China’s Grand Strategy for Global Data Dominance: A CGSP Report | Hoover Institution

foreign [Music] and thank you for joining us today in this special event in the Hoover institutions project on China's Global Shark power speaker series as many of you know who join us from time to time in addition to regular speakers on topics of urgent interest with regard to China the cgsp project also publishes a series of reports on issues of the day today we're rolling out one of those reports um uh really uh vital contribution from Matt Johnson who is a visiting fellow here at the Hoover institution on China's data strategy many of us are aware that there's a large National conversation in the United States regarding Tick-Tock and whether it should be free to do business in the United States or there should be restrictions on tick tock's ability to do business and collect data on Americans but that is only the beginning of the conversation and the tip of the iceberg as Matt is about to tell us Tick Tock is part of a much larger strategy that's been put together at the highest reaches of the Chinese government with regard to controlling the world's data using its commercial platforms this is much more than just Tick Tock and social media this is about the collection of data for economic intelligence for contributions to generative AI models for weather forecasting that will help with military planning for weather forecasting that will help with forecasting atmospheric conditions for Hypersonic missiles I want you I want to refer you all to Hoover's and cgsp's website that's www.hoover.org cgsp where you can download a free copy of today's report but without further Ado let me introduce Matt Johnson we'll describe it to you Matt Johnson is a visiting fellow at the Hoover institution and research director at Garner Global his expertise covers China's Global China's contemporary Elite politics strategic thinking and political control over the financial sector and private economy he was previously a lecturer in the history and politics of modern China at the University of Oxford and as academic Publications are focused on propaganda Chinese Communist Party ideology cultural Security State Society relations and the Cold War of interest to us is he participated in a Hoover working group on digital currencies and electronic payments and in the report that Hoover issued on digital currencies last year and most recently he's the co-author of a study on Tick Tock that was submitted to the Australian Parliament Matt over to you thank you Glenn for that warm uh introduction and um very succinct overview uh of the report um that we've just published today on China's Grand strategy for global data dominance thank you everyone for coming today and um those who are listening your attention is much appreciated I wanted to say thank you in particular uh to Larry Diamond Head of the China's Global sharp power project among his many roles uh to Glenn tiffert um also uh with the same program and and also for new colleague Francis hisgen uh who is also at cgsp and and the three of them together have uh edited this report um since its conception basically and I'm incredible great incredibly grateful to them for their support and thoughtful um review and then finally I want to thank the Hoover institution itself uh the Hoover press and folks um who do publicity for Hoover who have really again uh helped to roll this out in an engaging way so the report is long uh it's fairly detailed it has a lot of footnotes I'm a historian my background um you know I read a lot uh I I like sources I've tried to immerse myself in as many sources that seem relevant to this uh question as I possibly could and I've tried to put them together in a way that connects as clearly as possible uh What Glenn just described which is Elite policy making within you know the upper echelons of the party starting with Xi Jinping and then how that policy making has cascaded downward uh through China's party State and then moved outward from China into the world uh through uh commercial actors um companies for the most part and how all this fits together to form uh not an entirely coherent whole but a fairly I think powerful and Active network for data absorption that policy makers in the United States and other countries are really just beginning to catch up to in terms of its breadth and ambition so that's my starting point um because the report is long and fairly detailed uh what I want to do with this event um which you know has a good seminar feel to it uh which I also appreciate uh is is two things essentially for for those whose time and attention spans are limited um I I want to give an overview of the main argument and supporting takeaways including key policy recommendations um which basically summarizes the report but won't get too deeply into the weeds and then for those who are still around after that uh I I want to give a more um methodological overview of what I think are some of the key issues that arise in the course of this kind of research because one of the main points that I want to make today isn't just about data but it's actually that the party State and the Chinese Communist party in particular has a long history is a unique organization is unlike other nation state actors and requires I think you know a very different kind of research methodology in order to fully capture the the breadth and intricacy of um it's its organization and then for the third part uh we we have acute I'll you know do questions obviously starting with Glenn who's an old friend also from the the history uh days so the the top line of this report which is basically given away by the title is that China has a grand strategy for global data dominance that's that's a fact I think it's an empirically verifiable fact um but the implications of that fact require some spelling out and so I thought actually one way to get into that might be just to break down the words in the title itself so that we understand uh what we're talking about here and the terminology involved so when we talk about China we're talking basically you know we're starting with China's leaders the very top of the Chinese Communist Party who see their country and this is part of what the report proves uh starting with current supreme leader Xi Jinping as engaged in a global contest for dis for for uh control of digital information I.E data and that she for example foreshadowed this competition explicitly himself in 2013 right after coming to power when he told the Chinese Academy of Sciences the vast ocean of data just like oil resources during industrialization contains immense productive power and opportunities whoever controls Big Data technologies will control the resources and Initiative for development so this is she at the very you know start of his his now lengthy uh tenure as General Secretary of the Chinese Communist party uh comparing data to oil as a vital resource that China basically needs to uh control and absorb in order to um achieve its uh and really the party's strategic objectives and as the report shows she has personally LED this policy of data control through the creation of what I've called the party's accumulation Espionage system which in simplest terms is a network of internal storage and processing facilities some of which have been uh created and controlled by China's own security but the party's own Security Forces um and how these are coupled with policies in areas ranging from Big Data to civil military Fusion to e-commerce that leverage civilian institutions and commercial actors to act as siphons abroad feeding into military commercial and other technology and