the entire financial system. DC/EP is conceived as a supervision mechanism for preserving ‘stability’ and enhancing state control.
DC/EP fits within a vision of ‘economic work’ that Xi Jinping has developed over the past five years, which puts surveillance and supervision at the core. At the Central Economic Work Conference in December 2015, he said:
It is necessary to strengthen omni-directional supervision, standardise all types of financing behaviour, seize the opportunity to launch special programs for financial risks regulation … strengthen risk monitoring and early warning, properly handle cases of risk, and resolutely adhere to the bottom line that systemic and regional financial risk will not occur.11
Xi’s position that ‘financial risk should not occur’ is consistent with the party’s state security strategy, which prioritises pre-empting risk before it can emerge. This is embedded in the party’s state security work through the concept of ‘financial security’ (金融安全).12 Financial security means stability on the party’s terms. It calls for reforming the financial system by establishing supervision and control mechanisms, total financial governance, and strengthening China’s financial power.
At the Politburo’s collective study meeting of 23 February 2019, which focused specifically on preventing financial risks, Xi’s was quoted as stating:
It is necessary to do well in comprehensive financial industry statistics, complete an information system that reflects risk fluctuation in a timely manner, perfect information release management regulations, and complete a credit punishment mechanism. It is necessary to ‘control people, watch money, and secure the system firewall’ … Modern technological means and payment settlement mechanisms should be used to dynamically monitor online, offline, international, and domestic capital flows in a timely manner, so that all capital flows are placed within the scope of supervision of financial regulatory institutions.13
Xi’s guidance for using technology to connect finance and security has cascaded down to the fintech planning and implementation level. At every step, internally focused discussion of DC/EP has focused on supervision and centralised management. During a 30 December 2019 meeting of the PBoC Financial Technology Committee, PBoC deputy governor Fan Yifei reiterated the importance of supervising fintech innovation, ‘optimising’ the mobile payment ecosystem and ‘actively promoting data governance and accelerating the construction of a “digital central bank”’.14 At a PBoC work meeting held on 5 January 2020, participants including Governor Yi Gang and PBoC Party Committee secretary Guo Shuqing spoke of party-building at all levels of the financial system, building a ‘big supervision mechanism’, and strengthening financial statistics monitoring and analysis with specific reference to fintech and digital currency.15
Macroeconomic policy
As well as improving the scrutiny, and visibility, of international capital flows, and reducing the costs of printing and maintaining the circulation of cash, PBoC officials say the data collected through DC/EP will be used to improve macroeconomic policymaking. According to Yao Qian, who founded the Digital Currency Research Lab at the PBoC:16
Within this [digital currency] technology system, the central bank has the highest decision making and operational jurisdiction… big data analysis comes in during the process of currency issuance, monitoring, and control. Under conditions of data being appropriately stripped of identifying details, the central bank can use big data to carry out in-depth analysis of digital currency issuance, circulation and storage; understand the laws of monetary operation; and provide data support for intervention needs such as monetary policy, macro-prudential supervision, and financial stability analysis.17
Yao says the data used to inform macroeconomic policymaking will be anonymised. However, he also says the data will be used for law enforcement.18
Political discipline
The CCP’s top political organ for imposing political discipline internally, the CCP’s CCDI, is increasingly prominently involved in both the promotion and policy direction of DC/EP. The CCDI has recently promoted DC/EP’s potential to ‘solve’ the problem of terrorist financing and combat financial crimes such as bribery and embezzlement.19 However, the purpose of the CCDI is to impose party discipline through channels that exist above and outside the formal legal apparatus. The CCDI has served as Xi’s primary organisational weapon in his ongoing campaign to combat corruption, enforce ideological unity and purge the party of potential rivals.20 The involvement of the CCDI serves as a strong indicator of how the party intends to exploit the vast troves of data that DC/EP will make available to it.
Competing with the US financial-led global financial system
The party’s six-year program to develop a sovereign digital currency has been driven in part by a desire to propose currency alternatives to the US dollar (see Section 6). Recently, however, it’s been spurred by the competition from US digital currencies. China’s finance and banking officials have repeatedly expressed concern at the prospect of a supranational stablecoin, which they perceive as being tied to the US dollar. They equate US digital currencies with US dollar hegemony and say that it reinforces the need to decouple the renminbi from the US-dollar-led global financial system.21 An article by the PBoC’s China Banknote Printing and Minting Corp. Blockchain Technology Research Institute,22 published in the CCP Central Party School journal Study Times in August 2019, described DC/EP as a response to US-based digital currency Libra’s imminent “major and far-reaching effect on the global pattern of international monetary development”, and called for accelerating China’s development of digital currency and a digital currency supervision system.23 Similarly, Wang Zhongmin, former deputy chair of the China Social Security Fund Council and a former long-serving CCDI official, has said DC/EP’s progress is being benchmarked against that US effort.24 Li Lihui, former Bank of China president and head of the Blockchain Research Group of the China Internet Finance Association, has also indicated that China’s banking sector views US currencies as a danger to China’s currency and an extension of US global financial leadership and democratic values.25
Competing globally
China has a clear ambition to shape global technological and financial standards. With a new industrial policy (China Standards 2035) on the horizon, DC/EP and its related technologies are likely to be an important component in China’s push to establish a comprehensive alternative to the dollar system. The liberalisation of China’s current account is not required for export of the DC/EP technology stack to other countries. China’s ability to develop new financial technology that embeds authoritarian norms of control and surveillance may affect global standards and financial infrastructure well before the internationalisation of the renminbi is achieved.
3. DC/EP and surveillance
Dr Samantha Hoffman
DC/EP is being built to meet China’s specific needs, as defined by the party-state. In order to understand the CCP’s needs and their potential implications, it’s necessary to examine the tracking of money flow that is inherent in the DC/EP system, in conjunction with the supervision objectives those capabilities support. DC/EP’s surveillance and data collection potential doesn’t create fundamentally new forms of political or financial control but will enhance existing monitoring and surveillance capabilities.
Centralised control and visibility
DC/EP transactions are fully traceable. Yao Qian (the PBoC’s primary patent author on DC/EP) described DC/EP as having an ‘anonymous front end, real-name backend’.26 There’s an element of anonymity through a characteristic of DC/EP called ‘controlled anonymity’, but true anonymity doesn’t exist, as currency registration and traceability are built into DC/EP’s transaction process. That process, augmented by data mining and big-data analysis, provides the PBoC with the ability to have complete oversight over the use of the currency. That functionality is provided through DC/EP’s ‘three centres’ (Figure 3).
Figure 3: DC/EP’s data centres
Source: Created by ASPI
The term ‘controlled anonymity’ within the operation of DC/EP means that the PBoC has complete supervision over the digital currency but has afforded users some anonymity for their transactions and protection of their personal information from other third parties, besides PBoC. DC/EP has been designed such that, even if commercial banks and merchants were to collude, users’ purchase history couldn’t be determined by them or any other third party, except, crucially, the currency issuer.27
PBoC Deputy Governor Fan Yifei has explained that full anonymity won’t be implemented through DC/EP in order to discourage crimes such as tax evasion, terrorism financing and money laundering.28
All central banks would need to ensure that their digital currency meets anti-money-laundering and countering terrorism financing rules. Central bank digital currencies would allow for better digital records and traces, but it’s been suggested in a report by the Bank of International Settlements that such gains may be minimal because illicit activity is less likely to be conducted over a formal monetary system that’s fully traceable.29
DC/EP is designed so it can be used without the need for a bank account, but digital wallets have a grading system such that wallets that are loosely bound to a real-name account have transaction size limits. A user can attain the lowest grade of digital wallet—with the transaction limits—by registering their wallets with a mobile number only (of course, phone numbers are required to be registered to an individual’s real name in the PRC). Users can access higher grade digital wallets by linking to an ID or bank card. Through the Agricultural Bank of China, for instance, users are encouraged to upgrade their digital wallets to a ‘Level 2 digital wallet’ by registering with their name and national ID details (Figure 4).30 If a user registers in person at a counter, there are no restrictions on their digital wallet.31
Figure 4: Leaked Agriculture Bank of China DC/EP mobile application
Agricultural Bank of China’s test DC/EP mobile app provides the function to scan code to pay, transfer money, receive payment and touch phones to pay. The digital currency section allows the user to exchange digital currency, view transaction summaries, manage the digital wallet exchange and link an account to the digital currency wallet.
Source: ‘China’s central bank digital currency wallet is revealed’, Ledger Insights, online.
The integration of DC/EP into third-party applications doesn’t make users’ transactions on those applications more private, but the underlying digital currency system is designed to provide privacy from third parties (except, of course, the central bank). That being said, practicalities when implementing any payment system mean that in practice there’s little anonymity for the individual from any app, because the app will already know the user, and when transacting will need the user to identify the recipient of the funds and the transaction amount. Therefore, the implementation of DC/EP into mobile applications, such as DiDi Chuxing, BiliBili and Meituan Dianping, that are in partnership negotiations with PBoC32 doesn’t change the amount of information those apps, and by extension their linked platforms, are able to collect on the user.
Using DC/EP to enhance the party-state’s control
The PBoC’s creation of a massive repository of financial transaction data could improve both the efficiency and visibility required for the PBoC and CCDI to effectively supervise and police financial transactions. DC/EP’s political-discipline-linked policy drivers—anti-money-laundering, anti-terrorist financing and anti-tax evasion—are linked to the party-state’s ‘social governance’ process (also called ‘social management’). Social governance describes how the CCP leadership attempts to shape, manage and control all of society, including the party’s own members, through a process of co-option and coercion.33 DC/EP helps solve legitimate problems, but that problem solving also acts as a tool for enhancing control. For instance, a local PBoC official described ‘anti-money laundering’ as an ‘important means to prevent and defuse financial risks and consolidate social governance.’34 Similarly, an article by Deputy Governor of the PBoC Liu Guoqiang published in the People’s Daily said:
In recent years, the scope of anti-money laundering work has become increasingly diverse and has expanded to many areas such as anti-terrorist financing, anti-tax evasion and anti-corruption. Anti-money-laundering work has strengthening modern social governance as its goal, through guiding and requiring anti-money-laundering agencies to effectively carry out customer identification, discovering and monitoring large-value transactions and suspicious transactions, timely capturing abnormal capital flows, and enhancing the standardisation and transparency of economic and financial transactions to weave a ‘security net’ for the whole society to protect normal economic and financial activities from infringement …35
More specifically, the connection of DC/EP’s policy drivers to social management is indicative of how DC/EP would ultimately serve the party’s needs in practice. Through the PRC’s global Operation Skynet, which seeks to ‘track down fugitives suspected of economic crimes and confiscate their ill-gotten assets’, the PBoC cooperates directly with the Ministry of Public Security because of the role of the PBoC as an anti-money-laundering authority.36 Genuinely corrupt officials are certainly caught up in the campaign, but the accusation of corruption is the result of a political decision linked to power politics. Likewise, the crime of ‘terrorist financing’ is defined by the Chinese party-state’s version of ‘terrorism’, and it’s been directly linked to the PRC’s campaign against the Uyghurs in Xinjiang. For instance, in July 2020, Australian media reported on a Uyghur woman who has been arrested on charges of financing terrorism for sending money to her parents in Australia, who used it to purchase a house.37 DC/EP doesn’t create a process that didn’t already exist, but the technical ability to aggregate bulk user data in one place has the future potential to automate identification and analysis processes that at present are only partially automated; for example, to help trace money transfers through different entities at different levels.
Nor does DC/EP create objectives that didn’t already exist. Rather, its digital nature and centralised supervision facilitate the aggregation and bulk analysis of user and financial data, to more easily meet those objectives.
Future extraterritorial implications?
Under Xi Jinping, the concept of social management has expanded to specifically include ‘international social management’.38 Something to consider is the fact that Hong Kong’s new state security law criminalises separatism, subversion, terrorism, and collusion in and support for any of those activities by anyone in the world no matter where they are located.39 This means that journalists, human rights advocacy groups, researchers or anyone else accused of undermining the party-state and advocating for Hong Kong democracy could be accused of those four types of crime. By extension, anyone financing those individuals or entities (such as funding a research group) could potentially be linked to the accusations. If DC/EP is successfully rolled out and adopted, then the world would have to be prepared to contend with a PRC in possession of information that would also allow it to enforce its definitions of the activities that it’s monitoring (anti-corruption and anti-terrorism, for instance) globally, thus potentially allowing it to implement PRC standards and definitions of illegality beyond its borders with greater effectiveness.
4. The party-state ecosystem behind DC/EP
Dr Matthew Johnson
At the China Fintech Development Forum on 20 June 2020, Wang Zhongmin, the former deputy director of the China Social Security Fund Board (China’s national pension fund) and a former member of the CCP’s CCDI, announced that the back-end architecture for China’s central bank digital currency was basically complete.40 After six years of planning, investment and R&D, progress towards a cashless society had finally reached the testing stage (Figure 5, next page). The fact that this key announcement was made by a former member of the party’s political discipline inspection body, rather than a current or former official of the PBoC, demonstrates that the bureaucratic structure behind DC/EP’s development goes well beyond the central bank.
The speed with which DC/EP is being developed is partly a result of the enormous institutional power behind it. As well as the PBoC and the CCDI, the project is being shaped by a cluster of powerful regulatory and supervisory institutions that serve as the fulcrum for CCP efforts to maintain leverage over every element of the financial and economic systems.
Beyond the supervisory institutions, many of China’s biggest companies are also being called in to support. They include:
Bank of China, China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, China Postal Bank and China CITIC Bank
China Mobile, China Telecom, China Unicom, and China UnionPay
Alibaba Group affiliate Ant Group (Alipay), Tencent (WeChat Pay), Huawei Technologies and JD.com.
Figure 5: DC/EP development timeline
Source: Garnaut Global, September 2020.
PBoC leadership and innovation
The DC/EP project has been driven by the PBoC since its inception. Former PBoC Governor Zhou Xiaochuan established a digital currency research group in 2014. In March 2018, Zhou announced that the project had received approval from the State Council and now had a name—Digital Currency Electronic Payment.41
Through DC/EP, the PBoC has been swiftly transformed into a hub of party-state fintech innovation.
It has established its own technology units, such as the Digital Currency Research Institute, and harnessed a constellation of commercial enterprises and government agencies to drive investment in blockchain and fintech.42 More than 80 patents related to DC/EP have been filed with the Chinese Patent Office by research institutes connected to the PBoC.43 The standards created by these new technologies are likely to shape future development pathways for China’s cashless monetary system.
Information concerning local DC/EP pilots has been scarce, imprecise and occasionally misleading, but the overall trend it describes suggests that progress towards buildout of the user ‘front end’ is real.
Since April 2020, banks and government institutions have launched pilot distribution experiments and showcased prototype ‘digital wallets’ (apps that store payment details). The private sector has been particularly critical to building DC/EP’s scale; PBoC partners Alibaba Group and Tencent provide networks and raw data-processing power that no other state-controlled system can match (see Section 5).44
Powerful guidance
Outwardly shaped and managed by the PBoC, China’s DC/EP project is also guided by the top echelons of the CCP leadership. The PBoC itself isn’t independent but is one of several interconnected institutions, the function of which is, collectively, to prevent systemic risk through total control over China’s financial economy.45 The Financial Stability and Development Commission, chaired by Xi Jinping’s trusted economic adviser Liu He, sits at the apex of this financial regulatory cluster. The CCDI, the party’s extrajudicial discipline enforcer, encircles both, ensuring that regulatory officials adhere politically to Xi’s authority.46
Managing corruption: the Central Commission for Discipline Inspection
The CCDI sits several bureaucratic rungs above the PBoC and hasn’t featured in mainstream or industry reporting on DC/EP. Analysis of party texts and structures, however, indicates that the CCDI is emerging as one of the key patrons and potential customers of the DC/EP project. An ‘authoritative explainer’ on DC/EP, aired by national news broadcaster CCTV in June 2020, even explained that the CCDI would use digital currency as a ‘booster in managing corruption’.47
CCDI organisations are embedded directly within the PBoC itself, which is significant because it illustrates the party’s growing control over the central bank as well as other systemically important financial institutions.48 The CCDI is one of the party’s four core departments. It’s answerable directly to the Politburo Standing Committee through its Secretary, Zhao Leji, who’s the sixth-ranked leader in the Party (Figure 6). Three of Zhao’s deputies sit in the Central Committee. Compared to the CCDI, the PBoC is politically a relatively junior organisation. Its Governor, Yi Gang, isn’t counted among the 205 members of the Central Committee.49
Figure 6: DC/EP’s political and commercial ecosystem
Source: Garnaut Global, June 2020.
Coordinating security: the Financial Stability and Development Committee
In July 2017, Xi Jinping moved to integrate financial system regulation with the Party’s political, security, and legal organs by creating a new super agency called the Financial Stability and Development Committee (FSDC).50 Xi tapped Vice Premier Liu He to chair the committee, with Premier Li Keqiang as his deputy.51 The FSDC now serves as China’s main financial regulatory body.52
It also serves as the institutional flywheel that connects the finance system to key security organs.
According to state-controlled economic news media, the FSDC has special ‘planning and coordination’ arrangements with the party-state’s core security bodies, including the CCDI, the Propaganda Department, the Office of the Commission for Internet Security and Informatisation, the Ministry of Public Security, the Ministry of Justice and the Supreme People’s Court.53 The FSDC also oversees local financial coordination and regulation through local branches of the Banking and Insurance Regulatory Commission, the Securities Regulatory Commission and the Foreign Exchange Bureau.54 The Office of the FSDC is located within the PBoC and is directed by PBoC Governor Yi Gang, illustrating the ‘deputy’ function that the PBoC plays in implementing FSDC policy.55
5. The role of WeChat Pay and Alipay in DC/EP
Fergus Ryan and Alexandra Pascoe
China’s mobile payments industry has seen explosive growth over the past decade as the country’s two most widely used mobile payment services, Alipay and WeChat Pay, have garnered more than 890 million users.56 The two platforms have driven a shift away from cash in the country’s economy— an effort that DC/EP is expected to continue and complete.
In 2016, China’s mobile payments hit US$5.5 trillion, or roughly 50 times the size of America’s $112 billion market, according to consulting firm iResearch.57 The following year, that figure more than doubled: transactions made on the two third-party payment institutions (TPPIs) totalled more than US$17 trillion.58 Using QR codes and digital wallets, the companies enabled consumers to jump directly from cash to mobile payments. That saw users leapfrog the nascent and cumbersome debit and credit card systems established by the commercial banking sector. Collectively, the two TPPIs hold more than 90% of the market. Alipay has over 50% market share, and WeChat Pay almost 40%.59 Ninety per cent of people in China’s biggest cities use those payment platforms as their primary payment method; each platform boasts more than 600 million monthly active users.60
Beijing’s policy towards the TPPIs was marked by early optimism about the ability of the companies to break down the control of the banking system by the Big Four state-owned commercial banks.
The aim was to increase competition and innovation in the financial sector and drive economic activity by opening up additional sources of lending for Chinese small and medium-sized enterprises.
The disruption and innovation brought about by Alibaba and Tencent were actively encouraged and coupled with favourable government policies and protection from international competition.
However, Alipay’s and WeChat Pay’s rapid growth and increasing level of dominance have caused the overt encouragement of the fintech sector and regulatory permissiveness to increasingly shift to ambivalence and moves to enhance oversight over the payment systems.
In 2010, the PBoC enacted regulations that meant that foreign-funded third-party operators would need State Council approval to operate in the Chinese market, and under different rules from those governing domestic operators. That ruling prompted Alibaba founder Jack Ma, in a highly controversial decision, to secretly spin off the online payment service Alipay from Alibaba Group, which foreign operators Yahoo and Softbank have significant stakes in, to a private firm he controlled.61
In a text-message exchange with Hu Shuli, the editor of business magazine Caixin, Ma sought to explain his decision to spin off the company without the go-ahead from Yahoo and Softbank by saying the decision involved ‘more than just commercial interests’ and that there were national security implications to Alipay’s ownership structure. ‘The market economy tells us to steer clear of politics.
But if I ruin Alipay, I may face prison in addition to bankruptcy,’ Ma texted Hu.62 The spun-off firm was later renamed Ant Financial and now operates Alipay.
Like its rival, Tencent, Alibaba and Ant Financial both have CCP committees as part of their governance structures.63 The CCP has a direct line into both companies, but policymakers are increasingly concerned about the inordinate power of the duopoly. There are also concerns over the speed with which their third-party payment ecosystems have taken over systemically important functions of the country’s economy.
Driven by concerns over the growing size of money market funds facilitated by Alipay and WeChat Pay (Yu’e bao 余额宝 and Lingqiantong 零钱通), as part of its ‘deleveraging campaign’ in 2017,64 the PBoC expanded its regulatory oversight of the TPPIs, ordering the firms to move funds out of commercial banks and into PBoC accounts. In 2019, that process was completed when the central bank took over all deposits of platforms such as Alipay and WeChat Pay.65 This has helped to address risks associated with shadow banking, while also moving valuable user transaction data into the hands of the PBoC.
Most recently, it was reported that the State Council is considering whether to launch an antitrust investigation into Alipay and WeChat Pay. The PBoC recommended the probe earlier this year, given the platforms’ dominance and attempts to foster greater competition in the payments space by assisting smaller companies to enter the market.66
Co-opting Alipay and WeChat Pay
DC/EP will be made available through a two-tier system. The central bank plans to issue DC/EP to both commercial banks and TPPIs, and then the banks and TPPIs would distribute it to consumers. In this case, the current financial structure doesn’t change with DC/EP, only the mechanism through which commercial banks and TPPIs get their money.
The PBoC could have dealt a serious blow to Alipay and WeChat Pay by excluding them from the second tier of the structure. However, given the user base of the two payment platforms, that would severely limit the take-up and use of the digital currency. The PBoC appears to be bringing Alipay and WeChat Pay into the DC/EP structure on its own terms, allowing it to continue its quest to rein in the dominance of the firms while also using their user base and technology.
