‘The race to 5G is a race America must win’, US President Donald Trump said on 12 April. Just over a month later, on 15 May, he issued an executive order banning Huawei equipment in US networks. That decision has since been rippling well beyond Sino-US relations and will have an impact on the digital future of many other countries.

The US ban fuelled the already lively debate about the world facing a possible ‘digital iron curtain’^​ The implications go beyond wireless providers and could lead to a division of countries between ‘Team America’ and ‘Team China’ in terms of technology.

The fear of an unwanted digital bipolarity is already present in Southeast Asia, where some countries have military-cooperation or intelligence-sharing arrangements with the US, forcing them to make what some see as an impossible choice between Washington and Beijing.

US concerns about China on such issues as unequal market access, forced technology transfer, human and cyber-enabled state-supported theft of intellectual property, currency manipulation and state subsidies—as well as China’s expansive conception of state security and its belief that individuals and organisations should support state espionage—are all legitimate. But Trump’s ban on Huawei doesn’t address these concerns effectively, nor has it been communicated sufficiently to other countries, such as those in Southeast Asia.

US security concerns about Huawei, ZTE and other Chinese technology companies are shared by its closest allies in Asia—Australia and Japan. But while the debate has spread globally, the ban has also created a rift with other allies and partners, making the picture in the Indo-Pacific region, as well as Europe, more complicated.

Countries in Southeast Asia can be divided into three categories: allies and partners of the US with a strong sense of strategic convergence; countries with some convergence with the US in strategic interests; and countries that are distant from the US in the traditional sense of alignment. Put in the language of international relationships, there are those who side with a major power of their choice, those who hedge between two or more major powers, and those who balance against a major power that is seen as threatening.

In the controversy surrounding the 5G rollout and future digital technology, we see a similar pattern in how countries are reacting to US pressure over Huawei. It is a palpable dilemma in some Southeast Asian countries.

Among those that have embraced Chinese tech companies are two US treaty allies, Thailand and the Philippines, along with Cambodia and Myanmar.

In February, the Thai government launched a test of 5G and is promoting 5G infrastructure investment in its planned ‘eastern economic corridor’. According to a report in The Diplomat, the Thai government’s Digital Economy and Society Ministry has convened a committee on 5G with 29 members, both local and international, including Huawei.

In the Philippines, market leader Globe Telecom has confirmed a partnership with Huawei to develop 5G. On top of improving relations between Manila and Beijing since Rodrigo Duterte became president, Huawei has also supported the Philippines’ controversial public safety campaign related to Duterte’s so-called drug war, which the government claims is about cleaning up drug-related crime. A US$383 million deal was signed last year with China Telecom and Huawei to create a video surveillance system in Metro Manila and the city of Davao with a view to reducing crime rates.

Cambodia’s Smart Axiata announced in April that it had partnered with Huawei to develop a 5G solution. Prime Minister Hun Sen has said he wants Cambodia to be the first ASEAN country to launch 5G—with the help of Huawei and ZTE. While the state of Cambodia’s telecoms doesn’t suggest it would be an early adopter of 5G, the political will of Phnom Penh—whose relations with Beijing are increasingly good—is behind the effort to leapfrog into the new technology.

In Myanmar, ZTE has signed a memorandum of understating with the country’s Ooredoo to launch a 5G mobile network. In fact, all four mobile carriers in Myanmar are believed to use equipment made by ZTE or Huawei, mainly because of its accessibility and affordability.

Huawei representatives, meanwhile, have confirmed they are supporting digital transformation in Laos. With a market share of 15%, the company is the country’s third-largest mobile vendor, after Samsung (37%) and Apple (22%).

Among those that are more hesitant about adopting Chinese technology are Malaysia, Singapore and Indoneisa, which have signed up for 5G trials with Huawei, but are still cautious about considering a 5G network involving the company.

Huawei has a long history and strong foundations in Southeast Asia. It entered the region some 20 years ago—relatively early on and with competitive financial assistance. Its presence goes beyond wireless communications. The company provides funds for disaster relief, for example. In Malaysia, it has collaborated with Telekom Malaysia and Celcom Axiata to provide US$121,000 in assistance to communities affected by floods. Few other telecom giants have offered that.