surveillance development projects back in China or which may potentially be shared with other like-minded actors around the world for example Iran or Russia so China here is a political actor I.E the Chinese Communist Party of 96 million Members Plus a military plus others who knowingly or unknowingly support these agendas uh and and who are engaged in the competitive accumulation of data at a global scale the second element in the title Grand strategy which basically means here that winning the global contest is China's leaders Envision it uh is to use of all available tools of statecraft in in pursuit of uh this big data agenda one of the central claims that the report makes and proves is that in China's London is party State these tools include private companies which are under the party's organizational control even if they appear to be privately held and which are obliged to uphold party policies uh including as these relate to data finally what is meant by global data dominance this is beijing's non-reciprocal approach to data which means that it's companies and domestic data processing systems exploit the openness of other countries including via multilateral trade agreements to accumulate as much data about other societies as possible while maintaining barriers around access to China's own data and I would add that well uh leaders like Xi Jinping have been vague about what they intend to do with this data uh and the infrastructure being built to process it some indication of uh the the potential um of this project can be gleaned from two kinds of sources uh which this report documents fully the first is authoritative party state official text so like I said there's a lot of reading uh behind the research including directives from Top leaders uh and instructions on implementation and actually the the law itself um which is an independent of the party but basically shifts in accordance with um party goals and priorities what these say which the report spells out is that Beijing is building a nationally integrated Big Data System they say that data which is uh created and absorbed from other from other countries will be used for China's economic and Military advantage they say that data is viewed as a means of constant and omnipresent surveillance both for State security purposes at home and for military and Military adjacent actors abroad and they say that all data gathered via PRC entities whether corporations or individuals is subject to the collection and review of party State authorities the second type of sources that the report covers uh pretty much at the front uh at Larry's urging to bring some of the points about uh relevance home which I think was a wise move our um actual harms already being conducted by PRC commercial data handlers abroad so in other words we're not talking about hypotheticals we're talking about uh you know actual evidence of ways in which data is being used these include building databases of human genomes without consent they include mapping sensitive areas of other countries economic activity borders uh they include mining telecommunications networks for commercial secrets and intelligence they include the manipulation of online information environments they include the profiling of foreign citizens through social media and they include targeting journalists and those engaged in activities which are critical of China and of PRC companies including reports like this one foreign I also want to highlight a further point about data itself which is to say that data is not simply personal information so I've you know recently been reading dismissals even among those who are you know kind of vaguely critical of uh party State behavior in other areas saying you know there's there's too much attention being paid to tick tock you know what what really is the Strategic advantage of information gleaned via Tick Tock which I think somewhat minimizes the the problem I mean one in response I would say that data can include personal information which ultimately is is hardly trivial uh including because it may be used in the future in ways that are difficult to Envision in in the present whether for uh micro targeting of online messaging digital messaging or other forms of Leverage um but the data can also mean information about environments and patterns of activity uh which are collected through sensing technology like lidar you know on most autonomous vehicles that you see especially in a technology-rich area like like this one um it can refer to control signals transmitted through networked Smart Systems to autonomous vehicles Industrial Equipment power grids and other deep infrastructure underpinning our economy it can refer to entire environments of information for example social media content platform algorithms and potentially generative AI created knowledge ecosystems and finally it can refer to more traditional forms of information stored in digital form like blueprints confidential documents State Secrets institutional individual records Etc all of which are targets of traditional Espionage only now digitized this is why as the report shows the challenges posed to the United States and other countries democracy certainly but any country with a long-term vision of National Security which is to say most or all countries um the the challenges posed to all of these countries by China's digital dominance strategy are not simply confined to protecting the data of individuals from commercial data risk but should be uh but should include the protection of networks the protection of Institutions and in particular the protection of critical sectors of the economy from integration with PRC commercial data operators okay and so the examples that the report draw uh draws on though far from complete cover a wide range of areas including drones and autonomous vehicles uh including biotech and genomics social media I've done other work as Glenn mentioned on financial technology including cryptocurrencies all of these um you know have the potential to play outsized roles in impacting National Security especially when influenced by a foreign adversary which from a strategic perspective is how the United States uh government views China which is the point that I'll come back to later so the policy recommendations that the report makes are broad because the challenge is Broad here um one is to is to is to review and strategically decouple so at the top of this list is strengthening and expanding the US Department of commerce's information and Communications technology and services process also not known as the icts process to restrict data related transactions which pose undue or unacceptable risks to U.S national security um the the report goes into how the icts panel is first conceived under the Trump Administration and then further uh clarified under U.S President Joe Biden has broad discretion to begin investigating and unwinding threats across six sectors including critical infrastructure Network infrastructure data hosting uh surveillance and monitoring technology Communications software and emerging technology so not just social media apps which are a relatively recent addition through the icts process um Commerce has already begun reviewing transactions but it is not visibly enacted its Authority beyond the review level nonetheless it does represent a powerful tool for confronting foreign adversary threats to data across society and the potential and and represents the potential basis for comprehensive protection of information and infrastructure however as critics or at least commentators have no have no have noted as a commerce-led process it has been assessed to