Tag Archive for: Critical & Emerging Technology

Social Credit

Technology-enhanced authoritarian control with global consequences

What’s the problem?

China’s ‘social credit system’ (SCS)—the use of big-data collection and analysis to monitor, shape and rate behaviour via economic and social processes1—doesn’t stop at China’s borders. Social credit regulations are already being used to force businesses to change their language to accommodate the political demands of the Chinese Communist Party (CCP). Analysis of the system is often focused on a ‘credit record’ or a domestic ranking system for individuals; however, the system is much more complicated and expansive than that. It’s part of a complex system of control—being augmented with technology—that’s embedded in the People’s Republic of China’s (PRC’s) strategy of social management and economic development.2 It will affect international businesses and overseas Chinese communities and has the potential to interfere directly in the sovereignty of other nations. Evidence of this reach was seen recently when the Chinese Civil Aviation Administration accused international airlines of ‘serious dishonesty’ for allegedly violating Chinese laws when they listed Taiwan, Hong Kong and Macau on their international websites.3 The Civil Aviation Industry Credit Management Measures (Trial Measures) that the airlines are accused of violating were written to implement two key policies on establishing the SCS.4

As businesses continue to comply, the acceptance of the CCP’s claims will eventually become an automatic decision and hence a norm that interferes with the sovereignty of other nations. For members of the public on the receiving end of such changes, the CCP’s narrative becomes the dominant ‘truth’ and alternative views and evidence are marginalised. This narrative control affects individuals in China, Chinese and international businesses, other states and their citizens.

What’s the solution?

Democratic governments must become more proactive in countering the CCP’s extension of social credit. This includes planning ahead and moving beyond reactive reciprocal responses. Democratic governments can’t force firms to refuse to comply with Beijing’s demands, but they also shouldn’t leave businesses alone to mitigate risks that are created by the Chinese state’s actions. Democratic governments should identify the potential uses of certain technologies with application to the Chinese state’s SCS that could have serious human rights or international security implications. Export controls that prevent supplying or cooperating to develop such technologies for the Chinese state would buy time, but this is only a short-term and partial solution. Where social credit extends beyond China’s borders, the penetration is often successful through the exploitation of existing weaknesses and loopholes in democratic countries. A large part of the solution for addressing these easily exploitable weaknesses is through strengthening our own democracies. Issues such as data protection, investment screening and civil liberties protection are most pressing. Transparency, while not a solution, will help to identify breaches and to prosecute abuses where necessary. Steps must be taken to shield overseas Chinese communities from the kinds of CCP encroachment that will only proliferate with a functioning and tech-enabled SCS.

China’s social credit system

China’s SCS augments the CCP’s existing political control methods. It requires big-data collection and analysis to monitor, shape and rate behaviour. It provides consequences for behaviour by companies and individuals who don’t comply with the expectations of the Chinese party-state. At its core, the system is a tool to control individuals’, companies’ and other entities’ behaviour to conform with the policies, directions and will of the CCP. It combines big-data analytic techniques with pervasive data collection to achieve that purpose.

Social credit supports the CCP’s everyday economic development and social management processes and ideally contributes to problem solving. That doesn’t make social credit less political, less of a security issue or less challenging to civil liberties. Instead, it means that the threats that this new system creates are masked through ambiguity. For the system to function, it must provide punishments for acting outside set behavioural boundaries and benefits to incentivise people and entities to voluntary conform, or at least make participation the only rational choice.

Social credit and the technology behind it help the Chinese party-state to:

  • Control discourse that promotes the party-state leadership’s version of the truth, both inside and outside China’s geographical borders
  • integrate information from market and government sources, optimising the party-state’s capacity to pre-empt and solve problems, including preventing emerging threats to the CCP’s control
  • improve situational awareness with real-time data collection, both inside and outside China’s geographical borders, to inform decision-making
  • use solutions to social and economic development problems to simultaneously augment political control.

Source: Created by Samantha Hoffman, June 2018.

Extending control outside the PRC’s borders

For decades, the CCP has reached beyond its borders to control political opponents. Tactics are not changing under Xi Jinping, but techniques and technology are. For example, in several liberal democracies, Chinese officials have harassed ‘Xi Jinping is not my president’ activists and their families after messages were posted to WeChat.5 Research for this report also found other examples of harassment, including attempts by Chinese officials to coerce overseas Chinese citizens to install surveillance devices in their businesses.6 More commonly, the CCP doesn’t exert control overseas with direct coercion. Instead, it uses ‘cooperative’ versions of control.

For example, a function of Chinese student and scholar associations — which are typically ties to the CCP7 — is to offer services such as airport pick-up.8 Beyond providing necessary services, these techniques reinforce the simple message that the CCP is everywhere (and so are its rules). Social credit embeds such existing processes in a new toolkit for regulatory and legal enforcement.

On 25 April 2018, the Chinese Civil Aviation Administration accused United Airlines, Qantas and dozens of other international airlines of ‘serious dishonesty’ for allegedly violating Chinese laws in how they listed Taiwan, Hong Kong and Macau on their websites.9 To clarify: those websites, which belong to international companies, are for global clients. The Chinese authorities said failure to classify the places as Chinese property would count against the airlines’ credit records and would lead to penalties under other laws, such as the Cybersecurity Law.

The Planning Outline for the Construction of a Social Credit System (2014–2020) (the Social Credit Plan) specifically identified ‘improving the country’s soft power and international influence’ and ‘establishing an objective, fair, reasonable and balanced international credit rating system’ as goals.10

The goals aren’t credit ratings like those done by Standard & Poor’s or Moody’s, but are instead about ensuring state security. State security here, though, is not the simple protection of domestic and foreign security.11 It’s also about protecting the CCP and securing the ideological space both inside and outside the party. That task transcends geographical borders.

The Civil Aviation Industry Credit Management Measures that the airlines are accused of violating were written to implement two key policy guidelines on establishing China’s SCS. The measures are among many other implementing regulations of the Social Credit Plan. Social credit was used specifically in these cases to compel international airlines to acknowledge and adopt the CCP’s version of the truth, and so repress alternative perspectives on Taiwan. Shaping and influencing decision-making is a pre-emptive tactic for ensuring state security and party control. The CCP deals with threats by ‘combining treatment with prevention, but primarily focusing on prevention.’12 That doesn’t make the outcome less coercive.

Social credit records (for individuals and entities) are the outcome of data integration. Technical capacity for data collection and management, therefore, is the key to realising the envisioned SCS.13 Data integration and management don’t simply aid the process of putting individuals or entities on lists. They also support decision-making—some of which ideally will be done automatically through algorithms—and enhance the CCP’s awareness of the PRC’s internal and external environments. The key to understanding this aspect of social credit is the first line of the Social Credit Plan. The document says that social credit supports ‘China’s economic system and social governance system’.14 Social credit is about problem-solving but it’s also designed to thrive on its own contradictions, just like the social governance process (hereafter ‘social management’) that it supports.15 Social management isn’t simply the management of civil unrest. Social management as a concept requires the provision of services and the use of normal economic and social management to exert political control. Yet therein lies the contradiction: the Chinese state does not prioritise solving problems above political security. In fact, problem solving is simultaneously directed at political security. The system will also increasingly rely on technology embedded in everyday life to manage social and economic development problems while simultaneously using the same resources to expand control. Understanding this dual-use nature of the SCS is the key: the system’s ability to solve and manage problems does not diminish its political or coercive capacity.

Credit records are global and political

A January 2018 article published by the Overseas Chinese Affairs Office of the State Council for the attention of ‘overseas Chinese and ethnic Chinese’ (华侨华人) warned that the Civil Aviation Industry Credit Management Measures also applied to them.16 Violations would lead to greylisting and blacklisting and would be included in individuals’ and organisations’ overall credit records, it said. Importantly, ‘overseas Chinese and ethnic Chinese’ can cover anyone who the CCP claims is ‘Chinese’, whether or not they have PRC citizenship. In addition to expatriates, it can include someone who was never a PRC citizen, such as citizens of Taiwan.17 A PRC-born person with citizenship in another country is also considered subject to the rules.18

Political uses for social credit’s implementing regulations might seem disconnected from the idea that credit records should create trust and encourage moral behaviour, but they are not. ‘Trust’ and ‘morality’ have dual meanings in the context of social credit. One side is focused on the reliability of an individual or entity, and the other on making the CCP’s position in power reliably secure. Trust and& morality serve their purpose only if they’re created on the party’s terms and if they produce reliability in the CCP’s capacity to govern. So the language itself promotes the party’s authority and control.

The market and legal data that make up a person’s or entity’s credit record is intrinsically political, while input sources can be simultaneously political and non-political.19 For instance, Article 8, Section 3 of the Civil Aviation Industry Credit Management Measures sanction individuals and entities for ‘a terrorist event’ or a ‘serious illegal disturbance’. Such disturbances could include safety incidents, such as a passenger opening an emergency exit door in a non-emergency.20 They could also include false terrorism charges against those considered political opponents, such as Uygurs (the CCP already uses false-charge tactics against individuals and NGOs).21 This year’s civil aviation cases are not an irregularity. Similar demands on companies have accumulated since January 2018. For instance, the Shanghai Administration for Industry and Commerce fined Japanese retailer Muji’s Shanghai branch 200,000 yuan (A$41,381) over packaging that listed Taiwan as a country.22 The fine cited a violation of Article 9, Section 4 of the PRC advertising law, which sanctions any activity ‘damaging the dignity or interests of the state or divulging any state secret’. The violation was then recorded on the National Enterprise Credit Information Publicity System.

The timing of these cases coincides with a regulation that took effect on 1 January 2018, under which every company with a business licence in China was required to have an 18-digit ‘unified social credit code’. Every company without a business licence designating its code was required to update its licence.23 Euphemistically, the code is to ‘improve administrative efficiency’.24 ‘Efficiency’ includes the meaning that any sanction against a company filed on the company’s credit record could trigger sanctions under other relevant legislation. Similar cases may multiply after 30 June 2018 because unified social credit codes will also be required for government-backed public institutions, social organisations, foundations, private non-enterprise units, grassroots self-governing mass organisations and trade unions.25

Generating ‘discourse power’ through data

An overlooked purpose of the SCS is to strengthen the PRC’s ‘discourse power’ or ‘right to speak’ (话语权).26 This can also be understood as the idea of creating the CCP’s narrative control. Discourse power is ‘an extension of soft power, relating to the influence and attractiveness of a country’s ideology and value system’.27 Discourse power allows a nation to shape and control its internal and external environments.

In the hands of political opponents, discourse power is a potential threat. According to the CCP, ‘hostile forces’ can incite and exploit economic and social disorder in other countries.28 This threat has been tied directly to leading international credit agencies—Moody’s Investors Service, Standard & Poor’s and Fitch Ratings—seen as potential threats to China. One article claimed that the agencies can ‘destroy a nation by downgrading their credit score, utilising the shock power of “economic nukes”’.29 Another article tied the problem to the One Belt, One Road scheme (Belt and Road Initiative, BRI), because participant countries accept the current international ratings system. For the CCP, the solution is to increase the ‘discourse power [that China’s] credit agencies possess on the international credit evaluation stage’.30 China’s SCS provides an alternative to the existing international credit ratings system. It does some similar things to the existing system, but is designed to give the Chinese state a more powerful voice in global governance. As we saw in the international airlines case, this louder voice is being used to exert influence on the operations of foreign companies.

Preventing the sort of credit crisis described above requires the CCP to have control over the narrative to prevent a political opponent from taking over the narrative—in other words, it requires the CCP to strengthen its ‘discourse power’. Discourse power is directly embedded in the trust and morality that social credit is supposed to create in Chinese society, and not only because trust and morality help with everyday social and economic problem solving. Trust and morality, in the way the Chinese state uses the terms, include as a core concept support for and adherence to CCP control and directions. This linkage can be traced at least as far back as an early 1980s propaganda effort related to ‘spiritual culture’, which responded to ‘popular disillusionment with the CCP’ and the promotion of Western politics as ‘superior’ to China’s.31

The concern only increased as China’s present day perception of threat was shaped by events such as Tiananmen in 1989, Kosovo in 1999, China’s entry into the World Trade Organization, and the ‘colour revolutions’ of the early 2000s. For instance, one article said that, despite mostly positive benefits from China entering the World Trade Organization, ‘Western civilisation-centred ideology, and aggressive Western culture can erode and threaten the independence and diversity of [China’s] national culture through excessive cultural exchanges.’ 32

One reason social credit contributes to strengthening the CCP’s discourse power is that the system relies on the collection and integration of data to improve the party’s awareness of its internal and external environments. In, 2010 Lu Wei described in great detail the meaning of ‘discourse power’ as referring not only to the ‘right to speak’, but also to guaranteeing the ‘effectiveness and power of speech’.33 He elaborated that for China to have discourse power requires both collection power and communication power. Collection power is the ability to ‘collect information from all areas in the world in real time’. Communication power, which ‘decides influence’, becomes stronger with more timely collection.