Malaysian Prime Minister Mahathir Mohamad said at an event in Tokyo in May, ‘Malaysia is too small to have an effect on a huge company like Huawei, whose research is far bigger than the whole of Malaysia’s research capability, so we try to make use of their technology as much as possible. Yes, there may be some spying, but what is there to spy on in Malaysia? We are an open book.’

Days later, Singaporean Prime Minister Lee Hsien Loong noted in a speech at the Shangri-La Dialogue that Singapore is carefully studying the impact of 5G. However, he downplayed the security challenges posed by Huawei, emphasising that it’s not a ‘black-white’ issue, but rather a matter of degrees: ‘I would also say from the technical point of view, it is quite unrealistic to expect 100% security from any telecoms system you buy. Even the hand phone you buy is not 100%  secure, much less the entire telephone network. It does not matter whom you buy it from; it can be a friendly country, it can be a hostile country, or you can design it yourself—every system will have vulnerabilities.’

Indonesia’s minister of communications, Rudiantara, has also seemed to defuse fears of Huawei-enabled espionage, telling Reuters in February that Indonesia cannot be ‘paranoid’ about curbing Huawei. There are some 300 base transceiver stations in Indonesia that use foreign technology already, so excluding one foreign company would be a political decision rather than a practical one, he said.

Another important factor is the drive for smart cities. Southeast Asia is urbanising at one of the world’s fastest rates. Thailand and Malaysia are exploring the benefits of 5G broadband in building their Smart Cities networks and Smart Government initiatives, as well as disaster management preparedness. With Indonesian President Joko Widodo’s recent announcement of a project for a new capital city, as well as ongoing efforts to upgrade Jakarta, there are likely to be plenty of new opportunities for both ‘hard’ and ‘soft’ infrastructure investment.

Southeast Asian leaders are clearly downplaying the US government’s security arguments about the trustworthiness of Huawei’s 5G network. But given China’s ranking in the World Justice Project Rule of Law Index—82nd out of 126 countries ranked—Southeast Asian countries, many of them ranking in similar brackets, are also less alarmed at the prospect of using technology from Western liberal democracies.

Vietnam is the only country in Southeast Asia that is avoiding Huawei technology based on security concerns, although without an explicit ban. Instead, Vietnam wants to be among the very first in the world to develop its own 5G technology. State-owned telecom Viettel, in cooperation with Sweden’s Ericsson, has developed a network that was successfully tested earlier this year in Hanoi. Planned to be launched by 2021, if successful, it may be a model for other countries.

It’s worth noting that Chinese state companies have had access to Vietnamese telecoms before. ZTE partnered in the past with Viettel in developing 3G. But in developing 4G, Viettel already relied on its own self-produced base stations.

Vietnam’s plans for wireless communications aren’t purely based on rejecting the Chinese Communist Party–linked Huawei. It is also an integral part of the country’s national strategy for succeeding in the fourth industrial revolution—a key focus of Prime Minister Nguyen Xuan Phuc. It fits in with Vietnam’s efforts to reform its economy and make the high-tech manufacturing sector a key pillar of economic development. Hanoi’s decision has little to do with Trump’s ban, but rather comes from a long-term strategic awareness of security challenges coming from the big northern neighbour.

There’s no doubt that the young, vibrant population of Southeast Asia will remain one of the most dynamic markets in the internet economy, which was estimated at US$50 billion in 2017 and is expected to quadruple by 2025 to US$200 billion.^​ According to Huawei estimates, Southeast Asia provides opportunities worth US$1.2 trillion, with a potential 80 million 5G service subscribers.^​ This is an attractive region worth competing for.

If the estimates of the distribution of subscribers worldwide by 2023 are correct (see Figure 1), then the market will be shared, rather than dominated, by Huawei. The digital future of Southeast Asia will most likely be very competitive. But one thing is certain: a viable US alternative is missing from the picture. Unless countries are willing to invest in developing their own networks, either on their own or in cooperation with other global providers as Vietnam did, there are few options to consider. Currently, Huawei has an advantage because it is available now, offers competitive rates and is easily accessible.

The deciding factor for the future of 5G in Southeast Asia is not political alignment or even security concerns; it’s about the practical needs of these economies.