Patent applications from both Alibaba and Tencent appear to indicate the role that these platforms will play in the issuance of DC/EP. Between 21 February and 17 March 2020, Alibaba filed five patents on ‘digital currency delivery and transaction account functions, supervision and handling of illegal accounts, digital currency wallets, [and] support for anonymous transactions’.67 On 24 April, it was also reported that Tencent had filed a patent related to the transaction of digital assets, although the report didn’t directly refer to the PBoC’s digital currency, as appeared in Alipay’s patents.68
That being said, how exactly the PBoC and TPPIs will cooperate remains unclear. How those institutions distribute DC/EP will be the subject of a ‘horse race’ between the commercial banks and the TPPIs, the eventual frontrunner of which will ‘take the whole market’, the head of the PBoC Digital Currency Research Institute, Mu Changchun, told an audience in Hong Kong in 2019.69 That echoed comments made in 2018 by PBoC Deputy Governor Fan Yifei, who wrote that the central bank could leverage market forces to optimise related systems through close cooperation with commercial banks and other organisations, without imposing any prescriptive technology path in advance. This would facilitate resource integration, synergistic collaborations and innovation, as well.70
Mu Changchun has trumpeted DC/EP as having a superior legal and security status to WeChat Pay and Alipay due to its state backing.71 He has said that, should Alipay or WeChat Pay go bankrupt, there’s currently no way to assure the money held in those digital wallets. However, if the wallets held PBoC-backed digital currency, those funds could be guaranteed by the central bank.
The alleged superior security of DC/EP is perhaps more a rhetorical point from Mu, rather than reflecting any real possibility of Ant Financial or Tencent going bust. Furthermore, regulation changes requiring Alipay and WeChat Pay deposits to be moved into PBoC accounts mean that the PBoC has already clawed back a fair degree of oversight and control over funds held by those platforms.
Mu’s statements, along with references to how DC/EP will allow for anonymous transactions, taking user transaction data out of the hands of ‘private’ firms and into the hands of the central bank, appear to be aimed at sowing distrust in the non-state platforms and motivating trust in the PBoC’s digital currency in an attempt to drive take-up.
Recent reporting citing sources ‘familiar with the thinking’ of the PBoC states that DC/EP is aimed at eroding the dominance of Alipay and WeChat Pay in the digital payments space and providing a more level playing field between the two payment giants and the commercial banks.72 While DC/EP certainly presents an opportunity for greater competition—with commercial banks advancing their own user-facing offerings of digital wallets and QR codes—the current market share of Alipay and WeChat Pay means that it’s unlikely that the commercial banks will be able to quickly gain a stronger foothold in the payments space. It’s true that the PBoC has tried to rein in the dominance of Alipay and WeChat Pay, but it’s likely that the two platforms will play some role in DC/EP’s success.
According to PBoC statements, the transaction processing requirement for DC/EP is an average of 300,000 transactions per second (tps).73 While Tencent’s fintech division processes an average of 1 billion transactions per day, on Singles Day in 2019, Alibaba reportedly demonstrated its ability to process 544,000 tps.74 It’s unclear how closely Alibaba is working with the PBoC on DC/EP and, although it could be called on for assistance if asked, the PBoC would be building its own back-end architecture, meaning that it couldn’t simply replicate Alibaba’s system. Despite that, the raw data-processing power of Alibaba, and to a lesser degree of Tencent, is unmatched by any state-controlled system. Without an ability to at least match Alibaba’s capabilities in this area, widespread voluntary take-up of DC/EP will be difficult to achieve.
Future adoption
Given the ubiquity of Alipay and WeChat Pay in China, implementing digital wallets via the commercial banks alone would not readily result in the wide-scale adoption and use of DC/EP that the PBoC hopes for.
There’s speculation that the PBoC will provide incentives to drive take-up in the use of digital currency, for instance by providing salaries and travel subsidies in the digital currency, or not charging merchants a fee to accept DC/EP. Those incentives could be coupled with further measures to limit the dominance of Alipay and WeChat Pay and to boost the competitiveness of the commercial banks.
But, since most people in China’s biggest cities use either WeChat Pay or Alipay as their main payment method, the PBoC needs the user base of those platforms to achieve scale. The way in which the payment platforms are integrated into Chinese people’s daily lives means that Alipay and WeChat users are unlikely to quickly switch to a different wallet that, from a user’s perspective, barely differs from what they already use.75 As indicated by patent applications, the two payment platforms appear to have scoped out a role within the DC/EP system in order to maintain their user base and position in the payments space.
Further, Alipay and WeChat Pay are working hard to stay ahead of a QR-code-based DC/EP, exploring the development of payments systems based on facial-recognition technology.76
Thus, DC/EP can’t be read simply as an attempt to wind back the dominance of Alipay and WeChat Pay.
Beijing is likely to be working to strike a balance between using the technology and user base of the platforms while encouraging greater involvement from other players in the payments space.
6. DC/EP’s potential internationalisation and the global economy
The Chinese Government has stated that one driver behind its attempts to internationalise the renminbi is to create a substantial rival to the US dollar. From Beijing’s perspective, a US-led global economy is a potential threat to the Chinese party-state’s stability, because the US could leverage economic tools that could act as a catalyst for disrupting Chinese economic and social stability.77
Recent developments in Hong Kong illustrate why the party-state takes that threat seriously. In reaction to the Hong Kong State Security Law enacted on 1 July, the US and EU have both threatened sanctions on foreign financial institutions that knowingly do business with Chinese officials involved in stifling the protests.78 If taken to extremes, such sanctions could damage the Chinese economy and stifle development. Of course, Beijing has also suggested that any ‘rash’ US sanctions ultimately could damage US companies as well, including via possible Chinese retaliation.79
If DC/EP supports the PRC’s efforts to gain a stronger foothold in the international economic system, it could also help the PRC disrupt the existing system of global economic governance, which among other things could reduce the impact of international sanctions.
Renminbi internationalisation?
Since the 2009 global financial crisis, the internationalisation of the renminbi has been a significant PBoC objective. China’s 13th Five-Year Plan (2016–2020) clearly outlined the ambition, stating that China ‘will take systematic steps to realize RMB capital account convertibility, making the RMB more convertible and freely usable, so as to steadily promote RMB’.80 Its efforts to achieve that goal to date have included signing bilateral currency swap agreements,81 agreeing to add the currency to the International Monetary Fund’s Special Drawing Rights basket of currencies82 and investing heavily in renminbi-based regional projects.83
The nature of the Chinese economy and political system, however, undermines those objectives. Most internationalised currencies are associated with relatively open economies. In maintaining a ‘closed’ capital account84 and tight controls on the economy, Beijing inhibits its own internationalisation attempts. The renminbi doesn’t compete seriously on the international stage, even compared to its regional competitors, such as the Japanese yen. SWIFT’s June 2020 RMB Tracker statistics list the renminbi as the sixth most active currency for global payments by value, following the dollar, euro, pound, yen, and Swiss franc.
That being said, DC/EP could allow China to further define the global standards for emerging financial technologies, giving Beijing space to shape international standards (particularly as opposed to rival stablecoins). As a result, DC/EP may serve as a model for digitising a fiat currency—which would create a new form of power for Beijing. As a new technology, DC/EP’s incorporation into Chinese apps and cross-border trade might not have major implications initially, but could enable the PRC to push other countries’ financial technology out of developing markets.
Through DC/EP, payments would be settled as soon as possession of the digital currency changes, as opposed to the current system, which relies on intermediaries. Most current transaction methods are technically reversible for a period of time, depending on the speed and communication of the banks involved. This change would have significant implications for internationalisation via Chinese regional initiatives, particularly the BRI. If Beijing moves BRI payments to DC/EP, it could create DC/EP-based automated payments across more than 60 countries.85 Requiring DC/EP in payments doesn’t necessarily translate to those countries choosing to hold DC/EP or transact in it in any meaningful way, but it would provide an incentive for them to increase renminbi transactions where they might otherwise be reluctant. In any case, this process would be likely to take years. Even the integration of DC/EP into China’s financial activities wouldn’t necessarily lead to other countries choosing to either keep or spend DC/EP on their own.
An alternative to SWIFT?
If DC/EP succeeds, it could help reduce the PRC’s reliance on the SWIFT system. SWIFT is viewed as a secure financial messaging service that plays a vital role in connecting the international banking system.
Although the system itself has some flaws,86 it’s the mechanism by which financial institutions are able to communicate with each other, sending and receiving information about transactions in order to complete transfers and settlements. SWIFT acts as an intermediary for most global bank transactions, and the US has a capability to access those transactions for national security concerns.
For example, in 2006, the US Department of the Treasury went through SWIFT’s database to identify transactions tied to al-Qaeda, instructing SWIFT to block terror-related transactions.87 If SWIFT declines to be involved in a transaction, the transfer won’t go through. Naturally, this perceived level of oversight and control is concerning to many other global actors, especially those under sanctions.
Global reliance on SWIFT is one of the most crucial pieces of the financial system, and its impact is one that China doesn’t underestimate. In 2019, Huang Qifan, Deputy Director of the China Center for International Economic Exchange, stated that SWIFT is ‘gradually becoming [a] financial instrument for the United States to exercise global hegemony and exercise long-arm jurisdiction,’ citing examples of the US using the SWIFT database to blacklist and freeze transactions from Iranian banks over terrorism financing allegations, as well as the US’s 2014 threats to exclude Russia from the system altogether.88
The threats alone had an intensely negative impact on the Russian economy and depreciated the rouble.89
According to PBoC official Li Wei, through the BRI, China seeks to establish a ‘financial standard exchange cooperation and build a “hard mechanism” of … financial infrastructure cooperation’.90
To date, Beijing’s attempts to create an alternative to SWIFT have resulted in the introduction of the Cross-Border Inter-Bank Payments System (CIPS) in 2015. In 2018, CIPS handled approximately US$3.7 trillion.91 SWIFT, meanwhile, facilitated the transfer of US$40 trillion in 2018 and US$77 trillion in 2019.92
Bypassing sanctions?
The creation of an effective alternative to SWIFT would create an opportunity for Beijing to bypass international sanctions. In fact, CIPS has already been used by countries exposed to US sanctions, such as Turkey and Russia, to avoid SWIFT.93 If foreign businesses are able to bypass US banks and US currency, then the impact of US sanctions would be significantly reduced. While CIPS aids efforts to bypass US banks and currency, DC/EP could be implemented as a key part of the settlement system or as an alternative transaction method functioning in parallel to CIPS. It’s worth noting, however, that CIPS can carry any currency, while DC/EP will be limited to the renminbi.
DC/EP offers the opportunity to move away from the SWIFT system, as it appears DC/EP would have the same messaging capabilities that SWIFT and CIPS provide, but it would remove the need for intermediaries. DC/EP, therefore, could serve as a new messaging system that allows sanctions evasion, as an article published in Chinese state media argued:
[a] sovereign digital currency provides a functional alternative to the dollar settlement system and blunts the impact of any sanctions or threats of exclusion both at a country and company level. It may also facilitate integration into globally traded currency markets with a reduced risk of politically inspired disruption.94
Other state actors, such as North Korea, may also be attracted to the option to use DC/EP to evade sanctions. North Korea is widely understood as a proficient and successful cyber actor with an interest in cryptocurrencies and blockchain.95 Given Pyongyang’s interest in cryptocurrencies and increased holdings in various coins, any possibility of China allowing transactions between cryptocurrencies, such as bitcoin or Monero, and DC/EP could prove to be extremely beneficial to North Korea, and any other sanctioned actors. The most difficult part of sanctions evasion using cryptocurrency is the exfiltration point into fiat (or other digital) currency—DC/EP could offer a solution to that problem.
While, initially, given Beijing’s oversight, engaging with DC/EP might not be the ideal way past SWIFT, tightened sanctions and limited options could lead various sanctioned countries to view Beijing as their best path forward.
7. Recommendations
DC/EP’s rollout is likely to have notable ramifications for governments, investors and companies, including China’s own tech champions. More analysis is needed before prescriptive policy solutions can be developed for the political and financial oversight challenges DC/EP could create. At the same time, it’s important to act in anticipation of key shifts in global financial regulation and advances in financial technology, so that governments don’t end up trying to reverse course when it’s too late to deal with the systemic risks DC/EP could create.
We suggest the following:
If DC/EP achieves global take-up, the political features it embeds won’t be possible to effectively mitigate or regulate. Therefore, governments must be prepared to mitigate the political risks by investing in research into and the development of credible alternatives to DC/EP for all key highly traded currencies.
Decision-makers in liberal democracies must develop a clear strategy for detecting flaws in and improving the existing system for global financial governance and work to improve international coordination among each other to achieve those strategic outcomes.
Liberal democracies should establish domestic laws on data privacy and protection. They should regulate the ways that any entity can collect and use individuals’ data, improve oversight and improve due diligence aimed at mitigating data security risks.
Acknowledgements
The authors would like to thank several anonymous peer reviewers, as well as Michael Shoebridge, Fergus Hanson, Danielle Cave, James Aitken, Bill Bishop, Stephen Joske and Greg Walton for their helpful feedback.
This independent research was partly supported by a US$50,000 grant from Facebook, Inc. Additional research costs were covered from ICPC’s mixed revenue base. The work of ASPI ICPC would not be possible without the support of our partners and sponsors across governments, industry and civil society.
What is ASPI?
The Australian Strategic Policy Institute was formed in 2001 as an independent, non‑partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices. ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally. ASPI’s sources of funding are identified in our Annual Report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements.
ASPI International Cyber Policy Centre
ASPI’s International Cyber Policy Centre (ICPC) is a leading voice in global debates on cyber, emerging and critical technologies, issues related to information and foreign interference and focuses on the impact these issues have on broader strategic policy. The centre has a growing mixture of expertise and skills with teams of researchers who concentrate on policy, technical analysis, information operations and disinformation, critical and emerging technologies, cyber capacity building, satellite analysis, surveillance and China-related issues.
The ICPC informs public debate in the Indo-Pacific region and supports public policy development by producing original, empirical, data-driven research. The ICPC enriches regional debates by collaborating with research institutes from around the world and by bringing leading global experts to Australia, including through fellowships. To develop capability in Australia and across the Indo-Pacific region, the ICPC has a capacity building team that conducts workshops, training programs and large-scale exercises for the public and private sectors.
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This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.
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First published October 2020.
ISSN 2209-9689 (online), ISSN 2209-9670 (print)
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Funding statement: Funding for this report was partly provided by Facebook Inc.
Codruta Boar, Henry Holden, Amber Wadsworth, ‘Impending arrival—a sequel to the survey on central bank digital currency’, Bank for International Settlements, January 2020, online; see also Raphael Auer, Giulio Cornelli, Jon Frost, ‘Rise of the central bank digital currencies: drivers, approaches and technologies’, Bank for International Settlements, August 2020, online. ↩︎
https://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2025/03/27174917/PB40-Digital_Currency-static-banner.jpg4501350nathanhttp://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/10/16232551/ASPI-CMYK_SVG.svgnathan2020-10-14 06:00:002025-03-27 17:50:58The flipside of China’s central bank digital currency
The rapid escalation in the long-running conflict between Azerbaijan and Armenia which took place in late September 2020 has been shadowed by a battle across social media for control of the international narrative about the conflict. On Twitter, large numbers of accounts supporting both sides have been wading in on politicised hashtags linked to the conflict. Our findings indicate large-scale coordinated activity. While much of this behaviour is likely to be authentic, our analysis has also found a significant amount of suspicious and potentially inauthentic behaviour.
The goal of this research piece is to observe and document some of the early dynamics of the information battle playing out in parallel to the conflict on the ground and create a basis for further, more comprehensive research. This report is in no way intended to undermine the legitimacy of authentic social media conversations and debate taking place on all sides of the conflict.
https://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/12/15222206/quickTake-shadowWar-banner.jpg4501350nathanhttp://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/10/16232551/ASPI-CMYK_SVG.svgnathan2020-10-08 06:00:002024-12-15 22:24:39Snapshot of a shadow war
The Australian Strategic Policy Institute has been awarded a competitive grant from the Department of Defence to support a project which will look at strategies to provide more STEM career pathways to the Indigenous Australian community in Northern Australia.
This project will build on previous work ASPI’s International Cyber Policy Centre has done in 2019-20 including the Indigi-Cyber Camps for Aboriginal and Torres Strait Islander kids and ongoing research work.
This new multi-year project – which focuses on information and communications technology and cyber-security – will establish a best practice reference model comprising a framework and strategy for creating and sustaining workforce pathways for Indigenous Australians.
Across the country there is an increasingly vibrant Indigenous innovation sector and initiatives that walk hand-in-hand with Aboriginal and Torres Strait Islander knowledge keepers and communities. Indigenous people across Australia need to be resourced and supported to learn from each other, share knowledge and build sustainable activities and enterprises.
Up-skilling this community will boost the economy of northern Australia, service the shortage of STEM experts, strengthen the national security ecosystem of Australia’s north, and sponsor a more inclusive and diverse community culture.
Project co-lead Dion Devow from ASPI’s International Cyber Policy Centre said “Our ambition is to look 30 years ahead and consider the paths forward for Indigenous Australians into IT and cyber. We want to learn from the examples of Indigenous excellence in this area and expand education and employment opportunities. We are driven by the importance of forming shared values with communities, collaborating, celebrating and incorporating Indigenous Australian peoples and culture into IT and understanding the way this intersects with tech innovation.”
Please contact Dr. Huon Curtis if you would like to find out more about this new project huoncurtis@aspi.org.au.
https://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/04/17135358/v2Artboard-1-copy-scaled.jpg8532560markohttp://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/10/16232551/ASPI-CMYK_SVG.svgmarko2020-09-29 10:55:002024-11-13 10:57:44STEM career pathways for the Indigenous Australian community
ASPI’s International Cyber Policy Centre has launched the Xinjiang Data Project, along with two new major pieces of research, on Xinijang’s detention system, and on the destruction of mosques and significant Uyghur cultural sites in the region. One of the most effective research methods in both of these projects was the collection and analysis of satellite imagery, including the examination of night-time satellite imagery from Xinjiang.
Since 2017, a government crackdown in the far-western region of China known as the Xinjiang Uyghur Autonomous Region has seen over a million Uyghurs and other Turkic and Muslim minorities extrajudicially detained in a vast network of purpose-built detention facilities. There have also been media reports about incidents of mosques demolished or repurposed, along with other Uyghur cultural sites.
Credible data on the extent of Xinjiang’s post-2017 detention system is scarce. But researchers at ASPI’s International Cyber Policy Centre have now located, mapped and analysed 380 suspected detention facilities in Xinjiang, making it the most comprehensive data on Xinjiang’s detention system in the world. This new database highlights ‘re-education’ camps, detention centres, and prisons which have been newly built or expanded since 2017, and we believe it covers most such detention facilities.
The findings of this research contradicts Chinese officials’ claims that all “re-education camp” detainees had ‘graduated’ in December 2019. It presents satellite imagery evidence that shows newly constructed detention facilities, along with growth in several existing facilities, that has occurred across 2019 and 2020.
The second key piece of research on our new website is a project investigating the rate of cultural destruction in Xinjiang. This research estimates 35% of mosques have been demolished; and a further 30% have been damaged in some way, usually by the removal of Islamic or Arabic architectural features such as domes, minarets or gatehouses. We estimate approximately 16,000 mosques have been damaged or totally destroyed throughout Xinjiang (65% of the total). The majority of demolished sites remain as empty lots.
Further, 30% of important Islamic cultural sites (sacred shrines, cemeteries and pilgrimage routes) across southern Xinjiang have been demolished since 2017, with an additional 28% damaged or altered in some way. This includes the complete demolition of the ancient pilgrimage town of Ordam Mazar.
The Chinese Government has embarked on a systematic and intentional campaign to rewrite the cultural heritage of the Xinjiang Uyghur Autonomous Region (XUAR). It’s seeking to erode and redefine the culture of the Uyghurs and other Turkic-speaking communities—stripping away any Islamic, transnational or autonomous elements—in order to render those indigenous cultural traditions subservient to the ‘Chinese nation’.
Using satellite imagery, we estimate that approximately 16,000 mosques in Xinjiang (65% of the total) have been destroyed or damaged as a result of government policies, mostly since 2017. An estimated 8,500 have been demolished outright, and, for the most part, the land on which those razed mosques once sat remains vacant. A further 30% of important Islamic sacred sites (shrines, cemeteries and pilgrimage routes, including many protected under Chinese law) have been demolished across Xinjiang, mostly since 2017, and an additional 28% have been damaged or altered in some way.
Alongside other coercive efforts to re-engineer Uyghur social and cultural life by transforming or eliminating Uyghurs’ language, music, homes and even diets,1 the Chinese Government’s policies are actively erasing and altering key elements of their tangible cultural heritage.
Many international organisations and foreign governments have turned a blind eye. The UN Educational, Scientific and Cultural Organization (UNESCO) and the International Council on Monuments and Sites (ICOMOS) have remained silent in the face of mounting evidence of cultural destruction in Xinjiang. Muslim-majority countries, in particular, have failed to challenge the Chinese Government over its efforts to domesticate, sinicise and separate Uyghur culture from the wider Islamic world.
What’s the solution?
The Chinese Government must abide by Article 4 of China’s Constitution and allow the indigenous communities of Xinjiang to preserve their own cultural heritage and uphold the freedom of religious belief outlined in Article 36. It must abide by the autonomous rights of minority communities to protect their own cultural heritage under the 1984 Law on Regional Ethnic Autonomy.
UNESCO and ICOMOS should immediately investigate the state of Uyghur and Islamic cultural heritage in Xinjiang and, if the Chinese Government is found to be in violation of the spirit of both organisations, it should be appropriately sanctioned.
Governments throughout the world must speak out and pressure the Chinese Government to end its campaign of cultural erasure in Xinjiang, and consider sanctions or even the boycotting of major cultural events held in China, including sporting events such as the 2022 Winter Olympic Games.
The UN must act on the September 2020 recommendation by a global coalition of 321 civil society groups from 60 countries to urgently create an independent international mechanism to address the Chinese Government’s human rights violations, including in Xinjiang.2
Executive summary
Under President Xi Jinping, the Chinese Communist Party (CCP) has adopted a more interventionist approach to nation building along China’s ethnic periphery. Indigenous non-Han cultures, which are considered backward, uncivilised and now potentially dangerous by CCP leaders, must yield to the Han normative centre in the name of an ostensibly unmarked ‘Chinese’ (中华) culture.3
The deliberate erasure of tangible elements of indigenous Uyghur and Islamic culture in Xinjiang appears to be a centrally driven yet locally implemented policy, the ultimate aim of which is the ‘sinicisation’ (中国化) of indigenous cultures, and ultimately, the complete ‘transformation’ (转化) of the Uyghur community’s thoughts and behaviour.