lack the resources and Clarity of scope to begin systematically reducing risk across the economy a second potential solution is to restrict investment um to basically start with uh creating a list of which parts of the economy are most in need of being secured and which commercial data operators represent the the clearest threats and uh from that point the challenge of China's data dominance strategy can be met by streamlining the process through which foreign investment and critical data technology and infrastructure sectors is reviewed the report therefore recommends a clearer approve or reject model for covered transactions by the committee on foreign investment in the United States or ciphius and clearer restrictions on foreign adversary controlled investment in critical technology and supply chain areas a third recommendation is to strengthen the international ecosystem for data security um by joining multilateral Frameworks such as Japan's data free flow with trust proposal which I think is is worth uh careful study um there's the possibility to strengthen data protection between Allied and partner countries so that security shortcomings affecting the sale and transfer of data abroad including the Integrity of data communication systems and including data shared via non-commercial transactions such as International research Partnerships are addressed and then finally although I have to say that in the current environment uh this this um is uh I wouldn't say absurd but sort of in the category of Wishful Thinking although you know I think it is a world that we all should wish for uh there's the option of trying to impose uh terms of reciprocity and engagement on the government in Beijing which would mean that making access to America's company's investment and Market conditional on a more reciprocal attitude toward data and transparency that goes beyond superficial cyber security pledges which sort of represent the current state of U.S China discussion in this area and would require actual proof of commitment in order for PRC companies to continue operating in the United States and to continue receiving investment from the United States so to conclude this part of the presentation um I think that you know we in the United States of America and Democratic Partners need to begin to close the gap between understanding the China's party State Army there's always that third term is a is a foreign adversary that seeks to compete with and displace the United States and Democratic systems as principal stakeholders in the International System through conflict if necessary if you've watched uh China's recent sort of quasi-war mobilization uh policies and and operations closely um we need to close the gap between that reality and policies that give almost unfettered access to sensitive domestic information and systems to companies that are controlled by that foreign adversary so that's the Gap it's it's that simple to defend our principles and institutions and competitiveness this Gap the report argues needs to be addressed immediately so if you're staying just for the top lines and the main takeaways uh We've basically concluded that part of the presentation and and uh I would thank you for your attention but for others those in the room and particularly uh fellow researchers and analysts I just wanted to dive a little deeper using the time remaining to talk about some of the methodological features of the report now this this part is less scripted uh really I just want to make my own assumptions clear because there's a real debate about how we can study the party State and other channel-linked actors like companies or think tanks or overseas united front groups or you know illegal police stations in in New York City and how you know how we should go about mapping out ways in which all these parts of the party kind of connect with one another so I just want to make a couple of methodological points that hopefully will spark some further discussion one is that open source is important and you have to read a lot of Open Source material and you have to know how to get online and search for it and you have to know how to you know collect and analyze and I think as you know uh those were for those researching and analyzing the party or it's you know policies and activities in specific areas there's a sense in which we can't really over specialize I mean I haven't spent my whole career studying China's data policy but I think as you know a start for understanding that policy we need to read what's available and begin to put it together in ways that tell the story from the perspective of the actors using actors categories second point I would make is that what leaders say is important right so when we talk about China we talk about China's policies I would say even when we talk about Beijing what Beijing thinks really we have to focus a little in in a more granular Fashion on the the people who are the leaders of the Chinese Communist party because their speeches in China's system essentially have the authority of of law right when she says something it Cascades down through the party State system which is a which is a leninist system in terms of its organizational DNA and it means that every time she speaks we should probably pay attention because it's a it's a fast moving system it's it's not just a slow-moving you know kind of ossified bureaucracy the third point which I've sort of foreshadowed here is that China's political system is leninist and increasingly centralized this means that policies move from top to bottom this means that Society is increasingly integrated into the state and well uh the party's control over Society is not perfect all of the available evidence says that the goal is control and coordination that the vision is of a single political organism that moves in a perfectly coordinated manner you don't have to take my word for it because these are all the things that Xi Jinping says about you know top level planning and you know the big chess board and uh you know everybody having one one will and one sense of purpose that's that's what political discourse in China sounds like today the other also somewhat foreshadowed here is that China's political language is not transparent it has to be understood better the the terms and phrases that are awkward to translate can't just be dismissed as ideological and empty out of hand because we don't necessarily understand what they mean we have to bring specialist knowledge to bear on these you know sort of opaque and esoteric documents in order to understand what the purpose behind them actually is also and this is you know focused on I think one of the central claims of the report concerning corporations um that because of the unique features of the party as an organization control at the corporate level doesn't actually just mean ownership and controllers may be hard to identify because of the party's own Norms of secrecy you don't know where in a company you know the real sort of nodes of party control lie they get moved around um sometimes in the human resources department you know sometimes in other parts of uh corporate structures and that also requires actually a fairly forensic approach in order to understand and draw out all party controlled organizations are by definition non-transparent and so we need to get better at identifying the points of contact that make lines of control visible two more points and then I'll wrap up um one is that for for those whose work focuses on uh the forensic reconstruction of the Strategic policy and organizational Landscapes as I've described them above Behavior also matters I think there's you