The level of development, infrastructure and connectivity among Southeast Asia’s economies is very unequal. There’s also a vast disparity between cities and remote areas. Given the region’s young population and large proportion of mobile networks, most capital cities boast good connectivity and network coverage.

For many in the region, Huawei’s technology is more advanced than its Western competitors’ offerings, but it also comes at a fraction of the cost.^​ Huawei is certainly bearing the fruits of Chinese government subsidies, and the security argument is often dismissed not because of a lack of awareness, but because, as one analyst says, ‘Huawei is the most efficient and cost-effective platform available to us.’^​

Will the US pressure backfire? Even America’s long-term European allies and liberal democracies such as the UK and Germany have resisted the ban. Out of the 10 ASEAN countries, two of which are treaty allies of the US, no one is willing to blindly follow Washington’s ban on Huawei.

The implications of how Southeast Asia responds is beyond just 5G technology, or even Huawei’s services. It is ultimately about the technological dominance and the success of China’s digital silk road. While infrastructure is the main area of competition, the soft infrastructure is no less crucial.

Individual Southeast Asian countries will of course make their own decisions. But so far no country in the region, including US treaty allies, is willing to support the ban for political reasons.

The hyper-focus on 5G is counterproductive. Security concerns are legitimate and need to be addressed in the same way as concerns about privacy protections related to internet applications. At the same time, Southeast Asian nations should treat seriously the possibility that China-linked technology that penetrates their critical infrastructure could be used for coercive purposes in the future.

The conversation about 5G choices in Southeast Asia is not divorced from the larger issue of Sino-US competition and the debate about choosing one side or the other. But, can the issue of high-speed internet connections be disconnected from the wider context of cyber norms and cyber laws in the region?

The cybersecurity warnings coming from the US are too focused on Huawei. Online restrictions and recent cyber laws across a number of countries, including those in Southeast Asia, legitimise censorship, restrict data flows and certain content, allow for the collection of personal information or constrain foreign companies from storing data offshore. These also should be part of the debate.

Recent regulations and cyber laws in Malaysia, Thailand and Vietnam reflect this trend. Cyber-enabled authoritarianism, in fact, seems rather attractive to many Southeast Asian governments.

The political implications of the presence of US companies, or pressure from the US government, in the telecoms sector in Southeast Asia go much further than the ability to block Huawei. 5G is another key example of a standard-setting opportunity that was missed. As with the Trans-Pacific Partnership—the trade deal that involved 12 Pacific Rim economies before Trump pulled the US out of the deal—the decision by the US to withdraw from the agreement has been held up as one of key examples of a lack of US commitment to the region.

The TPP wasn’t only about trade and economic benefits. It was also about the ability to set and enforce standards. An example is Vietnam, which had to go through a number of economic reforms—including workforce rules and regulations on specific industries—in order to join the TPP. But once the US pulled out, it no longer had the ability to influence that sphere.

A similar logic applies to high-speed internet in Southeast Asia, or anywhere. If American technology providers are not offering an alternative to Huawei—the two other major players are Nokia and Ericsson—the US won’t have a say in setting standards of cybersecurity. To avoid a repeat of the TPP lesson—where the US withdrew for the sake of domestic interests—the US 5G strategy needs to go beyond banning Huawei and asking partners and allies to do the same. It needs to have a horse in the race.

Most Southeast Asians are not comfortable choosing sides in the great-power competition between China and the US. So, if this is a race where the US has to work harder to find partners in Southeast Asia, Washington needs to remind itself that much of its global primacy has been based on its technological prowess and that the innovation imperative is the only way to sustain its position.

A version of this piece was published in Global Asia’s September 2019 issue; it has been republished with permission.

On 1 October, to mark the 70th anniversary of the People’s Republic of China, President Xi Jinping will deliver a speech that unreservedly celebrates the Chinese Communist Party’s record since 1949. But, despite Xi’s apparent confidence and optimism, the CCP’s rank and file are increasingly concerned about the regime’s future prospects—with good reason.

In 2012, when Xi took the reins of the CCP, he promised that the party would strive to deliver great successes in advance of two upcoming centennials, marking the founding of the CCP in 1921 and the PRC in 1949. But a persistent economic slowdown and rising tensions with the United States will likely sour the CCP’s mood during the 2021 celebrations. And the one-party regime may not even survive until 2049.