In work for this report, we sought to quantify the extent of the erasure and alteration of tangible indigenous cultural heritage in Xinjiang through the creation of two new datasets recording:
demolition of or damage to mosques; and
demolition of or damage to important religious–cultural sites, including shrines (mazars), cemeteries and pilgrimage routes.
With both the datasets, we sought to compare the situation before and after early 2017, when the Chinese Government embarked on its new campaign of repression and ‘re-education’ across Xinjiang.
Media and non-government organisation reports have unearthed individual examples of the deliberate destruction of mosques and culturally significant sites in recent years.4 Our analysis found that such destruction is likely to be more widespread than reported, and that an estimated one in three mosques in Xinjiang has been demolished, mostly since 2017.
This equates to roughly 8,450 mosques (±4%) destroyed across Xinjiang, and a further estimated 7,550 mosques (±3.95%) have been damaged or ‘rectified’ to remove Islamic-style architecture and symbols. Cultural destruction often masquerades as restoration or renovation work in Xinjiang. Despite repeated claims that Xinjiang has more than 24,000 mosques5 and that the Chinese Government is ‘committed to protecting its citizens’ freedom of religious belief while respecting and protecting religious cultures’,6 we estimate that there are currently fewer than 15,500 mosques in Xinjiang (including more than 7,500 that have been damaged to some extent). This is the lowest number since the Cultural Revolution, when fewer than 3,000 mosques remained (Figure 1).7
Figure 1: The number of mosques in the Xinjiang Uyghur Autonomous Region since its founding
Note: The estimates from our research are included as the 2020 datapoint. Mosques that have been damaged but not destroyed are shown in orange. Source: Li Xiaoxia (李晓霞), ‘Analysis on the quantity change and management policy of Xinjiang mosques’ (新疆清真寺的数量变化及管理政策分析), Sociology of Ethnicity (民族社会学研究通讯), vol. 164 (2018), p. 40, online; and ASPI analysis.
Mosques across Xinjiang were rebuilt following the Cultural Revolution, and some were significantly renovated between 2012 and 2016, including by the construction of Arab- and Islamic-style domes and minarets. However, immediately after, beginning in 2016, government authorities embarked on a systematic campaign to ‘rectify’ and in many cases outright demolish mosques.
Areas visited by large numbers of tourists are an exception to this trend in the rest of Xinjiang: in the regional capital, Urumqi, and in the city of Kashgar, almost all mosques remain structurally intact.
Most of the sites where mosques were demolished haven’t been rebuilt or repurposed and remain vacant. We present three case studies (on the renovation and demolition of mosques in northern Xinjiang, the land use of demolished mosques, and the destruction of the Grand Mosque of Kargilik) to highlight the impacts of this process of erasure.
Besides mosques, Chinese Government authorities have also desecrated important sacred shrines, cemeteries and pilgrimage sites. Our data and analysis suggest that 30% of those sacred sites have been demolished, mostly since 2017. An additional 27.8% have been damaged in some way. In total, 17.4% of sites protected under Chinese law have been destroyed, and 61.8% of unprotected sites have been damaged or destroyed. We present two case studies (the destruction of the ancient pilgrimage route of Ordam Mazar and of Aksu’s sacred cemeteries) to show in detail the impact on sacred spaces.
Methodology
The Chinese Government’s 2004 Economic Census identified more than 72,000 officially registered religious sites across China, including more than 24,000 mosques in Xinjiang.8 Given the lack of access to Xinjiang and the sheer number of sites, we used satellite imagery to build a new dataset of pre-2017 mosques and sacred sites.
We found the precise coordinates of more than 900 sites before the 2017 crackdown, including 533 mosques and 382 shrines and other sacred sites.
Each of those sites was then cross-referenced against recent (2019–2020) satellite imagery and categorised as destroyed, significantly damaged, slightly damaged or undamaged. In most cases, significant damage relates to part of the site being destroyed or to Islamic-style architecture (such as domes and minarets) being removed.
We then used a sample-based methodology to make statistically robust estimates of the region-wide rates of destruction by cross-referencing it to data from the 2004 Economic Census, by prefecture.9
For prefectures for which we had a sample of more than 2.5% of mosques, the prefecture-wide destruction and damage rates were extrapolated directly from the observed sites in our sample.
The rate of destruction in prefectures that were undersampled (having less than 2.5% of all mosques located) was estimated by averaging the observed prefectural rate of destruction and the region-wide rate (excluding the regional capital, Urumqi). We estimated the total number of mosques destroyed and damaged by combining those prefectural-level extrapolations.
This analysis is only able to determine demolition or other visible structural changes to the sites. Based on our sample, the razing of mosques appears to have been carried out broadly across Xinjiang, and neither urban nor rural mosques were more likely to be damaged or demolished.
Urumqi and the tourist city of Kashgar are outliers where most mosque buildings remain visibly intact.
Those cities are frequented by domestic and international visitors and serve to conceal the broader destruction of Uyghur culture while curating the image of Xinjiang as a site of ‘cultural integration’ and ‘inter-ethnic mingling’.10
For more details on how our calculations were done and how to access the raw data, see the appendix to this report.
Results and case studies
Mosques
In total, we located and analysed a sample of 533 mosques across Xinjiang, including 129 from Urumqi. Of those mosques, 170 were destroyed (31.9%), 175 were damaged (32.8%) and 188 remained undamaged (35.3%). Urumqi has only 1.4% of Xinjiang’s mosques, despite representing 24% of our sample, and was an outlier that showed lower rates of mosque demolition (17% versus an average of 36% in other prefectures). Of the 404 mosques we sampled in other parts of Xinjiang, 148 were destroyed (36.6%), 152 were damaged (37.6%) and 104 were undamaged (25.8%). Figure 2 summarises the percentages of sampled mosques destroyed or damaged, by prefecture.
Figure 2: Percentage of sampled mosques that are damaged or destroyed, by prefecture, XUAR
Note: Territorial borders shown on maps in this report do not indicate acceptance by ASPI, in general they attempt to show current territorial control and not claims from any country. Source: ASPI ICPC.
The destruction of mosques appears to be correlated with the value authorities place on a region’s tourist potential; for example, Urumqi has a low rate of demolition, followed by the major tourist sites like Kashgar.11 Yet, it should be noted, both cities have undergone and continue to undergo significant urban development, which has resulted in the demolition or ‘renovation’ of part of Kashgar’s old city and the Uyghur-dominated Tengritagh and Saybagh districts of Urumqi.12
Extrapolating those figures on a prefectural level from official statistics allowed us to estimate the full number of destroyed and damaged mosques in Xinjiang. We found that across the XUAR approximately 16,000 mosques have been damaged or destroyed and 8,450 have been entirely demolished. The 95% confidence range of our regional findings is ±4% for the estimates of demolished, destroyed and undamaged mosque numbers. The full prefectural breakdown is shown in Table 1 and Figure 3.
Table 1: Full results showing the prefectural breakdown of mosques in Xinjiang, our sampling data and our estimates of damaged numbers
Note: In this table XPCC refers to the Xinjiang Production and Construction Corps (Bingtuan), a government entity distinct to Xinjiang’s regional government that directly administers large areas of the XUAR. Source: ASPI ICPC.
Figure 3: The estimated number of mosques destroyed or damaged in each prefecture of the XUAR
Note: Red dots represent the estimated number of destroyed mosques, orange represents the estimated number of damaged mosques. The number written shows these two combined. For full details see Table 1. Source: ASPI ICPC.
Officials from the ruling Chinese Communist Party (CCP) have repeatedly claimed that Xinjiang has more than 24,000 mosques and cite that as evidence of the state’s respect for religious freedom.13
However, our analysis shows that in most prefectures a majority of mosques and other sites of Islamic worship are being destroyed or transformed in ways that erode their religious and cultural significance.
In June 2015, Yang Weiwei, a researcher at the official CCP school in the northern prefecture of Altay, clearly articulated one of the perceived threats that authorities believe mosques pose to social stability in Xinjiang.14 Without providing evidence, she asserted that ‘the number of mosques in Xinjiang far exceeds the needs of normal religious activities,’ and instead provide venues for separatists and extremists to proselytise. The Islamic faith of Uyghurs in southern Xinjiang, she claimed, is propelling society away from traditional secularism towards conservatism, and challenging CCP rule. ‘In southern Xinjiang, the capacities of the party’s grassroot organs are hampered, but the role of mosques [is] constantly being strengthened,’ she warned.15
Her report specifically recommended that mosques be demolished, saying that only one mosque should exist in each administrative unit, that their design should adhere to strict unified standards (implying the removal of Islamic and Arab architecture), and that their opening hours should be limited to a single day every week and holidays.16
That recommendation doesn’t appear to be restricted to Altay Prefecture. Our evidence suggests the demolition and ‘rectification’ of mosques is more severe in other prefectures in Xinjiang, 17 of which (out of the 19 that we recorded) have higher rates of mosque demolition than Altay.
Xinjiang’s latest ‘mosque rectification’ (清真寺整改) campaign, which was conducted under the guise of improving public services and safety, began in 2016 and gathered pace under the new Xinjiang Party Secretary, Chen Quanguo.17 Local authorities were responding in part to Xi Jinping’s call for the ‘sinification’ (中国化) and the ‘deradicalisation’ (去极端化) of religion in Xinjiang.18 The vast majority of mosques in our sample that remained undamaged had no existing visible Islamic architectural features and didn’t need modification to adhere to the strict standards set out by the regional ‘rectification’ campaign.
Additionally, media reports suggest that a number of mosques that remain physically intact (and therefore would be classified as undamaged in our dataset) have been secularised or converted into commercial or civic spaces, including cafe-bars19 and even public toilets.20 We aren’t able to quantify this practice using our methodology.
However, visitors to the region since 2017, who saw several still-standing mosques and spoke privately with ASPI, estimated that roughly 75% of the mosques still standing had either been padlocked shut and had no worshippers visiting at key prayer times or had been converted into other uses. A separate recent visitor to Kashgar city told us that ‘virtually all’ of the mosques in the ‘old city’ had been closed and that a limited number had been converted into cafes.
Although other religious minorities aren’t the focus of our report, we also checked several Christian churches and Buddhist temples across Xinjiang and found that none of those sampled had been damaged or destroyed. This contrasts with the high number of damaged and destroyed mosques across the region, along with the widespread ‘rectification’ of many religious sites in other parts of China.21
Case study: Northern Xinjiang’s renovations and demolitions
Our study of mosques in northern Xinjiang revealed a wave of renovations and reconstructions between 2012 and 2016, followed by a wave of demolitions from 2016 onwards. This sudden reversal coincided with significant national-level changes to religious policy and a crackdown on expressions of faith,22 suggesting a centrally driven policy directive rather than decisions by local officials.
We found evidence that most mosques in a number of prefectures had been standardised through the addition of a large central dome and minarets on each building’s corners before 2016. An example of four mosques that were standardised in the same way is shown below in figures 4 and 5. For example, the bottom-left mosque in the examples is a mosque in Shiho city (Wusu). A dome and minarets were added in mid-2015, but by mid-2018 the entire site had been demolished.
Figure 4: Four mosques in Northern Xinjiang, chosen at random from our database, showing their structure before renovation between 2012 and 2016
Note: Clockwise from top left their locations are in Dorbijin County (Emin – 46.522N, 83.648E), Qutubi County (Hutubi – 44.185N, 86.900E), Changji City (44.0544N, 87.2262E), Shiho city (Wusu – 44.431N, 84.672E). Source: Maxar via Google Earth
Figure 5: The same four mosques were significantly renovated between 2012 and 2016; all showed additions of a dome and two or four minarets
Source: Maxar via Google Earth.
However, following Xi Jinping’s April 2016 speech at the National Religious Work Conference in which he called for the sinicisation of Chinese religion,23 this renovation work appears to have been halted.
Then, following Chen Quanguo’s ascension as Xinjiang Party Secretary in late 2016, the renovations made to these mosques were reversed. In some cases this resulted in the newly built domes and minarets being removed; in most cases, it resulted in the demolition of the entire structure. Three of the four randomly chosen mosques shown above have been entirely demolished since 2016, and one has had its Islamic architecture removed (Figure 6).
Figure 6: The same four mosque sites, showing that three of them have been demolished entirely and that the fourth had its dome and minarets removed by 2018
Source: Maxar via Google Earth.
Case study: Land uses at the sites of demolished mosques
Of 187 destroyed mosques that we recorded, only 41 sites (22%) have been redeveloped for other purposes, according to the latest imagery available at the time of publication, in many cases nearly three years since demolition (figures 7, 8 and 9). The rest either remain bare ground (65%) or have been converted for agriculture or turned into roads or car parks (12%).
Most mosques that were demolished between 2017 and 2020 weren’t razed to make way for new buildings, but instead were simply demolished and left as vacant land.
Figure 7: A mosque in Hotan’s Karakash County, before and after 2017
Source: Maxar via Google Earth.
Figure 8: A mosque in Bayingol’s Lopnur (Yuli) County, before and after 2017
Source: Maxar via Google Earth.
Figure 9: A mosque in Chochek’s Shiho (Wusu) city, before and after 2017
Source: Maxar via Google Earth.
The vast majority of mosque demolitions have been targeted desecrations in which surrounding buildings have remained intact, but there are some examples in which a mosque has been retained while surrounding residential buildings have been razed (Figure 10). Eighty per cent of mosques in the latter category are in Urumqi.
Figure 10: A mosque in Urumqi’s Saybagh district that remained in 2019 following the demolition of the residential community that it had served
Source: Maxar via Google Earth.
Case study: The demolition and miniaturisation of Kargilik’s Grand Mosque
A bizarre trend that has occurred in a small number of damaged mosques is the demolition of the Islamic-styled gatehouse and its reconstruction at a miniaturised scale. These mosques are generally significant and historic sites afforded significant degrees of formal protection.
For example, the Grand Mosque in Kashgar’s historic Kargilik County (Yecheng) was built in 1540.
In the 2000s, it was designated as a Xinjiang regionally protected cultural heritage site—the second highest level of protection granted to historic relics. Figure 11 shows the mosque as it once appeared (probably during the 1990s).
Figure 11: Kargilik’s Grand Mosque gatehouse as it appeared in the late 20th century
The historic Islamic architecture is clear: large domes and crescent moons at the top, colourful tile mosaics typical of Central Asian mosques, and the Shahada (Islamic creed) above the entranceway.
The Islamic features remained on the mosque, although somewhat faded, until the 2017 crackdown (Figure 12).
Figure 12: Kargilik’s Grand Mosque gatehouse in the 2010s
Source: Anon, “Kargilik’s Jame Mosque,” Mapio Net, nd., online.
Following the crackdown, most of the mosaic artwork was painted over, the Arabic writing was removed, the crescent moon motif was removed or replaced, and a large government propaganda banner hung from the mosque. Figure 13 is a photo taken in September 2018 by a visiting tourist, shortly before the gatehouse was razed. The mosque has a large red banner saying ‘Love the party, love the country’ draped across the building and a sign where the Shahada used to sit saying that CCP members, government employees and students are prohibited from praying in the mosque, including during the Eid festival. Furthermore, the doors were also closed and seemingly padlocked.24
Figure 13: Kargilik’s Grand Mosque gatehouse in September 2018
Source: YY, “Kargilik Mosque (加满清真寺),” Flickr, 11 September 2018, online.
Shortly after this photo was taken, the historic entranceway was demolished. By April 2019, it had been poorly reconstructed at roughly a quarter the original size (figures 14 and 15). Originally, the entranceway was roughly 22 metres across; the reconstruction is only 6 metres across. Much of the original site has been replaced by construction for a new shopping mall.
Figure 14: Kargilik’s Grand Mosque gatehouse rebuilt at a smaller scale in 2019
Note: This image has been slightly manipulated to avoid revealing potentially identifiable information about the photographer, who privately shared this image with ASPI. No architectural features have been changed from the original image.
Figure 15: Satellite imagery showing Kargilik’s Grand Mosque in September 2018 and April 2019; red arrowhead points to the miniaturised gatehouse
Source: Maxar via Google Earth.
Although ‘miniaturisation’ was relatively rare across Xinjiang, it was noted in several significant mosques in Kashgar, including in Kargilik and Yarkant.
Sacred public sites
Scattered across Xinjiang’s vast open spaces are a number of sacred spaces. The region’s oases have supported lives and communities for centuries. Uyghurs and other Turkic communities in what the Uyghurs call Altishahr (ئالتە شەھەر ), or the ‘six cities’ in the south of Xinjiang, have followed Islam for over 1,000 years and have cultivated a unique fusion of Sunni fellowship and Sufi cultural and religious traditions.25
The mysticism that influences Uyghur Sufism draws on a cultural connection to land and the sacredness of place, in which holy sites (often the locations of purported miracles or the burial places of enlightened scholars, leaders, poets, saints, mullahs or sheiks) retain their sacrosanctity indefinitely.
For the devout, these sites are a source of healing, of introspection and of good fortune. The sites are an integral part of Uyghurs’ cultural history and connection to the land.26
Since 2017, as the state began systematically restricting personal expressions of Islamic culture and belief in Xinjiang, the sacred sites of Uyghur identity have been desecrated and destroyed in large numbers. Rian Thum notes that access to most mazar (shrine) sites had already been locked off to pilgrims and visitors over the past decade, and that their subsequent ‘destruction appears to have been an end in and of itself’.27
Across Xinjiang’s five southernmost prefectures, we located 349 sacred sites, 103 of which were formally registered as protected cultural heritage by the Chinese Government at various levels.28
Of all the significant and sacred spaces we examined, we found that 30% have been entirely demolished, including sites of famous pilgrimages. A further 27.8% have been damaged in some way (Figure 16).
Figure 16: The rates of damage to the various sacred and significant cultural sites surveyed in this report, by level of protection
Formal protection by the authorities has affected the rates of demolition: 51.4% of protected sites are undamaged, compared to only 38.2% of unprotected sites. Likewise, formally protected sites are about half as likely to have been entirely demolished than unprotected sites: 17.4% of formally protected sites were demolished outright, compared to 35.4% of unprotected sites.
We also found relatively high rates of destruction among nationally and regionally protected sacred sites: 16.7% of the nationally protected sites we examined had been destroyed, and 41.6% were damaged (totalling 58.3% damaged or destroyed). Likewise, 16% of sites protected at the Xinjiang regional level had been destroyed, and an additional 32% had been damaged in some way (totalling 48% damaged or destroyed).
However, formal protection neither applies to nor provides protection to the most significant sites.
Several of the most well-known and culturally significant sites, such as Imam Jafar Sadiq Mazar and Imam Asim Mazar, and potentially Ordam Mazar, that previously hosted major annual pilgrimages are offered no formal protection and have all been demolished by Chinese authorities since 2017.29
In many cases where significant graves remain, satellite imagery reveals that attached mosques and prayer halls have been demolished, apparently to deny access to and space for worshippers. Additionally, in many cases otherwise undamaged sites appear to have installed security checkpoints at the entrances or have been fully enclosed by walls, restricting access.
Case study: The destruction of Ordam Mazar
Ordam Mazar ( ئوردىخان پادىشاھىم , ‘Royal City Shrine’) was a small settlement of about 50 structures in the Great Bughra desert (Figure 17). Sitting midway between Kashgar and Yarkant it was surrounded by miles of desert and was commemorated as the place from which Islam spread across the region.
It marked the site where, in 998 AD, Ali Arslan Khan, the grandson of the first Islamic Uyghur king, died in a battle to conquer the Buddhist kingdom of Hotan. Ali Arslan’s martyrdom was marked by a festival every year, drawing Uyghur pilgrims from all over southern Xinjiang at the beginning of the 10th Islamic month of Muharram.30
Figure 17: A 2013 satellite image of Ordam Mazar
Source: Airbus via Google Earth.
Tens of thousands of people visited the site before the festival was outlawed in 1997,31 the year before the 1,000th anniversary of Arslan Khan’s death. Since then, the area has been locked down. The religious curators of the site have mostly been pushed away, and only one family remained at the shrine by 2013: the family of Qadir Shaykh (Figure 18). He was required to report all unauthorised visitors to authorities, and most devotees who visited in the years preceding 2017 did so in the middle of the night to avoid identification.32 Their worship would only be betrayed by the presence of a new flag of prayers tied to the bundle of sticks that is often used to mark a sacred site (tugh,تۇغ ).
Figure 18: A photo of Qadir Shaykh taken by a visiting tourist in 2008
Source: ‘Left-behind elderly in the depths of the desert, accompanied by a falcon when living alone’ (沙漠深处的留守老人独居时与猎鹰为伴), WeChat, 8 April 2015, online.33
The official closure of Ordam Mazar in 1997 was justified by the banning of illegal religious activities (非法宗教活动) and feudal superstition (封建迷信), which linked the mystic traditions of the Uyghur people to notions of backwardness and mental illness.34 Ordam Mazar and its connection to mystic expressions of Islamic faith became emblematic of the ‘Three Evils’ (三股势力) of terrorism, separatism and religious extremism. The alleged linkage propelled the Chinese Government’s crackdown in Xinjiang and provided ideological justification for the erasure and alteration of sacred indigenous sites.
Our analysis of satellite imagery found that, between 24 November and 24 December 2017, the entire site of Ordam was razed (Figure 19). The following autumn, Altun Rozam ( ئالتۇن روزام ), a shrine formed from a bundle of sticks and flags that lay 1.2 kilometres northwest of Ordam and marked the sand dune where Arslan Khan is said to have been killed in battle 1,020 years ago, was bulldozed (Figure 20).
The stone foundations have been covered by the sand, and now no sign of the sacred town remains.
The whereabouts of Qadir Shaykh and his family are unknown
Figure 19: Ordam Mazar in May 2018, showing the nearly complete destruction of the desert outpost
Source: Maxar via Google Earth.
Figure 20: Photo of what appears to be the cultural relic preservation marker for Ordam Mazar in 2013
Source: Rita@kashi weifeng, ‘Pathfinder to the Desert Holy Land: Ordam, a tomb of king’ (探路沙漠圣地–奥达木王陵), Douban, 22 May 2013, online.
Ordam marks the endpoint of a 15-day pilgrimage route, which for centuries connected sacred sites in and around the Great Bughra desert. All the pilgrimage stops on this route were also demolished in late 2017; including Häzriti Begim Mazar, which was a shrine marking the location where Häzriti Begim, the son of Rome’s emperor, died in battle alongside Arslan Khan.35
The remoteness of Ordam Mazar and other stops along this pilgrimage route is significant. Ordam is roughly 15 kilometres from the nearest cultivated area and 35 kilometres from the nearest county centre (Figure 21). Given the level of surveillance in Xinjiang, including new networks that have been built since the 2017 crackdown, the demolition of these pilgrimage sites was not necessary to prevent worshippers visiting them.