know a bit of a gap and I in some ways I I can see it at times in my own work between you know what what the words say and what the behavior on the ground looks like so in other words uh building threat images requires some actual proof of threat and so in this report I've actually relied fairly heavily on the work of uh credible investigative journalists who pay attention to what companies do versus just what the the party says and you know their their work and their conclusions and you know the work of the the media and the investigative media are extremely important for this kind of effort finally the party's Roots as an underground organization which is what it was have fundamentally shaped the kind of organization that it is today and whether we acknowledge it or not we are locked into a competition between open Democratic societies and Status totalitarian societies at a global level it is impossible after years of you know reading the ideology coming out of Beijing out of states of Russia uh like like like Russia uh that you know to to avoid the conclusion that leaders in those countries see the current Global uh situation as one of direct confrontation and struggle you know which basically threatens to escalate with every passing day the Chinese Communist party has been purpose built and refined to exploit openness by moving in ways that exploit laws around privacy reputation ownership and individual rights and Liberties to achieve uh political Ends by undermining other nations sovereignty you know so when we talk about lawfare we're not just talking about salami slicing in the South China Sea Xi Jinping convenes the party's political legal commission once a year talk about you know how to negotiate other countries laws and how to use their laws to achieve China's broader International goals there's a I'm happy to share you know research that I've done on this topic as well it's interesting and this is why you know the the party's history is an underground organization and then it's you know kind of coming into full view during uh the the war with Japan China's Civil War um and then how that process spilled into perceived victories against the United States in Korea in the early 1950s is a kind of process that Xi Jinping is constantly bringing party members attention back to in terms of the party's internal ideology and Doctrine so this complex challenge requires a Revival uh to conclude of um specialized research of course the researchers always say that but um you know uh and Analysis techniques to defend National Security and principles of democracy and openness in a competition in a competition that has already started and in this sense study of data in China's Grand strategy for data is a is a case study I don't think it's it's the last word but it's a case study which highlights the Gap the current Gap it exists between the complexity of the challenge and the current response thank you thank you very much Matt um I want to invite those of you in the in-person audience but also on the zoom audience to um to field questions um but uh and while you do that I'm pleased those of you in the zoom audience um click the Q a button at the bottom of your screens um while you do that I I have a couple of comments uh Reflections and then I'll prime the pump with a question and then we can build up a queue um in many ways I think this report is a model of the kind of research and methodology that Matt just described for those of you who have not seen it yet and it is downloadable um it begins with sort of the top level findings that he just articulated to you but then in phenomenal granular detail it describes exactly the picture that he just painted um so that it becomes almost undeniable really that there is a much larger play going on here than many people have traditionally appreciated not almost not almost very well um but you know so so this I think is is a model for how the work can be done um a comment about um something that I think really bounces off of of what Matt said in many ways I think China's data strategy is a modernization of something that's extremely old in Marxist parties many of you will will know that there was the fantasy back in the Soviet period of creating the perfectly rational economy uh that Soviet state planners could could predict and and direct every small widget that went into Soviet production where it needed to go when it needed to go and of course this was a tremendous disaster even though they had tens of thousands of people trying to do it XI jinping's approach to this and cybernetics has been an ongoing interest of of marxist parties around the world Xi Jinping really believes that big data can solve this problem and it's breathed new life into that old idea that you can create the perfectly rational society and perfectly manage society that the party sits on top of and controls uh and underneath that idea that that that revitalized idea sits this enormous apparatus of data centers and big data collection that's truly Global uh in its scope and that is what's informing a great deal of this strategy this is just my perspective I'm curious to hear Matt's Reflections on that and then let me pose a question to Matt um I'm really glad to hear that that Matt mentions the multilateral piece of this particularly building trusted networks with allies and partners coordinating with Japan and our European allies because I think that's critical the solutions that one formulates in a bilateral context may look very different than the solutions that we come up with in a multilateral context and in particular Matt I want to ask you you know one of one of the big frustrations in this area dealing with global data and technology has been that our European Partners have tended actually to hold American firms to much higher standards of enforcement than they've held Chinese firms uh I and I wonder how do we tackle that problem um why is Europe actually seeing the United States as more of a threat than it's seeing China um so let me pose that thank you any well I mean I I would have a hard time speaking for Europe broadly um I guess I can relay odd pieces of anecdotal evidence that may help answer this question I think the fact that the United States is so powerful you know still as a technological innovator um seems from an Economic and Development perspective to be oddly enough you know the more serious economic threat uh when comparing the US and China and the discussion on the National Security side of the threat is definitely moving forward um but you know it's uh it's been years if not a good decade plus of uh China making inroads into sensitive systems uh you know through procurement through commercial transactions you know through fairly low level activity it's not like PRC companies like Huawei are showing up and saying we we have a master plan to you know absorb all your data and you know I think that would be putting it somewhat strongly anyway but at the same time um I think that it's it's it's two conversations really one is about you the the US is a as an economic competitor and then China as a potential national security threat but also you know and I've spent a little time talking to people in various European countries about this uh a more distant national security threat like they're so far away we don't trade with them as much as we trade with the United States you know they're they're not as big a they're not as important you know as as big as they are they're not as important a country for us but nonetheless the areas in which the trade is taking place might nonetheless be very very critical but I think those conversations are starting you know