Data collection supporting China’s environmental awareness doesn’t stop at the country’s borders. Social credit requires real-time monitoring through big-data tools that can inform decision-making and the implementation of the credit system. In 2015, Contemporary World, a magazine affiliated with the International Liaison Department, published an article focused on big-data collection associated with the BRI.34 It said that data could be used to inform diplomatic and economic decision-making, as well as emergency mobilisation capacity. ‘Data courier stations’ within foreign countries would send data via back-ends to a centralised analysis centre in China. Data collection would come from legal information mining, such as information on the internet and database purchases, and from market operations. The data courier stations would include ‘e-commerce (platforms), Confucius Institutes, telecoms, transportation companies, chain hotels, financial payment institutions and logistics companies’.35

The collection method and use of data would differ according to the source. The most obvious and practical reason for data collection at Confucius Institutes is to support teaching. Eventually, the same data would inform decisions on cultural exchange (ostensibly using Confucius Institute databases).36 The objective of ‘cultural exchange’ isn’t merely soft power creation. As ‘discourse power’ suggests, the CCP views ‘language’ as a ‘non-traditional’ state security issue and a means of influencing other states, businesses, institutions and individuals. One publication on the BRI linked to the propaganda department explained that ethnic minorities in China ‘use similar languages to others outside of our borders and are frequently subjected to hostile forces outside of the border’. To reduce the ‘security risk’, ‘resource banks’ or ‘language talent’ projects would support the automatic translation of both Chinese and non-common ‘strategic languages’.37 Automatic translation would help to ‘detect instability in a timely manner, [assist] rapid response to emergencies, and exert irreplaceable intelligence values over the course of prevention, early warning and resolution of non-traditional security threats, in order to ensure national security and stability’.38

According to the Ministry of Education, automatic translation would be implemented through technologies such as big data, cloud computing, artificial intelligence and mobile internet. 39 This kind of technology already supports online teaching platforms affiliated with Confucius Institutes. They are at least partly reliant on technology from Chinese firm iFlytek. In addition to language learning software, iFlytek develops advanced surveillance for ‘public security’ and ‘national defence’, including voice recognition and keyword identification.40 Data collection and integration serve the purpose of increasing real-time situational awareness and simultaneously support the SCS’s discourse power objectives.

Technology, social management and economic development

The CCP saw crises such as the colour revolutions in Central Asia and Europe as illustrations of potential risks to its own power in China. Increasing the party’s discourse power has been justified as one response. The CCP’s perception of its exposure to risk increased with events such as the milk powder scandal in 2008 and the SARS outbreak between 2002 and 2003.41 Each crisis revealed significant problems with the PRC’s crisis prevention and response capacity due to a combination of political, logistical and technical faults.42 The SCS is part of an attempt to address those faults and to prevent the party’s competence or legitimacy from being questioned.

An innocuous line in the Social Credit Plan called for ‘the gradual establishment of a national commodity circulation (supply chain) traceability system based on barcodes and other products’.43 Barcodes are commonly used in supply-chain management to improve product traceability. ‘Other products’ include radio-frequency identification (RFID), which is also used for supply-chain management. RFID is an electronic tagging technology, readable through sensors or satellites, that ‘would gradually replace barcodes in the era of the internet of things’.

Most narrowly and directly, ‘barcodes and other products’ will help to manage food safety and health risks. The integration of information, supported by technology, facilitates risk identification. As technology’s ability to effectively identify risks improves, the government would be able to improve the regulation of behaviours that heighten ‘risk’, as defined and perceived by the CCP. As a result, potentially destabilising crises can be prevented through the optimisation of everyday governance tasks.

In future, the technologies used for supply-chain management will form an integral part of China’s development of ‘smart cities’. Smart cities in China harness ‘internet of things’ technology in support of resource optimisation and service allocation for both economic development and social management. A plan for standardising smart cities in China said that data mining using chips, sensors, RFID and cameras contributes to processes such as ‘identification, information gathering, surveillance and control’ of infrastructure, the environment, buildings and security within a city.44 Data mining covers such areas as ‘automatic analysis, classification, summarization, discovery and description of data trends’, and can be applied to decision-making about a city’s ‘construction, development and management’.45

All of these things contribute to building the capacity to make decisions and prevent threats from emerging by early intervention. Social credit will require big-data integration and data recording through information systems. Real-time decision-making capabilities are central to the success of the monitoring and assessment systems discussed in the Social Credit Plan, particularly in areas such as traffic management and e-commerce. Decision-making is enabled through ‘decision support systems’, which provide support for complex decision-making and problem solving.46 In China, present-day research emerges from a field called ‘soft science’ (软科学) that developed in the 1980s.47

Soft science is defined in China as a ‘system of scientific knowledge sustaining democratic and scientific decision-making’ that can be used in China to ‘ensure the correctness of our decision-making and the efficacy of our execution.’48 Correctness has as much a political meaning as its more usual one.

The use of decision support systems directly contributes to mechanisms for crisis prevention and response planning. Technologies such as barcodes and RFID are found in the logistical mobilisation strategies of many countries, not just the PRC. In China, however, civilian resources are multi-use, with simultaneous economic and social development and political control functions. The same systems support mobilisations for crises. At a study session on a speech that Xi Jinping gave at the 13th National People’s Congress, delegates from the People’s Liberation Army and People’s Armed Police learned about ‘infrastructure construction and resource sharing’. Efforts to improve those areas would support a ‘coordinated development of social services and military logistics’, while utilising various strategic resources and strength in areas such as politics, the economy, the military, diplomacy and culture. 49

This integration of technology with social management, political control and economic development brings back into focus the concept of discourse power. Like the other aspects of social credit, those systems don’t stop at China’s borders. As part of the BRI, China plans to leverage smart cities, and technologies such as 5G, to ‘create an information superhighway’. 50 Combined with channels for information collected from projects ranging from logistics to e-commerce or Confucius Institutes, information can be integrated to support social credit objectives such as increased discourse power.

Future challenges and recommendations

How social credit will exactly develop is not entirely known because the system itself is a multi-stage, multi-decade project. In order to deal with the international consequences of social credit, foreign governments must act now while also applying long-term strategic thought and commitment to dealing with the international elements of this system. Although China’s development of the SCS can’t be stopped, its progress can be delayed and the system’s coercive aspects reduced while better solutions for dealing with the problem are found.

Recommendation 1: Control the export of Western technologies and research already used in—and potentially useful to—the Chinese state’s SCS.

Recommendation 2: Review emerging and strategic technologies, paying particular attention to university and research institute partnerships.

Controlling the export of Western technology is a key short-term solution. Governments should review strategic and emerging technologies that are already or could be used in the SCS. Universities and research organisations partnering with Chinese counterparts and contributing to the development or implementation of the CCP’s SCS should be included in this review. Universities can’t be blind to the impact and end uses of research that they conduct or contribute to with overseas partners. Besides the clear political and social control purposes, contributing to such a system also doesn’t align well with the ethical framework for most Western universities’ research; nor is it good for their global reputations. The findings of such reviews should help Western governments determine where to control access and what legislation is therefore appropriate.

Obvious starting points would be preventing situations such as, for example, the University of Technology Sydney’s Global Big Data Technologies Centre accepting $20 million from the state-owned defence enterprise China Electronics Technology Group Corporation (CETC).51 CETC is one of the key state-owned enterprises behind China’s increasingly sophisticated video surveillance apparatus, including facial recognition systems and scanners. One of University of Technology Sydney’s most recent 2018 CETC-funded projects is in fact research on a ‘public security online video retrieval system’.52 Another example that highlights policy gaps is the recently reported case in which surveillance technology developed by Duke University and originally intended for the US Navy was sold into China with ‘clearance from the US State Department’ because the technology failed to secure backing in the US.53

Recommendation 3: Strengthen democratic resilience to counter foreign interference.

At least part of the solution requires acknowledgement that the spread of social credit beyond China’s borders takes advantage of easily exploitable weaknesses. The problems are compounded when a government opposed to liberal democratic values and institutions exploits those weaknesses. Australia’s foreign interference law could provide a framework for other countries looking to deal with the problem via legislation, as increased transparency is a foundation for an informed response.

Recommendation 4: Fund research to identify dual-purpose technologies and data collection systems.

While it isn’t a complete solution, funding research that contributes to greater transparency and public debate about China’s SCS is very important. Understanding what the Chinese state is doing, and what the implications are for other countries, requires asking the right questions. The problem is not just technology per se, but the ways in which processes and information are used to feed into and support the SCS, as well as other technology-enabled methods of control.

Recommendation 5: Governments and entities must strengthen data protection.

A crucial step is to limit the way data can be exported, used and stored overseas. Auditing should be conducted to ensure that any breaches are detected and to identify loopholes. For example, in the case of Confucius Institutes mentioned above, any data collected for any purpose should be stored using university-owned hardware and software, and only in university-operated databases. In the case of any violations, the university’s obligations to protect privacy and personal data on individuals that it holds should be enforced.

Recommendation 6: New legislation should reflect that this is also a human rights issue.

China’s SCS is not only an issue of political influence and control internationally. It’s also a human rights issue, and new legislation should reflect that. Through contributions to smart cities development in China, for example, Western companies are providing support to build a system that has multiple uses, including uses that are responsible for serious human rights violations. The US’s Global Magnitsky Act is an example of the type of legislation that could be used to hold companies and entities accountable for—willingly or not—enabling the Chinese party-state’s human rights violations.

Recommendation 7: Support companies threatened by China’s social credit system

Western governments need to more actively and publicly support the private sector in mitigating risks that are created by the SCS. This should include collective counter-measures that impose costs for coercive acts.

Recommendation 8: Overseas Chinese communities must be protected from social credit’s overseas expansion.

Western governments must take steps to protect overseas Chinese from the kinds of CCP encroachment that have taken place for decades but that are now increasingly augmented through a functioning and tech-enabled SCS. Democratic governments must ensure that they legislate against the implementation and use of China’s SCS across and within their borders.

Acknowledgements

The author would like to thank Danielle Cave, Didi Kirsten Tatlow, Dimon Liu, Gregory Walton, Kitsch Liao, Nigel Inkster, Peter Mattis, Fergus Ryan and Rogier Creemers, as well as the Mercator Institute for China Studies. Disclaimer: All views and opinions expressed in this article are the author’s own, and do not necessarily reflect the position of any institution with which she is affiliated.

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 person.

© The Australian Strategic Policy Institute Limited 2018

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  1. Samantha Hoffman, ‘Managing the state: social credit, surveillance and the CCP’s plan for China’, China Brief, Jamestown Foundation, 17 August 2017, 17(11), online. ↩︎
  2. Concepts summarised in this paper, including on social management, pre-emptive control, social credit and the ‘spiritual civilisation’, crisis response and threat perceptions, are drawn from my PhD thesis: Samantha Hoffman, ‘Programming China: the Communist Party’s autonomic approach to managing state security’, University of Nottingham, 29 September 2017. ↩︎
  3. China Civil Aviation Administration General Division, ‘关于限期对官方网站整改的通知’ (‘Notice Relating to Rectification of the Official Website within a Specified Timeframe’), 25 April 2018; James Palmer, Bethany Allen-Ebrahimian, ‘China threatens US airlines over Taiwan references’, Foreign Policy, 27 April 2018, online; Josh Rogin, ‘White House calls China’s threats to airlines “Orwellian nonsense”’, The Washington Post, 5 May 2018, online. ↩︎

  4. The two key guidances directly referred to in the opening of the Civil Aviation Industry Credit Management Measures (Trial Measures) are the Planning Outline for the Construction of a Social Credit System (2014–2020) and 关于印发《民航行业信用管理办法（试行） 》的通知 (Civil Aviation Industry Credit Management Measures (Trial Measures)), 7 November 2017. ↩︎

Technological entanglement

Cooperation, competition and the dual-use dilemma in artificial intelligence

What’s the problem?

Despite frequent allusions to a race—or even an ‘arms race’—in artificial intelligence (AI), US leadership and China’s rapid emergence as an AI powerhouse also reflect the reality of cooperation and engagement that extend across the boundaries of strategic competition.1 Even as China and the US, the world’s emergent ‘AI superpowers’,2 are increasingly competing in AI at the national level, their business, technology and research sectors are also deeply ‘entangled’ through a range of linkages and collaborations. That dynamic stems from and reflects the nature of AI research and commercialisation—despite active competition, it is open and often quite collaborative.3 These engagements can, of course, be mutually beneficial, but they can also be exploited through licit and illicit means to further China’s indigenous innovation and provide an asymmetric advantage.4 The core dilemma is that the Chinese party-state has demonstrated the capacity and intention to co-opt private tech companies and academic research to advance national and defence objectives in ways that are far from transparent. 

This has resulted in a ‘dual-use dilemma’ in which the openness that’s characteristic of science and innovation in democracies can result in unforeseen consequences, undermining the values, interests and competitiveness of the US, Australia and other like-minded nations in these strategic technologies.5 These ‘entanglements’ have included ties between US tech firms and Chinese partners with military connections,6 as well as cooperation between Australian universities and the Chinese People’s Liberation Army (PLA).7 Despite the genuine advantages they may offer, such problematic partnerships can also result in the transfer of dual-use research and technologies that advance Chinese military modernisation, perhaps disrupting the future balance of power in the Indo-Pacific, or facilitate the party-state’s construction of surveillance capabilities that are starting to diffuse globally.

These adverse externalities have troubling implications for US military advantage, authoritarian regime resilience and even the future of democracy.8 How should policymakers balance the risks and benefits of such entanglement,9 while enhancing competitiveness in this strategic technology?

What’s the solution?

These unique and complex dynamics require a range of policy responses that balance the risks and benefits of these partnerships, collaborations and engagements. To enhance situational awareness, policymakers should examine closely research, academic and commercial partnerships that may prove problematic, and then consider updates and revisions to national export controls, defence trade controls and investment review mechanisms as targeted countermeasures. While there is a rationale for visa screening of foreign nationals who plan to study or research sensitive technologies, restrictions should be imposed only on the basis of evidence of direct and clear connections to foreign militaries, governments or intelligence services,10 and scrutiny should focus more on organisations engaging in talent recruitment that are linked to the Chinese central and local governments or to the Chinese Communist Party (CCP). At the same time, there are compelling reasons to sustain scientific cooperation, with safeguards for risk mitigation, including transparency and the protection of sensitive data.

Critically, the US and Australia must pursue policies that actively enhance the dynamism of their own innovation ecosystems to ensure future competitiveness. It is vital to bolster declining support for science and commit to increasing funding for basic research and the long-term development of strategic technologies. Given the criticality of human capital, governments should prioritise improving the accessibility and affordability of STEM education at all levels, while attracting and welcoming talent through favourable immigration policies. In this quest for competitive advantage, the US and Australia must also pursue closer public–private partnerships and expand alliance cooperation on defence innovation.