Likewise, considerable investment is needed to transport a demolition team across tens of kilometres of ungraded desert tracks, mostly crossing sand dunes. Therefore, this suggests that the demolition not only represents the curtailing of religious freedoms in Xinjiang, but also the deliberate severing of ties that Uyghurs have to their cultural heritage, history, landscape and identity.
Figure 21: A photo of part of Ordam town, showing the mosque, taken by a visiting tourist in 2017
Source: Mo de shijie (蓦的世界), ‘Exploring the mystery of Aodamu (Audang) Mazha’ (奥达木(奥当)麻扎探秘), Weixin, 25 March 2017, online.
Ordam’s demolition also marks the end of Dr Rahile Dawut’s public life. Dawut is an ethnographic scholar and an international expert on Xinjiang’s sacred sites. The New York Times described her as ‘one of the most revered academics from the Uyghur ethnic minority in far western China’,36 and her previous work on Ordam Mazar was funded by the Chinese Government and its academic grants.37
In December 2017, the same month that Ordam was demolished, Rahile Dawut went missing while trying to travel to Beijing for a conference. Her whereabouts remain unknown. Her family and relatives believe that she was forcibly ‘disappeared’ and arbitrarily detained somewhere in the vast network of more than 375 ‘re-education’ centres, detention camps and newly expanded prisons in Xinjiang.38
Her ‘crimes’ or ‘misdemeanours’ have never been made public. Dawut is one of at least 300 Uyghur intellectuals detained in Xinjiang since 2017.39
The demolition of Ordam Mazar and the disappearance of a world-renowned researcher of Uyghur sacred spaces highlights the extent that Xinjiang’s public spaces of faith and identity have been targeted and outlawed. This highly sacred site for the Uyghur people, which had fought back the desert and multiple rounds of conquest for over 1,000 years, has now been subsumed back into the desert.
Case study: The desecration of Aksu’s sacred cemetery
Near the Yéngichimen village in Toyboldi ( تويبولدى ) township, about a four-hour drive from Aksu city, lay the remains of Mulla Elem Shahyari ( شەھيارى ). Shahyari was a notable poet and Islamic leader around Aksu in the late 18th and early 19th centuries. In his youth, he studied Islamic oratory, and he eventually became a chief poet for the ming-begi (local chieftain, مىڭ بېگى ).40
He is known for his long poem, composed over 10 years, ‘Rose and Nightingale’ ( گۈل ۋە بۇلبۇل ). In 1814, after he died from illness in his home town at Toyboldi, his grave became a shrine. The grave was near the entrance of a 13-hectare cemetery, in the yard of the cemetery’s prayer hall (Figure 22).41
Figure 22: Yéngichimen cemetery in 2014 and 2019, showing its destruction
Source: Maxar via Google Earth.
As a child, Aziz Isa Elkun, a now-exiled Uyghur poet who grew up nearby, revered Shahyari’s shrine; the village considered Shahyari to be enlightened. During an interview with ASPI, Mr Elkun said:
[Our] Islamic and Uyghur cultural identities … are intrinsically linked; therefore [we] regard [Shahyari’s] burial place as a holy place that connects the spirits of the generations past and today … [The] graveyard is a symbol of bonding for the Uyghurs spiritually, culturally and politically.42
With many of his fellow townspeople, he visited the grave of Shahyari every Friday and after religious holidays, praying in front of the tomb:
I read Mulla Elem Shahyari’s best known poem ‘Rose and Nightingale’ when I was a teenager … After reading his poetry, it inspired me to learn Uyghur classic literature and poetry. Since then, I started writing poems and had them published in local newspapers and journals.43
The last time he visited Shahyari’s shrine was the last time he returned home in February 2017. During that visit, the shrine was in serious disrepair, and the authorities were prohibiting locals from repairing the grave (Figure 23).
Figure 23: A photo of Mulla Elem Shahyari’s Mazar, taken in 2009
Source: Cultural Relics Bureau of Xinjiang Uyghur Autonomous Region (新疆维吾尔自治区文物局), Immovable cultural relics: Aksu area, volume 1 (不可移动的文物 阿克苏地区卷1). Urumqi: Xinjiang meishu shying, 2015, p. 537.
Mr Elkun left Xinjiang in 1999, but his family stayed behind, mostly living in Yéngichimen village. In 2017, Mr Elkun’s father, Dr Isa Abdulla, was laid to rest after a life in the vicinity of Shahyari’s shrine, within 150 metres of it in a cemetery plot prepared by the family several years previously (Figure 24). Unable to return home, or even contact his relatives without risking their punishment, Elkun was forced to mourn from afar, finding his father’s grave on satellite images.
Figure 24: Dr Isa Abdulla’s gravesite, before its demolition
Source: Matt Rivers, ‘More than 100 Uyghur graveyards demolished by Chinese authorities, satellite images show’, CNN, 3 January 2020, online.
However, less than nine months after his father’s death, local authorities in Aksu Prefecture began re-engineering the cemetery. In August 2018, lines of new numbered graves were constructed over a corner of the cemetery. According to official documents and state media reports, the numbered graves are referred to as ‘public welfare ecological cemetery graves’ (公益性生态公墓建设).
Chinese Government officials say that they’re ‘standardising’ and ‘civilising’ public cemeteries in the name of social stability, rural revitalisation and ecological protection while preventing ‘random burials’ and relocating old graves.44 The new graves would eventually cover 1.5 hectares of the old cemetery.
Dr Isa Abdulla’s grave is now unmarked, save for the number 47, and is now otherwise identical to dozens of white clay-brick graves in 39 identical rows (figures 25 and 26).45
Figure 25: Isa Abdullah’s wife and daughter mourn at his new grave in a Chinese state media propaganda report
Source: ‘By following CNN, we find how they make fake news about Xinjiang’, CGTN, 13 January 2020, online.
Figure 26: Toyboldi’s new ‘public welfare ecological cemetery’
Source: ‘By following CNN, we find how they make fake news about Xinjiang’, CGTN, 13 January 2020, online.
The new graves covered only slightly more than 10% of the original cemetery. In early February 2019, the remaining graves, spread over 11 hectares, were levelled, according to satellite imagery analysis.
None of the original graves remains. Although the garden of the mosque, where Shahyari’s shrine sat for hundreds of years, hasn’t been bulldozed, the shrine itself has been demolished.
In 2020, the site was visited by reporters from the Chinese state media outlet CGTN, who filmed the bulldozed and barren remains of the cemetery (Figure 27).46
Figure 27: The grounds of Yengichimen cemetery after being cleared of graves
Source: ‘By following CNN, we find how they make fake news about Xinjiang’, CGTN, 13 January 2020, online.
The CGTN report claimed that Dr Isa Abdullah’s family requested that his body be moved before the original gravesite was demolished. The mechanism of exhumation requests is unknown in this case.
However, a 2019 community notice posted at another to-be-bulldozed cemetery near Hotan gave relatives just three days to register and request the exhumation and relocation of their loved ones’ remains; otherwise, the remains would go unclaimed (Figure 28).47
Figure 28: Public notice of tomb relocation in Hotan
Note: This Uyghur notice states: ‘Notice of relocation of the tomb of Hotan Sultanim Mazar. To the people of the city: In accordance with the needs of our city’s urban development plan and the spirit of the legislation of the Ministry of Civil Affairs of the Autonomous Region on further standardisation of the management of burial places and cemeteries in our autonomous region, as well as the requirements for creating a comfortable environment for the general public, it is decided to relocate corpses from Sultanim Mazar into Imam Muskazim Mazar of the Hotan Prefecture. Therefore we ask the owners of the graves to register at Sultanim Mazar between 18 March 2019 to 20 March 2019. Any graves without registration will be considered as unclaimed graves and will be relocated automatically. A delayed response will be responsible for all the consequences. Please send this notification to others.’ Translation by ASPI.
Source: Bahram Sintash, Demolishing faith: the destruction and desecration of Uyghur mosques and shrines, Uyghur Human Rights Project, October 2019. online.
The policy of demolishing traditional cemeteries and replacing them with ‘public welfare ecological cemeteries’ has been widely adopted throughout Aksu Prefecture. Standardised management of cemetery grounds was adopted in June 2016, and ‘complete coverage’ of numbered clay graves was to be achieved by the end of 2019, according to local media reports.48
Of 26 rural shrine and cemetery complexes that we located in Aksu through satellite imagery analysis, 22 (85%) had had most or all of their graves demolished by 2020, and 15 (58%) of cemeteries had had traditional graves replaced with rows of clay-brick graves (Figure 29).49
Figure 29: Mardan Mugai, Deputy Secretary of Aksu Prefecture’s Party Committee, and other members of the local government standing beside a ‘public welfare ecological cemetery’ construction site
Source: ‘At the end of 2019, the Aksu area has basically achieved full coverage of the construction of public welfare ecological cemeteries’ (2019年底阿克苏地区基本实现公益性生态公墓建设全覆盖), Aksu News Network (阿克苏新闻网), 20 May 2016, online.
In a 2016 speech, the Deputy Secretary of Aksu Prefecture’s Party Committee, Mardan Mugai, called on government departments to ‘waste no time in guiding the masses … to change their customs’ and ‘abandon closed, backwards, conservative and ignorant customs’, 50 referring to traditional cemeteries and burial grounds in the prefecture, including sacred sites and shrines.
An August 2018 state media report claimed that the ‘rectification’ of traditional cemeteries had been implemented in 235 cemeteries across Aksu by the end of July and that the construction of 174 ‘public welfare ecological cemeteries’ had begun.51
Our evidence suggests that this policy has continued unabated since 2018 and that the number of cemeteries with graves demolished and new ‘ecological cemeteries’ built is likely to be roughly double the figure stated above.52
The demolition of spiritual sites in Xinjiang’s Aksu Prefecture represents the forcible severing of ties between Uyghur communities and their history and landscape. Aziz Isa Elkun characterised Shahyari’s shrine and the attached cemetery as the lifeblood of the village, saying, ‘The entire community was connected to that graveyard’ and that it was a place to pray.53
A Uyghur academic we spoke to while writing this report emphasised the importance of cemeteries to the public life and personal identity of Uyghurs and other non-Han nationalities in Xinjiang. The cemeteries, in their words, are ‘a material and symbolic representation of the collective claim to a place, a land and a homeland’.54
Major cemeteries ‘play a significant role in bonding the past and present’. For this individual, China’s new assault on cemeteries is more than the physical removal of sacred areas; it’s an attack on one of the last remaining aspects of Uyghur public life tolerated by Chinese authorities:
Arguably … until this campaign began, [cemeteries] had been the only part of Uyghur physical space, life and culture that hadn’t been tainted by large-scale CCP political imposition … In this sense, the demolition of cemeteries isn’t just an attack on Uyghurs’ claims to ancestral land … it is also a calculated effort to sever the emotional and blood ties to the past.55
Earlier this year, a spokesperson for China’s Foreign Ministry said, in response to concerns raised about the destruction of traditional cemeteries, that ‘Xinjiang fully respect[s] and guarantee[s] the freedom of all ethnic groups … to choose cemeteries, and funeral and burial methods.’56 However, widespread evidence collected by ASPI and other researchers, including satellite images and statements from officials in Xinjiang, shows that to be untrue, as traditional cemeteries are being subjected to a systematic campaign of desecration.
Background: sinicising Xinjiang under Xi Jinping
The Uyghurs and other Turkic minorities are no longer trusted with autonomy or their own cultural traditions but rather must actively embrace the cultural traditions and practices of their Han colonisers.57 This process of incorporation involves both the effacement of certain aspects of minority culture and the reshaping of local cultures and landscapes in order to more firmly stitch them into the national story.
The religious and foreign elements of non-Han cultures are viewed with particular suspicion by government officials.58 At the National Religious Work Conference in April 2016, Xi Jinping stressed the importance of fusing religious doctrines with Chinese culture and preventing foreign interference.
‘The ultimate goal [of religious work]’, the CCP’s top religious policy adviser Zhang Xunmou stated in 2019, ‘is to achieve its complete internal and external sinicisation.’59
In recent years, the Chinese Government has strengthened its control over religion, passing a revised set of regulations monitoring religion in 2017 and subsuming the state body managing religious affairs into the CCP’s United Front Work Department (UFWD) in 2018.60
Despite the fact that Xinjiang was designated a Uyghur autonomous region in 1955, Xinjiang is now spoken about as a location of ‘cultural integration’, where different peoples, religions, and cultures have long ‘coexisted’, ‘blended’ and, ultimately, fused together.61 This is despite the fact that Uyghurs and other Turkic or Muslim minorities made up roughly 59% of the XUAR’s population in 2018,62 and nearly 60% of Xinjiang’s 25 million residents practise some form of Islam.63
The Chinese state recognised the importance of documenting and protecting the ‘excellent traditional ethnic cultures’ (优秀传统民族文化) of Xinjiang in a 2018 government White Paper, but also stressed the need to ‘modernise’ and ‘localise’ the ethnic cultures while insisting that ‘Chinese culture’ is the ‘bond that unites various ethnic groups’.64 Foreign reporters on state-sponsored trips to Xinjiang are told Uyghurs are ‘immigrants’ to Xinjiang and that Islam was imposed on Uyghurs by foreigners.65
That ethos was outlined in a 2019 state media editorial by hardline public intellectual Ma Pinyan, who claims the various ethnic cultures of Xinjiang have been ‘nurtured’ in the ‘bosom’ and ‘fertile soil’ of Chinese civilisation and culture: ‘Without Chinese culture, the culture of any other ethnic group would be like a tree without roots and water.’66 In this telling, Xinjiang culture wasn’t synonymous with Islamic culture; rather, Uyghur culture, in particular, ‘originated from Chinese culture dominated by Confucianism’.67
In Xinjiang, officials have cracked down on ‘illegal’ or ‘abnormal’ religious practice among the Uyghurs and other Muslims since 2009, outlawing ‘illegal religious activities’ as they tightened controls over Islamic education, worship, fasting and veiling.68 Islamic-sounding names were banned,69 and ‘extremist’ religious materials (Qurans, prayer mats, CDs etc.) were confiscated70 and, in one case, appear to have been burned in public.71
In 2014, the former Executive Director of the UFWD,72 Zhu Weiqun, blamed ‘religious fanaticism’ (宗教狂热) for unrest in Xinjiang and called for ‘persisting with the trend towards secularisation’ within Xinjiang society in a state media interview.73 In 2017, the XUAR passed a comprehensive set of regulations to guide ‘deradicalisation’ work across Xinjiang—a set of rules that was revised in October 2018 to retrospectively authorise the mass detention of Uyghurs in ‘re-education’ camps.74
Xinjiang officials now warn against the ‘Halal-isation’ (清真泛化),75 ‘Muslim-isation’ (穆斯林化),76 and ‘Arab-isation’ (阿拉伯化)77 of religious practices in Xinjiang and seek to actively ‘rectify’ any practices, products, symbols and architectural styles deemed out of keeping with ‘Chinese tradition’.78
Tighter control over mosques and religious personnel is central to the plan to sinicise Islam in Xinjiang, as is the ‘rectifying’ of places of religious worship. Wang Jingfu, head of the Ethnic and Religious Affairs Committee in Kashgar city, told Radio Free Asia in 2016:
We launched the rectification campaign with the purpose of protecting the safety of the worshippers because all the mosques were too old. We demolished nearly 70% of mosques in the city because there were more than enough mosques and some were unnecessary.79
Under the UFWD’s ‘four entrances campaign’ (‘四进’清真寺活动), mosques across Xinjiang are required to hang the national flag; post copies of the Chinese Constitution, laws and regulations; uphold core socialist values; and reflect ‘excellent traditional Chinese culture’.80 Architecturally, this involves the removal of Arabic calligraphy, minarets, domes and star-and-crescent and other symbols deemed ‘foreign’ and their replacement with traditional Chinese architectural elements.81
Finally, the control and sinicisation of Xinjiang also advances the state’s economic agenda through commodified and curated tourism and the promotion of Xinjiang as a key node in Xi Jinping’s Belt and Road Initiative.82
Cultural heritage and the role of UNESCO
The global bodies charged with the preservation of cultural heritage worldwide have been silent on cultural destruction in Xinjiang. The Chinese Government has worked closely with UNESCO after ratifying the UNESCO World Heritage Convention in 1985 to develop its capacities for preservation work.83
There’s been a sustained, top-down effort involving all levels of the Chinese Government to expand the formal recognition of Chinese cultural sites and intangible culture on the world stage and to deepen China’s involvement and influence in UNESCO,84 pre-dating, and assisted by, the US decision to reduce funding and withdraw from UNESCO in 2017.85 China’s representative, Qu Xing, is the organisation’s current Deputy Director-General.86
Evidence of those efforts came in 2019, when the total number of Chinese UNESCO World Heritage sites reached 55, making China the country with the most such sites.87 Cultural heritage is not only a soft-power asset for the Chinese state but also a tool of governance. Rachel Harris reminds us:
It can be used to control and manage tradition, cultural practices, and religion and to steer people’s memories, sense of place, and identities in particular ways, providing a softer and less visible way of rendering individuals governable.88
Two Uyghur cultural practices are listed on the UNESCO Intangible Cultural Heritage register: the 12 muqam,89 inscribed in 2005; and the mäshräp,90 inscribed in 2010.
However, both these diverse and rich cultural practices, which involve song, dance and storytelling, have been co-opted and politicised by the Chinese Government. Mäshräp has been stripped of its religious content and is now used to counter extremism,91 while muqam has been commodified, rewritten and secularised for safe consumption.92 Meanwhile, well-known Uyghur performers of traditional Uyghur music, such as Abdurehim Heyt and Sanubar Tursun, suddenly disappeared from public life in 2017 and 2018 before resurfacing under mysterious circumstances.93
UNESCO, which is an organisation founded to ‘promote the equal dignity of all cultures’ and ‘in response to a world war marked by racist and anti-semitic violence’,94 has made no public comment on the abuses perpetrated against Xinjiang’s minorities by the Chinese state.
Similarly, UNESCO’s advisory body dedicated to protecting ‘cultural heritage places’, the International Council on Monuments and Sites (ICOMOS), has been silent on the destruction of cultural heritage in Xinjiang while publicly condemning, for example, Turkey’s decision to ‘reverse the status of Hagia Sophia from a museum to a mosque’ in July 2020.95 In 2009, the US branch of ICOMOS publicly expressed concern about the demolition of much of the old city of Kashgar,96 but it’s been silent since then.
For over a decade, the World Monuments Fund, a New York based non-profit, has trained Chinese conservators and helped to fund the renovation of the Forbidden City and the Great Wall, while doing nothing to stop the wanton cultural destruction in Xinjiang.97
ASPI repeatedly sought comments from UNESCO and ICOMOS about their public position on Xinjiang and the Uyghurs but received no response.
These organisations must re-examine their mission. Their failure to investigate or comment on the destruction of indigenous culture in Xinjiang suggests their capture by or subservience to Beijing.
Conclusion and recommendations
The Chinese Government’s sinicisation policies in Xinjiang have led to the destruction of thousands of mosques and hundreds of sacred cultural sites. These acts of intentional desecration are also acts of cultural erasure. The physical landscape—its sacred sites and even more prosaic structures—holds the memories and identities of local community and ethnic groups. ‘Memory floats in the mind’, eminent historian R Stephen Humphreys remarked in 2002, ‘but it is fixed and secured by objects.’98
The Chinese Government’s destruction of cultural heritage aims to erase, replace and rewrite what it means to be Uyghur and to live in the XUAR. The state is intentionally recasting its Turkic and Muslim minorities in the image of the Han centre for the purposes of control, domination and profit.
The Chinese state has long sought to ‘transform’ and ‘civilise’ Xinjiang, but Xi Jinping and his lieutenants bring a new sense of urgency to this colonialist project. Under the guise of combating perceived ‘religious extremism’ and promoting ‘inter-ethnic mingling’, Chinese officials are slowly but systematically stripping away those elements of Uyghur culture they deem to be ‘foreign’, ‘backward’, ‘abnormal’ or simply out of sync with Han-centric norms. What remains is a Potemkin village: sites and performances for tourist consumption and propaganda junkets.
Unlike the international condemnation that followed the Taliban’s dynamiting of the Bamyan Buddhas in Afghanistan99 or the destruction of parts of Dubrovnik and Sarajevo following the collapse of Yugoslavia,100 China’s acts of cultural erasure in Xinjiang have been perhaps less dramatic and visible, yet arguably far more wide-ranging and impactful.
In the light of this report’s findings, ASPI recommends as follows:
The Chinese Government must abide by Article 4 of its own Constitution, allow the indigenous communities of Xinjiang to preserve their own cultural heritage and protect the freedom of religious belief outlined in Article 36, and not in ways that are defined and controlled by authorities who appear to have the opposite motive. It must uphold the autonomous rights of its non-Han communities to protect their own cultural relics and heritage under the 1984 Law on Regional Ethnic Autonomy and cease the demolition of significant cultural and religious sites in the XUAR.
UNESCO and ICOMOS should immediately investigate the state of indigenous cultural heritage in Xinjiang and, if the Chinese Government is found to be in violation of the spirit of both organisations, it should be appropriately sanctioned. Both organisations must make public statements on the cultural erasure in Xinjiang, drawing on our investigations and other existing research.
National governments should apply public pressure to UNESCO, ICOMOS and other conservation bodies if they fail to respond to Uyghur cultural destruction in Xinjiang.
International cultural and heritage organisations such as UNESCO and ICOMOS must shift from silence on cultural erasure in Xinjiang to a coordinated approach with the global human rights network, which is already engaged in bringing international pressure to bear on Chinese authorities in ways relevant to the missions of UNESCO and ICOMOS.
Governments throughout the world, including governments of developing and Muslim-majority countries, must speak out and pressure the Chinese Government to end its genocidal policies in Xinjiang, stop the deliberate destruction of indigenous cultural practices and tangible sites, and consider sanctions or even the boycotting of major cultural events held in China, including the 2022 Winter Olympics.