the US government is talking to allies and I think trying to raise some of those security concerns and in ways that aren't Sensational but really just highlight you know the uh risks involved with procuring your you know strategically or from a national security perspective sensitive sensing technology for example from Chinese providers Larry well I'll just preface my question by saying in the digital age it doesn't matter if you're next door at 10 000 miles away it's uh geography has been turned upside down um I think it would be helpful um to people here and people listening to have you elaborate on the risk side of things and maybe even in some fairly granular detail a lot of people particularly a lot of young people but I think users of digital systems social media and so on of every age group have just become frankly resigned and apathetic to the fact that their data is available well there's no immediate evidence that their lives have changed as a result of it everybody has it um I frequently hear well why should we worry particularly at Tick Tock Facebook has my data as well why should we worry that the Chinese government has my data the U.S government can probably get it from Facebook as well um so China has my genetic data you know so what um can you uh give us some more granular and graphic insights into why people should worry at various levels about um China getting um and being able to amass and analyze and Aggregate and store forever their personal data and then can you also say something about how all of this relates to the race uh uh to take potentially a permanent lead in artificial intelligence yes uh and um let me start uh by uh moving to the personal data question sort of second and I think starting with some of the bigger political and economic issues um that you know might seem distant to you know at least somewhat distant to people who are uh younger and just you know sort of like finding their footing in society Etc um but that could potentially have long-term ramifications one which we really focused on in The Tick Tock report was not so much personal data although it's clear that the app may be able to access permissions across your device uh that are you know not necessarily confined just to your behavior within the tick tock app so that's that's one issue is you know is it really just Tick Tock the app and I only need to be worried about what you know I do or say via that app or is it more like a kind of Trojan horse that might be able to uh you know access other features of my personal device in direct ways that I don't want it to um you know and and there are some interesting uh questions now being raised about fast fashion companies uh shiners she in and uh tomu um you know for for their uh basically like asking young people to trade uh their data from other apps for discounts Etc which I think actually says a lot about the agenda there um and um you know that that that kind of app behavior in other words the app is not just the app and I think that's an important point to make um and you know while I I think that young people uh are obviously facile with technology and you know by the two kids and they are much quicker than me pretty much everything but um you know the uh truth also is that unless you really are a technologist and unless you do a forensic study of the behavior of these applications there's probably a lot that you don't know about them you know no matter how Adept you are at using technology and so it's it's good that we study these things and it's it's good that we put that information out there but on the political and economic points that I mentioned you know one which we found in The Tick Tock report was that in addition to the you know like leveling up of privileges uh like inside of your phone there's also uh app behavior in terms of search results in terms of the like perspectives that are that are uh privileged concerning specific sensitive issues you know for example our study focused mainly on issues uh that are sensitive from the perspective of China's government in Beijing and found that the results skewed way toward uh uh views that were much more in line with official policies than not and if you're a young person in this country I think you need to ask yourself what an app like that does to your understanding of the world your ability to consume information and more or less you know freeways that that you want to consume it in and um you know finally what kind of impact that may have on the political system of the country that you live in you know given that we are in a pretty contentious uh to put it mildly time uh as a nation and um you know how then information shapes viewpoints shapes Behavior Etc in the context of the political process is significant and so you know to have a foreign adversary control an app that is increasingly used by younger people for news information in the context of a democratic election seems dangerous it just seems dangerous you know and it doesn't seem like it's going to help the national conversation much at all because it's clear it's been clear for as it's been clear for Russia also that internal division in the United States so suits China's foreign policy objectives just fine you know because it it in a sense limits uh unity and potentially you know action to respond to specific um threats both internal and and external so that's the political side I think economically also um you know this is probably hard for Americans to digest uh based on history but there's no guarantee of unlimited future economic growth and uh you know I think the the economic threat that uh China and other countries pose to the United States through Espionage you know it's it's not through Fair competition but through Espionage through uh data harvesting that is non-recipro uh you know the attempt to develop emerging Technologies sort of on the back of American economic activity that that those Trends do not lead to an economic future that favors the United States and so your own you know personal circumstances economically uh professionally Etc you know those of uh people who come after you are all affected by these sorts of decisions that we make in the present to just be apathetic or ignore and so that's how I would begin answering that very complex question Larry uh you know I on AI uh I'm not an AI expert um you know I've done a little bit of computing uh one of the great laws of computing is garbage in garbage out um you know so it's not necessarily that all raw data automatically leads to you know sort of great strides in AI but certainly uh you know the ability to train um machines on large data sets uh improves their performance uh you know along with other kinds of ways of improving the technology so um you know we're in the midst of a global conversation right now about chat GPT and you know the ramifications of god-like artificial intelligence uh you know that that may be throwing forward a bit too far but you know at the same time yeah absolutely I mean I I don't think that we should treat this as an unserious problem David uh Matt thank you just just a general question uh you mentioned um some arguments that maybe there's too much attention being paid to things like Tick Tock it's consumer facing of course it's an obvious example uh might you draw out a couple examples from your report of other data streams where you think it's sort of off people's radar or the policy conversation has not yet gotten around to it there's a lot of Buzz these days on on ports and logistics for example I'm curious what you found right right so that's that's a great question um I mean ports and other critical infrastructure