AI ‘without borders’

Today, national competition in AI is intensifying at a time when the engine for technological innovation in such dual-use technologies has shifted from governments to commercial enterprises. In today’s complex, globalised world, flows of talent, capital and technologies are rapid, dynamic and not readily constrained by borders. Chinese investments and acquisitions in Silicon Valley—and US investments in China—are sizable and increasing, despite intense concerns about the security risks of such investments,11 which have motivated reforms to the Committee on Foreign Investment in the United States (CFIUS) and could result in discretionary implementation of China’s national security review mechanism in response.12 This increased globalisation of innovation ecosystems has proven beneficial to AI development, and dynamic US and Chinese companies are emerging as world leaders in the field.

Increasingly, these enterprises are quite international in their outlook, presence and workforce while engaging in a global quest for talent.13 For the time being, the US remains the centre of gravity for the top talent in AI, and Silicon Valley is the epicentre of this talent ‘arms race’.14 While currently confronting major bottlenecks in human capital, China has great potential, given the number of graduates in science and engineering and the range of new training and educational programs dedicated to cultivating AI talent.15 At the same time, the Chinese government is actively incentivising the return and recruitment of ‘strategic scientists’ via state talent plans.16 At the forefront of the AI revolution, Baidu and Google epitomise in their strategic decisions and activities the linkages and interconnectivity among such global centres of innovation as Silicon Valley and Beijing.17

Baidu has prioritised AI and has emerged as a leading player in this domain. It created the Institute for Deep Learning in Beijing in 2013 and then established its Silicon Valley Artificial Intelligence Laboratory (SVAIL), which employs about 200 people, in 2014.18 Baidu’s CEO, Li Yanhong (李彦宏, or Robin Li), advocated as early as 2015, prior to the Chinese Government’s decision to prioritise AI, for a ‘China Brain’ plan that would involve a massive national initiative in AI, including welcoming military funding and involvement.19

Increasingly, Baidu has actively invested in and acquired US AI start-ups, including xPerception and Kitt.ai,20 while seeking to expand its US-based workforce. The company has stated that Silicon Valley ‘is becoming increasingly important in Baidu’s global strategy as a base for attracting world-class talent.’21 In March 2017, Baidu announced plans to establish a second laboratory in Silicon Valley, which is expected to add another 150 employees.22 Notably, Baidu has also launched the Apollo project, which is a collaborative initiative to advance the development of self-driving cars that involves more than 100 tech companies and automakers, including Ford, NVIDIA, and Microsoft.23 At the same time, Baidu is engaged in research on military applications of AI, particularly command and control.24

Google remains at the forefront of AI development, leveraging an international presence and global workforce. Beyond Silicon Valley, Google has opened AI research centres in Paris, New York and Tokyo,25 and it will soon add Beijing and then Accra, Ghana.26 When Google announced the opening of the Google AI China Center in December 2017, chief scientist Fei-Fei Li declared, ‘I believe AI and its benefits have no borders. Whether a breakthrough occurs in Silicon Valley, Beijing, or anywhere else, it has the potential to make everyone’s life better for the entire world.’27 She emphasised, ‘we want to work with the best AI talent, wherever that talent is, to achieve’ Google’s mission.28

Google’s decision to expand its presence and activities in China, after withdrawing its search product from the market due to concerns over censorship, surveillance and the theft of intellectual property via cyber espionage in 2010,29 reflects this enthusiasm for the potential of future talent in China—and probably the availability of a sizable market and massive amounts of data as well.30 At the same time, this decision presents an interesting counterpoint to Google’s recent issuing of a statement of principles that included a commitment not to build technologies used for surveillance.31 Given the dual-use nature of these technologies, Google’s choice to engage in China may involve risks and raise ethical concerns,32 especially considering the Chinese party-state’s agenda for and approach to AI.

China’s global AI strategy and ambitions

At the highest levels, the Chinese Government is prioritising and directing strong state support to AI development, leveraging and harnessing the dynamism of tech companies that are at the forefront of China’s AI revolution. The New Generation Artificial Intelligence Development Plan (新一代人工 智能发展规划), released in July 2017, recognised this strategic technology as a ‘new focal point of international competition’, declaring China’s intention to emerge as the world’s ‘premier AI innovation centre’ by 2030.33 The Three-Year Action Plan to Promote the Development of New-Generation Artificial Intelligence Industry (促进新一代人工智能产业发展三年行动计划) (2018–2020), released in December 2017, called for China to achieve ‘major breakthroughs in a series of landmark AI products’ and ‘establish international competitive advantage’ by 2020.34 China’s central and local governments are providing high and ever-rising levels of funding for research and  development on next-generation AI technologies, while seeking to create a robust foundation for innovation by introducing new talent and education initiatives, developing standards and regulatory frameworks, and supporting the availability of data, testing and cloud platforms.35

China’s ambition to ‘lead the world’ in AI is self-evident.

China’s ambition to ‘lead the world’ in AI is self-evident.36 These plans and policies should be contextualised by its tradition of techno-nationalism and current aspirations to emerge as a ‘science and technology superpower’ (科技强国).37 In recent history, indigenous Chinese innovations, particularly defence technological developments, have been advanced and accelerated through licit and illicit means of tech transfer, including extensive industrial espionage.38 However, pursuing a new strategy of innovation-driven development,39 China is actively seeking to progress beyond more absorptive approaches to innovation and instead become a pioneer in emerging technologies, including through increasing investment in basic research.40 To further this agenda, the Chinese government is avidly targeting overseas students and scientists, offering considerable incentives via talent plans and engaging in recruitment via ‘talent bases’ and organisations that are often linked to the CCP or to central or local governments.4142

At this point, the success of these initiatives remains to be seen, and there are even reasons to question whether an AI bubble may arise due to excessive enthusiasm and investments. Although China’s future potential for innovation shouldn’t be dismissed or discounted, this ‘rise’ in AI often generates alarm and exuberance that can distract from recognition of major obstacles that remain. As its plans openly admit, China continues to lag behind the US in cutting-edge research and is attempting to compensate for current shortfalls in human capital.43 Notably, China confronts continued difficulties in the development of indigenous semiconductors,44 which will be critical to the hardware dimension of future advances in AI,45 despite billions in investment and quite flagrant attempts to steal intellectual property from US companies.46

While gradually becoming more capable of truly independent innovation, China also intends to coordinate and optimise its use of both domestic and international ‘innovation resources’.47 Notably, the New Generation AI Development Plan calls for an approach of ‘going out’ (走出去) involving overseas mergers and acquisitions, equity investments and venture capital, along with the establishment of R&D centres abroad.48 For instance, a subsidiary of the China Electronics Technology Group Corporation (CETC), a state-owned defence conglomerate, established an ‘innovation centre’ in Silicon Valley in 2014, which seeks to take advantage of that ecosystem with a focus on big data and other advanced information technologies.49 In Australia,50 CETC established a joint research centre with the University of Technology Sydney (UTS), which will focus on AI, autonomous systems and quantum computing, in April 2017.51 Starting in 2018, CETC’s Information Science Academy is also funding a project at UTS on ‘A Complex Data Condition Based Public Security Online Video Retrieval System’, which could have clear applications in surveillance.52 There have been extensive collaborations on dual-use AI technologies between PLA researchers from the National University of Defence Technology and academics at UTS, the University of New South Wales and the Australian National University.53

Meanwhile, Huawei is actively funding research and pursuing academic partnerships in the US and Australia, including through its Huawei Innovation Research Program.54 China’s ‘One Belt, One Road’ strategy is also concentrating on scientific and technological cooperation, including educational exchanges and research partnerships, such as a new Sino-German joint AI laboratory.55 Some of these new collaborations will focus on robotics and AI technologies, often enabling access to new sources of data that may facilitate China’s emergence as a global leader in AI development.56 In certain instances, China’s provision of funding to these initiatives may also reorient the direction of research based on its own priorities.57

As China seeks to advance indigenous innovation, the strategy of ‘going out’ is complemented by a focus on ‘bringing in’ (引进来) to ensure that vital talent and technologies are drawn back into China.58 At the same time, the Chinese government is evidently seeking to ensure that innovation ‘made in China’ will stay in China. As the US undertakes reforms to CFIUS, China could respond by recalibrating the implementation of its own national security review process, which is ambiguous enough to allow for great discretion in its application, pursuant to an expansive concept of national or state security (国家安全).59 Notably, the State Council has also issued a new notice that requires that scientific data generated within China be submitted to state data centres for review and approval before publication.60 The policy purports to promote open access to and sharing of scientific data within China, while creating ambiguous new restrictions that, depending upon their implementation, could render future cooperation asymmetrical in its benefits.61 Given these factors, while opportunities for research cooperation should often be welcomed, it is also important to ensure transparency regarding the research and intellectual property that may result from it, as well as the security of valuable or
sensitive datasets.

China’s integrated approach to indigenous innovation

In pursuit of its dreams of AI dominance, China is pioneering a new paradigm of indigenous innovation that takes advantage of critical synergies through creating mechanisms for deeper integration among the party-state, technology companies and the military. The CCP seeks not only to support private Chinese companies in their quest for innovation but also to control and guide them, ensuring that the companies serve the needs of the party and don’t become a threat to it. China’s ‘champions’ in AI— Baidu, Alibaba, Tencent and iFlytek—are at the forefront of innovation in the field, and this ‘national team’ will be supported and leveraged to advance state objectives and national competitiveness.62

For instance, Baidu is leading China’s National Engineering Laboratory for Deep Learning Technologies and Applications (深度学习技术及应用国家工程实验室),63 and iFlytek is leading the State Key Laboratory of Cognitive Intelligence (认知智能国家重点实验室).64 It seems likely that the research in these new laboratories will be directed to dual-use purposes. These champions will also undertake the development of new open innovation platforms in AI: Baidu will be responsible for autonomous vehicles, Alibaba Cloud (Aliyun) for smart cities, Tencent for medical imaging and iFlytek for smart voice (e.g., speech recognition, natural-language processing, machine translation, etc.).65 The platforms will be piloted in the Xiong’an New Area, a development southwest of Beijing that’s intended to be a futuristic demonstration of Chinese innovation and to showcase AI technologies and applications in action.66

Meanwhile, Xi Jinping has recently reaffirmed the Mao-era sentiment that ‘the party leads everything’, and China’s advances in AI must also be understood in the context of this system, in which the CCP is steadily increasing its control over private companies.67 In recent years, the CCP has introduced representatives of party branches and committees into notionally private companies,68 which have started to undertake more active ‘party building’ (党建) activities that are intended to expand the CCP’s presence and influence.69 Just about every major tech company, including Baidu, Alibaba, Tencent, Sohu, Sina and NetEase, has a party secretary, who is often a fairly senior figure within the company, and new requirements may even require all listed companies to ‘beef up party building’.70 For example, in March 2017, the CCP Capital Internet Association Commission (中共首都互联网协会 委员会) convened a party committee expansion meeting and a work meeting on grassroots party building that brought together the leaders of many prominent companies.71 At the meeting, Baidu Party Secretary Zhu Guang (朱光), who is also a Senior Vice President responsible for public relations and government affairs,72 talked about innovation in ‘party building work’, including the development of a mobile solution for ‘party building’. He committed Baidu to leveraging its capabilities in big data and AI applications, as well as its ‘ecological advantage’, to enhance the effectiveness of such efforts.73

This blurring of the boundaries between the party-state and its champions may create a tension between national strategic objectives and these companies’ global commercial interests.74 Increasingly, the CCP is even attempting to extend its reach into, and authority over, foreign companies operating in China.75

The dual-use dilemma in China’s AI development

The future trajectory of AI in China will inherently be shaped and constrained by the interests and imperatives of the party-state, and international collaboration with Chinese research institutions and corporate actors needs to be understood, and engaged in, with this important context in mind. Critically, AI will enhance both economic development and military modernization, while reinforcing the party’s ability to control its population through domestic surveillance, all of which are integral to the regime’s security and legitimacy. China’s AI plans and policies include the concern that AI will remain ‘secure and controllable’ (安全 , 可控), given the risks of societal disruption, while highlighting the importance of AI ‘to elevate significantly the capability and level of social governance, playing an irreplaceable role in effectively maintaining social stability’, thus bolstering regime security.76

Indeed, the pursuit of such ‘innovations’ in social governance through big data and AI has included the construction of predictive policing and surveillance capabilities, often developed with the assistance of start-ups such as SenseTime and Yitu Tech, that have often been abused, particularly in Xinjiang.77 Given the party’s attempts to extend its reach—and the trend towards deeper integration in civilian and military AI efforts in China—it can be difficult to disentangle notionally commercial activities from those directly linked to the party-state’s agendas for social control, indigenous innovation and military modernisation.

… a national strategy of ‘military–civil fusion’…

China seeks to take full advantage of the dual-use nature of AI technologies through a national strategy of ‘military–civil fusion’ (军民融合). This high-level agenda is directed by the CCP’s Military–Civil Fusion Development Commission (中央军民融合发展委员会) under the leadership of President Xi Jinping himself.78 Through a range of policy initiatives, China intends to ensure that advances in AI can be readily turned to dual-use applications to enhance national defence innovation. Although the effective implementation of military–civil fusion in AI may involve major challenges, this approach is presently advancing the creation of mechanisms and institutions that can integrate and coordinate R&D among scientific research institutes, universities, commercial enterprises, the defence industry and military units.79 For instance, in June 2017, Tsinghua University announced its plans to establish a Military–Civil Fusion National Defence Peak Technologies Laboratory (清华大学军民融合国防尖端技术实验室) that will create a platform for the pursuit of dual-use applications of emerging technologies, especially AI.80 Notably, in March 2018, China’s first ‘national defence science and technology innovation rapid response small group’ (国防科技创新快速响应小组) was launched by the CMC Science and Technology Commission in Shenzhen,81 and is intended to ‘use advanced commercial technologies to serve the military.’82

China’s AI ‘national champions’ may often be engaged in support of this agenda of military-civil fusion. Notably, in January 2018, Baidu and the 28th Research Institute of the China Electronics Technology Group’s (CETC), a state-owned defence conglomerate, established the Joint Laboratory for Intelligent Command and Control Technologies (智能指挥控制技术联合实验室), located in Nanjing.83 The CETC 28th Research Institute is known as a leading enterprise in the development of military information systems, specializing in the development of command automation systems,84 and it seeks to advance the use of new-generation information technology in defence ‘informatization’ (信息化).85

This partnership is directly linked to China’s national strategy of military-civil fusion, leveraging the respective advantages of CETC and Baidu to take advantage of the potential of big data, artificial intelligence, and cloud computing. Going forward, the new joint laboratory will focus on increasing the level of ‘intelligentization’ (智能化) in command information systems, as well as designing and developing new-generation command information systems ‘with intelligentization as the core.’ Baidu’s involvement in this new laboratory reflects its active contribution to military-civil fusion, a strategy that is resulting in a further blurring of boundaries between commercial and defence developments.