Appendix: Full methodology
For both datasets, the basic methodological aim was the creation of a new, unbiased, stratified dataset of locations of mosques and sacred sites before the 2017 crackdown. Those locations were then checked against recent satellite imagery to ascertain their current status.
Mosques
The Chinese Government’s 2004 Economic Census identified nearly 24,000 mosques in Xinjiang.101
Accordingly, it wouldn’t be feasible to manually examine every site and ascertain its current status following the 2017 crackdown. Therefore, in order to estimate the number of mosques damaged and destroyed in Xinjiang, we needed to build our own dataset of suitable sample sites and then extrapolate the results across the region.
For valid extrapolation, it was crucial to obtain a nearly random sample of Xinjiang’s mosques. Therefore, any previously created lists of demolished mosques needed to be completely ignored.
Instead, we needed to create a novel database free of any sampling bias. The most complete source of this data would be through official Chinese Government information; however, there are significant barriers to access to and use of that information.
The data from the 2004 Economic Census provided addresses for each of the nearly 24,000 mosque sites in Xinjiang;102 however, in many cases, the addresses are imprecise and couldn’t be clearly associated with physical buildings visible in the satellite imagery. Therefore, we used a combination of two different methods.
First, an aggregated database of 10,000,000+ points of interest (POIs) across China was obtained. The POIs primarily represented businesses, amenities or attractions located with high precision, largely for inclusion into national navigation and online map platforms. An example of the density and precision of the POIs is shown in Figure 30 as a screenshot of a map of part of the regional capital, Urumqi.
Figure 30: A map showing the full POI database consulted (not queried for mosque) across a neighbourhood in Urumqi
Source: ASPI ICPC.
The database was queried for the word ‘清真寺’ (mosque). That yielded 1,733 mosques nationwide, including 289 in Xinjiang. Of those, 16 were excluded due to their current status or location being unclear or due to being duplicate results, leaving 273.
A visual examination of the mosques found through this method showed varied results for the size and prominence of the mosques, along with their locations (rural or urban). Mosques in Urumqi were overrepresented compared with those in other prefectures. This bias was accounted for by the prefecture-based extrapolation explained below.
For purposes of comparison, the database was also queried for the terms ‘教堂’ (church) and ‘庙’ (temple). Those queries yielded 14 and eight results, respectively (representing 13.6% and 16.6% of all sites of those denominations in Xinjiang when compared to the 2004 Census). Of those, none had been damaged or demolished.103
Additionally, we conducted a systematic visual search of mosques using pre-2017 satellite imagery.
That was done by selecting three search locations for each county: one in the county centre, one in a randomly selected township centre and one in a randomly selected village.104 Each search point was expanded into a circle with a 2.5-kilometre radius to define a search area.
That resulted in 307 search areas. Mosques were found in approximately 70% of the areas; the 94 remaining search areas generally had inadequate satellite imagery to ascertain the location of the mosque, or had no clearly discernible mosque in the search area.105 Finally, duplicates were removed.
Later, we removed mosques for which recent satellite imagery was unavailable and the current status of which couldn’t be ascertained.106 That left a total of 192 mosques found through this method.
The dataset was completed using only pre-2017 imagery to avoid accidental bias towards demolished mosques (for example, through structures suspected to be mosques being ‘confirmed’ as mosques by their demolition).
Finally, a second POI database from AutoNavi was queried for mosques. That found an additional 73 mosques, of which 67 were unique and not duplicates of previously examined mosques.
Together, using these two methodologies and three datasets, we found a total of 533 unique mosques, representing 2.25% of the official total in the region. A map of all mosques in our pre-2017 dataset is included in Figure 31.
Figure 31: The distribution of mosques located as part of the pre-2017 dataset
Source ASPI ICPC.
Once we compiled the pre-2017 dataset of mosque locations, each one was then visually compared to recent satellite imagery (generally mid-2019 to 2020). We recorded its current status, changes since 2017 and, where available, date ranges for the demolition or removal of Islamic architecture.107 For undamaged sites, we recorded the date of the last available satellite imagery so that follow-up studies can be prioritised to look at the ‘oldest’ sites. We generally accessed satellite images via Google Earth; where Google Earth didn’t have sufficient satellite imagery, we used other commercial sources with 30–50-centimetre resolution.
In some cases, we based the distinction between ‘slightly damaged’ and ‘significantly damaged’ on an assessment of how important the removed features were to the mosque’s structure and aesthetics.
For example, a mosque with only a small dome that had been removed would be coded as slightly damaged, despite the fact that all Islamic architecture on the structure had been removed, as the dome wasn’t a significant element in the building’s earlier aesthetics.
Those results were then tabulated by prefecture and current status. Eleven prefectures had over 2.5% of their total mosques represented in our sample.
We performed statistical tests against the data to determine any predictive variables, including population density, distance from county centre, distance from prefectural city, percentage of minority population and latitude. None of those tests showed significant responses to rates of damage and demolition. The variables are available on request to researchers who want to explore potential correlations further.
Extrapolation for the total number of destroyed and damaged mosques across Xinjiang was done at the prefectural level, which accounted for the majority of variation within the sampled data. For the 11 prefectures that were represented by over 2.5% of their total mosques, we directly extrapolated using the sampled data; for example, in Urumqi, where 38% of mosques were sampled, 17% were destroyed, so we extrapolated that 17% of all mosques had been destroyed.
For the remaining prefectures with under 2.5% of all mosques sampled, the extrapolation was guided equally, using both the prefectural rates of destruction and the Xinjiang-wide rates (excluding Urumqi, an outlier in our sample and dramatically overrepresented). For example, if a prefecture with fewer than 2.5% of mosques sampled had 40% of all sampled mosques destroyed, but the Xinjiang-wide rate was only 30%,108 it would be extrapolated that 35% of all mosques had been destroyed in the prefecture.
Cultural sites
We analysed shrines and other sacred sites in a similar manner. We selected and located a total of 251 culturally significant sites from Xinjiang’s Cultural Heritage Bureau’s 30-volume Immovable cultural relics encyclopedia.109 Our efforts focused only on southern Xinjiang, where the Uyghur population is concentrated, and traditional Uyghur cultural influences are more pronounced.
We selected sites for inclusion based on their assessed cultural significance with assistance from a Uyghur analyst, and where possible then found the exact location of those sites. Additionally, we queried a separate 6,000,000-point POI database obtained from academic sources for the term 麻扎 (mazar, ‘shrine’). That resulted in 131 points in the examined prefectures that could be confidently linked to a suitable location, such as a cemetery complex, mosque or shrine structure.
The inclusion of those points was considered important owing to the bias against Islamic sites in China’s official protection of heritage and was designed to expand our dataset to include sacred sites that aren’t formally registered or protected and that therefore don’t appear in the volumes we consulted.
This dataset was then compared against recent satellite imagery in the same manner that mosques were, and the same values were recorded. No extrapolation was done with this dataset to quantify the total numbers of damaged and destroyed sites beyond our sample due to the lack of information on the number of sites before 2017.
Acknowledgements
The authors would like to thank our peer reviewers including Professor Rachel Harris, Dr Elise Anderson, Nicole Morgret, Michael Shoebridge, and an anonymous reviewer. We are grateful for the advice of Jacinta Holloway and Dr Lorenz Wendt on the statistical model for calculating the region-wide rates of damage from our samples. The artwork on the cover of the report was created by an artist who would rather stay anonymous, we thank them nonetheless. Please note that due to safety concerns, Tilla Hoja is a pseudonym. Finally, we would like to thank ASPI’s International Cyber Policy Centre Deputy Director Danielle Cave and Director Fergus Hanson for their support and guidance. ASPI was awarded a research grant from the US Department of State, which was used towards this report. More detail about that grant, and the research activities it supports, can be found here: https://xjdp.aspi.org.au/about/. The work of ASPI ICPC would not be possible without the support of our partners and sponsors across governments, industry and civil society.
What is ASPI?
The Australian Strategic Policy Institute was formed in 2001 as an independent, non‑partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices. ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally. ASPI’s sources of funding are identified in our Annual Report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements.
ASPI International Cyber Policy Centre
ASPI’s International Cyber Policy Centre (ICPC) is a leading voice in global debates on cyber, emerging and critical technologies, issues related to information and foreign interference and focuses on the impact these issues have on broader strategic policy. The centre has a growing mixture of expertise and skills with teams of researchers who concentrate on policy, technical analysis, information operations and disinformation, critical and emerging technologies, cyber capacity building, satellite analysis, surveillance and China-related issues.
The ICPC informs public debate in the Indo-Pacific region and supports public policy development by producing original, empirical, data-driven research. The ICPC enriches regional debates by collaborating with research institutes from around the world and by bringing leading global experts to Australia, including through fellowships. To develop capability in Australia and across the Indo-Pacific region, the ICPC has a capacity building team that conducts workshops, training programs and large-scale exercises for the public and private sectors.
We would like to thank all of those who support and contribute to the ICPC with their time, intellect and passion for the topics we work on.
If you would like to support the work of the centre please contact: icpc@aspi.org.au
Important disclaimer
This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.
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First published September 2020.
ISSN 2209-9689 (online), ISSN 2209-9670 (print)
Funding for this report was provided by the US Department of State
See, for example, Austin Ramzy, Chris Buckley, ‘“Absolutely no mercy”: leaked files expose how China organized mass detentions of Muslims’, New York Times, 16 November 2019, online; Bethany Allen-Ebrahimian, ‘Exposed: China’s operating manuals for mass internment and arrest by algorithm’, International Consortium of Investigative Journalists, 24 November 2019, online; James Leibold, ‘The spectre of insecurity: the CCP’s mass internment strategy in Xinjiang’, China Leadership Monitor, 1 March 2019, online; ‘“Eradicating ideological viruses”: China’s campaign of repression against Xinjiang’s Muslims’, Human Rights Watch, 9 September 2018, online; Adrian Zenz, ‘Sterilizations, IUDs, and mandatory birth control: the CCP’s campaign to suppress Uyghur birthrates in Xinjiang’, Jamestown Foundation, 21 July 2020, online. ↩︎
‘Global coalition urges UN to address China’s human rights abuses’, Human Rights Watch, 9 September 2020, online; ‘Global call for international human rights monitoring mechanisms on China’, Human Rights Watch, 9 September 2020, online. ↩︎
James Leibold, ‘China’s ethnic policy under Xi Jinping’, Jamestown Foundation, 19 October 2015, online. For Xi, culture is the ‘blood vessels’ of the nation, in which Zhonghua (Chinese) culture is formed through a ‘grand national fusion’ that includes various minority nationalities but has the Han ethnic majority at its core. ‘Chinese civilisation’, Xi declared in September 2019, ‘possesses a uniquely embracive and absorbent character.’ See Xi Jinping (习近平), ‘Speech at the national awards ceremony for advancing national unity’ (在全国民族团结进步表彰大会上 的讲话), Xinhua Net (新华网), 27 September 2019. ↩︎
Lily Kuo, ‘Revealed: new evidence of China’s mission to raze the mosques of Xinjiang’, The Guardian, 7 May 2019, online; ‘Two of three mosques in Xinjiang village razed amid campaign targeting Muslim holy sites’, Radio Free Asia, 11 August 2020, online; Nick Waters, ‘Are historic mosques in Xinjiang being destroyed?’, BellingCat, 5 April 2019, online; Bahram K Sintash, Demolishing faith: the destruction and desecration of Uyghur mosques and shrines, Uyghur Human Rights Project, October 2019. ↩︎
Wang Qingyun, ‘Foreign Ministry refutes US “lies” about Tibet and Xinjiang regions’, China Daily, 31 December 2019, online; Liu Xin, Fan Lingzhi, ‘Xinjiang refutes latest set of lies’, China Global Times, 3 January 2020. ↩︎
State Council Information Office (SCIO), ‘Cultural protection and development in Xinjiang’, PRC Government, November 2018, online. ↩︎
Li Xiaoxia (李晓霞), ‘Analysis on the quantity change and management policy of Xinjiang mosques’ (新疆清真寺的数量变化及管理政策分 析), Sociology of Ethnicity (民族社会学研究通讯), vol. 164, 2018, online. ↩︎
5G will be the next generation of mobile telecommunications.
There are differing views on how quickly it will become commonplace and exactly what form it will take, but it will ultimately transform much of what we do and how society functions. The trustworthiness, security and resilience of 5G networks will therefore be critical. A key part of this will be the partnerships that network operators form with vendors to provide and maintain the network infrastructure. There’s now a good understanding that 5G will underpin critical national infrastructure in a way that previous telecommunication technologies don’t, and that supply-chain trust and security are key national security issues.
Australia and some other countries have eliminated specific vendors from their 5G supply chains, but the space is globally contested and there is no consensus on what happens next. There is a need for a trusted ecosystem of vendors, which may also bring enormous opportunities for states, including Australia, to develop sovereign 5G capabilities and grow their 5G market. However, barriers to entry and a lack of consensus among key 5G stakeholders across the public and private sectors are holding up progress towards these goals.
What’s the solution?
It’s time to move on from debates about individual vendors to understand what a trusted ecosystem of 5G vendors and technology should consist of, what needs to be done to achieve that outcome and how we still manage the residual risks associated with vendors. Rather than looking at the trustworthiness of individual vendors as a binary yes/no decision at a particular point in time, policymakers and industry need to understand the spectrum of vendor risk and put in place measures to manage different levels of risk. The highest risk vendors can be excluded, but residual risks need to be understood and mitigated. The costs of insecure systems must be recognised and better explained.
Governments need to work together to build an environment that promotes a resilient supply chain with a plurality of trusted suppliers to avoid the risk of operators putting all their eggs in one basket.
If the security of one vendor is compromised, that shouldn’t compromise the whole network or all the networks. This will require initiatives to promote diversity and interoperability, including standards setting, testing and integration facilities, and regulation. If implemented correctly, this will not only improve cybersecurity but also provide an economic opportunity for industry. States need to find the most promising opportunities to develop key sovereign 5G capabilities, including in Australia, and take that same approach to other key enabling technologies in order to avoid similar supply-chain security challenges in the future. The window of opportunity is open now, so we need to lead by taking action now and encouraging other like-minded countries to follow and coordinate with us.
Introduction
5G is a subject that seems to come up in almost every discussion about the future of technology.
Numerous networks are already advertising 5G services, on the basis that they deploy new, more efficient 5G radios at the edge of the network. However, the real transformation, in which the major security implications arise, of a merged ‘core’ and ‘edge’ operating inside a cloud environment is yet to arrive. While there may be debates about how quickly the full 5G transformation will happen and what form it will take, there’s no doubt that it has the potential to transform much of what we do. As this technology becomes an integral part of our lives, the trustworthiness, security and resilience of 5G networks will become ever more critical. A key part of this is the suppliers who will build and maintain the network equipment, and this has led to numerous discussions about the trustworthiness of particular vendors and to some countries, including Australia, banning Chinese vendors such as Huawei and ZTE from their 5G network builds.
This paper aims to broaden the global discussion. Given that all 5G network operators will need to rely on vendor partnerships to build and operate their networks, what are the desired characteristics of the vendor ecosystem that supports operators and what practical policy options should be considered to help achieve that?
This paper is based on a review of existing global literature and interviews with key stakeholders from vendors, network operators and governments in Australia and overseas. The views of these stakeholders – across the public and private sectors – differed considerably in a range of areas. This, in itself, is a part of the problem– there is often not agreed consensus on key topics and therefore the right pathway forward.
This report begins with a review of what 5G is, the current state of technology and rollouts, and the implications and considerations for the cybersecurity of 5G networks, and then looks at the current vendor environment, market opportunities and barriers to entry and diversity, leading to recommendations for the way forward.
What is 5G?
New generations of mobile technology come along about every 10 years, driven by increasing volumes of data, increased variety of data and the rapid velocity of change in types of data usage. The 5th generation, or 5G, the latest one, is starting to be implemented now and will ultimately replace the 4G networks that began to appear in 2010. However, existing technologies will probably still be with us alongside 5G for many years to come. Change between each mobile generation is not always a step change, and there have been incremental updates between generations. In fact, the first mobile data devices, including the first iPhone, used a technology called GPRS, which was sometimes referred to as ‘2.5G’.
The internationally accepted technical standards are set by an organisation known as the 3rd Generation Partnership Project (3GPP1). As the name implies, this was originally for 3G mobile networks, but it’s taken the lead for 4G and 5G without an update of its name.
It’s generally accepted that true 5G networks require the implementation of at least R15 of the 3GPP standard.2 In simple terms, there are three key components of ‘real’ 5G:
Faster mobile broadband speeds: This is generally the most common public perception of 5G—how many gigabits of speed can be provided to a mobile handset and hence how quickly you can download an ultra-HD movie to your phone. However, this is unlikely to be what delivers transformational change in how we use mobile devices; nor will it provide the revenues to justify the investment made by network operators.
Ultra-reliable low-latency communications: These are needed for extremely time-sensitive and mission-critical applications, such as remote factory automation and so on. It’s even been suggested that this could enable remote robotic surgery in which a surgeon is able to get real-time feedback on how the patient reacts to steps taken and can reliably make changes that are implemented in real time.
Massive machine-to-machine communications: 5G networks will enable a much greater density of transmitting and receiving devices, especially if they’re sending small amounts of data. This will enable large-scale monitoring, measuring and sensing applications in which large numbers of devices directly communicate with each other without human intervention—machine-to-machine communications. This is sometimes also referred to as the ‘internet of things’. While this is already starting to happen, 5G networks will enable exponential growth in the numbers of connected devices.
Other key features, depending on how networks are configured, can include ‘edge computing’, in which the equivalents of current cloud computing capabilities are brought closer to wireless devices to enable more rapid processing, and ‘network slicing’, in which different customers, applications, or both can have their own virtual slices of a common physical network.
In the underlying technology stack (see box), a key part of 5G network architecture is increased ‘virtualisation’, in which more and more functionality is implemented in software, including even the underlying network topology. This enables greater flexibility and agility in how they will be used, but also, as we shall see, brings greater complexity and potential security vulnerabilities.
It would be fair to say that no one really knows what 5G networks will be used for—including the service providers who will need to commercialise and monetise them. However, it’s certain that they’ll drive ever more usage and reliance on mobile data networks, and in particular more and more critical applications, transforming our way of life in ways not yet even imagined. Of course, this isn’t unusual for new technologies—remember that the worldwide explosion in SMS messaging since the late 1990s came from an obscure engineering feature included in the 2G mobile specifications that was intended for network service messages.
5G technology components
At the conceptual level, a telecoms network consists of:
a radio access network (RAN)—antennas and electronics that convert between the radio signals sent to and from wireless devices and the bits and bytes sent as signals on network cables and inside computer equipment
a core network that manages and carries the network traffic between the mobile devices and the other computer and network components, and also authenticates and provisions services to users
traditional ICT—routers, switches and servers that provide the data transport, storage, processing and logic.
Within each of these ‘black boxes’ are a huge number of electronic components, some of which are specialised for the functions of 5G, such as high-density antennas and signal processing, and some of which are more generic (Figure 1).
Figure 1: A 5G network
The overall user experience is delivered by applications and services that run across the top of these components: different bits of software may run on different components of the system but work together to provide a seamless experience for the user. One of the differences in moving to 5G is that more and more will be done in software, and in order to provide the full experience the application service provider will need to run specific software on more parts of the network.
For example, today a messaging service such as WhatsApp requires specialised software running on the end-user device and on the WhatsApp servers. Tomorrow, supporting remote surgical procedures via a 5G network may require software running on the radio access nodes and servers at the edge of the network to meet the response time requirements.
This virtualisation will enable greater service customisation, scale and optimisation. The standards even envisage ‘network slicing’, in which there may be a dedicated ‘slice’ across the whole system for a particular user group and application service—effectively, computational and network resources on every box reserved just for them.
Overview of current 5G technology maturity
Preparations for 5G by telecommunications network operators are proceeding at pace. At the end of 2019, it was estimated that 348 operators in 199 countries had announced plans to invest in 5G.3
However, implementation and take-up have been slow to date. Only 77 operators have deployed 5G technology, and 61 operators in 34 countries have launched services. Although only limited 5G-enabled devices are currently available, Ericsson estimates that there were 13 million users globally at the end of 2019, mostly driven by take-up in Korea and China.4 The same report forecasts an estimated 2.6 billion active 5G subscriptions by 2025, but even that pre-pandemic estimate would still be less than a third of all mobile subscriptions.
While a glance at advertising material might make you think that fully featured 5G networks are commonplace in many major countries, the advertising doesn’t tell you that those deployments are often only part of the overall 5G capability. Generally, operators have implemented radio interfaces that allow users to experience the faster mobile broadband speeds of 5G, but not other features.
Even the radio interfaces are generally not using the cloud-based radio processing included in the 5G standards. Almost all currently deployed networks are built on top of existing 3G/4G networks (referred to as ‘NSA’, or non-stand-alone), which has allowed rapid rollout. That means that, while 5G coverage may be limited (for example, to just parts of major cities in Australia), users can have a seamless experience when moving in and out of 5G coverage. Chinese mobile providers had previously announced plans to deploy a stand-alone (SA) 5G network in the last quarter of 2019, but appear to have settled for an initial NSA deployment.
A full 5G core and SA network architecture will be needed to enable the other key features, such as low latency and massive machine-to-machine communications, and hence many of the transformational and mission-critical applications. This will require significant new investment in an environment in which network operators have had low margins from their existing businesses, even before the pandemic. The last-minute decision by China Telecom to change its deployment from an SA network to NSA probably confirms the challenges in implementing SA networks and the immaturity of the technology. That said, we are seeing some evidence of SA deployments this year despite all the disruption, for example with Telstra claiming to have made their network “standalone-ready” in May 20205, but it’s clear that the full concepts and designs for true next-generation architectures and applications are still emerging.
5G standards and interoperability
Looking at the current 5G standards, it’s clear that there’s much to be defined. The current widely-implemented version of the 3GPP standard is R15, which really focuses on migration from 4G to 5G, and even for this operators have noted that different vendors have different approaches to the coexistence of the generations and to fallback from 5G to 4G when 5G isn’t available. The next version of the standard, R16, issued in July 2020, starts to look at specific use cases such as industrial internet of things applications and better power consumption, but we’ll need to wait for R17, the scope of which isn’t even confirmed yet, in order to define some of the more critical features.
