Nathan Picarsic & Emily de la Bruyere
For 70 minutes on September 3rd, China paraded its military forces along Beijing’s Chang’an Avenue – exhibiting everything from stealth UAVs to long-range missiles, laser weapons to robot dogs. The display sent a clear message. Beijing is a global military force and has no intention of hiding it. That is concerning and potentially destabilizing. But it also obscures the real Chinese threat, and arsenal. The military hardware that Beijing celebrated are shiny accessories to the country’s already deployed force: China’s globally proliferated Hidden Huaweis.
Over the past decade, China has leveraged State-led industrial policy, a strategy of military-civil fusion, and the country’s advantages of scale and industrial capacity to dominate the upstream of information and communication technologies – including critical materials, modules, and components. Despite growing recognition of China as a strategic adversary, the United States has not grasped the extent of this threat. Trying to fight Huawei, Washington has missed a global arsenal of Hidden Huaweis. And focused on traditional security frameworks, Washington has failed to recognize the strategic effect those Hidden Huaweis deliver. They promise Beijing the power to shape tomorrow’s data flows – and the resources, ideas, and movements that depend on them. Until the United States engages seriously in the contest for the upstream hardware of information and communication technologies, Hidden Huaweis promise Beijing global control.
Chinese State-backed and -directed companies sit at the core of every information technology component, and therefore every foundational infrastructure, of the connected world. China’s Quectel and Fibocom control the majority of the cellular IoT module, mobile hotspot device, and fixed wireless access equipment: Anywhere you connect to WiFi, they are positioned to collect. Hesai, Robosense, and other Chinese companies account for 89 percent of the global LiDAR market, and therefore have veto power over the ability of self-driving vehicles to operate. Chinese champions, including Sungrow, make most of the world’s power inverters, the smart components that connect power sources to the grid – unless they decide to disconnect them. In data center optical transceivers, Innolight alone accounts for more than 10 percent of global market share, and is increasingly present across the U.S. artificial intelligence ecosystem.
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