Editorial of the Day: China’s ‘Developmental’ Security Approach (The Hindu)

Context: The article is discussing a recent announcement made by the Cyberspace Administration of China regarding the U.S. chip giant Micron. According to the announcement, Micron had been under investigation by the Cybersecurity Review Office, and it failed to obtain a security clearance. As a result, the Chinese government stated that Micron’s products were deemed to pose a threat to national security. In response, business operators connected to critical information infrastructure were advised not to purchase Micron products. In this regard, the article is highlighting a series of actions taken by the Chinese government, targeting American consultancies and domestic firms involved in business with overseas clients.

Decoding the Editorial

• The Capvision Raid: Firstly, the raid on Capvision, a consultancy firm based in Shanghai.
• • Capvision was accused by Chinese security authorities of using economic inducements to steal state secrets and facilitating the transfer of sensitive information from its experts to foreign clients.
  • The company was found guilty of violating laws related to national security.
• Raid on Bain and Co.: Secondly, came the raid on Bain and Co., an American consultancy firm.
• • While no employees were detained, the Chinese authorities seized computers and phones from the company’s offices.
• Raid on Mintz: Thirdly, the article mentions the raid on Mintz, another American firm, in which some of its employees were detained.
• • This led to the closure of Mintz’s two offices in Beijing.
• Furthermore, the Chinese government has been delaying approval for mergers and acquisitions involving foreign entities, resulting in increased operational costs for foreign businesses.

• The crackdown can be seen as a response to the U.S.-led efforts to tighten export controls, particularly regarding advanced computing chips and supercomputers.
• The U.S. actions, implemented in October 2022, were aimed at restricting China’s access to critical technologies.
• In this context, the Chinese government’s actions against American firms can be viewed as a form of retaliation or vengeance, aiming to counteract the constraints imposed on China’s technological advancement.
• Furthermore, Beijing may seek to capitalize on the diverging viewpoints between the U.S. administration and the American business community regarding China policy.
• • By restricting the access of American firms to the vast Chinese market and causing disruptions in their operations, the Chinese government can potentially exploit the rift between the U.S. government and its business community.
  • This strategy aims to leverage the differing interests and perspectives to its advantage.

Domestic Component:

• There is also a domestic component to these decisions.
• The Chinese authorities have their own motivations and objectives for cracking down on these firms.
• These motivations could include maintaining tighter control over national security and sensitive information, regulating the flow of intellectual property, and enhancing domestic capabilities in various sectors.

Security as a Key Focus in Chinese Politics:

• Xi Jinping’s Emphasis on Balancing Development and Security:

• • Under President Xi Jinping, the Chinese discourse on national security has highlighted the inseparable connection between development and security.
  • Xi has consistently emphasised the need to strike a balance between the two.
  • This emphasis was evident at important events such as the 20th Party Congress and the Two Sessions, where Xi emphasised the integration of development and security to safeguard China’s opening up and progress.
• Development Securitization and Non-Traditional Security Issues:
  • China’s approach to securitizing its development has led to the increasing significance of non-traditional security issues in its developmental narrative.
  • Among these issues, cybersecurity and data/information security have become major concerns for Chinese authorities.
  • This is reflected in their efforts to strengthen cybersecurity laws and counter-espionage measures.
• Amended Counter-Espionage Law and Broadened Scope of Espionage:
  • The recently amended Counter-Espionage Law, effective from July 1, 2023, expands the definition of espionage to include cyberattacks against state organs or critical information infrastructure.
  • It treats documents, data, materials, and items related to national security and interests on par with state secrets, broadening the scope of espionage.
  • The law also grants authorities the power to seize data, electronic equipment, personal property information, and impose bans on border crossing.
• Comprehensive National Security Concept:
  • The concept of comprehensive national security, initially introduced in 2014, has permeated various aspects of governance and developmental strategy during Xi’s tenure.
  • It signifies that the idea of national security has become an integral part of every governance domain, including economic development, technology, and information exchange.
• Suspicions of Espionage and Backdoor Installations:
• The Chinese administration holds a view that some foreign businesses operating in China are engaged in espionage activities.
• • Due diligence firms and consultancies are suspected of leveraging their extensive networks to extract sensitive data under the guise of information exchange.
  • Additionally, authorities suspect the installation of backdoors by U.S. tech companies at the request of their government.

Way Forward

Regarding the trade war with the US, the next steps China can consider taking are as follows:

1. Diplomatic Engagement: China can continue diplomatic engagement with the US to find a mutually acceptable solution to the trade war. Diplomatic negotiations and dialogues can help address concerns, bridge differences, and work towards a more balanced and fair trade relationship.
2. Market Access and Level Playing Field: China can take steps to improve market access for foreign companies, including those from the US. By creating a more level playing field and addressing concerns related to intellectual property rights, technology transfer, and non-tariff barriers, China can demonstrate its commitment to fair trade practices and attract foreign investment.
3. Structural Reforms: Implementing structural reforms to address long standing issues raised by the US can be a significant step. This can involve reforms in areas such as state subsidies, industrial policies, and government procurement practices, which can help create a more transparent and market-oriented business environment.
4. Strengthen Intellectual Property Protection: Enhancing intellectual property protection is crucial for building confidence among foreign businesses. China can further strengthen its legal framework, enforcement mechanisms, and penalties for intellectual property violations to demonstrate its commitment to protecting the rights of innovators and creators.
5. Multilateral Engagement: China can actively engage in multilateral platforms such as the World Trade Organization (WTO) to promote international trade cooperation and uphold global trade rules. By working within a multilateral framework, China can help address trade issues in a fair and transparent manner, and contribute to the stability of the global trading system.
6. Dialogue and Collaboration: China can foster open and constructive dialogue with the US and other countries to address trade concerns, promote economic cooperation, and identify areas of mutual interest. This can include sector-specific dialogues, trade working groups, and joint initiatives aimed at resolving trade disputes and promoting economic integration.

It is important for China to approach the trade war with the US with a long-term perspective, seeking to find common ground and achieve a mutually beneficial outcome. By demonstrating a commitment to fair trade practices, addressing concerns raised by the US, and promoting open and transparent economic policies, China can contribute to the resolution of the trade war and create a more stable and predictable trade environment.

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