Policy considerations and recommendations

There is no single or simple solution, and policy responses must take into account the inherent complexities of these global dynamics, which necessitate highly targeted and nuanced measures to mitigate risk.86 At the same time, real and serious concerns about China’s exploitation of the openness of our democracies must not lead to reactive or indiscriminate approaches that could cause collateral damage to the inclusivity and engagement that are critical to innovation.

The benefits of scientific collaboration are compelling, and continued cooperation should be supported, with appropriate awareness and safeguards. In future, the quest to achieve an advantage in emerging technologies will only intensify, and the US and Australia must also look to enhance their own competitiveness in these strategic technologies.87

The options for policy response include, but aren’t limited to, the measures detailed below.

Strengthen targeted, coordinated countermeasures.

1: Review recent and existing research and commercial partnerships on strategic technologies that involve support and funding from foreign militaries, governments or state-owned/supported enterprises, evaluating the dual-use risks and potential externality outcomes in each case.

  • ​​Evaluate early-stage research to determine the likelihood that it may turn out to have disruptive dual-use implications in the future.
  • Present a public report with findings and recommendations to raise awareness and ensure transparency.
  • Continue to push back against forced tech transfer in joint ventures.88

2: Explore updates and revisions to national export controls, defence trade controls and investment review mechanisms that take into account the unique challenges of dual-use commercial technologies; communicate those updates clearly and publicly to relevant stakeholders.

  • Share lessons learned and pursue coordination with allies and partners to account for the global scope and scale of these dynamics.
  • Ensure that these restrictions are applied to sensitive datasets associated with AI development, including data used for training purposes.

3: Engage in visa screening of foreign nationals who plan to study or research sensitive or strategic technologies, targeting scrutiny on the basis of whether or not students or researchers have direct and clear connections to foreign militaries, governments or intelligence services.

  • Deny visas to those who are determined to be likely to leverage their studies or research in support of a foreign military that is not a security partner.
  • Incorporate an independent review mechanism into the process to assess evidentiary standards and mitigate risks of bias in visa determinations.

4: Identify organisations engaging in talent recruitment that are linked to the Chinese central and local governments or to the CCP, and require their registration as foreign agents where appropriate.

5: Enhance counterintelligence capabilities, particularly by augmenting language and technical expertise.

Encourage best practices and safeguards for risk mitigation in partnerships and collaborations, with a particular focus on universities.

6: Introduce stricter accountability and reporting requirements, managed by departments of education, which make transparent international sources of funding for research strategic technologies

7: Engage in outreach to companies, universities and think tanks in order to highlight the potential for risk or unintended externalities in joint ventures and partnerships, including through developing and presenting a series of case studies based on past incidents.

8: Propose best practices for future academic collaborations and commercial partnerships, including transparency about the terms for scientific data and intellectual property, as well as clear standards on ethics and academic freedom.

  • Identify favourable domains to sustain open collaboration and engagement, such as issues of safety and standards.

9: Introduce, or where appropriate adjust, policies or guidelines restricting those who work for national or military research institutes and laboratories or receive public funding at a certain level from organisations accepting funding from or collaborating with a foreign military, state-owned enterprise or ‘national champion’ that is not an ally.

Go on the offensive through policies to enhance national competitiveness in technological innovation.

10: Increase and commit to sustaining funding for basic research and the long-term development of AI technologies.

11: Prioritise improving the accessibility and affordability of STEM education at all levels, including creating new scholarships to support those studying computer science, AI and other priority disciplines.

12: Sustain openness to immigration, welcoming graduating students and talented researchers, while potentially offering a fast-track option to citizenship.

13: Pursue closer public–private partnerships through creating new incubators and institutions that create a more diverse and dynamic community for innovation.89

  • Encourage dialogue and engagement between the tech and defence communities on issues of law, ethics and safety.

14: Explore the expansion of alliance coordination and cooperation in defence innovation, including collaboration in research, development and experimentation with new technologies and their applications.

15: Engage with like-minded nations to advance discussions of AI ethics and standards, as well as potential normative and governance frameworks.

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 person.

© The Australian Strategic Policy Institute Limited 2018

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.

  1. Elsa B Kania, ‘The pursuit of AI is more than an arms race’, Defense One, 19 April 2018, online. ↩︎
  2. Kai-Fu Lee, AI superpowers: China, Silicon Valley, and the new world order, Houghton Mifflin Harcourt, 2018, forthcoming ↩︎
  3. For prior writing on these issues, see Elsa Kania, ‘Tech entanglement—China, the United States, and artificial intelligence’, Bulletin of the Atomic Scientists, 5 February 2018, online. ↩︎
  4. For a detailed study on these issues, see Office of the United States Trade Representative, Executive Office of the President, Findings of the investigation into China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation under section 301 of the Trade Act of 1974, 22 March 2018, online. ↩︎
  5. Throughout this policy paper, I use the concept of ‘entanglement’ to characterise the close linkages and range of mechanisms for engagement in the research, development and commercialisation of technologies, particularly in the context of AI. In historical perspective, entanglement, whether in alliances or economics, has proven to be both a factor restraining conflict and a major source of friction. ↩︎
  6. ‘US tech companies and their Chinese partners with military ties’, New York Times, 30 October 2015, online. ↩︎
  7. Clive Hamilton, Alex Joske, ‘Australian universities are helping China’s military surpass the United States’, Sydney Morning Herald, 27 October 2017, online. ↩︎
  8. Josh Chin, Clément Bürge, ‘Twelve days in Xinjiang: how China’s surveillance state overwhelms daily life’, Wall Street Journal, 19 December 2017, online. ↩︎
  9. For the purposes of this paper, I target the proposed policy responses to the context of the US and Australia, but the suggested responses are intended to be applicable to other liberal democratic states. ↩︎
  10. These screenings should not extend to outright restrictions or unwarranted discrimination on the basis of nationality. For a compelling perspective on the imperative of keeping the door open to foreign scientists, read Yangyang Cheng, ‘Don’t close the door on Chinese scientists like me’, Foreign Policy, 4 June 2018, online. ↩︎
  11. For a notable report on these concerns, see Michael Brown, Pavneet Singh, China’s technology transfer strategy: how Chinese investments in emerging technology enable a strategic competitor to access the crown jewels of US innovation, Defense Innovation Unit Experimental (DIUx), January 2018, online. ↩︎
  12. ‘CFIUS reform: House and Senate committees unanimously clear bills that would greatly expand CFIUS authority’, Lexology, 1 June 2018, online. National/State Security Law of the People’s Republic of China [中华人民共和国国家安全法], 7 July 2015, online. For further discussion of the concept of ‘state security’, see Samantha Hoffman, ‘China’s state security strategy: “everyone is responsible”’, The Strategist, 11 December 2017, online. ↩︎
  13. For an interview that describes the campaign from the perspective of an organiser, see ‘Tech workers versus the Pentagon’, Jacobin, 6 June 2018, online. ↩︎

Weibo diplomacy and censorship in China

Sina Weibo

Since its inception in 2009, Sina Weibo – China’s souped-up version of Twitter – has provided a rare foothold for foreign governments in the PRC’s tightly-controlled media environment.

Yet while the PRC is allowed free reign to push its messages in Western media and social media platforms, Beijing’s censors have been hampering the legitimate digital diplomacy efforts of foreign embassies.

This ASPI ICPC report provides an in-depth look at the increasingly sophisticated censorship methods being used on foreign embassies on Weibo and provides a series of recommendations for foreign governments, including Australia, to address these policy challenges.

What’s the problem?

As the Chinese Communist Party (CCP)-led state extends its reach into other nations, it’s actively limiting the ability of other countries to do the same in the People’s Republic of China. Seeing itself in an ideological confrontation with ‘the West’,1 the CCP under Xi Jinping is determined to ensure ideological conformity in its own information space.

A key battleground is Weibo, the Chinese micro-blogging service most closely analogous to Twitter. Since Weibo’s inception, embassies have maintained a presence on it—a rare foothold for foreign governments in China’s tightly controlled information space.

While some governments, particularly those of Western countries, have occasionally spoken outside the CCP’s frame of acceptable public discourse, most do not. As Weibo continues to introduce new and subtle methods of direct censorship, foreign embassies are both self-censoring their messaging and failing to speak up when their content is being censored.

In Australia’s case, this lack of transparency and cycle of self-censorship sits oddly with the description of Australia as ‘a determined advocate of liberal institutions, universal values and human rights’ in the 2017 Foreign Policy White Paper.2

What’s the solution?

To not be seen as agreeing to the CCP’s ideological agenda, like-minded governments, in coordination with each other, should commit to publishing transparency reports to reveal the extent to which their legitimate online public diplomacy efforts are being curtailed in China.

Foreign governments should establish and publish clear terms of use for their social media accounts in China so that they don’t fall into the trap of self-censoring their policy messages and advocacy. They should use uncensored social media platforms such as Twitter—which, despite being blocked in China, still has an estimated 10 million active users in the country.3

Embassies could cross-post all of their content there so that audiences are both aware of any incidences of censorship and have alternative avenues to access their full content. The Australian Government should establish Weibo accounts for the positions of Prime Minister and Foreign Minister.

‘Orwellian nonsense’

In early May 2018, the US Embassy in China put Weibo censors in a delicate bind when it issued a provocative slapdown of Beijing’s censorship overreach.

‘President Donald J Trump ran against political correctness in the United States’, read the White House statement, which had been translated into Mandarin.4 ‘He will stand up for Americans resisting efforts by the Chinese Communist Party to impose Chinese political correctness on American companies and citizens.’

The statement was put out in response to the Chinese Civil Aviation Administration’s call on 36 foreign airlines, asking them to come into line with Beijing’s preferred terms of reference for Taiwan, Hong Kong and Macau as ‘Chinese territories’.

The statement continued: ‘This is Orwellian nonsense and part of a growing trend by the Chinese Communist Party to impose its political views on American citizens and private companies.’ It went further still: ‘China’s internal Internet repression is world-famous. China’s efforts to export its censorship and political correctness to Americans and the rest of the free world will be resisted.’

The post, most likely penned by White House press secretary Sarah Huckabee Sanders, was a deliberate poke in the eye for Beijing and it promptly caused a firestorm on the platform.

In the short history of Weibo diplomacy, sometimes referred to as ‘Weiplomacy’, it was the most direct challenge to China’s censorship regime yet. Having shone a mirror on their own activities, Sina Weibo’s censors were put on the spot.

‘Only folks with strong connections (like you) can avoid getting censored’ read the most upvoted comment in the hour immediately after the post went out (Figure 1). ‘I can imagine the censorship department scratching their heads over this,’ read another comment.5

Notably, Hu Xijin, the chief editor of Global Times, the nationalist newspaper owned by the CCP, took to his own Weibo account to call on ‘Weibo management’ to refrain from intervening.6

Instead, in the ensuing few hours, Sina Weibo’s censors used every tool at their disposal short of deleting the post to ensure that the missive had as little impact as possible. Not only was the sharing function for the post switched off, but the comments section under the post was carefully manicured to remove liberal voices and replace them with CCP-approved sentiment (Figure 2).

Figure 1: The comments section under the US Embassy post less than an hour after it was published included users directly challenging the censorship regime.

Translation

  • Only folks with strong connections (like you) can avoid getting censored. [2,656 Likes]
  • I’m also against political correctness or imposing your ideology on others but respecting the sovereignty and territorial integrity of other countries should not be mixed up with ideology. [2,077 Likes]
  • If we were exercising extreme oppression on the domestic Internet, do you think you’d still be talking shit here? [1,277 Likes]
  • Hahahahaha seeing in my living years the US opposing China’s political correctness.. [1,027 Likes]
  • How does our press freedom rank in the world again, one hundred and something right? [634 Likes]
  • I sincerely hope the Indians can claim back their land and establish their own country, while Hawaii could become an independent country. [814 Likes]
  • If you don’t want to do business here, then f&#% off. If you do want to do business here, respect our laws. [497 Likes]
  • [I] support President Trump’s thinking, the world belongs to the people, not a certain party. [378 Likes]
  • Leave your name here before the post gets deleted. [321 Likes]

Figure 2: The comments section under the US Embassy post (now seen in mobile view) around 2 hours after it was published and after censors removed posts that didn’t toe the party line.

Translation

  • If you don’t want to do business here, then f&#% off. If you do want to do business here, respect our laws. [110,000 Likes] 
  • When China and the US established diplomatic relations in 1972, Nixon openly accepted China’s political correctness during his trip here. Are you now denying the establishment of diplomatic relations? [7,854 Likes]
  • Independence for Hawaii
    Independence for Alaska
    Independence for California
    Independence for Texas
    Independence for New Mexico [7,108 Likes]
  • 1. This is not political correctness, this is the one-China principle.
  • 2. Please abide by the terms of the Sino-US joint communique, if you choose to unilaterally go against them, it will be seen as a violation of the agreement. [6,560 Likes]

The incident was an object lesson in how sophisticated the PRC censorship apparatus has become and how precisely it can be deployed. It may be ‘Orwellian nonsense’, but it does largely work. While some Western media reports 7 took care to note that more varied opinions were expressed by Weibo users under the post before the censors swooped in, most reports didn’t.8

What remained after the censors had done their work was nothing more than a Potemkin post, with the comments under it carefully selected to give the impression of a uniformly nationalistic online Chinese public. Such an impression has led previous scholarship on ‘Weiplomacy’ to conclude that the power of Weibo to further the goals of public diplomacy might have been overestimated.9

But a closer examination of the comment section under the post revealed a plethora of viewpoints that the censors failed to expunge. Even though the censors had cherrypicked CCP-approved comments to feature as the most upvoted comments, many of the comments under those comments weren’t toeing the party line (Figure 3). Peeling back the curtain on the Potemkin post reveals the raucous marketplace of ideas that still exists on Weibo, if one takes the time to seek it out.