that increasingly play a role in you know the the lifeblood of the economy I think drones autonomous vehicles uh you know so not yet stuff that's widely used um all of these are areas where China linked or Chinese companies have made pretty considerable inroads and so the report focuses on drones and it focuses on two companies DJI and aut Hill and you know I think based on the research that I've done based on speaking to people in those Industries um you know the way that AV works the way that sensing technology works uh has a range of National Security implications from controllability you know the ability to use the equipment in regular and predictable ways if uh you know it can be controlled externally um which you know given software given the network nature of equipment uh is a real threat um to just the amount of economically important and strategically important information that could be you know gleaned through uh AV Vehicles essentially you know like mapping US national infrastructure and activity uh you know on that infrastructure in other words it's basically two things really it's basically and potentially uh a giant intelligence collection tool you know networks of autonomous vehicles whether whether drones or cars or trucks um and it is also in a sense uh a risk in terms of the software and the processing and the potential for uh you know those features of our infrastructure to be linked in ways that are not fully uh understood to um entities outside of the United States so there's a control issue and there's a sort of information collection issue that I think you know those are important streams so to speak to focus on uh Larry mentioned genomics also that's that's in the report you know I think there's been a lot of um you know uh non-consensual collection of genetic and other information that's come to light again you know not through my research but through the the reporting of people who Focus closely on these things and in healthcare also uh you know there I think the risks are somewhat commercial you know the development of new um Pharmaceuticals that uh companies around the world are striving to uh develop right now uh you know to cure cancer to cure uh genetic uh illness um so you know that's more the commercial argument but if we want to continue to be a competitor in those spaces I think um it's worth thinking about where the data in those kind of Partnerships and in the use of those products uh actually goes you know I've again been been told by people in the biotech space that uh genetically you know sort of targeted weapons or not likely in the near future and so you know I I know that one gets thrown out a lot and there may not be as much credibility to it just as you know the commercial threat of data that supports Innovation um you know not uh not being shared in ways that are that are obvious or transparent ly uh please speak into the mic okay okay are converted into information about a conditional outcomes of the events of the future by way of a model of a physical system the physical system that one wants to establish control over and I happen to know that our country is extremely bad at doing that this is essentially what I do research on it's so bad that in the case of climate change the climate battles by which the United States had helped to regulate uh the outcomes of events for Earth's climate system conveys no information about the outcomes of those events to the government therefore the government cannot really regulate that system well if you extrapolate that to afford Affairs is very worrisome to me it has some evidence of the fact that we are very poor at doing doing uh that kind of of mole building and so is teaching his Communist party so you've got two organizations both armed with thermonuclear weapons in threatening each other with their nuclear weapons who are using models and making policy decisions that that convey no appraise to them I really worry about that so if I can brief you in detail and my intelligent that I would be handling to who I help you I'd I'd be very grateful I mean it's it's true there are scenarios you know that we have to contemplate now that weren't necessarily on the radar even five years ago way which an information theoretically optimal model can be created by uh the construction of a model which I have done many times I know all about yeah I'd love to have that conversation good thank you Nick please no thanks and Matt thanks for a great presentation I think a very timely piece of work um I just thought I'd make a comment and then ask you a question uh speaking as a European and there are some Brits that still declare themselves to be Europeans amazingly um I think um if I may say so holding a mirror up to the United States I think sometimes you make the mistake of thinking that Europe is a homogenous entity uh and um certainly the remarks that a certain president has made in the course the last week in France um perhaps might be conceived to be a European comment they're not really I don't think I mean Eastern Europe takes a very different perspective and indeed the prime minister of Estonia has just written a really good article in the economists having given a speech in Australia about cyber and protecting our data and everything associated with it because Estonia has a lot of experience in all of this I think part of it is European naivete and that's why I think your report should be very timed and I hope it gets widely read throughout European countries not least as I was reading the other day that the German cyber command is using Huawei technology inside its own base databases which is pretty extraordinary but my question is do you recommend in the report that the U.S should have a grand strategy to deal with this because your policy recommendations seem to be extraordinarily sand but I wonder whether they should also be nested of ground strategy which we can all get behind that's uh a fantastic observation um you know I I think that uh it should and I have to say that in you know the kind of quests to ground the conclusions in you know ways that would appeal to policy makers the the grand strategy part uh probably dropped out a bit but it's something I would have to give more thought to I think you know as a as a fundamental principle as painful as it sounds it seems that the almost logical conclusion is uh accelerating decoupling in strategically important areas you know sort of broader version of rip and replace where you know they're just the the threat to critical infrastructure it seems now and not just critical infrastructure in a sort of um you know more narrow National Security sense but the systems that are required you know to sustain societies and to sustain economic growth uh are vulnerable in ways that I'm not sure that policy has caught up to yet and that you know I mean that that hopefully comes through from the report um but you're you're absolutely right about the need for something like a grand strategy and uh that that not being uh in the report and your your point on the heterogeneity so to speak of Europe definitely well taken I mean my my conversations have been primarily in Estonia uh actually and you know I I would agree completely with your assessment that there's you know kind of heightened awareness there that is not uh uniform everywhere else sounds like the infrastructure of cyber intelligence would be critical infrastructure you'd imagine you know with rip and replace too we need Appropriations to pay for the replacement Leo here we are several years after ripping their place in local Telecom providers and they've not been able to replace the equipment so the Chinese