A further complication is that the agreement of standards, once considered a very dry subject in which technical experts put their heads together and collaborate to get the best technical outcomes, has now become politicised. Some nation-states have realised that there are advantages in influencing choices towards areas where they have expertise and technical leadership. This can help provide ‘first mover’ advantage in implementation and can also often deliver value from existing patents in the form of royalties (from manufacturers that make standards-compliant products) that can be reinvested in R&D to maintain a leading position.
As an example, in May 2018, it appears that Chinese companies were pressured into backing a Huawei proposal over one from US rival Qualcomm, and Lenovo’s founder was forced to issue a statement denying the company had been unpatriotic and failed to back its compatriot in the final round of voting.6 This is hardly surprising, given that homegrown technologies are often a matter of national pride, and China has set an explicit goal of becoming ‘a standards-issuing country’.7 The rewards for success in influencing the standards can be immense, in the form of both tangible, monetary rewards (licensing fees can be worth several billions of dollars a year to a company) and the intangible—the ability to influence how technology is used (see, for example, recent proposals by Huawei to the International Telecommunication Union for a ‘New IP’ internet architecture, which some have seen as an attempt introduce new, authoritarian-friendly values8).
Therefore, standard setting has become a key to global power and influence, but Australia and other allies don’t appear to have recognised this and hence aren’t currently in a position to compete in this sphere.
Although 5G is based on an ‘open standard’ published by the 3GPP consortium there are still factors that work against easy interoperability. Apart from the usual engineering challenge that different engineers may interpret standards differently, the standards definition process may be being manipulated, and in any case lags well behind what vendors are developing and carriers are implementing. The challenges from immature technology and the standards processes are undoubtedly a factor driving carriers to prefer single-vendor end-to-end solutions.
Although 3GPP, a body dominated by carriers and vendors, has become the de facto leader in mobile network standards, it is only one of a number of potential bodies. There is a potential overlap with the International Telecommunications Union which is an international member state, treaty based organisation, and there are also other competing standards bodies such as ISO and ETSI. Making a choice about how and where to develop standards has became a matter of values and geopolitics, often at the expense of technology considerations.
Some carriers have recognised these challenges, in particular in relation to radio signalling and the problems of getting different base stations to work together, and have established their own initiatives, such as the OpenRAN venture under the Facebook-headed Telecom Infra Project. This initiative is intended to reduce the expense of providing internet and voice services by standardising the design and functionality of hardware and software in the RAN, increasing the number of companies that can supply components for the infrastructure that carries mobile traffic. There are a number of competing interests at play here: carriers and Facebook would like telecommunications in general to be cheaper; incumbents would prefer no increase in competition; and some states have interests in promoting national champions. Despite this, the OpenRAN initiative appears to be gathering momentum, with at least one global player, Nokia, recently committing to Open RAN interfaces9.
Another development has been the announcement by a number of global carriers, including Telstra, of the establishment of the 5G Future Forum, which intends to produce uniform interoperability specifications, develop public and private marketplaces to enhance access to technology and share global best practice.10
If these sorts of initiatives don’t succeed and the global 5G market ends up with different vendors dominant in different geographies, without clear standards and interoperability, there’s a very real risk of long-term incompatibilities that will undermine many of the potential benefits. After all, it’s happened before—in the 1990s, the major US carriers chose a technology called CDMA, while the rest of the world followed the GSM standard.11 The current lack of a major US network equipment vendor is probably at least partially due to that bifurcation—US companies concentrated on developing a technology that no one else used and ended up in a technical dead end.
5G and cybersecurity
Why is cybersecurity seen as so critical for 5G networks? Because 5G isn’t just the next natural stage in the evolution of wireless networks. 5G is about more than movie downloads. The likely applications and use cases will become critical to the functioning of governments, companies and society, including cyber-physical and safety-critical systems that will rely on the network. Not only do we need to be concerned about the confidentiality of data and users on the network, but we also need to consider the impacts of an attacker potentially compromising the availability and integrity of the systems, including the risks of the attacker being able to take down the whole network at once.
Australian and many other governments have already identified telecommunications networks as critical national infrastructure that’s essential to the effective functioning of society and therefore requiring additional regulation and attention, and it’s easy to understand why.12 In Australia in recent months, we’ve seen the chaos caused by outages of electronic payment (EFTPOS) systems for a few hours, making it impossible for people to buy basic items because they’re unused to carrying cash.13
Now imagine the impact of a smart city suddenly losing all traffic sensor data and the ability to control traffic lights. An attacker could cause major accidents by maliciously changing the data being sent to traffic lights. In fact, given some of the potential applications enabled by 5G, it could be possible to cause major disruption by more subtle changes. If applications such as remote driving of vehicles rely on ultra-low latency, what would happen if an attacker introduced a small delay to some or all network traffic?
The increasing importance of the network, combined with the increased risk that a cyber breach will cause major real-world consequences, means that the cybersecurity of 5G networks must be a critical consideration, planned and accounted for from the outset. Risk management approaches should also consider the more sensitive functions that are used by national security and law enforcement authorities, such as compliance with legislation on telecommunications interception and data retention, which may create additional security risks.
Building an understanding of 5G security requires integrating security and the 5G network architecture. Both suffer from a major skills gap in Australia14 and globally,15 so we would expect a major shortage of professionals with a detailed understanding of both, exacerbated by the fact that 5G architectures are complex and still evolving.
One example is the debates about the separation of the ‘core’ and ‘edge’ components of a 5G network. Can they be effectively segregated so that a threat in the edge can’t affect the core? Australian authorities say they can’t be effectively segregated, whereas UK authorities appear to be suggesting they can. Without getting involved in the details of the debate here, it’s likely that the true answer is that it depends on architectural choices and complex overall system-level interactions. Concepts such as network slicing will make this even more complex. End users are given effective control and exclusive use of an end-to-end slice of the network, and attention will need to be paid to the security safeguards required to minimise the risk of them escaping their own virtual slice and getting access to other parts of the network.
Vendor trust and security
The issue of vendor trust and security has been prominent in discussions about 5G security. Australia and the US have announced decisions to bar certain vendors, the UK has been formulating a compromise approach,16 (although this seems to be still evolving) and active debates in Europe are seemingly close to reaching a conclusion.
The risks from using a particular vendor can be many and varied. Much commentary on the subject talks about hardware ‘backdoors’ being inserted by a vendor at the factory,17 but that’s probably not the biggest issue. In fact, it’s probably an unhealthy focus that can drive the debate onto specific component manufacturers, when the bigger risks probably come higher up the technology stack.
A much more worrying vendor risk occurs when carriers are critically dependent on vendors for maintaining the quality of service and so give the vendors access to the live network for support and maintenance. The nature of 5G networks as ‘software defined everything’ also means that there are security risks throughout the network that can be hidden in the complexity of software—vulnerabilities that are deliberately introduced by the vendor, or that come from genuine errors and oversights.
Different vendors have different approaches to and cultures of security. The extent to which they use approaches such as secure software development, system integrity validation and third-party supplier checks can be a useful guide, as well as their approach to the reporting and patching of security issues.
However, the control and ownership of vendors, in particular those from nation-states in which companies may be subject to extrajudicial direction, has, to date, been the main criterion used to measure vendor risk.18 This should be broadened to consider all sources of risk. As well as foreign ownership and control, vendor threats can come from insiders, such as rogue employees, even in a vendor from a trusted country, and also depend on the quality of the security culture and secure-by-design approaches used by a vendor. This leads to a spectrum of vendor risk levels that can be used to guide appropriate treatments.
We can sensibly decide to exclude very high risk vendors, but since no vendor will be zero-risk, other mitigation measures will be needed in addition. While, given the criticality of 5G networks, we should impose a high standard of cybersecurity control and risk management across the network even for the lowest risk vendors, additional measures may be needed for intermediate levels. It’s important that carriers understand these requirements and can factor the different security costs into their procurement decisions (so potentially avoiding the incentive to simply choose the cheapest supplier who isn’t excluded due to being very high risk).
Independent testing of vendor equipment may be of some use to assess and mitigate risk (see, for example the Huawei testing facility set up and used by the UK over the past few years), but it’s not just a matter of testing the product from the factory. For any software components, each new release will require retesting, and in a 5G world the software becomes the most critical layer. The public reports from the UK testing facility19 show a series of damning findings and a lack of any assurance that identified flaws are resolved effectively. This means that, at best, this approach can be only a small part of a broader strategy.
In some cases, architectural approaches can be used to mitigate the risk. For example, end-to-end encryption could be used to mitigate the risk that particular network equipment could have unnecessary access to user details and data on the network. However, if we look at the risk of an adversary seeking to completely disable a network, the vendor risk is much greater, as ultimately the end-to-end network works only if every component in the chain is working—RAN, core access and routing.
This means it isn’t just a matter of assessing and using a vendor with an acceptable level of risk. Any farmer will tell you to avoid monoculture—growing just one crop means that one disease can wipe you out overnight. Similarly, if a network is dependent on a single vendor and a vulnerability is found, the vendor becomes untrusted for some reason or the company collapses, the equipment will be almost impossible to replace, and entire networks can become at risk overnight.
Therefore, as well as vendor trust, we need to ensure vendor diversity and redundancy in design.
Operators need to have confidence that multiple vendors’ equipment can interoperate, and ideally have multiple vendors’ systems in service for each major function. This will provide resilience and options to reduce dependence on a particular vendor if circumstances change. In a given carrier’s network, there should be at least two vendors for each key equipment type, and across the market there should be four or more viable suppliers considered acceptable to use. These are bare minimums from a competition policy and resilience perspective; from a long-term resilience point of view, there should be as many vendors as possible, subject to ensuring that each has critical mass and is commercially sustainable in the long term.
The 5G vendor landscape
The dominant vendors in the 5G market are generally considered to be Huawei and ZTE from China, Nokia from Finland and Ericsson from Sweden. This is certainly the case in the 5G network equipment sector, although they have some competition from Samsung (Korea) for radio equipment and Cisco (US) for the network core. There’s more competition in the devices market and for switches and routers. The main market players are shown in Figure 2.
Figure 2: The main 5G players
Source: Adapted with permission from James A Lewis, How will 5G shape innovation and security: a primer, Center for Strategic and International Studies, Washington DC, 2018, 4, online.
Figure 2 shows that Chinese companies are major players in the network equipment market, but not (yet) runaway leaders. Ericsson and Huawei have very similar shares of the RAN equipment market, and Nokia isn’t far behind, and for the evolved packet core Ericsson leads Huawei. The US is also starting to have a presence among market leaders in the core network, where much of the future growth is expected. All three network equipment categories show very strong concentration: only two or three non-Chinese vendors in each category have any significant market share.
Considering the RAN in more detail, the OpenRAN initiative mentioned above is creating opportunities for new entrants. In January this year, O2, the Telefonica-owned UK mobile operator, announced plans to engage new UK- and US-based entrants, including Mavenir, DenseAir and WaveMobile, in an OpenRAN deployment.20 In November 2018, Vodafone revealed that it had issued a request for information covering tests for OpenRAN-compatible solutions and received responses from seven vendors, only one of which (Samsung) appears in the list above; the others were a mix of US, French and Indian companies. Vodafone then ran a request for quote process for the deployment of OpenRAN across 100,000 sites on its European networks.
Down at the component level, there’s greater diversity. For specialised radio components, such as small cell antenna arrays and power amplifiers, European and US companies dominate, and for specialised field-programmable gate arrays, which are essential for high-power embedded processing, there are really only two major manufacturers: Intel and Xilinx, which are both US companies.
This confirms that, if the US continues to enforce the listing of Huawei on the ‘Entity List’, and thus prohibit exports of US-made components to it, there would be serious impacts on Huawei’s ongoing manufacturing capability, at least in the short to medium term.
If we look further up the stack to the services and applications layer, that’s where many critical applications will be implemented, which also provides an opportunity to reduce dependence on the network equipment (for example through end-to-end encryption). The use cases and applications are only now being defined and implemented, so it’s too early to identify the key players in this space, but it will be an important one in which to understand vendor trust and act accordingly.
Market opportunities and barriers
The 5G infrastructure spend was US$784 million in 2019 and is forecast to be US$47.8 billion in 2027.21
This estimate didn’t account for the impact of Covid-19, which is likely to cause some delays and cutbacks, but the market over the next few years is still likely to be highly lucrative as a whole, although the accessible RAN market may be less so due to the high market share of low-cost Chinese vendors.
While a significant portion of the revenue will go to the established players noted above, there are still opportunities for new entrants to gain significant revenue, given that the development and building of fully featured 5G networks is still at an early stage.
Compared to earlier generations of mobile technology, 5G offers more opportunities for new entrants to the market. This is because in 5G architectures a significant number of functions become virtualised and are implemented in software. This opens up opportunities for software solution providers unconstrained by the costs and timescales of bespoke hardware development—especially if they can write efficient, fast and reliable code to implement mission-critical use cases. This world of ‘software defined everything’ means that innovative and potentially sovereign businesses have the opportunity to add trust and value at the software layer.
The RAN equipment market presents particular challenges—it traditionally requires specialist hardware for antennas, radio signal generation and reception, and signal processing. Significant investment and time are needed to develop new hardware for the new frequencies, higher speeds and more devices that 5G will need to support. However, the 5G architecture does mean that, even for radio processing that’s traditionally done using specialised hardware at the antenna site, signals can be digitised and processed in software at remote sites.
In other network equipment classes, there will still be barriers to entry. The established players can be expected to compete strongly to maintain market dominance. They’ll also use the immaturity of standards to persuade service providers that it’s lower risk to use a single end-to-end provider. From discussions with providers for this report, this could resonate, especially given consumers’ focus on service quality. Telecoms companies nowadays prefer to buy managed services from vendors rather than build and integrate systems themselves. This means that when there are service outages they have a ‘single throat to choke’ (their vendor’s), rather than having to referee finger-pointing between vendors. A shortage of systems engineering skills has also been identified as a major barrier to enabling telecoms companies to consider developing multivendor environments, along with the challenge of needing to develop expensive interoperability testing facilities.
The third area of opportunity is in developing and running applications and services across the network to implement 5G use cases. In this case, the market for software to implement new applications is wide open, given that the applications have often not even been defined, or in some cases probably not even imagined yet.22 However, we can still expect the leading network equipment vendors to compete strongly, given their obvious adjacency and the opportunity to grow their businesses. Revenue streams from network equipment sales, in addition to any state subsidies, can be used to fund major R&D budgets and aggressive pricing. Antidumping provisions are especially difficult to manage for software, given the low cost of production, and carriers will always have financial drivers to choose the cheapest option without necessarily paying heed to broader requirements for vendor diversity and risk management.
Established vendors, wherever they’re from, can be expected to promote the perceived benefits of their end-to-end integration, critical mass and established brand recognition. They may use their control of the platform to seek to set up trusted ecosystems (think of Apple iOS devices and the App Store) in the name of security and openness, while in practice setting up barriers to entry. We can also imagine groups of platform, software and hardware vendors from one country, with implicit or explicit encouragement from their government, looking to set up collective monopolies. Carriers will see advantages in single-vendor solutions, in reducing performance risks, reducing their requirements for system integration skills etc. The challenge will be to persuade major carriers to look at the broader risk landscape, to be willing to integrate multi-vendor solutions and to put faith in emerging companies for what would be expected to be a long-term investment.
Recommendations for developing the trusted vendor market
We’ve noted that there are significant opportunities for vendors from Australia and allied countries to develop critical technology. However, they face significant competition from established players with economies of scale, and in some cases direct or indirect foreign government support. Appropriate policy actions will be needed to overcome the barriers in order to open up genuine opportunity for a broader range of vendors and provide the diversity that we need to improve the security and resilience of our 5G ecosystem.
Take a graduated approach to risk assessment and mitigation
There is a need for appropriate market signals to encourage carriers to choose lower risk vendors. There’s already, in Australia and some other countries, an outright ban on very high risk vendors, but, given the spectrum of risk, regulation should also ensure that the increased security costs of choosing a higher risk option sit with the carrier, rather than, for example, national cyber authorities being responsible for extra costs as they seek to protect carrier networks against vendor threats and mitigate risk.
The Australian Cyber Security Centre should develop a comprehensive framework of recommended vendor risk ratings based on various factors. The ratings should be used to define mandated risk-mitigation actions based on risks, which could include tailored levels of isolation, control and monitoring of any access that vendors are given to live networks for support and maintenance purposes, along with limitations on offshore managed service provision and offshore data storage.
Another example could be ensuring that sensitive and critical functions (such as lawful interception and audit logging) are segregated and can be separately managed using highly trusted solutions independent of the main network equipment vendors.
Regulate competition
Competition and merger policy levers should also be used to ensure fair opportunity for new entrants by limiting consolidation, preventing cross-subsidies of existing major vendors when selling new capabilities, and perhaps even mandating major vendors to subcontract a portion of the work.
This could include identifying where companies may be receiving subsidies from nation-state governments, and whether trade and international agreements provide remedies to address unfair competition impacts.
These restrictions should apply to all existing major vendors, not just those from high-risk jurisdictions. It wouldn’t be an appropriate approach to just pick one or two ‘winners’ from the existing major European and US vendors—a rich, diverse, vendor pool is needed to ensure the long-term resilience of our 5G networks.
Expand industry development policy and invest in key technologies
We’ve seen that building 5G vendor diversity can also be an economic opportunity for Australia. Therefore, we should ensure that industry policy promotes this. While we have a strong start-up culture, we need to ensure that successful companies are able to scale up rapidly to credibly compete and serve the global market.
Regulatory barriers that prevent or slow scale-up should be identified and addressed, and action is also needed to address the problem of access to capital. The Australian Government should establish an investment fund that can fund key technologies critical to our national security. It could be modelled, for example, on the National Security Strategic Investment Fund set up by the UK.23 Its remit would probably be broader than the scope of this paper, but it could certainly help to support the scale-up of 5G technologies. Another model to consider could be the recent proposal from a group of US senators for a US$1.25 billion proposal to fund new R&D and a multilateral project fund for 5G technologies.24
Encourage a more open network equipment market
Given the desired objective of vendor diversity, we need to ensure that carriers have both the right incentives and the confidence to move away from the single-vendor environment. To assist this, the government should establish, fund and manage an independent test facility for 5G networks. This should be fully modular to allow the testing of different components from different vendors (as an example of how this can be done, see, for example, the Open 5G Core project25). As well as enabling interoperability testing, this would also enable security and vulnerability research and testing at the overall 5G system level, which we’ve noted is currently a poorly understood area. Potentially, this could be a joint undertaking with other allied countries, such as Canada and New Zealand, to reduce costs, but we caution that it should be ensured that Australia is a major contributor to this and hence able to use influence to achieve our own national security objectives.
Consideration should be given to mandating that network providers use multiple vendors for key components. This may be difficult to implement, and network providers may have concerns over the burden that it imposes. However, doing so would go a long way towards overcoming the possibility of ‘monoculture’ security risk. Other countries, such as the UK, have discussed going in a similar direction, and that may allow Australia to learn lessons from their experience and devise an appropriate approach for our circumstances.
We need to ensure active engagement with 3GPP on standards setting to avoid politicisation and ensure that choices that maximise overall security and resilience, and market opportunity for new entrants, are made. This will include the identification of the key use cases for priority development, seeking to avoid choices reliant on foreign patents, and preference for the best technical choices based on open standards and implementation. Current responsibility for such engagement is diffused among different organisations, so one organisation needs to be given the mandate and funding to lead this work.
We’ve noted the challenges with standards-setting bodies, so, if engagement there doesn’t prove effective, there may be a need for local regulations to mandate open interfaces for the most critical functions, especially where they’re needed to provide the option to segregate critical functions to be carried out by sovereign vendors. As an example, for lawful interception, open internal interfaces, referred to as X1, X2 and X3, would allow the administration of warrants and the intercepted data to be partitioned securely. Ideally, we could seek to align such regulations with those of other like-minded countries, but in the absence of agreement Australia may need to act alone in our own interest.
Address RAN equipment supply
Even though the RAN forms only one part of the overall 5G network, the small number of suppliers and its criticality to the overall availability of the network indicate that equipment supply should receive some focus from policy-makers. Although it does not seem likely to lead to security or diversity benefits in the short term, if the OpenRAN initiative gains more momentum it will also provide opportunities for new entrants. Australia should work with allies and other countries that do not have domestic suppliers or interests in promoting their national champions to encourage further adoption of the OpenRAN standard to allow more vendors into this marketplace using appropriate combinations of grants and incentives to carriers to encourage them to adopt this standard.
Invest for the future
Finally, action needs to be taken to prepare for the future to avoid a repetition of this situation with other emerging technologies. Australia needs to invest in developing and commercialising technologies for artificial intelligence, 6G, quantum computing and other emerging fields. In building the right skills pipeline, we should also address current perceived skills gaps. We need systems engineers who can design and build systems bringing together components and technologies from different companies.
Conclusions
5G networks are the next generational uplift in mobile communications technology. They’ll enable not only fast speeds but more reliable, low-latency communications and massive machine-to-machine communication, enabling new applications for which security will be critical. While there are significant identified risks to the privacy and confidentiality of data on the network, and the users, there are also risks from an adversary seeking to completely take down a communications network or compromise its integrity. There are a number of potential causes, but a significant one is trust in the vendors whose equipment is used. Various countries have made differing decisions on excluding specific vendors considered to be high risk, but the discussion needs to move on, as reliance on one or two ‘not high risk’ vendors will still create major security risks. Long-term security and resilience depend on a diverse vendor ecosystem.
Fortunately, the technology and rollout plans for ‘real’ 5G are still developing, so now’s the time to take appropriate action. We recommend that urgent action be taken to identify opportunities for developing new capabilities, the barriers to market entry, and policy actions to encourage new entrants and build a diverse 5G vendor ecosystem. Table 1 summarises our findings and recommendations.
Table 1: Findings and recommendations
We should seek to work in coordination with our allies and other like-minded countries for maximum impact. However, if we wait to first build global consensus it’s likely that we’ll miss the window of opportunity. Australia took the lead in making the decision to exclude the highest risk vendors and now needs to lead in taking the next set of actions required for the long-term security and stability of 5G infrastructure, and in parallel encourage others to work with us in this endeavour.
Acknowledgements
The author thanks those government and industry stakeholders who made themselves available for discussions and openly shared their thoughts and perspectives, and ASPI colleagues who provided constructive comments on this report. The author also thanks all anonymous peer reviewers for their feedback. No specific sponsorship was received to fund production of this report. The work of ICPC would not be possible without the financial support of our partners and sponsors across governments, industry and civil society.
