DigiChina Digest – January 2019

The DigiChina Digest includes exclusive new content and news tracking from Chinese-language sources on digital policy in China, as well as the latest from our collaborative work.The Digest is produced in partnership with our colleagues at the Leiden Asia Centre. This edition was compiled by Graham Webster, Katharin Tai, and Alessandra Jonkhout.

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RECENTLY FROM DIGICHINA

China's Efforts to Develop a Semiconductor Industry and Xi Jinping's 'Critical and Core Technology' Push

Following a Xi Jinping speech on AI (see our coverage) and a top scholar's speech to leaders (see next item), DigiChina presents an assessment of the most important Chinese companies engaged in an energetic effort to develop China's own semiconductor industry.

Companies like Huawei, Baidu, and Alibaba each have significant efforts, and startups including Cambricon, Horizon Robotics, and DeePhi are among the leading new entrants. We provide context for what these companies are actually trying to do and how their efforts fit into long-term Chinese government goals of increased independence from outside suppliers. [Full analysis includes a table of companies, their focuses, and who they partner with.]

Read What Top Chinese Officials Are Hearing About AI Competition and Policy

In a translation in cooperation with the ChinAI newsletter, DigiChina presents the full text of a lecture by Chinese Academy of Sciences scholar Tan Tieniu before the National People's Congress Standing Committee. Tan observed that "all spheres of society have recognized the strategic significance of AI" and its integration into diverse social developments. In addition to a detailed discussion of the sprawling AI field, Tan said AI has emerged as a national priority:

"The major developed countries in the world have, one after another, taken the development of AI to serve as a major strategy to enhance international competitiveness and national security."

China's prospects, he said, are good but uncertain:

"China shows promise of becoming the global frontrunner. However, we must also clearly see that AI development in China faces the risk of overheating and forming a bubble."

[Read the full translated speech.]

Public Security Ministry Aligns With Chinese Data Protection Regime in Draft Rules

Despite its deep background in cybersecurity, China's Ministry of Public Security (MPS) has been relatively absent in the formulation of an emerging policy regime around privacy and personal information protection. New guidelines translated by DigiChina mark its full arrival in the interagency mix and represent a link between the ministry's reinvigorated "multi-level protection system" and other personal information regulatory efforts. [See our full translation of the guidelines, accompanied by contextual analysis.]

What's at Stake for U.S.–China Relations After the Arrest of Huawei CFO Meng Wanzhou?

In a cross post at Slate through New America's Future Tense partnership, DigiChina's Graham Webster analyzed Canada's arrest of Huawei CFO Meng Wanzhou at the behest of the United States and raised several questions that remain unanswered. Among them: How do U.S. attempts to coerce China in economic ties interact with efforts to target a major company such as Huawei? [Read more.]

NOTABLE NEWS FROM OTHER SOURCES

People's Daily Sets Tone, Targeting Canada on the Huawei Arrest

China Media Project has translated a column under the quasi-authoritative byline "Zhong Sheng," written by staff who set tough benchmarks on major international topics. The column matches the tone of other official media, threatening "a much heavier price" for Canada—but leaving the United States, which initiated the arrest, mainly out of it. Since the arrest, Chinese authorities have arrested multiple Canadian citizens in actions Chinese officials have referred to as retaliation.

'China Information Security' Recounts Dozens of Enforcement Actions by Cyberspace Authorities in 2018

In a likely incomplete listing, China Information Security published a rundown more than 60 enforcement actions by national and regional cyberspace authorities in 2018. Some examples (in paraphrase):

• The Cyberspace Administration of China (CAC) summoned Alibaba-linked Alipay and Sesame Credit for failure to adhere to the Personal Information Security Specification in collecting user data (even though the specification would not go into effect until May.)
• Shanghai cyberspace authorities confronted the fashion retailer Zara for including "Taiwan" in the "country" field on its website.
• In May, Hebei cyberspace authorities were said to investigate 13 websites for violations of law or regulations. That number was 27 in June and 64 in August.

CAC and its local counterparts, the list suggests, are keen to be seen as active in enforcement, ranging from taking down illegal content to stopping unauthorized businesses or showing resolve to impose data protection rules. The prominence of local authorities underlines that China's cyberspace regulatory system is distributed and raises questions about the degree of coordination between the central government and localities.

TC260, China's IT Security Standards Body, Releases Stack of New Standards at Year End

TC260, the technical standards-setting organization operating under the Cyberspace Administration of China that assembles technical experts and stakeholders from government and the private sector, released 27 standards on December 28, 2018, all of which are to take effect July 1, 2019, according to a WeChat post from China Information Security. The standards cover a wide range of issues, including Internet of Things security, biometrics, RFID, terminology for cyber attacks, email security, virtual private networks, the "multi-level protection system," etc.