equipment is still there because they need to maintain service and so this is a very expensive proposition that needs to be attended to horrible uh you know apropos of um your question you should know that his report is sort of a Prelude to a larger project which we do anticipate assembling a group of people possibly even in Washington to consider the conclusions and the data that Matt has offered up and to try to come to some conclusions about what does this mean for us and what we should do and I want to ask you Matt apropos that you know I think that um doing The Reckless sort of uh a very naive period of globalization when it was always win-win-win and nobody cared who owned what it was just one great big comment uh we had a version of that in trade we had a version of that and research we had a version of that and just about everything so I look at data through that period it's kind of like the atmosphere I mean we share it it doesn't have any boundaries it doesn't have any sovereignty or at least we didn't look at it in that way now what your report is suggesting is that we need to segregate it into some sort of sovereign territories and there's some no-fly zones for different countries um how are we going to do that that isn't a massive challenge I mean look I I try to be self-reflexive as much as possible and I realize that there is a kind of strange lovian quality to this topic because as you say there's a sense in which data is everywhere um and uh the idea of protecting it in some way seems very difficult uh indeed but I think that's probably in a way where the answer has to begin is that we have to begin disaggregating this idea of data so that it has less you know or at least fewer of these ethereal qualities to it and we have a better sense of what we're talking about and where the priorities lie I tried to do that somewhat in the the beginning of the presentation um you know I've I've had to say several times during this presentation like what I'm not because I I know that there are you know especially at a university like Stanford there are people with deep technical expertise that's not my background but it does strike me that digital information so to speak has many applications it's not just there for consumption it has you know again it relates to issues of controllability across systems it relates you know sort of just generally to information that people consume and use uh it you know relates to more broadly um the environments in which people consume information so when we're talking about data really what we're talking about is like specific ecosystems and so I think that's you know for younger people in the audience uh you know that that's that's maybe one helpful place to begin from a regulatory perspective I haven't done as much of that in this work but you know that was sort of vaguely in the recommendations in terms of like let's start with a list of where we think the priorities lie we can't treat data as a single issue um and and you know the the pragmatism of the recommendations was ideally you know sort of grounded in a sense that there are some areas that are more sensitive than others and there are some kinds of information that are more sensitive than others so you know that's that's where I I would start but I agree with and I I love your characterization this is sort of like this is like the hangover after globalization but from from an American perspective because you know not all countries experience globalization as win-win and you know other countries to the extent that they grew through globalization as well um want to continue growing I mean that's a sort of basic law of international relations I would think and you know that that sort of sense of a great power competition does not seem to be fully in our strategy or in our institutions so yeah it's a little like the dollar that we see the re-sovereignization of currency so that we don't have one universal uh currency of the realm the dollar people are trying to make Brazil and China and Russia and China so I think we're heading into this kind of strange world where we have to re-soverize an awful lot of things and data is probably one of the most difficult ones to do that with yep I can only agree I think that's right I want to draw on a question from the online audience um in which the questioner like I think many Americans is not sufficiently convinced that they have more to fear from the Chinese government than they do from American firms or from their own government with regard to data collection and so you know with that observation is not some of the solution here to have a National Data regime the United States I think has been fairly um unique in being a very laissez-faire with regard to the collection of of data and that's had tremendous benefit in that well American firms have done extremely well and grown very quickly in this area but of course the costs are well known to us also and I wonder to what extent focusing on the end user that is say China versus the United States um that's got to be part of the solution but is not part of the problem also in just the initial collection of this data should we not be attacking it from that end of the problem um so because once the data itself is collected it can be sold on markets it can be bought through third parties and acquired so even if we shut China if we decouple China from our Market uh the data can be sold second third fourth hand to Chinese firms and is being that's correct and it can be hacked as well instantaneously so simply collecting the data that is dangerous um is itself something we should be thinking about so how do we sort of balance those competing concerns about um yeah no great uh and thank you to the audience member um who raised that one especially speaking at an institution like Hoover I would be hesitant to jump into you know an argument that we need to immediately start regulating um some of our most valuable Industries uh so I would sidestep that solution uh at least for the time being um you know as it's not that that's not an important conversation but I feel like the domestic conversation and the foreign policy conversation are not the same conversation and we shouldn't treat them like the same conversation and I think actually tick tock's lobbyists have really tried to you know pursue this line of approach that you know what we don't need is a tick tock solution what we really need is a solution for everybody 15 20 years in the future when that finally gets worked out in the meantime what happens right so I mean from my perspective uh yes you know let's let's think about rules that protect people uh I think that's what our government does anyway uh you know I I haven't lost uh hope or optimism in in that sense um but you know I'm I'm more focused on the the foreign policy aspect of the threat which is you know how is as you mentioned at the end of that question Glenn you know how um data moves across borders you know feeds into the designs of foreign adversaries Etc you know that that to me is a present enough threat that it should not be you know sort of like subordinated to a broader conversation around uh you know what what to do about Facebook can I just ask briefly when I raised this recently someone suggested um why not just ban the export of um data uh from American data companies to China we have export controls in other Realms uh do you have any thoughts on that yeah fair I mean that sounds like a great starting point that's that's the the basis of negotiations between the US government and and Tick Tock have been you know over this idea you know the so-called uh Texas Project where you know all