Figure 3: The comments under the cherrypicked nationalist comments reveal sentiment from opposing ideological clusters.

Translation

  • If you don’t want to do business here, then f&#% off. If you do want to do business here, respect our laws. [12,076 Likes]
  • ‘Little pink’ maggots [a derogatory term for young nationalists] are really disgusting [4,879 Likes]
  • So ZTE deserved to be prosecuted in the US because it didn’t obey their laws. [3,319 Likes]
  • ‘War Wolves’ [a reference to patriotic hit Chinese film Wolf Warrior] always think the rest of the world couldn’t survive without China. [3,302 Likes]
  • Saying it like this is a bit extreme. China and the US affect each other mutually. Chinese airlines need to fly to the US and US airlines need to fly to China. It’s not possible for only one side to depend on the other for business. [3,091 Likes]
  • [The commenter] is obviously a slave but one who talks with the tone of a master. [1,970 Likes]

Weibo and foreign governments: a history of censorship and self-censorship

Three years after the UK Embassy became the first foreign embassy to open an account on Sina Weibo, Jonas Parello-Plesner warned that diplomats should be wary of creeping self-censorship.

‘Embassies shouldn’t accept self-censorship by only posting innocuous tweet[s] that can pass through the censors,’ Parello-Plesner wrote in The Diplomat in 2012.10 ‘Instead they should give the full spectrum of views including on values—even if it means more deleted postings.’

In the intervening years, some foreign embassies took up the challenge, showing a willingness to push the envelope even at the risk of having their content censored. At times, the envelope pushing has been inspired. Doing this required them to be quite creative, because being predictable means being easily blocked.

On 30 May 2012, the US Embassy tapped into Michael Jackson’s popularity in China to give a boost to a politically sensitive interview with then ambassador Gary Locke.11

‘Michael Jackson has an album called Thriller, one of the best selling records in the history of music. The story we’re telling today is also a Thriller. Click to read,’ read the post, which also included a picture of the famous album (Figure 4).

The link led to a Newsweek interview titled ‘Ambassador to China Gary Locke talks Chen, Drama in China’,12 which included details about the attempt by former Chongqing police chief Wang Lijun to get political asylum from the US, as well as the dramatic story of activist Chen Guangcheng’s successful bid for political asylum.

Figure 4: The censored 2012 Weibo post from the US Embassy, which used Michael Jackson’s celebrity as a smokescreen for a politically sensitive interview with then ambassador Gary Locke. The post was archived on FreeWeibo.com.

In 2014, the UK Embassy posted a 2013 human rights report to Weibo using ‘Martian’, a coded language based on Chinese characters (Figure 5).13

Figure 5: The 2014 Weibo post from the UK Embassy, which used coded language in an attempt to evade censorship.

If the post had gone out using standard Chinese, keywords deemed sensitive by the party-state, such as ‘human rights’, would have been flagged automatically. But by using the ‘Martian’ coded language, the longevity of the post was prolonged before the censors became aware of it.14

In other instances, embassies have posted ‘sensitive’ content on Weibo in order to address what they have perceived as unfair treatment by China’s state-controlled media.

On 3 August 2011, the Canadian Embassy was censored for the first time after it posted about Chinese fugitive Lai Changxing. The post included a full federal court decision that resulted in his deportation to China. It included mentions of Liu Xiaobo and Falun Gong and was deleted almost immediately.15

At other times, foreign embassies have tested the boundaries of what is deemed acceptable discourse by Beijing’s censors. In 2016, the US consulate in Shanghai sent out a Weibo post asking for virtual private network (VPN) supplier recommendations. The post was deleted within an hour of its appearance.16

On 1 February 2017, the British Embassy posted an EU statement calling for the investigation of allegations of torture of detained human rights lawyers.17 According to Citizen Lab, Weibo users weren’t able to forward or comment on the post.18 The post was subsequently deleted. And on 3 June 2014, a day before the 25th anniversary of the massacre at Tiananmen Square, the Canadian Embassy posted a photo of Ambassador Guy Saint-Jacques posing with his wife at the site (Figure 6). The low comments-to-shares ratio on the provocative post would suggest some form of censorship, with comments either being deleted or not allowed at all.

Figure 6: Canadian Ambassador and his wife at Tiananmen Square, 2014

The text reads:

  • ‘On June 1, ambassador Guy Saint-Jacques and wife Sylvie Cameron took a tour around the Chairman Mao Memorial on their bikes. A visit to the place they once saw reminded of various past events associated with the square, including the once more cordial and relaxed atmosphere there.’
  • Despite being shared 917 times, the post only displays a few comments—a telltale sign that censors had throttled engagement with it.
  • One share of the post added the comment: ‘There are only a few comments on this post, and you can’t see any of the shares of it.’

At times, the act of censorship happens not because an embassy has made a decision to push the envelope, but because it’s made a diplomatic faux pas. On 26 March 2014, the Russian Embassy Weibo account made what Foreign Policy called a ‘large digital diplomacy gaffe’ when it made mention of the Tiananmen incident. The embassy argued that ‘Russia’s current situation’, following Western sanctions after Russia’s annexation of Crimea, ‘somewhat resembles what China suffered after the Tiananmen incident.19

More recently, however, the instances of blatant censorship—in which posts and even the accounts themselves are deleted—appear to have dropped off. Instead, as this report shows, the invisible hand of Beijing’s censors is, for the most part, eschewing heavy-handed censorship for more surreptitious forms. At the same time, it appears that foreign embassies on Weibo are pulling their punches and accepting ‘the sliding slope of red lines and self-censorship inside the Chinese system’ that Parello-Plesner warned about.20 The combination results in the suppression of ideas that are different from the CCP’s ‘correct line’.

Websites FreeWeibo and Weiboscope have been extremely useful for uncovering examples of blatant censorship, including deletions of posts and keyword blocking. However, less obvious forms of censorship are more difficult to detect. Some of those methods include disabling the comments section under posts and switching off their sharing functionality.

The disabling of comments has been one of many levers that Sina Weibo’s censors have been able to pull from as early as 2012, when, rather heavy-handedly, all comments on all posts were switched off after rumours of a coup spread on the platform.21

Similar forms of surreptitious censorship include ‘shadow-banning’, in which users are under the impression that their posts are being seen when in fact they’re being hidden from other users. The practice is known to be used, if only anecdotally, on Sina Weibo, but has been proven to be in use on China’s dominant chat application, WeChat. 22

These stealthier forms of censorship are less noticeable to the user and therefore less likely to provoke any unwanted backlash.23 As Lawrence Lessig observed in 1999, it’s the underlying code that determines ‘whether access to information is general or whether information is zoned’.24 Or to rework the old aphorism, ‘If a message is posted on social media, but the algorithm doesn’t prioritise it, does it really make a sound?’

How censorship on Weibo works

An analysis of three months’ worth of Weibo posts between November 2017 and January 2018 from the top 10 foreign embassies in China (measured by follower numbers) found 51 instances of censored posts, mostly on the US Embassy account (Figure 7).25

Figure 7: Three months of Weibo posts from November 2017 to January 2018 resulted in 51 instances of censorship.

The US Embassy account had 28 instances of censorship in total, and a variety of methods were used to reduce or erase the impact of its posts. Those methods ranged from the blunt to the subtle:

  • Six posts were deleted—some immediately, some weeks after the fact.
  • Fifteen posts had their comments sections disabled immediately.
  • Three posts had comments sections disabled immediately and then re-enabled weeks later.
  • Two posts had their comments sections allowed, then disabled and hidden at some later stage.
  • In two posts, Weibo notified users that comments were being accepted but asked that they wait patiently for a ‘server synchronisation’. The user comments never made it through.

A range of censorship methods were used on US Embassy posts, ranging from the blunt to the subtle (Figure 8).

Figure 8: Censorship methods used on the US Embassy Weibo account

In a blatant act of censorship, a post sent out by the US Embassy on 7 November 2017 showing the first leg of President Trump’s Asian tour, in Japan, was immediately deleted. The deleted post—captured and archived by FreeWeibo.com 26—was also tweeted from the US Embassy Twitter account,27 helping to make its absence on Weibo more noticeable (Figure 9).

Figure 9: The US Embassy tweet, the Weibo equivalent of which was deleted by Chinese censors.

Translation: President Trump and First Lady Melania Trump were welcomed by the Emperor and Queen of Japan on the second day of their Japan visit. They also met with the families of North Korean abductees. President Trump held bilateral talks with Abe, and met with Japanese and American business leaders, while the First Lady had a joyous meeting with some Japanese primary school students. #POTUSinAsia

Two days later, on 9 November 2017—the second day of President Trump’s first state visit to the PRC—a post sent out by the US Embassy linking to a transcript of a press briefing by Secretary of State Rex Tillerson (Figure 10)28 had its comments section immediately disabled.

The post contained a statement from Secretary Tillerson that presented President Trump and President Xi as being on a joint ticket in regard to denuclearisation of the Korean Peninsula, and quickly became that week’s most shared post from the embassy, with 523 shares and 441 ‘Likes’.

Figure 10: The tweet about Rex Tillerson, the Weibo equivalent of which was deleted by Chinese censors.

Translation: President Trump and President Xi confirmed their determination in realising the complete, verifiable and ever lasting denuclearisation of the Korean peninsula. President Trump and President Xi won’t accept a North Korea that is armed with nuclear weapons. We thank China’s cooperation. Secretary of State Rex Tillerson at Beijing Press Conference. Read the brief.

On 17 November, another post quoted a different part of Secretary Tillerson’s earlier press briefing:

The key topic of discussion was our continued joint effort to increase pressure on North Korea, to convince them to abandon their nuclear and missile program. President Trump and President Xi affirmed their commitment to achieve a complete, verifiable, and permanent denuclearization of the Korean Peninsula. President Trump and President Xi will not accept a nuclear-armed North Korea.

On 24 November, another post quoted President Trump from his joint press conference with President Xi two weeks earlier: 29

All responsible nations must join together to stop arming and financing, and even trading with the murderous North Korean regime. Together we have in our power to finally liberate this region and the world from this very serious nuclear menace. But it will require collective action, collective strength, and collective devotion to winning the peace.

And on 30 November 2017, a US Embassy Weibo post announced a call between President Trump and President Xi after Pyongyang tested a missile reportedly capable of reaching the US mainland (Figure 11).30 A copy of the post remains on the US mission’s Twitter account.31

Figure 11: The tweet about Trump’s phone call with Xi, the Weibo equivalent of which was deleted by Chinese censors on Weibo.

Translation: President Trump spoke with President Xi to discuss North Korea’s latest missile test. President Trump stressed America’s determination to defend itself and its allies from the growing threat posed by the North Korean regime. November 29, 2017, the White House President Trump and President Xi call briefing.

Six months after these four posts were published, they no longer exist. It’s unclear when exactly the censors deleted them. This method of delayed censorship avoids detection on FreeWeibo.com, where there are no records of the posts being censored. With the North Korea nuclear crisis still a live issue, the deletions suggest that Beijing is trying to regain control of the narrative inside its own information space.

On 27 December 2017, the US Embassy was censored again after it sent out a post linking to a US– German embassy joint statement about the sentencing of activist Wu Gan and his lawyer, Xie Yang:

We see lawyers and defenders of rights as aiding the strengthening of the Chinese society via developing governance by law. Click the link here to view the recent cases.

The post was captured on FreeWeibo.com after being censored on Weibo.32

Aside from these six instances of deleted posts, all other instances of censorship captured in this report involved the disabling of the comments section under posts. This softer, less noticeable form of censorship is what’s more generally applied to posts from foreign embassies, resulting in suspiciously low levels of reported engagement from users. Engagement levels are artificially deflated when comments are disabled.

In a response to a list of questions asked by ASPI’s International Cyber Policy Centre (ICPC), three governments—the US, Australian and Japanese—confirmed that their embassies in Beijing never disable the comment sections under their Weibo posts.33

‘We don’t delete our own posts,’ a US Embassy spokesperson told ASPI ICPC via email. ‘The US Embassy faces regular and routine blocking of social media posts in China.’ 34

‘We don’t disable the comments section ourselves,’ a Japanese Embassy spokesperson told an ASPI ICPC researcher over the phone. ‘When comments are closed for posts it’s always done by Sina. They will always disable comments for posts mentioning the names of Chinese political leaders, for example.’

In fact, in the data covered in this report, 75% of the time censorship appears to have been meted out because a top Chinese official (living or dead) was mentioned by name or was in a photo in the post.

The sensitivity around senior Chinese officials isn’t surprising. In his 2013 book, Blocked on Weibo, Jason Q Ng found that the largest share of blocked words he discovered through his research were names of people, mostly CCP members.

‘[P]rotection from criticism on Weibo seems to be a perk for rising up the ranks—while dissidents and people caught up in scandals or crimes make up the rest of the names,’ Ng wrote.35

A post by the Cuban Embassy on 25 January 2018 mentions Song Tao (宋涛) , the head of the CCP’s International Department. The post described Song as ‘Secretary Xi Jinping’s Special Envoy’, which was probably the reason for the censorship that followed (Figure 12).

Figure 12: A Cuban Embassy post runs into trouble

Translation of error message: Sorry, you cannot proceed with your attempt as the content contains information that has violated relevant laws and regulations or Weibo community guidelines.

Even when posts mentioning Xi Jinping are positive, they still attract the attention of censors. In October 2017, former Australian Prime Minister Kevin Rudd posted a photo of himself ‘studying’ Xi’s report to the 19th CPC National Congress (Figure 13). ‘China has entered a new age,’ he wrote. According to Rudd, comments under the post were disabled by Weibo. 36

Figure 13: Comments were disabled after Kevin Rudd posted on Weibo

A Sina spokesperson confirmed to ASPI’s ICPC that government-affiliated Weibo accounts with a blue verified badge have the ability to disable the comment sections on their own posts.37 However, in the dataset collected for this report, only one instance of a foreign embassy disabling its own comments was found, on the South Korean embassy’s Weibo account (Figure 14).

