Capstones: Addressing Our “Made in China” Problems

October 2020
By Alan W. Dowd

If there’s a silver lining in the COVID19 crisis, it may be that Beijing’s criminal mishandling of the virus has spurred the free world into expanding cooperation, reducing dependence on China and thinking creatively.

5G
Perhaps the most dramatic example of this is Britain’s 5G reversal.

The Chinese telecommunications firm Huawei is a leader in 5G technology. It also happens to have ties to the Chinese government, which explains why Washington worked so hard to persuade the British government to block Huawei from Britain’s 5G buildout. Even so, Prime Minister Boris Johnson approved Huawei for the 5G project over U.S. objections in January 2020. But then, Johnson reversed course in July 2020.

What changed? We know that COVID19 swept the globe in the months between January and July. But COVID19 didn’t change the products or services offered by Huawei, and it didn’t change the nature of Xi Jinping’s China. Rather, what COVID19 did—or more accurately, what Beijing’s intentional or incompetent response to COVID19 did—was remind Britain and the world of a hard truth: The PRC is an ends-justify-the-means regime that has contempt for norms of behavior. The world now knows that Xi’s regime lied about human-to-human transmission, allowed thousands of people to leave the virus epicenter in Wuhan for destinations around the world, ordered scientists not to share findings about coronavirus-genome sequencing, and carried out a premeditated plan to hoard 2.5 billion pieces of medical protective equipment as the virus spread.

Put another way, if Xi and his henchmen can be so callous and calculating when it comes to life and death, they will have no qualms about exploiting Huawei’s trojan-horse technologies to advance their interests—whether in Britain, Europe, the Americas or Asia.

D10
To protect the free world from the 5G equivalent of a COVID19 disaster, the U.S. has launched the 5G Clean Path initiative—what the State Department describes as “an end-to-end communication path that does not use any 5G transmission control, computing or storage equipment from an untrusted vendor, including Huawei and ZTE.” Dozens of corporations and allied governments have joined the U.S. in building this “clean 5G network.”

The clean 5G network relies on five pillars: “clean carriers” (ensuring that untrusted PRC carriers are not connected to their telecom networks), “clean stores” (keeping untrusted PRC apps that threaten privacy, spread viruses and promote disinformation out of mobile app stores), “clean apps” (preventing untrusted PRC smartphone manufacturers from pre-installing apps), “clean clouds” (protecting sensitive personal information and intellectual property from cloud-based systems connected to PRC-backed firms), and “clean cables” (ensuring the undersea cables that connect the Internet are not compromised by PRC intelligence gathering).

Johnson is now rallying the D10—an informal partnership of 10 democracies enfolding the Group of Seven industrialized democracies plus Australia, South Korea and India—to pool their technological resources, build on their shared values and harness their interoperability to accelerate efforts geared toward forging an uncompromised 5G network. In other words, the D10 could become the “operating system” for the 5G Clean Path.

Already, a clean-tech partnership comprised of U.S. firms Dell, Microsoft and AT&T, European firms Nokia and Ericsson, and Japanese firms NEC and Fujitsu is taking shape. Canada’s major telecommunications carriers have shifted to Samsung, Ericsson and Nokia. Likewise, leading telecommunications firms in France, India, Australia and South Korea have become “clean telcos” in recent months. India is leaning toward blocking Huawei from involvement in the country’s 5G network.

The Economist reports growing concerns among German lawmakers over Huawei. President Emmanuel Macron of France calls the 5G buildout “a sovereign matter” and believes key elements of the EU-French 5G network “must only be European.”

Noting that “much of our success is based on having a technological edge over our potential adversaries,” NATO Secretary General Jens Stoltenberg says the alliance is committed to “ensuring the security of our 5G infrastructure.” NATO’s top civilian adds: “We need to make sure that these systems are reliable…that we do everything we can to prevent espionage” and “that they are available and functioning in times of crisis.” The best way to do that, as Stoltenberg understands, is to make sure firms connected to Xi’s regime are not connected to NATO members’ 5G systems.

EPN
Shifting from technology to supply chains, the U.S. recently launched an Economic Prosperity Network (EPN) “comprised of countries, companies, and civil society organizations that are anchored in trust and that operate by a set of trust principles,” as State Department officials explain. Quite unlike Xi’s China, EPN partners are committed to “integrity, accountability, transparency, reciprocity, respect for rule of law, respect for property of all kinds, respect for sovereignty of nations and respect for basic human rights,” the State Department recently detailed.

The EPN and related efforts aim to “restructure…supply chains to prevent something like this [the COVID19 supply-chain breakdown] from ever happening again,” according to Secretary of State Mike Pompeo.

The U.S., Australia, Colombia, India, Japan, New Zealand, South Korea and a handful of other countries represent the core group exploring how to build this uncompromised supply chain. Underscoring the importance of this effort, the “Quad partners”—the U.S., Australia, India and Japan—vowed in October to “deepen cooperation to create resilient supply chains, promote transparency, counter disinformation and advance shared efforts to support a post-pandemic recovery,” the State Department reports.

Five Eyes Plus
British, Japanese and Australian officials have proposed expanding the membership and mission of the Five Eyes (an intelligence alliance enfolding the U.S., Britain, Australia, Canada and New Zealand) by adding Japan and by cooperating on production of strategically critical materials, such as medical supplies and rare-earth elements.

Rare earths are essential to the manufacture of cell phones, televisions, hybrid engines, computers, lasers, industrial magnets, batteries, MRI equipment, fiber-optics, superconductors and a range of military equipment. Each F-35 fighter-bomber, for example, contains 919 pounds of rare earths. The M1A2 tank’s navigation system and the Tomahawk missile’s guidance system rely on rare earths.

The bad news is that China is the dominant producer of rare earths and has slowed or halted exports of rare earths without warning. The good news is that the free world has an abundant supply of rare earths, even though it lacks a single source to mine and process them as of now. The better news is that an Australian rare-earth mining firm recently began shipping rare-earth minerals to a U.S. processing firm—serving as proof of concept for what might be called “the Five Eyes Plus” plan.

Partners
These efforts point the way to a practical solution to the challenge exposed by COVID19: Rather than retreating into protectionism and autarky—which failed spectacularly after World War I—the free world can work together to build up supply-chain resilience, diversify sourcing and production, forge uncompromised systems and networks, and ensure availability of critical materials, products and technologies.

In short, the answer to our “Made in China” problems is not only “Made in America,” but also in Mexico, Australia, Japan, India, Europe, South Korea, South America and Southeast Asia.

Indeed, what’s emerging is an international partnership built around new groupings such as the Quad, D10 and EPN, as well as time-tested alliances such as NATO and the Five Eyes—all committed to producing, supplying, processing, prepositioning and securing everything from technology hardware and software, to medical equipment and medicines, to rare earths and products built with rare earths.

The purpose of this burgeoning partnership of partnerships is not to weaponize supplies and resources, as China has done, but to allow the market to function unhindered by malign actors like China—and to ensure that supplies and resources are available to the free world during the next pandemic, the next trade dispute, the next financial crisis, the next war.

Alan Dowd is a senior fellow with the Sagamore Institute, where he leads the Center for America’s Purpose.