While there’s technically no time limit on dictatorship, the CCP is approaching the longevity frontier for one-party regimes. Mexico’s Institutional Revolutionary Party retained power for 71 years (1929–2000); the Communist Party of the Soviet Union ruled for 74 years (1917–1991); and Taiwan’s Kuomintang held on for 73 years (from 1927 to 1949 on the mainland and from 1949 to 2000 in Taiwan). The North Korean regime, a Stalinist family dynasty that has ruled for 71 years, is China’s only contemporary competition.

But historical patterns aren’t the only reason the CCP has to be worried. The conditions that enabled the regime to recover from the self-inflicted disasters of Maoism and to prosper over the past four decades have largely been replaced by a less favourable—and in some senses more hostile—environment.

The greatest threat to the party’s long-term survival lies in the unfolding cold war with the US. During most of the post-Mao era, China’s leaders kept a low profile on the international stage, painstakingly avoiding conflict while building strength at home. But by 2010, China had become an economic powerhouse, pursuing an increasingly muscular foreign policy. That drew the ire of the US, which began gradually to shift from a policy of engagement towards the confrontational approach evident today.

With its superior military capabilities, technology, economic efficiency and alliance networks (which remain robust, despite President Donald Trump’s destructive leadership), the US is far more likely to prevail in the Sino-American cold war than China. Though an American victory could be Pyrrhic, it would more than likely seal the CCP’s fate.

The party also faces strong economic headwinds. The so-called Chinese miracle was fuelled by a large and youthful labour force, rapid urbanisation, large-scale infrastructure investment, market liberalisation and globalisation—all factors that have either diminished or disappeared.

Radical reforms—in particular, the privatisation of inefficient state-owned enterprises and the end of neo-mercantilist trading practices—could sustain growth. But, despite paying lip service to further market reforms, the CCP has been reluctant to implement them, instead clinging to policies that favour state-owned entities at the expense of private entrepreneurs. Because the state-owned sector forms the economic foundation of one-party rule, the prospect that CCP leaders will suddenly embrace radical economic reform is dim.

Domestic political trends are similarly worrying. Under Xi, the CCP has abandoned the pragmatism, ideological flexibility and collective leadership that served it so well in the past. With the party’s neo-Maoist turn—including strict ideological conformity, rigid organisational discipline and fear-based strongman rule—the risks of catastrophic policy mistakes are rising.

To be sure, the CCP will not go down without a fight. As its grip on power weakens, it will probably attempt to stoke nationalism among its supporters, while intensifying repression of its opponents.

But this strategy cannot save China’s one-party regime. While nationalism may boost support for the CCP in the short term, its energy will eventually dissipate, especially if the party fails to deliver continued improvement in living standards. And a regime that is dependent on coercion and violence will pay dearly in the form of depressed economic activity, rising popular resistance, escalating security costs and international isolation.

This is hardly the uplifting picture Xi will present to the Chinese people on 1 October. But no amount of nationalist posturing can change the fact that the unravelling of the CCP’s rule appears closer than at any time since the end of the Mao era.

Welcome to ‘The Strategist Six’, a feature that provides a glimpse into the thinking of prominent academics, government officials, military officers, reporters and interesting individuals from around the world.

1. How is your government coping with the Venezuelan crisis?

We have been suffering what we consider the most dramatic humanitarian and migration crisis in Latin American history. We host today more than 1.3 million Venezuelan brothers and sisters. Most of the Venezuelan brothers and sisters who have come to Colombia have come with broken bones; they come to Colombia with hunger and despair.

They have been flying away from the most brutal dictatorship that we have seen in Latin America. And when you look at the report that was issued recently by the Office of the UN High Commissioner for Human Rights, these are exactly the same patterns that we saw with Milosevic. We have a war criminal continuously hurting the Venezuelan people. And we hope that with all this diplomatic pressure and the recognition of President Juan Guaidó as the legitimate president of Venezuela and the national assembly, we will be able to put enough pressure so that three goals are met: the end of the dictatorship, a transition government with broad participation, and a call for a free election.