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Important disclaimer
This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.
This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, educational institutions (including schools, independent colleges, universities and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from ASPI and free of charge.
First published September 2020. ISSN 2209-9689 (online), ISSN 2209-9670 (print)
Funding: No specific sponsorship was received to fund production of this report.
For more information on 3GPP membership and activities, see About 3GPP home, 3GPP, 2020, online. ↩︎
Kelly Hill, ‘5G deployment faces a skills gap’, RCR Wireless News, 4 April 2019, online. ↩︎
UK Government, ‘Coronavirus (COVID‑19): what you need to do’, Gov.UK, 28 February 2020, online. ↩︎
See, for example, Peter Bright, ‘Bloomberg alleges Huawei routers and network gear are backdoored’, ArsTechnica, 5 January 2019, online. ↩︎
Scott Morrison, Mitch Fifield, ‘Government provides 5G security guidance to Australian carriers’, joint media release, 23 August 2018, online. ↩︎
‘Huawei cyber security evaluation centre oversight board: annual report 2019’ UK Cabinet Office, 28 March 2019, online. ↩︎
Bevin Fletcher, ‘UK’s O2 taps non‑traditional vendors for O‑RAN project’, FierceWireless, 16 January 2020, online. ↩︎
‘5G Infrastructure Market by Communication Infrastructure, Core Network, Network Architecture, Operational Frequency, End User & Geography ‑ Global Forecast to 2027’, MarketsandMarkets, Oct 2019, online. ↩︎
As an example, in the late 1990s some companies made huge revenues from developing software to send short service messages around 2G networks—which was ultimately used for the explosion in SMS communication. ↩︎
‘British Business Bank launches £85m National Security Strategic Investment Fund (NSSIF) Programme to support development of advanced dual‑use technologies’, news release, British Business Bank, 31 July 2018, online. ↩︎
Mark R Warner, ‘National security senators introduce bipartisan legislation to develop 5G alternatives to Huawei’, press release, 14 January 2020, online. ↩︎
https://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2025/03/25111748/PB30-Trusted-5G_banner.jpg4501350nathanhttp://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/10/16232551/ASPI-CMYK_SVG.svgnathan2020-09-17 06:00:002025-03-25 11:19:32Ensuring a trusted 5G ecosystem of vendors and technology
While most major international social media networks remain banned from the Chinese market in the People’s Republic of China (PRC), Chinese social media companies are expanding overseas and building up large global audiences. Some of those networks—including WeChat and TikTok—pose challenges, including to freedom of expression, that governments around the world are struggling to deal with.
The Chinese ‘super-app’ WeChat, which is indispensable in China, has approximately 1.2 billion monthly active users1 worldwide, including 100 million installations outside of China.2 The app has become the long arm of the Chinese regime, extending the PRC’s techno-authoritarian reach into the lives of its citizens and non-citizens in the diaspora.3 WeChat users outside of China are increasingly finding themselves trapped in a mobile extension of the Great Firewall of China through which they’re subjected to surveillance, censorship and propaganda. This report also shows how Covid-19 has ushered in an expanded effort to covertly censor and control the public diplomacy communications of foreign governments on WeChat.
Newcomer TikTok, through its unparalleled growth in both Asian and Western markets, has a vastly larger and broader global audience of nearly 700 million as of July 2020.4 This report finds that TikTok engages in censorship on a range of political and social topics, while also demoting and suppressing content. Case studies in this report show how discussions related to LGBTQ+ issues, Xinjiang and protests currently occurring in the US, for example, are being affected by censorship and the curation and control of information. Leaked content moderation documents have previously revealed that TikTok has instructed “its moderators to censor videos that mention Tiananmen Square, Tibetan independence, or the banned religious group Falun Gong,” among other censorship rules.5
Both Tencent and ByteDance, the companies that own and operate WeChat and TikTok, respectively, are subject to China’s security, intelligence, counter-espionage and cybersecurity laws. Internal Chinese Communist Party (CCP) committees at both companies are in place to ensure that the party’s political goals are pursued alongside the companies’ commercial goals. ByteDance CEO Zhang Yiming has stated on the record that he will ensure his products serve to promote the CCP’s propaganda agenda.6
While most major international social media platforms have traditionally taken a cautious and public approach to content moderation, TikTok is the first globally popular social media network to take a heavy-handed approach to content moderation. Possessing and deploying the capability to covertly control information flows, across geographical regions, topics and languages, positions TikTok as a powerful political actor with a global reach.
What’s the solution?
The global expansion of Chinese social media networks continues to pose unique challenges to policymakers around the world. Thus far governments have tended to hold most major international social media networks and Chinese social media networks to different standards. It’s imperative that states move to a policy position where all social media and internet companies are being held to the same set of standards, regardless of their country of origin or ownership.
This report recommends (on page 50) that governments implement transparent user data privacy and user data protection frameworks that apply to all social media networks. If companies refuse to comply with such frameworks, they shouldn’t be allowed to operate. Independent audits of social media algorithms should be conducted. Social media companies should be transparent about the guidelines that human moderators use and what impact their decisions have on their algorithms. Governments should require that all social media platforms investigate and disclose information operations being conducted on their platforms by state and non-state actors. Disclosures should include publicly releasing datasets linked to those information campaigns.
Finally, all of these recommended actions would benefit from multilateral collaboration that includes participation from governments, the private sector and civil society actors. For example, independent audits of algorithms could be shared by multiple governments that are seeking the same outcomes of accountability and transparency; governments, social media companies and research institutes could share data on information operations; all stakeholders could share lessons learned on data frameworks.
We would like to thank Danielle Cave and Fergus Hanson for their work on this project. We would also like to thank Michael Shoebridge, Dr Samantha Hoffman, Jordan Schneider, Elliott Zaagman and Greg Walton for their feedback on this report as well as Ed Moore for his invaluable help and advice. We would also like to thank anonymous technically-focused peer reviewers.
This project began in 2019 and in early 2020 ASPI was awarded a research grant from the US State Department for US$250k, which was used towards this report. The work of ICPC would not be possible without the financial support of our partners and sponsors across governments, industry and civil society.
What is ASPI?
The Australian Strategic Policy Institute was formed in 2001 as an independent, non‑partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices. ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally. ASPI’s sources of funding are identified in our Annual Report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements.
ASPI International Cyber Policy Centre
ASPI’s International Cyber Policy Centre (ICPC) is a leading voice in global debates on cyber, emerging and critical technologies, issues related to information and foreign interference and focuses on the impact these issues have on broader strategic policy. The centre has a growing mixture of expertise and skills with teams of researchers who concentrate on policy, technical analysis, information operations and disinformation, critical and emerging technologies, cyber capacity building, satellite analysis, surveillance and China-related issues.
The ICPC informs public debate in the Indo-Pacific region and supports public policy development by producing original, empirical, data-driven research. The ICPC enriches regional debates by collaborating with research institutes from around the world and by bringing leading global experts to Australia, including through fellowships. To develop capability in Australia and across the Indo-Pacific region, the ICPC has a capacity building team that conducts workshops, training programs and large-scale exercises for the public and private sectors.
We would like to thank all of those who support and contribute to the ICPC with their time, intellect and passion for the topics we work on. If you would like to support the work of the centre please contact: icpc@aspi.org.au
Important disclaimer
This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.
This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, educational institutions (including schools, independent colleges, universities and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from ASPI and free of charge.
First published September 2020.
ISSN 2209-9689 (online), ISSN 2209-9670 (print)
Funding for this report was provided by the US State Department.
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The Chinese Communist Party (CCP) is increasingly deploying coercive diplomacy against foreign governments and companies. Coercive diplomacy isn’t well understood, and countries and companies have struggled to develop an effective toolkit to push back against and resist it.
This report tracks the CCP’s use of coercive diplomacy over the past 10 years, recording 152 cases of coercive diplomacy affecting 27 countries as well as the European Union. The data shows that there’s been a sharp escalation in these tactics since 2018. The regions and countries that recorded the most instances of coercive diplomacy over the last decade include Europe, North America, Australia, New Zealand and East Asia.
The CCP’s coercive tactics can include economic measures (such as trade sanctions, investment restrictions, tourism bans and popular boycotts) and non-economic measures (such as arbitrary detention, restrictions on official travel and state-issued threats). These efforts seek to punish undesired behaviour and focus on issues including securing territorial claims, deploying Huawei’s 5G technology, suppressing minorities in Xinjiang, blocking the reception of the Dalai Lama and obscuring the handling of the Covid-19 pandemic.1
China is the largest trading partner for nearly two-thirds of the world’s countries, and its global economic importance gives it significant leverage.2 The impacts of coercive diplomacy are exacerbated by the growing dependency of foreign governments and companies on the Chinese market. The economic, business and security risks of that dependency are likely to increase if the CCP can continue to successfully use this form of coercion.
What’s the solution?
A coordinated and sustained international effort by foreign governments and companies is needed to counter this coercive diplomacy and uphold global stability. This can be achieved by the following means:
Increase global situational awareness about the widespread use of coercive diplomacy and the most effective strategies to counter it.
Respond via coordinated and joint pushback through multilateral forums and by building minilateral coalitions of states affected by the same coercive methods.
Five Eyes countries should consider adopting a collective economic security measure, analogous to Article 5 of the North Atlantic Treaty establishing NATO. Using their collective intelligence arrangements and by pulling in other partners, authoritative joint attributions could be made of any coercive measures levied against any of the members with collective economic and diplomatic measures taken in response.
Factor in the heightened risk of doing business and building economic relations with China, particularly with regard to trade flows, supply chains and market share.
Develop economic, foreign and trade protocols in collaboration with the business community on how best to respond to coercive methods applied to business. In cases of coordinated action against companies, the dispute should be elevated to a state-level discussion to prevent individual companies being picked off and capitulating.
Introduction
First, as a responsible major country, China stands upright with honour. We never strong-arm others, never seek supremacy, never withdraw from commitments, never bully others, and never complain. The word ‘coercion’ has nothing to do with China. — Chinese Foreign Ministry spokesperson Hua Chunying, October 2019.3
The past three years have seen an escalation in the CCP’s political and strategic use of coercive measures to defend what it defines as China’s ‘core’ national interests.4 Those interests include preserving domestic stability, stimulating economic development, upholding territorial integrity and securing great power status.5 The CCP has made it clear that these interests are ‘non-negotiable bottom lines of Chinese foreign policy’.6 Elizabeth Economy, the Director for Asia Studies at the Council on Foreign Relations, explains that President Xi Jinping desires to ‘use China’s power to influence others and to establish the global rules of the game’ to protect and promote China’s national interests.7
Coercive diplomacy can be defined as ‘non-militarised coercion’ or ‘the use of threats of negative actions to force the target state to change behaviour’.8 This is in contrast with chequebook diplomacy, in which positive inducements and confidence-building measures in the forms of foreign assistance and promised investment are used by states, including the CCP, to reward countries.9 This carrot-and-stick approach reflects ‘a new level of assertiveness, confidence and ambition’ in the CCP’s foreign policy and economic diplomacy.10
Every country is concerned about protecting its interests and playing to its strengths. Larger states, such as the US and Russia, have applied pressure to smaller states to get what they want with varying levels of success.11 Nevertheless, the CCP’s approach is unique in that it rarely employs traditional methods of coercive diplomacy, which are regulated through the state’s official capacity.12 The CCP is instead arbitrarily imposing measures without officially acknowledging the link between the measures taken and the CCP’s interests, which allows for greater flexibility in escalating or de-escalating situations with less accountability and international oversight.13 This non-traditional type of coercive diplomacy therefore requires a very different set of policy tools and responses.
This research has documented 152 instances of CCP coercive diplomacy between 2010 and 2020 (Figure 1). Of those cases, 100 targeted foreign governments, while the remaining 52 cases targeted specific companies.
Figure 1: Cases of coercive diplomacy used by the CCP, by year, 2010 to 2019
Figure 1 shows a sharp increase in the number of recorded cases from 2018 onwards. Although it isn’t possible to show the full dataset for 2020, within the first eight months there were 34 recorded cases, which equates to more than half of the number recorded in 2019.
Coercive diplomacy from the CCP’s perspective
The CCP has been persistent in maintaining the narrative that its actions are proportionate to its pursuit of protecting core national interests. Most Chinese-language sources examined for this report indicate that, from the CCP’s perspective, coercive diplomacy is an instrument that’s either exclusively used by the West and to which the CCP objects,14 or is carried out by the general Chinese public and has nothing to do with the government.15
However, Chinese state-run think tanks and media organisations have explicitly encouraged the use of coercive diplomatic tactics against offending actors.16 Jian Jisong, an international law expert at the Zhongnan University of Economics and Law, writes that ‘China should liberate its thinking, and fully utilise the important tool of unilateral sanctions’.17 That sentiment is also reflected by the China Institute for Contemporary International Relations, a think tank closely associated with the Ministry of State Security, which states that ‘given the fact that our nation has increasing economic power, we should prudently use economic sanctions against those countries that … threaten our country’s national interests’.18
The CCP, particularly under the leadership of Xi Jinping, has made it increasingly clear that the party ‘leads everything’ and is in strict control of the country through its ‘ideology’ and ‘structural system’.19 This differs from liberal democracies in that China’s core national interests are closely centred on the CCP’s own self-defined political security. Any conduct by foreign states or companies perceived to breach these core national interests is therefore treated as a direct threat to the legitimacy and survival of the CCP (Figure 2).
Figure 2: Global Times tweet depicting Australia as a puppet of the US and issuing a warning against key Australian industries
Source: Global Times (@globaltimesnews), ‘Opinion: If #Australia provokes China more, China will fight it to the end to defend its core interests’, Twitter, 2:20 am, 9 July 2020, online.
Methodology
This report draws on English and Chinese open-source information from news articles, policy papers, academic research, company websites, social media posts, official government documents and statements made by politicians and business officials. This report attempted to gather as many examples of coercive diplomacy as could be identified through open-source materials over a 10-year period and the cases underwent external peer review by 27 experts from 16 different countries. However, various limitations in the methodology used and finite human and language resources mean that it’s certainly not exhaustive or comprehensive. The resulting database is a starting point and an indicator of practice rather than a complete record.
Coercive diplomacy, by design, is difficult to measure because it takes various forms, is defined differently across the literature and can represent different levels of state authoritativeness, particularly in cases involving nationalist responses. The underlying data for most of this report relies on direct or implied statements by senior CCP officials and authoritative Chinese state media, non-authoritative Chinese media, and perceptions of coercive diplomacy in foreign media reports (although in some circumstances non-Chinese sources may be restricted or controlled in part by governments to prevent any further deterioration in relations with the Chinese state). Where possible, this report supplements this data with analysis from academic sources and in-country experts during the peer review process. Those sources are used to connect the action that the CCP objects to and the resulting coercive measure, as the CCP doesn’t make the link explicit and tends to deny responsibility.
However, some examples are likely to have been missed in this dataset or incorrectly specified, as cases might be only partially reported, be reported in error or go entirely unreported. This report excluded some acts of coercion, such as coercion against civil society actors and individuals, unless there was a clear link to a state dispute. This report also excluded cases in which the measures were considered a normal or proportionate diplomatic response to state conduct and cases that amounted to ‘tit-for-tat’ measures. For example, coercive acts related to the US–China trade war and the diplomatic fallout from the India–China border clash aren’t counted in the dataset.
A single incident or dispute can generate multiple instances of coercive diplomacy, which affects the total number of cases recorded in this report. A single dispute might start with a verbal threat and be followed up by a tourist ban and then by some form of trade sanction. Because this report focuses on instances of coercion rather than individual disputes, the methodology used would count that as three different instances of coercion.
Categorising CCP coercion
Coercive diplomacy encompasses a broad range of tactics that can be applied either individually or collectively by the CCP against individual companies and governments. This report divides the methods of CCP coercive diplomacy into eight categories: arbitrary detention or execution, restrictions on official travel, investment restrictions, trade restrictions, tourism restrictions, popular boycotts, pressure on specific companies and state-issued threats.
Arbitrary detention or execution
The CCP has sought to use arbitrary indictments, detainments and executions of foreign nationals for coercive effect against governments ‘that are not willing to fall in line with [the CCP’s] narrative or to cooperate, according to its own terms’.20 Arbitrary detentions and executions often involve the imposition of enforced disappearances, unusual trial delays, harsh punishments, prolonged interrogations and lack of transparency to maximise the effects of coercion.21 The CCP is also known to reinstate Chinese citizenship to detainees to prevent them from being repatriated, placing even further pressure on the governments of their home countries.22
Restrictions on official travel
Restrictions on official travel involve exerting coercive leverage by downgrading bilateral relations, imposing sanctions on travel to China by foreign leaders and state delegations, or refusing to meet with foreign counterparts.23 Examples of restrictions on official travel that have previously been imposed by the CCP include refusals of entry into China and cancellations of high-level visits.24 This often subjects the targeted government to greater political pressure in its own country to repair or reset relations to the CCP’s advantage.
Investment restrictions
China’s emergence as a major global investor has enabled the CCP to impose restrictions on Chinese outbound and inbound investment activities, such as major trade deals, foreign direct investment, infrastructure projects and joint ventures.25 Those investment restrictions can lead to economic consequences unless the target state changes its stance to that demanded by the CCP.26 This method of coercive diplomacy is commonly used against developing countries in conjunction with chequebook diplomacy.
Trade restrictions
The CCP relies heavily on trade restrictions as a means of coercing states. This tactic involves concerted efforts to disrupt trade flows and restrict foreign access to the Chinese market through import and export restrictions.27 The restrictions can be facilitated through the selective use of international regulations, targeted customs inspections, licence denials, tariff increases or unofficial embargoes.28 Chinese authorities often give unrelated administrative or regulatory explanations for such moves, simply denying the punishment motive.
Tourism restrictions
With direct influence over the movements of its own citizens, the CCP has increasingly turned to tourism restrictions to coerce foreign governments. Given the size of China’s tourism market, the effects of Chinese tourism restrictions are often immediate and long-lasting. The CCP has blocked outbound tourism by issuing official travel warnings, suspending package tours organised through state-run travel agencies and banning permits for independent travellers.29 In other instances, the CCP has blocked inbound tourism by suspending visa waivers or limiting access to consular services.30
Popular boycotts
The CCP can retaliate against foreign governments without imposing direct legal or regulatory interventions by encouraging its citizens to engage in nationalistic popular boycott campaigns through state and social media (Figure 3).31 Popular boycotts can be distinguished from pressure on specific companies in that they focus on companies and industries from the target state more broadly as a means of punishing the state and influencing its public opinion. Popular boycotts aren’t always directly orchestrated by Chinese authorities but can still be encouraged through uncontrolled nationalist protests or negative coverage in state media.32 In the words of the Chinese Central Political and Legal Affairs Commission, ‘Chinese people’s anger is not just verbal but will translate into action.’33
The centralisation and comprehensive government control of media in China make it easier for the CCP to mobilise its extensive consumer base and amplify existing boycott campaigns to coerce other countries.34 Pál Nyíri from the Vrije Universiteit Amsterdam explains that ‘in a country that so tightly controls its online spheres, we can assume some degree of at least tacit support simply by the fact that such actions are allowed to continue on the Chinese web.’35
Figure 3: Chinese demonstrators staging a protest to boycott South Korean conglomerate Lotte Group in March 2017 after the heightening of diplomatic tensions between China, South Korea and the US over the Terminal High Altitude Area Defense (THAAD) anti-missile system
Source: AFP, ‘Chinese protest against South Korea’s Lotte’, The Straits Times, 5 March 2017, online.
Pressure on specific companies
Multiple foreign companies have been coerced by Chinese authorities and consumers into issuing public apologies and modifying business operations for supposedly ‘hurting the feelings of Chinese people’.36 Such objectionable actions include ‘mislabelling’ Chinese territories on marketing platforms, supporting pro-democracy movements and making references to politically sensitive issues, even if they weren’t originally targeted at the Chinese market.37 While this method of coercive diplomacy is similar to popular boycotts, the two methods can be distinguished in that individual companies are the target on these occasions, rather than foreign governments, although the effect can be to demonstrate strength to the country where the company is based. This method of coercive diplomacy leads to adverse economic impacts due to losses in sales, popular endorsement, brand reputation or market access to the mainland.38 For this research, cases were limited to those that had a geopolitical angle and were either explicitly encouraged by state media or were likely to have been tacitly supported (although discerning the latter category necessarily involved a degree of subjectivity).
State-issued threats
Chinese diplomats, embassies, and government ministries seek to use coercive diplomacy by releasing official statements threatening foreign governments.39 Most, if not all, such state-issued threats contain vague terminology such as ‘countermeasures’,40 ‘retaliation’,41 ‘inflict pain’,42 and ‘the right to further react’.43 Another source of state-issued threats is state-run media organisations. The Global Times, China Daily, Xinhua News and other outlets are often used as mouthpieces by the CCP to publish warnings through sensationalised English-language commentary aimed at the target state and the international community.44 Global Times editor-in-chief Hu Xijin has implied on numerous occasions that the Global Times reflects the views of Chinese authorities, stating that ‘they can’t speak willfully, but I can’ (Figure 4).45 State-issued threats are often used as a prelude to tougher coercive measures.
Figure 4: Tweets by Global Times editor-in-chief Hu Xijin sharing information about potential countermeasures by the CCP against the US
Key Findings
This research documents 152 instances of CCP coercive diplomacy between 2010 and 2020.
Of those cases, 100 targeted foreign governments (Figure 5), while the other 52 cases targeted foreign companies. Those two categories are analysed separately in this report.
Figure 5: Cases of coercive diplomacy used by the CCP against foreign governments, by category
The most common methods of coercive diplomacy against foreign governments
From the data gathered for this report, the most prominent and common methods of coercive diplomacy used by the CCP to target foreign governments are; state-issued threats (with 34 cases recorded between 2010 and 2020, over half of which were recorded in 2020 alone), trade restrictions (19 cases recorded) and tourism restrictions (17 cases recorded).
Of the 27 countries affected, Australia was subjected to the highest number of recorded cases (17 cases), followed by Canada (10 cases) and the United States (9 cases).