Figure 14: The error message reads ‘Due to this user’s settings, you’re unable to comment.’ The South Korean embassy did not respond to ASPI ICPC’s enquiries.

Occasionally, there are exceptions to the censorship rules. An uncensored post from Canadian Prime Minister Justin Trudeau sent on 6 December 2017 included Chinese Premier Li Keqiang’s name in the text, as well as Li’s image in a photo.38 

The outsized success of a selfie taken by Indian Prime Minister Narendra Modi and Chinese Premier Li Keqiang and posted to Weibo in July 2015 is another exception to the rule (Figure 15). 39 The virality of the post was due not only to the rare inclusion of a top Chinese leader, but also due to the content, in which Modi wishes Li a happy birthday. Premier Li’s exact birthday hadn’t been publicly disclosed before.40

Figure 15: Indian Prime Minister Narendra Modi and Chinese Premier Li Keqiang post a selfie

In a rare case during the 2017 G20 summit in Germany, any mention of Russian President Vladimir Putin was blocked on Weibo, according to the Financial Times.41

The move was interpreted by the paper as ‘giving Russia’s president an immunity from public criticism usually reserved for China’s Communist Party elite.’ In that instance, any mention of Putin on the accounts of Weibo users with more than 1,000 followers triggered the message: ‘This post does not allow commenting.’

Out of 51 instances of suspected censorship over the three-month study period, only 13 were posts that didn’t mention any top Chinese leaders.

One particularly notable instance of censorship was of a 13 November 2017 post from the US Embassy Weibo account, which included a video of President Donald Trump emphasising the US as a country whose ‘home’ is ‘on the Pacific’ (Figure 16).

Figure 16: Comments are disabled on US Embassy’s post of President Trump speaking about the US and the Pacific.

Translation of error message: Sorry, you cannot proceed with your attempt as the content contains information that has violated relevant laws and regulations or Weibo community guidelines.

Other, more personal, attempts at cross-cultural communication were also hamstrung by the censors. On the final day of President Trump’s state visit to the PRC, a video of Trump’s 6-year-old granddaughter Arabella Kushner that Trump had personally shown President Xi and his wife Peng Liyuan was published on the US Embassy account and immediately had the comments section on it disabled (Figure 17).

Figure 17: Screenshot of the US embassy’s post of Arabella Kushner singing in Chinese. Comments on the post were immediately disabled.

On the same day, a Weibo post written in the first person by President Trump at the end of his state visit to the PRC appeared:

I’m now leaving China for Vietnam for the APEC meeting #APEC2017#. First Lady Melania will stay here to visit the zoo, and of course, the Great Wall of China. Then she will go to Alaska to greet our amazing troops.

The post prompted some users to ask in comments whether Trump had taken over control of the US Embassy account.

After 39 comments were made, any subsequent attempt to comment resulted in an error message reading: ‘Posted successfully. Please be patient about 1–2 minutes delay due to server synchronization, thank you’ (Figure 18).

Figure 18: The Trump post at the end of his China visit.

Translation of error message: Posted successfully. Please be patient about 1–2 minutes delay due to server synchronization, thank you.

Two other posts by the US Embassy probably drew the ire of Weibo’s censors by providing an opportunity for Chinese netizens to draw comparisons between conditions in the US and China.

One such post answered a question posed to the US Embassy Weibo account about whether American officials were provided with special food supplies (Figure 19).42 Chinese news reports in 2011 revealed that Chinese Government officials have exclusive suppliers of organic food.43 Given that the post didn’t include any sensitive words that might cross a censorship fault line, it managed to garner at least 88 comments before commenting was disabled by the censors.

Figure 19: One of only 13 censored posts that didn’t refer to a senior Chinese leader, this post seemed to invite a comparison of US officials to Chinese officials, and comments were disabled.

Weibo accounts run by the US Government have been suspended and even completely deleted in the past. The US Shanghai consulate’s Weibo account was shut down on 14 July 2012, while the US Embassy account was suspended briefly on 5 May 2016, according to China Digital Times, which is a website following social and political developments in China and run by the University of California.44

At times, it’s less clear why a decision to disable comments was made. When the US Embassy posted that it wouldn’t be able to continue posting to Weibo and WeChat during a government shutdown on 22 January 2018, the post went viral (Figure 20).45 It was the second most shared of all posts gathered during the three-month reporting period for this report.

Figure 20: A post by the US Embassy, explaining that it wouldn’t be posting during a government shutdown, was picked up by the Chinese media.

Translation: Due to an unresolved issue with funding, the US embassy’s social media account will cease its regular updates. While the funding issue remains unresolved, all regular and emergency consular, citizen and immigration services will continue as usual. Those seeking visa or citizen services who have secured an appointment in advance should attend as scheduled. In the exception of emergency security and safety information, the embassy website will not continue its regular updates before full resumption of operations.

However, after the post garnered 1,893 comments, further comments were disabled, despite the Global Times’ gleeful reporting on the incident.46

For China’s overzealous censors, even posts that could be used to show the apparent weaknesses of liberal democracies, such as the US Embassy’s government shutdown post, need to be censored—presumably for fear that discussion of the US Government will prompt users to draw comparisons to their own government. Clearly, the censors, of which Sina Weibo employs an estimated 13,000,47 are highly sensitive to any content that falls outside the boundaries of acceptable CCP-approved discourse.

It follows that a country such as Australia, which claims to be ‘a determined advocate of liberal institutions, universal values and human rights’,48 should expect such advocacy to attract the attention of China’s censors. If it didn’t, something would be odd. However, the Australian Embassy Weibo account doesn’t appear to be attracting much CCP censorship. In the three months of data collected for this report, the embassy’s Weibo account was censored only three times, all for mentioning Xi Jinping. Whether this lack of censorship reflects savvy account management, the CCP’s disinterest in the embassy Weibo account or self-censorship by the Australian Government is the important question.

Rising nationalism

Rising Chinese nationalism online has been allowed to foment amid recent social media campaigns against companies such as South Korean conglomerate Lotte Group, German carmaker Daimler’s Mercedes-Benz brand and Marriott International. The campaigns have received support from both state-run media and the Chinese Government.49

On 17 November 2017, an innocuous post by the German Embassy explaining the meaning of the German word Lückenbüßer (stopgap)50, became a place for nationalists to congregate and protest after pro-Tibetan independence flags were sighted at a soccer match in Germany involving Chinese players (Figure 21).

Figure 21: The German Embassy Weibo post and angry responses from nationalists.

Translation: Luther invented the word Lückenbüßer while translating the Old Testament. The word is about holes and cracks needing to be mended in the Holy Wall in Jerusalem. This is the origin of the word. Today, it refers to a person who acts as a replacement for the one missing from the original plan, although the plan does
not work out in the end. No one wants to be a measure of expediency, but we often cannot do without one. During a period of transition when changes are about to happen, or when a final choice has yet to be made, it usually connects the world together.

Translation of comments:

  • You want freedom of speech? Sure! Next time you Germans want to come to China for any games, we will bombard with swastika flags and photos of Hitler, and salute and chant the name of Hilter throughout, and belt out Nazi songs! Then you’d be happy, be content! A nation that cannot retain its roots is really pathetic, of course, they will treat the territorial integrity of other nations as bullshit!
  • You deserve terrorist attacks in Europe, it’s all your own making!
  • Can we perform Nazi rituals and bear Nazi flags when the German team comes to China?
  • Since some people purposely provoked aggression with flags for Tibetan independence during a China–Germany soccer match, while you brushed it aside with the excuse of freedom of speech, I think it would not be an issue to paste around your embassy all with flags of east Germany!
  • What is freedom of speech? If the separation of China can be counted as freedom of speech, then we sincerely hope that you would again divide Germany into two countries.

The prevalence of such deep nationalism, both real and manufactured, has prompted some, like Adelaide University scholar Ying Jiang, in her pioneering research into ‘Weiplomacy’ efforts, to suggest that the power of Weibo to further the goals of public diplomacy might have been overestimated.51 It’s easy to see how that could be the case. While liberal voices face extra scrutiny from the censors, nationalist voices are allowed to flourish. Even foreigners on Weibo have been tapping into Chinese nationalism as a fast track to viral fame on the platform.

David Gulasi, a China-based Australian English teacher, attracted attention on the platform with funny videos, but saw it skyrocket when he started aping nationalistic views. State media outlet Xinhua has noted that videos uploaded by Gulasi include one in which he ‘professed his love for China and denounced foreigners who did not share his passion for the country’.52

In 2016, when thousands of China-based trolls attacked Australian Olympic swimmer Mack Horton and his supporters after Horton called his Chinese rival Sun Yang a ‘drug cheat’, Gulasi joined in on Weibo (Figure 22).53

Figure 22: Joining a Chinese nationalist pile-on on Australian Olympian Mack Horton helped David Gulasi achieve viral fame on Weibo.

In another video, Gulasi complains about the slow pace of life in Australia and tells his audience he has come to China to pursue his ‘Chinese Dream’ 54 —a populist slogan introduced by Xi Jinping in 2013. Astoundingly, Gulasi was chosen by the Australian Embassy to feature in its 45 Years, 45 Stories campaign to commemorate the 45th anniversary of Australia–China diplomatic relations.55

Foreign embassies and even national leaders such as India’s Narendra Modi have had their Weibo accounts deluged with angry nationalistic messages.56 But in an increasingly censored and controlled online media environment, foreign embassy accounts can also be a channel for netizens to protest about their own government.

In early February 2018, the comments section on posts sent out by multiple foreign embassies, including the US, Japanese and UK embassies, as well as the United Nations, spontaneously became a space for Weibo users to protest the China Securities Regulatory Commission and its head, Liu Shiyu (Figure 23).57

Figure 23: A screenshot of the US embassy Weibo account from 9 February 2018. The screenshot was censored on Weibo but retrieved by FreeWeibo.com, a censorship monitoring site. Source: 科学自然 ‘科学自然：激动的中国股民涌到美国驻…’, FreeWeibo.com, 10 February 2018, online

Translation:

  • Since the China Securities Regulatory Commission Weibo has banned hundreds of millions of investors from protesting, all we can do is voice our fury here and strongly demand Liu Shiyu to step down.
  • Please have your American reporters go to the CSRC to interview Liu Shiyu, [and ask him] why is the Chinese stock market so unable to take a hit?
  • As our official platform has been censored, I just want to borrow this space to call for Liu Shiyu to step down. The stock market has crashed five times in two years, slaughtering hundreds of millions of investors
  • ‘641’ (a homonym for Liu Shiyu) must step down immediately, you’ve already seriously hurt hundreds of millions of families.

In April 2018, Weibo reversed a ban on content ‘related to’ homosexuality after an unusually fierce backlash from internet users.58

Both incidents reveal the diversity of views and ideological groupings that continue to exist online in China despite the party-state’s efforts to promote nationalism. Research by the Mercator Institute for China Studies (MERICS) demonstrates how those widely differing views coexist on Chinese social media, even after extensive efforts by the CCP to repress liberal voices on the platform.59

Its research shows that ,while party-state propaganda plays a dominant role, a number of other distinct ideological clusters exist on Chinese social media sites such as Sina Weibo. Among the groupings they identify are ‘Market Lovers’, ‘Democratizers’, ‘Humanists’ and ‘US Lovers’.

Furthermore, a survey conducted by MERICS for the report shows that Chinese nationalism isn’t necessarily anti-Western. While 62% of respondents in the online survey said China should be more assertive internationally, 75% also supported the ‘spread of Western values’. As the paper points out, ‘the CCP’s strategy of denouncing so-called Western values has repeatedly backfired when netizens pointed out the lack of better Chinese alternatives.’ Western embassies’ public diplomacy efforts seem to have some fertile ground, despite the censorship.

Israel, the Weibo stand-out

The ICPC’s analysis of three months of posts from the top 10 foreign embassies on Weibo shows that a failure to cut through can’t be blamed only on censorship. Many foreign embassies simply aren’t putting enough resources into ensuring that their content is engaging enough to succeed in a highly competitive online media environment, or creative enough to not be easily spotted by censors.

The Israeli Embassy is a stand-out exception: it has a highly successful content strategy that has proved highly popular on the platform.
In her own research into ‘Weiplomacy’ efforts, Adelaide University scholar Ying Jiang captured 2015 data from the top 10 embassies on Weibo, and Israel didn’t make the list. Just a year later, research by Manya Koetse, editor-in-chief of the Chinese social trend tracking website What’s on Weibo, showed that the Israeli Embassy had come out of nowhere to take the top spot (Table 1).

Table 1: The top 10 foreign embassies on Weibo, 2015 to 2017

(Table-1)

Sources:
a) Ying Jiang, ‘Weibo as a public diplomacy platform’, Social Media and e-Diplomacy in China, 10 August 2017, online.
b) Manya Koetse, ‘Digital diplomacy: these foreign embassies are most (un)popular on Weibo’, What’s On Weibo, 20 December 2016, online.
c) Data collected by Fergus Ryan, December 2017.

Of course, a successful digital public diplomacy effort on Weibo should not only be judged by how many posts are censored; it should also be pragmatic. Above all, any digital diplomacy, or ‘e-diplomacy’, effort is fundamentally about the use of the internet and new information and communications technologies to help achieve diplomatic objectives.60

Drawing on data from late 2017, this report has Israel maintaining its lead at number 1 (despite losing followers), while the US and Canada continue to vie for second and third place. The UK has recovered from its loss of two places to regain the number 6 slot, while Australia has managed to re-enter the top 10.

However, follower counts can be a somewhat crude metric, as they can be easily gamed.