2. Coca crops have reached unprecedented levels. How did your country end up in this situation?

Many things were done wrong in the last few years. From 2000 when Plan Colombia began until 2012, the area of illegal crops reduced from more than 180,000 hectares to almost 50,000. But in the last four years, before we took office, they increased again from less than 60,000 hectares to 209,000.

Manual eradication groups were downsized severely, aerial spraying stopped, and incentives were created to essentially exchange coca for subsidies. This naturally gave birth to a vicious cycle.

That’s why, when I came into office, I said that we needed an integrated approach. And by that I mean the use of substitution, manual eradication, the payment for environmental services, alternative development programs, the use of precise aerial spraying in harmony with the environment, and social protection.

We need the whole toolkit. That’s why we also talk about interdiction, anti-money laundering and disruption of smuggling structures. We need to take those who are selling drugs in our streets to jail, because we are also a consumer country. And at the same time, we need to treat the addict. That’s why we insist on this integrated approach.

3. After one year in office, is this paying dividends?

For the first time in seven years we have stopped the upward trend of illicit crops in Colombia, and we actually have a reduction. Not a substantial reduction, but one that signals the change in the trajectory. That’s why we have to persevere day by day to do much better.

We have improved our interdiction capacity. Only this year, by market value, or street value, we have seized the equivalent of the money made by Goldman Sachs, more than US$9 billion.

Colombia represents more than 50% of the seizure of drugs in the western hemisphere. There’s no country in the world that seizes the amount of drugs that we do. For every ton of cocaine that the US seizes, we seize 18. And we do it not to please anyone, but because this is our moral duty and because the future that I want for Colombia is not the future of cartels or drug addiction.

4. What is your view on China’s economic dominance and its role in Latin America?

This year we will be celebrating 40 years of bilateral relations between Colombia and the People’s Republic of China. I don’t look at the relationship with China in terms of dominance. What I look at is the need for countries like Colombia to diversify exports. And I think being able to open the Asian markets is very important for us.

We have a free-trade agreement with South Korea, we have a long relationship with Japan, and when it comes to China we have to be able to do much better when it comes to trade. So I think Colombia can be able to participate in that market. And I think rather than dominance, this has to be more about multilateralism, more about constructivism, more about looking at trade as a way to generate bonds between nations.

5. You wanted to amend the peace accords signed by your predecessor with the FARC. What is your approach to peace and how is the implementation of those accords going?

I have always said: ‘Peace with legality.’ The essence of peace with legality is that when people are genuinely on the path to reintegration, it has to succeed. We want them to have productive lives. That’s why, when it comes to reintegration, our administration in just one year has done more than what was done during the last two years after the implementation of the agreements began under the previous administration. Before we took office, just one or two projects were attended by a small number of people. We have now 25 productive projects that are attended by 1,500 people.

But obviously, if there’s a repeat of the past, if people want to go back to criminal activities, we’re going to be very tough with the rule of law because the essence of peace with legality is that you have genuine truth, justice, reparation and non-repetition. My administration works under those principles.

6. Your country recently hosted the first Australia–Colombia Dialogue. What are some of the opportunities you see for Australian–Colombian relations?

I think in the last decade the bonds between Australia and Colombia have strengthened a lot. But I think we should do much better. In terms of trade, our exports to Australia are valued at only $50 million, which is tiny. I also think we should look at a long-term investment relationship. We have a lot of Australian companies turning their gaze to Colombia for sustainable mining and energy generation. And I am very happy that the interest that we are seeing is also connected with principles on the environment.

We also see the interest of Australian companies wanting to invest in our road and port systems. So I think there is an area that is open to be developed in the following years. The bonds between Australia and Colombia have to be strengthened every day, and I have made this a priority in my foreign policy.

In this episode, ASPI’s Michael Shoebridge and Marcus Hellyer discuss the pro-democracy protests rocking Hong Kong and the likelihood of a violent intervention from Beijing.

Later on in the podcast, Renee Jones talks to Canadian senator and former Ottawa police chief, Vern White, about the challenges of modern policing, the opioid crisis and pill testing.

You can view links to the articles mentioned in this week’s episode here.