Geopolitical trends
The regions that recorded the most instances of coercive diplomacy were Europe; North America; Australia and New Zealand; and East Asia (South Korea, Japan, Taiwan), while countries in Africa, South America, the Pacific islands and the remaining parts of Asia recorded the smallest number of cases (Figure 6). There were no recorded cases of coercive diplomacy in Central America, Central Asia, and Russia during the relevant period. This divide bears many similarities to the divide between high-income and middle/low-income countries, as defined by the World Bank.46
Figure 6: Cases of coercive diplomacy, by region
The most likely reason for this is that the political backers of the CCP are predominantly in the developing world. The CCP has had no reason to subject those countries to coercive diplomatic measures in the past 10 years. The CCP maintains a non-alliance policy, and its supporters aren’t a formal block.47 However, the recent opposing joint statements to the UN on the CCP’s treatment of Uyghurs and other minorities in Xinjiang provide a good demonstration of current affiliations.
As demonstrated in Figures 7 and 8, there’s no overlap between countries subjected to coercive diplomacy by the CCP and those supportive of the CCP’s persecution of minorities, with the exception of the Philippines. The CCP’s use of coercive diplomacy against the Philippines arose mainly from disputes over the South China Sea. However, since President Rodrigo Duterte publicly announced a foreign policy shift to China in 2016, no further coercive diplomacy cases against the Philippines have been recorded.48
Figure 7: Countries that have recorded cases of coercive diplomacy by the CCP between 2010 and 2020
Figure 8: Countries by their stance on the CCP’s treatment of Uyghurs and other minorities in Xinjiang
Another geopolitical trend is the impact of the Covid-19 pandemic on the CCP’s coercive diplomacy. The pandemic caused a world-wide lockdown that inhibited key forms of diplomatic and economic leverage for the CCP, particularly tourism restrictions (which included foreign students). This likely contributed to the rise in state-issued threats, of which over half of the 34 recorded cases from the last decade occurred after the CCP implemented the 23 January 2020 lockdown in Wuhan (see figure 9).
Figure 9: Cases of state-issued threats recorded before and after the Wuhan lockdown commenced
Threats were also a timely way for the CCP to combat the rise in criticism against its handling of the outbreak. Criticisms came mainly from Western European and Anglosphere countries, but countries such as Brazil also expressed criticism and were accordingly subjected to threats of countermeasures. The increase in state-issued threats in 2020 can also be linked to the CCP’s crackdown in Hong Kong, which prompted states around the world to take positions and actions the CCP disliked at a time when they had limited options to use other forms of coercive diplomacy.
After China started easing its lockdown restrictions, another key form of diplomatic leverage became China’s exports of medical supplies. In line with the above geopolitical analysis, the CCP ‘rapidly escalated’ medical and financial relief efforts to many countries in the developing world, particularly in Africa.49 With the much-needed medical supplies as ‘carrots’, the CCP was able to offer them with the expectation that the recipient countries wouldn’t criticise the CCP’s mishandling of the outbreak. The trade in medical supplies could also be used coercively in an attempt to influence state behaviour.
For example, in April 2020, the Netherlands angered the CCP by renaming the country’s diplomatic mission in Taiwan as ‘Netherlands Office Taipei’. In response, the state-run Global Times published an article that cited ‘Chinese netizens’ who called for the export of medical supplies to the Netherlands to cease and quoted an analyst who raised this move as a means for the CCP to send a warning to the Netherlands. This also worked as a warning to other states about the CCP’s willingness to use coercive measures, even in critical areas such as health care and during a global pandemic.50
Divide-and-conquer tactics
Each of the 100 recorded cases of coercive diplomacy involved the CCP acting unilaterally against an individual country. Although the response of countries to the coercive measures wasn’t always clear, where it was possible to discern the reaction, most countries made re-establishing good relations the priority. For example, the CCP enacted multiple coercive measures against Norway in 2010 in retaliation to the awarding of the Nobel Peace Prize to Chinese dissident Liu Xiaobo. After those measures were enacted, UN voting patterns showed closer alignment between China and Norway, and the Norwegian Government supported the admission of China as an observer in the Arctic Council in 2013 and refused to meet with the Dalai Lama for the first time in 2014 (although Norway, like many other countries, may have ceased those meetings in response to China’s general growing global clout, without the fallout from the awarding of the prize).51 The CCP’s actions succeeded in influencing Norway’s foreign policy, as the concessions required to appease the party were relatively minor (the same level of success mightn’t have been achieved had the required concession been bigger).52
This type of result seems likely only to license further coercion by the CCP against others. The CCP intentionally isolates countries in this way to retain comparative strength and ensure the effectiveness of its coercive methods. The CCP’s comparative strength would be significantly diminished if countries that have been subjected to similar coercive diplomatic tactics joined forces to counter them. Remarkably, countries have so far failed to band together to counter CCP coercion, even when that’s been manifestly in their interests. This may be due to a lack of awareness of the widespread use by the CCP of coercive diplomacy, a lack of strategic analysis by foreign ministries of the best way to counter such coercion, or both.
A notable example of this failure involved Canada and Australia. Just days following the arrest of Huawei executive Meng Wanzhou in Canada pursuant to the US–Canada extradition treaty, the CCP arbitrarily arrested Canadian citizens Michael Kovrig and Michael Spavor. It took three weeks before Australia released a statement expressing its ‘concerns’ over the Canadians’ detention.53 The statement fell short of condemning the CCP’s actions and didn’t call for the immediate release of the Canadians, despite two Australian citizens having been subjected to arbitrary detention the previous year and both of them still being detained.54 Australia’s delay in issuing the statement meant that Australia and Canada (as well as the EU and US) weren’t unified in their response to the CCP’s actions and therefore had little impact.
Further analysis on the most common methods of coercive diplomacy against foreign governments
State-issued threats
In addition to the Covid-19 pandemic significantly limiting other forms of coercive diplomacy available to the CCP in 2020 (discussed above) a likely reason for the high rate of state-issued threats is because they are the quickest and most cost-effective form of coercive diplomacy and carry the lowest risk to the CCP’s interests. Our research has found these can be enough, on their own, to coerce the target state into changing course if the state places limited political value on the source of the dispute55 (although threats were not enough to change behaviour if the stakes were high enough, as the in-depth case studies on pages 18–21 illustrate).
Trade restrictions
This report recorded 19 cases of trade restrictions between 2010 and 2020, over half of which occurred since 2018. In all recorded cases, the CCP never officially implemented official sanctions against the target state; instead, an unrelated official reason was provided (such as non-compliance with sanitation or labelling requirements) or no reason was given at all. There are strong indicators for each recorded case that the CCP’s measures were designed to thinly disguise the use of trade to punish and change the behaviour of target states.
For some issues, to be effective, the target state needs to be aware that the trade measures are being levied as punishment for a given action, so, while direct causal relationships aren’t made explicit by the CCP, the trade restrictions are made in such a way as to make the connection clear to the target state. For other issues, it can be useful to maintain greater ambiguity to put the target state off balance, not knowing exactly why the restrictions are happening but only that the CCP is displeased and that concessions in some form are needed. Both approaches help the CCP maintain its official stance that coercive diplomacy is exclusively employed by the West.56 By providing an unrelated official reason to disguise coercive diplomatic measures, the CCP is able to maintain plausible deniability, which offers some protection against countries raising the issue through international channels, such as the World Trade Organization.57
The recorded cases of trade restrictions also demonstrate that the CCP is highly selective in the commodities it targets in order to send a powerful message to target states whilst minimising any harm to its own interests.58 For example, the CCP imposed restrictions on Canadian meat imports in June 2019 in retaliation against the arrest of Huawei executive Meng Wanzhou. 59 However, the CCP retracted these restrictions just 5 months later despite the tensions over this issue persisting, after the effects of a swine fever outbreak continued to drive domestic pork prices unsustainably high.60 With China’s domestic supply not being expected to recover for two or three years (especially with the risk of further outbreaks) and inflation rates nearing an 8 year high as a result,61 it was ultimately in the CCP’s interests to make this concession.62 This case illustrates some of the constraints on the CCP’s use of economic coercion.
The CCP’s recent trade restrictions against Australian barley (which are widely interpreted to be retaliation for Australia pushing for an inquiry into the origins and handling of the Covid-19 outbreak) further illustrate how these measures are often ‘aligned with—or constrained by—market trends and conditions’.63 Of all the trade restriction cases recorded, the CCP’s measures imposed on barley stand out as seemingly having the biggest effect on China’s own trade practices, as Australian barley accounted for up to 80% of China’s barley imports in recent years.64 However, this in fact aligns with the CCP’s goal of self-sufficiency and import diversification.65 Furthermore, the restrictions coincided with a significant decline in China’s domestic demand for barley.66 Though the sanctions were ‘triggered’ by Australia’s call for the Covid-19 inquiry, the CCP wanted to employ them anyway due to the benefit that would provide to the Chinese domestic market.67 As argued by Scott Waldron from the University of Queensland, it is significant that the CCP has not imposed restrictions in relation to wool, given China buys approximately 75% of Australia’s wool exports.68
The selective use of trade restrictions simultaneously minimises impacts on Chinese consumers and businesses, while maintaining leverage against the target state. Severe disruption to all trade with a target state would not only negatively affect Chinese consumers and businesses but would also exhaust all leverage against the target state in one go and completely undermine the CCP’s narrative of plausible deniability. To date, the CCP has aimed to find a balance between punishing a country enough to make it change its behaviour and running the risk of damaging relations to the point at which the state no longer sees value in appeasing the CCP or at which the Chinese economy would be damaged. As demonstrated by the case studies, the CCP selects only individual commodities or services to target with restrictions. While targeted restrictions were in place, it was common for other sectors within the same state to experience an increase in Chinese trade. This was the case in Canada in 2019; after Canadian canola imports were blocked in China, Canadian wheat exporters experienced a rise in wheat imports into China.69 Similarly, in August 2020, trade between China and Australia was 4% higher than in the previous year, despite the constraints of the Covid-19 pandemic and a deterioration in bilateral relations.70
Tourism restrictions
Tourism restrictions are the third most common form of coercive diplomacy used to target foreign governments identified through this research. This report recorded 17 cases between 2010 and 2020, half of which occurred after 2018. China is the world’s largest outbound tourism market. It accounts for more than 20% of global tourism, and 150 million Chinese tourists travelled abroad and spent a combined total of US$277 billion in 2018.71 Subject to the long-term impacts of the Covid-19 pandemic on large-scale tourism, those figures are likely to continue to increase and further grow the importance of the Chinese tourist market, as only an estimated 10% of Chinese citizens hold passports.72
The CCP holds considerable influence over its outbound tourism market,73 which it has manipulated to promote foreign policy objectives. As demonstrated in the recorded cases, the CCP controls outbound tourism through issuing travel warnings and using its regulatory powers over travel agents to direct them to avoid selling package tours to a blacklisted country. The travel restrictions necessitated by the Covid-19 pandemic have not prevented the CCP from threatening tourism restrictions or issuing travel warnings. The lack of international travel at the time these warnings were issued highlights the fact that the measures are usually not in response to the reasons claimed by the CCP and are primarily used to coerce.
In-depth case studies
Norway, South Korea, Canada and Australia have each individually experienced the full spectrum of the CCP’s coercive diplomatic tactics. Despite obvious temporal and geographical differences among the following four case studies, the CCP’s actions followed a remarkably similar pattern.
In-Depth Case Study: Norway
In-Depth Case Study: South Korea
In-Depth Case Study: Canada
In-Depth Case Study: Australia
Coercive diplomacy against foreign companies
This report documents 52 cases of pressure applied by or at least encouraged by the CCP against foreign companies. In many of the recorded cases, the CCP applied pressure by inciting backlash from Chinese consumers, blocking websites or adding legal penalties. Even in cases in which the CCP can’t be directly linked to the backlash, it has arguably encouraged this consumer response by not censoring it. This is despite the backlash being overtly political and something that would ordinarily attract censorship in China if it were directed against anything contrary to the CCP’s interests.
The effectiveness of the CCP’s coercion against companies can be measured by the rate at which apologies were issued in response to the coercion. Of the cases recorded in this report, 82.7% of the companies issued apologies. Almost no companies had their own governments step up to help them respond (Figures 10, 11 and 12).
Figure 10: Percentages of companies that have issued apologies, complied with directions from Chinese state authorities, or both
Figure 11: An image portraying foreign brands being targeted by the Chinese social media platform Weibo
Source: Manya Koetse, ‘Hong Kong protests: Brand “witch hunt” takes over Chinese internet”’, BBC News, 15 August 2019, online.
Figure 12: An official apology by Italian luxury brand Versace was shared online after it received backlash for designing T-shirts that implied that Hong Kong and Macau are independent territories
Source: VERSACE (@Versace), ‘The Company apologizes for the design of its product and a recall of the t-shirt has been implemented in July’, Twitter, 7:36 pm, 11 August 2019, online.
The success of coercive measures against businesses largely stems from companies being profit-driven and having limited power relative to the world’s second largest economy. China’s consumer spending overtook the US’s for the first time in 2019,74 so companies are unlikely to risk losing access to that market. Targeting companies allows the CCP to achieve political ends while keeping the dispute at arm’s length from governments that would be better placed to push back. For example, in April 2018, the Chinese Civil Aviation Administration ordered 36 international airlines to remove all references from their websites that suggested Hong Kong, Taiwan and Macau were separate regions or risk having the company’s ‘serious dishonesty’ recorded and facing ‘disciplinary actions’.75 By July 2018, all 36 airlines, including British Airways, Japan Airlines, Lufthansa and Qantas, had modified their websites and other promotional material to reflect the CCP’s views. Delta Airlines went further and apologised for its listing, stating ‘We are fully committed to China and to our Chinese customers.’76 If the governments of the countries where the airlines were headquartered had instead banded together to counter the threat, the outcome would likely have been very different.
The emergence of a counter-coercion strategy
A number of foreign governments, including those of Australia, Canada, Japan, India, the UK and the US, are starting to call out the CCP’s coercive diplomacy as it happens and are working on ways to develop an effective counter-coercion strategy.77 For example, Australia set the foundations for a counter-coercion strategy back in June 2017 during the 16th Shangri-La Dialogue when then Prime Minister Malcolm Turnbull stated that ‘a coercive China would find its neighbours resenting demands they cede their autonomy and strategic space, and look to counterweight Beijing’s power by bolstering alliances and partnerships.’78 The Australian Government then enacted new national security and foreign interference legislation, citing ‘disturbing reports about Chinese influence’.79
Three years later, in June 2020, Prime Minister Scott Morrison formally declared that Australia won’t be intimidated by threats from the CCP and won’t trade its values in response to ‘coercion’.80 In August 2020, Morrison affirmed that Australia wants to ‘see international engagement framed by agreed rules and norms, not crude economic or political coercion’ in reference to the CCP and ‘will call it as we see it’.81
Another example was in August 2020 when the Five Eyes intelligence alliance issued a joint statement demonstrating grave concern over the disqualification of pro-democracy candidates in the Hong Kong Legislative Council elections and condemning the suppression of Hong Kong citizens’ rights and freedoms following the imposition of a new national security law by the CCP.82 The joint statement came after the CCP threatened countermeasures against all five member states for suspending extradition treaties and providing assistance to Hong Kong citizens.83 While counter-coercion strategies remain unclear for the rest of the world, they’re likely to increase in the future as the CCP continues with its coercive tactics.
Future challenges and recommendations
Coercive diplomacy is an important tool of Chinese foreign policy that the CCP will continue to use against foreign governments and companies, particularly in democratic countries. The CCP’s practice of coercive diplomacy is very broad in its targets, intentions, methods and levels of retaliation. Therefore, this report seeks to offer flexible policy options that can be implemented across different levels of society.
Recommendation 1: Increase global situational awareness about coercive diplomacy
The current failure of countries and companies to effectively deter coercive diplomacy suggests that there’s limited appreciation of its prevalence and limited discussion of effective countermeasures. Governments could remedy this by tasking their foreign ministries to track coercive diplomacy and use that data to identify potential coalitions, particularly in the areas of economic cooperation, trade liberalisation and technological development. Research institutions could also be encouraged to systematically track instances of coercive diplomacy.
Recommendation 2: Respond via coordinated and joint pushback
Responding to coercive threats in an individual capacity, whether as a state or as a company, will only work for the US, given China’s current size and heft. To be effective, governments need to counter the CCP’s divide-and-conquer tactics by pursuing coordinated and joint pushback through multilateral forums such as the G7, G10 and European Union and by building minilateral coalitions of countries affected by the same coercive methods. Those coalitions could be used to publicly call out examples of coercion in the same way that’s currently used to attribute cyberattacks, and follow that up with countermeasures. In many cases, it would be unethical and against core values to reciprocate with like-for-like countermeasures (for example, arbitrary arrests and executions), so countermeasures will need to target alternative areas, such as through joint statements, economic sanctions or official travel restrictions.
Recommendation 3: Establish a 5 Eyes collective economic security pact
The Five Eyes countries should consider adopting a collective economic security measure, analogous to Article 5 of the North Atlantic Treaty establishing NATO (“an armed attack against one or more of them in Europe or North America shall be considered an attack against them all”). Using their collective intelligence arrangements, the Five Eyes countries could make authoritative joint attributions of any coercive measures levied against any of the five members and take collective economic and diplomatic measures in retaliation. Such an arrangement could also involve an agreement to abstain from taking advantage of any coercive trade measures imposed by the CCP (for example, refusing to fill the shortfall created by banning Canadian pork). While this approach may be less attractive to the current US Administration it may be of interest to future administrations and would be highly effective in deterring the use of coercive diplomatic measures.
Recommendation 4: Develop protocols in collaboration with the business community to counter coercive measures targeting companies
Affected governments should work more closely with business groups to develop protocols on how to best respond to economic coercive methods applied by the CCP. The increasing risk of economic coercion by the party should be assessed as a structural matter in economic and trade policies, not just as isolated or unexpected acts in response to particular decisions and events. In cases of coordinated action against companies, the dispute should be elevated to a state-level discussion to prevent individual companies from being picked off and being forced to capitulate. In the case involving 36 global airlines, a more effective approach would have involved governments assuming the lead in responding to the ultimatum, working to form a global coalition of countries and their airlines that refused to be pressured, and countering the coercion by threatening reciprocal bans on access to their markets.
Recommendation 5: Factor in the heightened risk of doing business and building economic relations with China
As the CCP uses economic coercion more often, and more overtly, foreign companies with business operations in China need to factor in the increasing risk to trade flows, supply chains and market share. That risk is significant enough to warrant board-level attention and will no doubt be a standing topic in audit committees because of its bottom-line impact. This requires board-level involvement to protect shareholder value and is also likely to require companies to work more closely with their home government policymakers.
Appendix
Readers are encouraged to download the report PDF to access the extensive dataset which details cases of CCP coercive diplomacy targeting foreign governments and companies.
Acknowledgements
We would like to thank Danielle Cave, John Garnaut, Darren Lim and Michael Shoebridge for their feedback on this report. We would also like to thank all the experts from around the world that peer-reviewed the cases in the Appendix: Dr Altay Atli, Aakriti Bachhawat, Alexandre Dayant, Andreas Bøje Forsby, Dr Rudolf Furst, Bonnie Glaser, Dr Xue Gong, Dr Samantha Hoffman, Edcel John A. Ibarra, Daria Impiombato, Alex Joske, Prof. Sharad K Soni, Dr Huong Le Thu, Dr John Lee, David McDonough, Anna Michalski, Yuma Osaki, Lucrezia Poggetti, Dr Frans-Paul van der Putten, Dr Shelley Rigger, Dr Uma Shankar Prasad, Dr. Ana Soliz Landivar de Stange, Dr Tim Summers and Yun Sun. No specific sponsorship was received to fund production of this report. The work of ICPC would not be possible without the financial support of our partners and sponsors across governments, industry and civil society.
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First published August 2020.
ISSN 2209-9689 (online), ISSN 2209-9670 (print)
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Alyssa Leng, Roland Rajah, ‘Chart of the week: global trade through a US–China lens’, The Interpreter, 18 December 2019, online. ↩︎
Hua Chunying, ‘Foreign Ministry spokesperson Hua Chunying’s regular press conference on October 23, 2019’, Ministry of Foreign Affairs of the PRC, press conference, 23 October 2019, online. ↩︎
Jinghao Zhou, ‘China’s core interests and dilemma in foreign policy practice’, Pacific Focus, 2019, 34(1):33. ↩︎
Kathleen Hicks, Joseph Federici, Connor Akiyama, Hybrid CoE strategic analysis 18: China in the grey zone, European Centre of Excellence for Countering Hybrid Threats, 2019, 3. ↩︎
Jinghan Zeng, Yuefan Xiao, Shaun Breslin, ‘Securing China’s core interests: the state of the debate in China’, International Affairs, 2015, 91(2):245. ↩︎
Elizabeth Economy, The third revolution: Xi Jinping and the new Chinese state, Oxford University Press, New York, 2018, 187. ↩︎
The origin of coercive diplomacy is deeply rooted in traditional security studies, in which earlier definitions involved the threat of future military force or the limited use of military force. See Alexander George, William Simons (eds), The limits of coercive diplomacy, Westview Press, Oxford, 1994; Daniel Byman, Matthew Waxman, The dynamics of coercion: American foreign policy and the limits of military might, Cambridge University Press, New York, 2002. While a widely accepted definition of coercive diplomacy hasn’t been established, this report has adopted the definition used by Ketian Zhang to reflect recent shifts towards a diplomatic strategy that’s more political and economical. See Ketian Zhang, ‘Chinese non-military coercion—tactics and rationale’, Brookings, 22 January 2019, online. ↩︎
Graeme Dobell, China and Taiwan in the South Pacific: diplomatic chess versus Pacific political rugby, Center for the Study of the Chinese Southern Diaspora, 2007, 10. ↩︎
Anne-Marie Brady, ‘China’s foreign propaganda machine’, Journal of Democracy, October 2015, 26(4):51–59. ↩︎
Global Agenda Council on Geo-economics, The age of economic coercion: how geo-politics is disrupting supply chains, financial systems, energy markets, trade and the internet, World Economic Forum, 2016, 7, online. ↩︎
Peter Harrell, Elizabeth Rosenberg, Edoardo Saravalle, China’s use of coercive economic measures, Center for a New American Security, 2018, 2. ↩︎
Harrell et al., China’s use of coercive economic measures, 20. ↩︎
https://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2025/03/25152101/pb36-static-banner.mp4_.jpg4501350nathanhttp://aspi.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2024/10/16232551/ASPI-CMYK_SVG.svgnathan2020-09-01 06:00:002025-03-25 15:22:52The Chinese Communist Party’s coercive diplomacy