A 2014 investigation by The Globe and Mail found that large chunks of those followers were fake. According to the online tool used by the paper, 45.8% of the US Embassy’s followers, 39.9% of the UK’s and 51.2% of Japan’s were real. Only 12.9% of the Canadian Embassy’s 1.1 million followers were determined to be real.61

Another more meaningful metric is to examine the number of shares, likes and comments that each post gets on average to arrive at an idea of how ‘influential’ each embassy is (Figure 24).

Figure 24: Top 10 foreign embassies, by shares and likes per post

Using these engagement metrics, the Japanese, UK, US, Israeli and Canadian embassies are the top 5 leading the pack. 

Central to the success of the top 5 accounts is a tendency to not just promote the image of their own countries, but to engage with and leverage Chinese culture, particularly pop culture. Weibo’s audience skews young (88% of Weibo users are under 33 years of age) and, after its most vocal liberal voices were purged, is now largely dominated by entertainment.62

If the aim of foreign embassies on Weibo is to enhance soft power and to shift public opinion around to supporting their foreign policy positions, the Israeli Embassy Weibo account is exemplary. Shimi Azar, who worked as social media manager at the embassy from late 2014 to early 2016, says the country received a lot of exposure through state visits by Israel’s leaders to China.

‘The first visit of Israel’s Prime Minister Netanyahu to China in 2013 and the visit of the late president Shimon Peres in 2014 created a big buzz in the media,’ Azar told the Global Times.

‘So the embassy took advantage of this buzz and created a Sina Weibo account for Shimon Peres, which was very successful and soon attracted half a million followers.’63

But the outsized success of the Israeli Embassy Weibo account also occurred in the context of a number of deadly terrorist attacks by jihadist-inspired separatist groups in Xinjiang Province.64 As Peter Cai noted in 2014, the majority of comments under an Israeli Embassy Weibo post that likened Hamas to the Islamic State terrorist group were supportive of Israeli attacks on Hamas.

‘Israel, you must control the population in Gaza, otherwise it’s impossible for you to win. You should ditch your humanitarian principles and the only hope for you is to fight evil with evil,’ read one representative comment under the post.

Chinese netizen support for Israeli foreign policy, which goes against the official Beijing position, is still ongoing. Nine sentences sent out by the Israeli Embassy following US President Trump’s decision to recognise Jerusalem as the capital of Israel was the most shared piece of embassy content (the item was shared 2,298 times) in the three-month period covered in this report (Figure 25).65

Figure 25: The most shared piece of embassy content—on the US recognition of Jerusalem as Israel’s capital

The post, which outlines the official Israeli view of the history of Jerusalem, was positively received by Weibo users. ‘The world will rest assured and the people will be satisfied when Jerusalem is given to you,’ reads the most liked comment underneath the post.

‘Put the boot into the cancer of humanity’, the second most liked comment reads—a sentiment typical of a growing anti-Muslim sentiment online that has gone unchecked by Beijing’s censors. Islamophobia has been given a wide berth online in China as authorities continue to crack down in its restive region of Xinjiang. Frequent anti-Muslim comments under many Israeli embassy posts suggest that there’s a perception in their audience that the Israeli Embassy Weibo account is itself anti-Muslim.

A lack of coordination and transparency

But the efficacy of even the most well-resourced and strategic use of Chinese social media platforms such as Weibo is ultimately limited by the party-state. On his second official visit to China in December 2017, Canadian Prime Minister Justin Trudeau sought to parlay his image as a ‘Weibo addict’ into a public diplomacy coup when he made his first stop a visit to Sina Weibo headquarters in Beijing.

Promotional material released before Trudeau’s visit to Weibo claimed the Q&A with the Canadian Prime Minister would be broadcast live, via video stream onto Weibo (Figure 16). But instead of seeing a live-stream of the proceedings, Weibo users at first saw only a delayed 36-second clip of the PM. It was only hours later that more of his appearance was made available.66 As the Canadian Government intended the event to be live-streamed, a reasonable conclusion is that the abrupt cancellation was due to Weibo censors.

Figure 26: A Sina Weibo poster advertising Canadian Prime Minister Justin Trudeau’s video live-stream from Sina Weibo HQ. The poster refers to Trudeau as a ‘Weibo addict’.

Chinese officials, when questioned about the practice of censoring the comments section on foreign embassy Weibo accounts, pass the buck back to Sina Weibo. An exchange between a foreign journalist and an official at a recent Foreign Ministry press conference provides an illustrative example:

Q: Some Chinese investors were angry about the decline in the domestic stock market last week, and they used the US Embassy’s Weibo account to vent, posting comments to that account. On Saturday, we saw these comments have been blocked. Can you tell us your understanding as to what happened there? Does China see that the US is doing anything incorrect in this matter?

A: You might as well ask the US Embassy in China, whose staff is responsible for the maintenance of their own account.

Follow-up: It appears from our report that they did not take actions to block anything. That may have been the Weibo that blocked them.

A: I have not heard about what you mentioned. As I understand, you need to ask them if there are problems with their Weibo account. If the problem cannot be solved, they may contact relevant competent authorities. 67

Conclusion and policy recommendations

It’s estimated that Beijing spends US$10 billion a year on external propaganda, an order of magnitude higher than the US, which spent US$666 million on public diplomacy in 2014.68 Content from Chinese state media has featured in major Western outlets such as The Sydney Morning Herald, The Washington Post, the UK’s Daily Telegraph and Le Figaro as well as on the social media platforms Twitter and Facebook.

The reverse would be unthinkable in the PRC’s tightly controlled media environment. This is despite the fact that the PRC backed a landmark resolution in July 2012 at the UN Human Rights Council, which affirmed that ‘the same rights that people have offline must also be protected online, in particular freedom of expression, which is applicable regardless of frontiers and through any media of one’s choice.’69

Insisting that the PRC uphold the rights of its citizens to engage freely with the legitimate online public diplomacy efforts of foreign embassies isn’t a boutique concern. It’s a parallel issue to seeking reciprocity from the Chinese state for numerous other things, such as intellectual property regimes and market access. The PRC’s online censorship regime cloisters its netizens in an information environment that’s cut off from the rest of the world and primed with a nationalistic ideology. The more the Chinese party-state controls the media to promote its own narrative, the more it limits its own options for how it can resolve international conflicts.70

While CCP statements at the UN are reassuring, the trendlines for censorship in China are moving in the opposite direction. Under Xi’s rule, China has increasingly tightened its grip on the internet, concerned about the erosion of its ideology and policy by a vibrant online culture and the spectre of so-called ‘hostile foreign forces’. As this paper shows, Beijing’s censors aim to use almost imperceptible amounts of censorship to throttle discussion on Weibo that they deem falls outside the frame of discourse acceptable to the CCP party-state. For foreign governments, the temptation to self-censor is increasing.

Foreign governments should demand that Beijing refrain from censoring their legitimate and overt digital diplomacy efforts. Short of that, and probably more powerful for the netizen community, like-minded governments, in coordination with each other, should commit to publishing transparency reports, both to reveal the level of censorship that they’re receiving on Weibo and to demonstrate their commitment to presenting Western political norms and values to Chinese civil society. This can be very influential public diplomacy. It’s important that embassy Weibo accounts speak to China’s diverse netizen groups. Publishing a transparency report about CCP censorship will also inform those groups of their own government’s actions.

The continued meaningful presence of foreign embassy accounts—which occasionally speak outside the bounds of the CCP’s frame of acceptable discourse—will demonstrate those countries’ commitment to presenting Western political norms and values to Chinese civil society.

These accounts can also help reduce misunderstandings between foreign governments and the population of one of the world’s most powerful countries.
Changes need to be made to the way governments engage online in China. Those changes need to include preventive measures to stop governments falling into a cycle of self-censorship. This paper makes the following recommendations:

  1. Governments need to become more assertive and more creative in their messaging on Chinese social media platforms. Of course, some content should be tailored for local audiences. But foreign governments must ensure that they’re communicating the same policy and political messages to the Chinese public as they are to other publics around the world. They are likely to be censored for this.
  2. Foreign governments should use uncensored social media platforms such as Twitter—which, despite being blocked in China, still has an estimated 10 million active users in the country 71 — to cross-post all of their content. That way, incidences of censorship will be transparent and available to global audiences. Cross-posting content elsewhere also gives Chinese netizens an alternative avenue to access and engage with uncensored content. The US Embassy’s Twitter account—which as 738,000 followers—provides other countries with a good model.72
  3. When governments have their official content censored on Chinese online platforms, they should raise this censorship directly with their Chinese Government counterparts. Those countries 73 which allow the Chinese Communist Party an open media and cyber environment to communicate all of its official messages should request reciprocity.
  4. The Australian Government needs more avenues to engage the Chinese public and to put different messages forward. Dedicated official accounts for the positions of Prime Minister and Foreign Minister should be established immediately.

Acknowledgements

The author would like to thank Amber Ziye Wang for her help researching this paper. He’d also like to thank Richard McGregor, Peter Cai and Alex Joske for their comments, which greatly improved the final product. He’s also immensely grateful to my colleagues at ASPI, Danielle Cave, Fergus Hanson and Michael Shoebridge, for their crucial assistance.


ASPI International Cyber Policy Centre

The ASPI International Cyber Policy Centre’s mission is to shape debate, policy and understanding on cyber issues, informed by original research and close consultation with government, business and civil society.

It seeks to improve debate, policy and understanding on cyber issues by:

  1. conducting applied, original empirical research
  2. linking government, business and civil society
  3. leading debates and influencing policy in Australia and the Asia–Pacific.

We thank all of those who contribute to the ICPC with their time, intellect and passion for the subject matter. The work of the ICPC would be impossible without the financial support of our various sponsors.

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 person.

© The Australian Strategic Policy Institute Limited 2018

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.

  1. Mareike Ohlberg, Boosting the party voice: China’s quest for global ideological dominance, Mercator Institute for China Studies, 2016, online. ↩︎
  2. Australian Government, 2017 Foreign Policy White Paper, 2017, online. ↩︎
  3. Jon Russell, ‘Twitter estimates that it has 10 million users in China’, TechCrunch, 5 July 2016, online. ↩︎
  4. US Embassy, Weibo post, 7 May 2018, online. ↩︎
  5. Jiayun Feng, ‘US Embassy bashes Chinese “political correctness” on Weibo, sending the Chinese internet into a frenzy’, SupChina, 7 May 2018, online. ↩︎
  6. Hu Xijin (胡锡进), Weibo post, 7 May 2018. ↩︎
  7. Jiayun Feng, ‘US Embassy bashes Chinese “political correctness” on Weibo, sending the Chinese internet into a frenzy’. ↩︎
  8. Sidney Leng, Jane Li, ‘US, China in fresh row as Beijing tells foreign airlines they will be punished for failing to respect territorial claims, report says’ South China Morning Post, 7 May 2018, online. ↩︎
  9. Ying Jiang, ‘Weibo as a public diplomacy platform’, Social Media and e-Diplomacy in China, 10 August 2017, online. ↩︎

The Internet of Insecure Things

Introduction

The Internet of Things (IoT) is the term used to describe the growing number of devices being connected to the internet. Some of the more common IoT devices include home appliances such as Google Home, wearable devices, security cameras and smart meters.It’s been predicted that the number of connected devices was close to 8.4 billion in 2017 and that there will be over 20 billion devices connected by 2020.1 Even though the IoT has been developing since the rise of the internet in the early 1990s, there’s no universally accepted definition. Kevin Ashton, who coined the phrase in 1999, says the IoT is much more than just connected appliances and describes it as a ‘ubiquitous sensor network’ in which automation leads to innovation.2 While there are some justifiable cybersecurity concerns about the IoT, there are also many notable advantages to living in a connected world. The IoT is saving lives through advanced healthcare technology, manufacturers are saving time and money through automation and tracking, and a plethora of home devices are adding value to people’s lives by providing a range of different services.

There are many different ways to categorise IoT devices, which makes safeguarding the technology challenging. The IoT can be dissected by industry, such as healthcare, transport, manufacturing and consumer electronics. One major subcategory of the IoT has earned its own acronym: the IIoT, to which control systems belong. Another way of categorising devices is by looking at their individual capabilities. Devices that can take action pose a different threat from devices that simply collect data to report back to the user.

The IoT offers benefits to all industries, but the connectivity of these once isolated things also introduces new vulnerabilities that can affect our homes and industries. As well as promising convenience and efficiency, the IoT is a problem because a vast number of internet connected devices with poor default security create a large attack surface that bad actors could take advantage of for malicious ends. A variety of international organisations and government groups are working on issues pertaining to the IoT, but at present there’s no coordinated vision to implement standards for the IoT on a global scale. Similarly, in Australia, a host of different cyber agencies and industrial groups are working to overcome some of the cybersecurity issues that the IoT presents, but a coordinated strategy detailing how government and industry can collaborate on the IoT is needed.

This issues paper aims to give a broad overview of IoT issues to increase awareness and public discussion on the IoT.

In December 2017, ASPI’s International Cyber Policy Centre produced a discussion draft asking stakeholders key questions about IoT regulation, governance, market incentives and security standards to help inform this issues paper. We received responses from government, industry representatives, technical experts and academics. While those stakeholders were consulted in the research phase of this paper, the views here are those of the authors.

THREAT TO CRITICAL INFRASTRUCTURE

In 2016, a severe storm disrupted crucial services in South Australia, resulting in a loss of power for 850,000 customers.3 Trains and trams stopped working, as did many traffic lights, creating gridlock on flooded roads. The storm, together with the failure of backup processes, resulted in the death of a number of embryos at a fertility clinic in Flinders Hospital.4 The total cost for South Australian businesses as a result of the blackout was estimated to be $367 million.5

Some have noted that, due to the interconnectedness of infrastructure, this event mirrored the potential effects of a large-scale cyberattack.6

Disrupting utilities that power an entire city could cause more damage than traditional terror tactics and can be done externally and with more anonymity.

Again, severe storms demonstrate that a loss of power can cause more deaths than the physical destruction of infrastructure.

