What you need to know
China's tech firms are not immune from the country's poor human rights record.
Beijing rarely shows weakness in the face of adversity from global, predominantly Western competitors. But amid revelations that China has built 380 internment camps in Xinjiang, the pressure is rising.
China’s publication of a recent white paper on forced labor in Xinjiang provides a rare glimpse of how jittery the Chinese leadership has become over the issue. The white paper, coupled with strenuous attempts to deny any human rights abuses in the province, shows China is increasingly at pains to control information coming out of Xinjiang, and grappling with severe international backlash.
Chinese tech firms, many of which are global giants controlling significant supply chains and commanding impressive market share, are finding themselves in a particularly harsh spotlight. It’s becoming clear that Beijing is getting nervous – and is fearing the economic consequences.
When a province becomes a prison
More than any other government, Beijing has made technology central to its repression. It has invested billions into AI and facial recognition technology in order to control the population and suppress minorities. By turning military cybersecurity capabilities into a means for enforcing civilian “public security,” China is militarizing its cities – and has turned Xinjiang into the test lab for a new generation of state surveillance.
Drones have come to play a main role in this, spying on people in at least five provinces, including Xinjiang. Their use is not surprising, given China is home to the world’s leading drone manufacturer, Da-Jiang Innovations (DJI). While the details are hazy, this private company has been active in Xinjiang since 2017, after signing a “deep strategic cooperation agreement” with the provincial security bureau for police drones to be used for maintaining stability, public security, and evidence gathering.
Such connections between tech firms like DJI and the Chinese security apparatus are feeding growing unease about Chinese tech. A look at DJI’s global influence serves to drive the point home: the company currently controls roughly 70% of the entire global drone market. With the industry expected to expand to US$43.1 billion by 2024, DJI will likely further bolster its share in the near future.
DJI’s security threats
In the United States, DJI holds a 77% market share. With the next closest company trailing with barely 4%, DJI stands to join other Chinese technology giants in the crosshairs of international governments. As the controversy surrounding Huawei and its alleged links to the Chinese government and military shows, many Chinese tech firms are suspected to “spy, sabotage, or take other actions on [Beijing’s] behalf” by sending personal data to Chinese servers without users’ consent.
Indeed, governments are right to be suspicious. Given that law enforcement is the main buyer of DJI’s drones, the DJI drone app’s multiple security flaws are highly troubling. According to an independent analysis by security research firm GRIMM, DJI’s Go 4 app was able to install arbitrary applications when linked with Weibo SKD, during which private user data was transferred to servers in China. Overall, the researchers concluded the app to contain several concerning features as well as techniques designed to prevent a detailed analysis of the app’s true abilities, or what it is doing with user data. Worrisome enough, these findings mirror the security concerns of other DJI-made apps, which were found to send data to Chinese servers through insecure means.
All of these flaws make it possible for China’s spy agencies to exploit the drones’ user data for political and intelligence purposes. The Australian transport and infrastructure department recently published a paper warning the country is ill-prepared to defend against Chinese-made drones being used by foreign state actors as “kinetic and cyber weapons for image and signals gathering, espionage, data exfiltration or physical attack.”
Having already been a priority target for Chinese influence operations for years, Australia has particular grounds to fear Beijing’s surveillance capabilities. Chinese spying and hacking is already so pervasive in the country that Australia’s intelligence agencies are routinely left overwhelmed. Even the series of laws introduced in 2018 to reign in the menace seem to have only had a limited effect. The use of Chinese-made commercial drones presents yet another avenue for Chinese intelligence gathering, and on a much larger scale than before.
Shattering China’s global tech dream?
In January 2020, the U.S. Interior Department grounded its entire fleet of DJI drones for the same reasons. Countries like the U.S. and Australia speaking out about concern over drones is indicative of a better understanding of how Chinese tech threatens their sovereignty and internal security.
But so far, only the U.S. and India – both involved in intense power competition with China – have made concerted efforts to push China’s technology giants out. In early September, India banned 118 Chinese apps, including those developed by Tencent and NetEase, while blocking services from Baidu and the Alibaba-affiliated Ant Group as well. New Delhi had already prohibited popular video app TikTok along with dozens of other apps in June.
It was the first time India banned Chinese technology as an act of retaliation, following the slaying of 20 Indian soldiers in a Sino-Indian border clash. India's fear of foreign-supplied technology also exposed the Chinese tech industry’s vulnerability to geopolitical swings – or when ethical questions became overwhelming.
Thus far, only the U.S. has imposed major sanctions on Chinese companies with links to forced labor from Uyghurs and other groups in Xinjiang, including firms such as Hefei Bitland Information Technology and Tanyuan Technology. It’s unclear to what extent the tech supply chains of other players are involved in using forced labor.
However, it’s evident that sanctioning Chinese enterprises and banning them from accessing the U.S. market is an effective tool in punishing them for their transgressions. The banishment of Tencent and Alibaba services is an example of success, having caused investors to drastically revalue their holdings in them. As such, it’s clear that denying market access to Chinese firms over tech backdoors or human rights abuses hits where it hurts.
Beijing might continue to condemn the sanctioning of its companies as “bullying,” but it’s a futile attempt if the rest of the world gets bolder in standing up to China. The Chinese tech industry’s dreams of global domination could soon wind up dashed.
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TNL Editor: Daphne K. Lee (@thenewslensintl)
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