In March last year, Australia and Vietnam upgraded their diplomatic relations to a strategic partnership, stressing among other things the importance of a region ‘shaped by rules and norms’ and annual meetings between their defence ministers. The agreement is a shared vision for a regional security outlook that trumps the differences in political systems. In one of his first official trips as the re-elected prime minister of Australia, Scott Morrison is set to arrive in Hanoi on Thursday amid tensions roiling in the South China Sea.

There are many highlights in the relationship. Australia has been a reliable partner in providing assistance to Vietnamese UN peacekeeping forces, and it has supported infrastructure in the vulnerable Mekong region, including completion of the Cao Lanh Bridge last year—Canberra’s largest single aid project in mainland Southeast Asia. Trade and economic ties are the key areas of mutual interest. Vietnam is our second-fastest-growing trade partner, and the bilateral trade volume has been consistently growing—by 12% in the past five years. But there’s more that Australian businesses can do.

Vietnam is an attractive market. It is one of seven economies, according to Standard Chartered Bank, whose GDP growth will remain at about 7% through the 2020s, provided there are no major disruptions from the trade war. A youthful population will fuel significant consumption growth—Vietnam’s GDP per capita is expected to increase four-fold by 2030. Australian brands are among the most trusted in agriculture, medicine and education by a Vietnamese middle class of 33 million people, a number that continues to grow by 1.5 million each year. Around 30,000 Vietnamese are currently studying in Australia and the potential is much higher. There is high demand for both English-language and digital-literacy training. The Australian and Vietnamese economies are very complementary.

But beyond flourishing opportunities, there are also mounting geostrategic challenges. Since the signing of the partnership, the strategic environment has considerably deteriorated. Back then, the concept of the ‘Indo-Pacific’ was still in its infancy and the US–China trade war had not fully begun.

As Hanoi welcomes Morrison, Vietnam faces Chinese coercion as maritime militia and coastguard forces escort Chinese petroleum survey ships into Vietnam’s exclusive economic zone. Outside the US, international reaction to continuing incidents at sea has been relatively muted. Australia is yet to explicitly condemn Beijing’s action. Canberra signed the recent collective statements from AUSMIN and the US–Australia–Japan strategic dialogue that alluded to the event as ‘disruptive activities’ related to oil and gas projects and fisheries in the South China Sea.

The Morrison government took office at a time when Australia’s relations with China were becoming increasingly difficult to manage, on multiple fronts. When the prime minister sits down in talks with Vietnam’s leaders in Hanoi this week, he can expect to face questions on the consistency of Australia’s South China Sea policy. Ideally, the Vietnamese would like more diplomatic and practical support from Canberra, backed up by Australian oil and gas exploration companies commercially partnering with Vietnamese ones in the disputed waters. Just how strategic is the strategic partnership between the two if they can’t count on each other in the key security agenda?

Vietnam’s independent spirit is reflected not only in traditional issues of sovereignty, but also in how it manages the impact of new technology. Vietnam has 5G network ambitions but shares concerns about Huawei technology. Vietnamese telecommunications companies have partnered with Ericsson and have successfully tested the network in Hanoi. If the second phase is completed, Vietnam will be among the first to have a 5G network not reliant on Huawei—something of interest to Australia given its rejection of Chinese equipment for its network.

Vietnam is now the world’s second largest exporter of smartphones, and the current tariff restrictions on China’s electronic components have boosted its numbers. South Korea’s Samsung and LG have also shifted manufacturing of semiconductors to Vietnam. The Vietnamese government, under Prime Minister Nguyen Xuan Phuc—who signed the strategic partnership with Australia last year—has made seizing the opportunities of the fourth industrial revolution a priority for the country.

For Canberra, Vietnam’s importance goes beyond just its bilateral relations with China; it is increasingly a key diplomatic and strategic actor in the region. As Vietnam prepared to take up the ASEAN chairmanship in 2020 (along with sitting on the UN Security Council as a non-permanent member), how Hanoi regards the Indo-Pacific concept will be important for the future of the idea. Noting that Vietnam will be the first ASEAN chair following the release of the organisation’s ‘outlook on the Indo-Pacific’, this is an opportunity for Morrison to communicate Australia’s own guiding principles in the fast-changing Indo-Pacific region.