When Hurricane Irma caused the air conditioning at a Florida nursing home to fail, 12 residents died of suspected heat-related causes.7

Digital weapons are being used intentionally by nation-states to inflict physical destruction or compromise essential services. The now infamous attack on Iran’s nuclear program, known as Stuxnet, used infected USB drives to contaminate computer systems with malware,8 which caused physical damage to a number of uranium centrifuges.9 In 2015, hackers used stolen user credentials to attack a Ukrainian power grid, which resulted in loss of power for more than 230,000 people.10 In 2016, the attackers used malware specifically designed to attack Ukraine’s power grid to disrupt the power supply to Kiev. This indicates that malicious actors have both the resources and the intent to develop cyberattack capabilities targeted at essential services.11

The IoT overlaps with critical infrastructure because many control systems are also now connected to the internet. Kaspersky researchers found more than 3,000 industrial control systems in Australia by using Shodan and Censys IoT search engines.12 Studies have also revealed vulnerabilities in control systems made by major vendors, such as Schneider Electric and Siemens.13

In the discussion version of this paper, several respondents expressed the view that a separate cyber organisation focusing specifically on the security of critical assets and services would be unhelpful. However, many acknowledged a need for greater collaboration between those responsible for protecting these assets to help mitigate IoT-related threats.

The Australian Cyber Security Centre (ACSC) could seek to increase coordination between owners and operators of critical assets, helping with the technical aspects of adopting voluntary industry standards for the IoT. The ACSC has the technical expertise to participate in the formation of international standards and could work with policy experts in the Department of Home Affairs to encourage national adoption.

THE CYBER LANDSCAPE IN AUSTRALIA

The cyber landscape in Australia is complex. Government cybersecurity responsibilities have recently been reorganised through the establishment of the Department of Home Affairs and structural changes to the Australian Signals Directorate and ACSC. Getting a clear picture of roles and responsibilities was difficult, and it would be beneficial to identify any gaps in roles and responsibilities after these recent organisational changes have been properly implemented. Industry roles could be identified in an IoT road map that helps industry and government bodies work together to more effectively mitigate IoT threats. Consumers should be educated on cybersecurity and responsible ownership of IoT devices, including patching and updating, building on initiatives such as Stay Safe Online.

The IoT has exacerbated an already confronting problem: the lack of skilled cybersecurity professionals both nationally and globally.

The Australian Cyber Security Growth Network estimates that a further 11,000 skilled experts will be needed in the next decade.14 In January 2018, the network announced that cybersecurity qualifications will be offered at TAFE institutions around Australia, which is a significant step forward.15 However, cybersecurity is a broad domain that requires not only workers with technical skills but also experts in risk management and policymaking, among other areas. Advances in automation and data analytics could help to address the skills shortage, as those technologies will increase the availability of cybersecurity experts, by replacing technical jobs in other areas.

We need to think about IoT security as a holistic system that combines practical skills-based training with industry best practise. The under-representation of women in cybersecurity has been widely noted and overcoming it was listed as a priority in Australia’s Cyber Security Strategy.16 The government has conducted research to better understand the issue and is running workshops to help increase participation.17

SECURITY RATINGS AND CERTIFICATIONS

A number of countries, including Australia, are considering the value of security ratings for IoT devices. In October 2017, Dan Tehan, the then Minister Assisting the Prime Minister on Cybersecurity, suggested in a media interview that such ratings should be created by the private sector, not by the Australian Government.18 The UK Government is also exploring ‘how to encourage the market by providing security ratings for new products’, as outlined in its National Security Strategy.19 Introducing a product security rating for consumer electronics has the potential to improve awareness of cybersecurity issues and to encourage industry to adhere to minimum security standards. But whether the ratings should be initiated by government or industry is only the beginning of the issue, as there are several problems with cybersecurity ratings that need to be addressed.

First, the vulnerability of an IoT device could potentially vary over its lifetime as weaknesses are discovered and then patched. The energy efficiency of a refrigerator or washing machine, by contrast, is relatively fixed, and so energy-efficiency ratings can be trusted over the device’s lifetime. With IoT devices, new vulnerabilities are constantly being exposed. At best, a security rating would reflect the security of a device based on the information available at the time of the security assessment. It would need to be adapted as security standards evolve and new vulnerabilities are discovered.

Second, it’s worth investigating whether a cyber rating could lull consumers into a false sense of security by negating their own role in protecting themselves from attack. Before implementing a security rating system, we need to research whether purchasing a device that claims to be secure could make consumers less likely to install updates or change default passwords.

Third, as mentioned in the introduction of this report, there’s considerable variation in IoT products. A Jeep Cherokee and a baby monitor (both of which have been compromised) present vastly different dangers, but the compromise of either can have serious consequences. While all IoT devices should include baseline security features in the design phase, devices deemed to be high risk should also require commensurately robust security features. Burdening otherwise cheap, low-risk devices with expensive certifications or strict security regulations, however, could make them commercially unviable in Australia. It’s important to recognise that it will be challenging and expensive to come up with a rating that appropriately addresses all the different categories of IoT devices.

In 2018, the IoT Alliance Australia (IoTAA) is prioritising the introduction of an ‘IoT product security certification program’ as a part of its strategic plan.20 Exactly what this will look like remains unknown, but it’s likely to be performed by accredited independent bodies that evaluate products based on security claims. The Australian Information Industry Association recommends an accreditation scheme that would also certify organisations making IoT devices. The authors’ view is that some manufacturers (for example, Samsung) make so many products that this would be ineffective as a stand-alone tactic, but this idea could be used in collaboration with an individual product rating.

REGULATION AND STANDARDS

Regulation and standardisation are at the forefront of the IoT debate, and positions tend to be polarised, as reflected in the responses to our discussion draft. The respondents acknowledged that regulation isn’t always effective and can impose a significant cost, but some also said that there’s potentially room for government to play a more direct role if a device is deemed to provide a critical service to the community. Some industries, such as transport and healthcare, already have safety standards addressing a wide range of security concerns; those standards need to prioritise current and emerging cybersecurity threats.

Multiple IoT-related bills introduced into the US Congress last year exemplified some of the legislative attempts to enforce IoT security by way of law. The Internet of Things (IoT) Cybersecurity Improvement Act of 2017 stresses the importance of built-in security and the provision of security patches,21 while the Cyber Shield Act of 2017 seeks to introduce a voluntary certification process for IoT devices.22

While US lawmakers have proposed some government regulation, some in Australia believe that IoT security would be more effectively regulated by industry.

Legislation takes time to introduce and often struggles to keep pace with the quickly evolving technology it seeks to control.

Taking a market-driven approach to IoT security may mean that imposed standards will more rapidly adapt to the changing security climate.

Some classes of IoT devices, however, present little threat to their owners, but their poor security allows them to be co-opted in ways that can be used to harm other internet users or internet infrastructure. This is similar to a widget-making factory that causes air pollution; the factory owner and widget buyer both benefit from lower costs of production and neither has a strong incentive to do the work needed to reduce air pollution, as that would raise costs. In economics, this is described as a negative externality, and negative externalities can be effectively dealt with through regulation. The authors’ view is that incentives do not exist for effective industry-led standards to develop, especially for consumer IoT devices.

The International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) are the two major global providers of standards. The ISO and IEC have a joint technical committee focusing on information technology and a subcommittee focusing on the IoT and related technologies. Australia is a member of the subcommittee through Standards Australia. ISO/IEC also has the 27000 series, which is a series of standards that addresses the security of information security management systems.23

The European Union Agency for Network and Information Security released baseline security recommendations for the IoT in late 2017.24 Standards have also been developed in Asia, including a draft policy on the IoT by India25 and a general framework by Japan.26 Other organisations working on IoT standards include the IEEE (Institute of Electrical and Electronics Engineers), The Open Group, and SAE International. While a considerable amount of work on IoT standards has been completed, a draft report on the status of global IoT standards by the National Institute of Standards Technology in the US indicates that there’s a long way to go. The report reveals several gaps in current standards development and implementation, including network security, IT system security evaluation and system security engineering.27 It also highlights the variety of SDOs (standards development organisations) working in this space. There’s currently a need for international consensus on IoT standards and a clear pathway to implementation.

Locally, the IoTAA has drafted multiple versions of IoT security guidelines to help promote secure designs for manufacturers and to support industry in understanding security and privacy issues. The IoTAA has also outlined key focus areas for 2018 in its Strategic Plan to Strengthen IoT Security. Australia also has iotsec, a non-profit start-up that promotes security in IoT devices to help industry and consumers.

While regulation and standardisation are often thought of in a binary way (enforced by either government or industry), the feedback from the discussion draft highlighted the importance of approaching IoT security in a holistic manner, in which government, industry and consumers all play a role. Furthermore, IoT cybersecurity is a problem of global, not national, proportions. Devices sold in Australia are manufactured all over the world. Being only a small proportion of the IoT market, Australia risks becoming a dead-end market if device makers’ security costs outweigh their income from sales. For this reason, any attempt to introduce standards for IoT devices in Australia must be done with a global mindset. The challenge now is to reach international consensus and to encourage manufacturers to adopt the standards. An IoT definition would help to focus global efforts both to secure and to develop the technology and help to articulate its scope.

CONCLUSION

The IoT offers Australia many economic and social advantages and should be embraced and used to benefit all Australians. However, it also introduces new risks and vulnerabilities that our current regulatory systems aren’t necessarily mitigating effectively.

It’s the authors’ view that our current policy and regulatory settings are almost certainly sub-optimal, but effective management of the IoT from a government policymaking perspective requires many difficult trade-offs, and easy answers aren’t immediately apparent. Corruption of traditional ICT devices such as phones and laptops has resulted in the theft of both personal and corporate data. Connecting more devices, such as watches, whitegoods, automobiles and industrial equipment, has intensified this problem and introduced new types of threats. Other incidences of organised crime and terrorism have shown that malicious actors exploit seams in systems, regulation and security.

For this reason, it is imperative that we continue to address gaps in these areas to limit opportunities for the exploitation of IoT devices.

This paper is intended to illuminate some of the issues involved in managing IoT risk so that industry and government can have a robust discussion and work collaboratively to improve the security of IoT devices.

  1. Gartner, ‘Gartner says 8.4 billion connected “things” will be in use in 2017, up 31 percent from 2016’, 2017, Gartner.com, online. ↩︎
  2. Rain RFID Alliance, ‘RAIN Q&A with Kevin Ashton RFID and the internet of things’, 2015, pp. 1–4 ↩︎
  3. Australian Energy Market Operator, Black System, 2017, p. 5 ↩︎
  4. ‘SA weather: human error to blame for embryo-destroying hospital blackout during wild storms’, ABC News, 23 January 2017 ↩︎
  5. Business SA, Blackout Survey Results, 2016 ↩︎
  6. Roger Bradbury, ‘South Australian power shutdown “just a taste of cyber attack”’, The Australian, 2016. ↩︎
  7. ‘12 of 14 nursing home deaths after Irma ruled homicides’, VOA News ↩︎
  8. European Union Agency for Network and Information Security, Stuxnet analysis ↩︎
  9. Council on Foreign Relations Cyber Operations Tracker, Stuxnet ↩︎
  10. Council on Foreign Relations, Compromise of a power grid in eastern Ukraine ↩︎
  11. ‘CRASHOVERRIDE: analysis of the threat to electric grid operations’, Dragos.com, pp. 10–11 ↩︎
  12. Oxana Andreeva, Sergey Gordeychik, Gleb Britsai, Olga Kochetova, Evgeniya Potseluevskaya, Sergey I Sidorov, Alexander A Timorin, Industrial control systems and their online availability, p. 8 ↩︎
  13. IEEE. Sagar Samtani, Shuo Yu, Hongyi Zhu, Mark Patton, Hsinchun Chen, Identifying SCADA vulnerabilities using passive and active vulnerability assessment techniques, University of Arizona, 2016 ↩︎
  14. Australian Cyber Security Growth Network, Cyber security sector competitiveness plan, 2017 ↩︎
  15. Australian Cyber Security Growth Network, Australian TAFEs join forces to tackle the cyber security skills gap, 2018 ↩︎
  16. Australian Government, Australia’s Cyber Security Strategy, p. 53 ↩︎
  17. PMC. Australian Government, Women in cyber security ↩︎
  18. Denham Sadler, Security ratings for IoT devices?, 2017 ↩︎
  19. UK Government, National Cyber Security Strategy 2016–2021, 2016, pp. 36–37 ↩︎
  20. IoT Alliance Australia, ‘Strategic plan to strengthen IoT security in Australia’, 2017 (unpublished material) ↩︎
  21. Mark Warner, Cory Gardner, Internet of Things Cybersecurity Improvement Act of 2017, 2017 ↩︎
  22. Cyber Shield Act of 2017, 2017 ↩︎
  23. ISO, ISO/IEC 27000 family— Information security management systems ↩︎
  24. European Union Agency for Network and Information Security, Baseline security recommendations for IoT, 2017 ↩︎
  25. Department of Electronics and Information Technology, Draft policy on internet of things, Indian Government, 2015 ↩︎
  26. National Center of Incident Readiness and Strategy for Cybersecurity, General framework for secure IoT systems,
    Japanese Government, 2016 ↩︎
  27. National Institute Standards Technology, Interagency report on status of international cybersecurity standardization for the internet of things (IoT), 2018, pp. 54–55 ↩︎

© The Australian Strategic Policy Institute Limited 2018
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.

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 person.

Acknowledgements
We thank all of those who contribute to the ICPC with their time, intellect and passion for the subject matter. The work of the ICPC would be impossible without the financial support of our various sponsors but special mention in this case should go to JACOBS, which has supported this research.

Big data in national security

ASPI is releasing two research publications on the uses and limitations of big data in national security.

The first report, ‘Big Data in national security’, provides a high-level analysis of how big data capabilities can be used and managed by Australia’s national security community.

The second product, ‘Big Data in National Security – Online Resource’, is a background paper which provides policy makers and the public with a detailed analysis of the key concepts, trends, and challenges of big data in national security.

Big data requires big governance…

Hear Dr John Coyne discussing the report with author Michael Chi;

Watch the publication launch…

The research was conducted with the support and sponsorship of DXC Technology, formerly CSC Australia.

Bid Data in National Security online resources

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