Tick-Tock data would be stored by Oracle it in servers you know they're located within the United States and whose activity can be monitored and controlled I think that is an important starting point so I want to pull on that thread with another question from the uh from the online audience and that is to get a little bit of on this is there a weakness uh that we can exploit in China's data strategy is there a way into which we can turn this to our advantage foreign I think um look I mean this report was very much written in the how can we protect Americans mode you know not as much in the how can we disrupt China's systems mode uh to the extent that it makes a recommendation in that latter area the main recommendation isn't you know for um exploitation so to speak but it is a recommendation that we you know we researchers analysts others who care about these issues get serious about the research you know everyone I talk to who wants to solve these problems goes right to the point that there is a lack of capacity you know whether it's capacity to you know sort of map the landscape to you know capacity to enforce the the laws um and you know various actions in between so I think a starting point to that question is simply you know uh somewhat to Orville's point about sovereignty um having a serious discussion about how to protect sovereignty and protect citizens because the exploitation of openness as I said at the end there is something it's not just that the party does it well you know because they were underground organization in Shanghai in the 1930s or that kind of thing it's it's because the party now studies how to exploit openness in other societies as I was saying to pursue its own ends you know whether it's legally whether it's um you know through like setting up groups in civil society that actually turn into tools of uh you know the the the repression of dissidents living abroad it's exploitation of openness so getting serious about protecting openness in ways that uh at the same time make this kind of activity that seems to run like totally counter to Democratic Values uh you know that that would be one starting point stop stop giving it all away for free so excuse me Terry yeah could I address that what did you just said there is a book out called the psychology of totalitarianism it's written by an academic uh uh psychologist and uh one of his findings is that totalitarianism is associated with the use of models by governments that produce little or no information so that's one way perhaps we can get out of big bind that we're in huh sure I know I I happen to believe that democracies you know perform better in in the senses that you're describing because there's a question for your flow of information miserable failure which is indicative of the models that the marxists use provide them with little or no information that's right now and and there's there's a you know a school of thought that I've encountered recently you know it's the sort of like we did it once we'll do it again school of thought but it's not focused on World War II is that we did it once it's the you know collapse of the Soviet Union as we did as we did it once in the sense that you know really avoiding war with China which is you know a scenario complex and Grave to contemplate um is a priority and you know the alternative uh but still you know one that protects U.S national security over the long term is to you know try to contain uh China and China's growth in ways that would ultimately you know put stress on um China's Society from within David voice question uh Matt both you and Glenn touched on working with allies and partners um we mentioned that some countries in Europe might be behind the US on waking up to this risk are there us allies Partners or friends who are ahead of us on this I mean Estonia was brought up what are they doing um that maybe you think the U.S should be doing um you know Taiwan is another example in my mind of of a of a partner who I think is attuned to this risk and has a lot of experience sure so that's that's great um I think on this idea of data free flow with trust you know that's that's Japan um and so Japan in terms of the the kind of like multilateral dimensions of the topic um is a country to look to as you know uh having proposed under the Ave government you know a sort of serious idea in response to um this threat I think domestically uh you know Australia obviously has um pursued an agenda of counter foreign interference you know that's not applied to China only uh which is I think an important point to make as well um but you know that that has a kind of framework for identifying uh what malign activity looks like and then uh attempting to resolve um those those issues you know through through law enforcement um among others so those those are two that come to mind um and Estonia uh you know I I have had some really important to me conversations with colleagues there and you know I don't know that the model is coming into view yet but what I find striking is we have you know uh in the world uh countries whose populations have like living memory and experience of dealing with large uh you know authoritarian or totalitarian neighbors and you know how they've then taken measures to decouple or detach uh are probably worth exploring for sure Laura the final question thank you Matthew for your presentation I want to continue on this topic about the fourth third countries um some of the recommendations like strategic decoupling and working with this group of friends might work very well for the group of friends but as you said that foreign policy is something that you are an expert in um what have you thought about further further in terms that that making that group of friends and creating sovereignty in terms of American internet might increase block forming in the world and how do third countries have to deal with that yeah that's I mean where it's a great question where China's been successful is in you know providing a lot of third countries that you know various sort of economic stages so to speak uh with critical infrastructure that they and their populations need to modernize and I think that that fact shouldn't be overlooked um I think it's probably incumbent on the United States and you know like-minded uh countries to propose you know real Concrete Solutions um that go beyond just like don't use this or don't do this and I don't think that that side of the policy has been fully worked out yet to put it mildly but you know I I definitely see that as a concern I definitely see that as an issue that requires response that's a great question so I think that brings our eventual close I want to thank you all for some excellent questions great discussion and in particular thank Matt for what really is an extremely important substantively Rich intervention and this topic is Orville suggested this is the opening round I think in a much larger push that we're going to build around the set of topics and set of questions involving that as we as we really try to move the needle on the discussion um I want to alert those of you in the audience that uh on April 26th at noon Pacific we're going to have another cgsp speaker event um Richard Carney will be speaking to us about his new manuscript China's chance to lead acquiring Global influence via infrastructure development and digitalization I hope you can join us for that and thank you for coming today good

Channel: Hoover Institution

Views: 12,157

Keywords: Chinese Communist Party, propaganda, China’s Grand Strategy for Global Data Dominance

Id: _A5lmtpyfMk

Length: 74min 56sec (4496 seconds)

Published: Tue Apr 25 2023