Intelligence Reporting

SUMMARY

China hosted its World Internet Conference on 7-9 November 2018 in Wuzhen, the fifth conference in this series.  As in past years, the conference was attended by Chinese political and corporate figures as well as representatives from several major Silicon Valley companies.  However, the level of foreign participation was significantly reduced from last year.  Tim Cook of Apple and Sundar Pichai of Google, featured speakers in 2017, skipped the 2018 conference.  Xi Jinping did not participate, and instead had his Propaganda Chief deliver a speech emphasizing China’s “sovereignty” over its piece of the Internet.  Even some Chinese observers noted that “without the foreign tech dignitaries, such events are more of an embarrassment than a win for China on the world stage.”

The fading of this conference may be due to Western disappointment in the hopes that engagement in this event would help lead to greater freedom for the Chinese online and greater Western access to tech markets in China.  In fact, censorship in China is now tighter than ever and foreign market access is still constrained.  The ongoing trade war, which is negatively impacting Chinese tech firms, may also be dampening enthusiasm.  In any event, Xi Jinping appears to be choosing “cyber sovereignty” over greater integration of China into the rest of the world’s Internet, even if it hurts China in the international marketplace.

BACKGROUND

China’s first World Internet Conference was held in Wuzhen, near Shanghai, in 2014.  High-level government support for this event was indicated by Premier Li Keqiang’s attendance in 2014, and Xi Jinping spoke there in 2015.  The tone of those conferences indicated that China saw this event as a marker for a new era of digital openness, with China as a champion of global cyber-governance.  China’s cyberspace chief, Lu Wei, began developing relationships with US technology leaders, leading delegations from Chinese tech industries to the United States. This paid off by 2017 when Apple’s Tim Cook and Google’s Sundar Pichai attended the Wuzhen conference.[1]

The hope from the US side was that this kind of engagement would lead to a greater opening up of the Chinese Internet and greater access to the Chinese tech market for the rest of the world.  However, in 2018 the Chinese Internet is subject to even tighter censorship than ever and market access remains limited.  In fact, Freedom House, a US-based cyber rights watchdog, placed China at the bottom of its ranking for Internet freedom this year and warned that China was actively exporting its version of “digital authoritarianism” to other countries.[2]

ATTENDANCE

This apparently led to the decision by leaders of major Silicon Valley companies to stay away in 2018.  Google, Facebook, Microsoft and Amazon all sent lower-level representatives.[3]  The only Westerner who spoke at the opening ceremony was Steve Mollenkopf, chief executive of US chipmaker Qualcomm, who praised President Xi’s comments on a “shared future in cyber space.”[4]

The pullback by Silicon Valley leadership may indicate they believe the payoff for engagement is not living up to expectations.  Ryan Hass from the Brookings Institution, who ran China policy for the US National Security Council under President Obama, expressed this perspective, saying, “There could be growing wariness by chief executives of major multinational firms about the direction of China’s tech policies towards tightening and control.”[5]  Some Chinese observers have also noted that “without the foreign tech dignitaries, such events are more of an embarrassment than a win for China on the world stage.”[6]

Xi Jinping did not attend the conference this year, either.  None of the Politburo Standing Committee, the body of the Chinese Communist Party’s top leaders, attended.  This may be due in part to a conflict with the China International Import Expo, also held in Shanghai at the same time, which Xi did attend.[7]

This year, China’s corporate attendees included Ma Huateng of Tencent and Jack Ma of Alibaba.[8]  Also attending were Cao Guowei from of Sina Technologies, Lei Jun from smartphone manufacturer Xiaomi, and Wang Xing from group-buying website Meituan Dianping.[9]  Chinese attendance notably did not include Lu Wei, former head of the China Cyberspace Administration, since he was in jail awaiting sentencing on corruption charges.  Likewise, Richard Liu, the head of the China e-commerce firm JD.com, was missing, since he is the subject of a rape investigation by the United States.[10]

The current state of political friction between the United States and China may also affect interest in this conference by both sides.  Since the beginning of the ongoing trade war with the United States, market capitalization of the big Chinese technology companies has reportedly declined by almost 40%.[11]

The keynote speech was delivered by Huang Kunming, head of the Propaganda Department of the Chinese Communist Party.  This included a letter drafted by Xi Jinping which Huang read out to the attendees.  In the letter, Xi made statements in favor of cooperation such as “countries should deepen practical cooperation, take common progress as the driving force and win-win results as the goal, and blaze a trail of mutual trust and governance to make the community of common destiny more vibrant.”[1]  However he also emphasized that “we should adhere to the principle of respecting cyber sovereignty, respecting every individual country’s right to choose its own development path for cyberspace, model of cyber governance, and internet public policy.[2]  This statement reiterates points made by Xi at the 2015 conference and in a statement presented on his behalf in 2017: that “cyber sovereignty” means China has a right to decide how to control Internet content and access for its citizens.

TOPICS AND EXHIBITS

China Daily reported that the 2018 conference would discuss fairly standard topics such as “Integration and Development in AI,” “Breakthroughs in Industrial Internet,” and “The Internet of Things.”  It also included more China-specific topics like “International Cooperation along the Digital Silk Road,” essentially promotion of China’s giant infrastructure development plan known as the Belt and Road Initiative.  However, it also included the subject, “Construction of a Social Credit System,” which is a controversial Chinese program in which citizens are scored based on how much their behavior conforms to socialist principles.[3]

The conference was also used as a venue to demonstrate China’s newest high-tech products.  Exhibits that were part in the Wuzhen conference included an “Artificial Intelligence Anchor,” a digital news-reader avatar developed by Xinhua News based on images of a real news presenter.  The supposed advantage of an AI news reader, as explained by the avatar himself, was that he could “work tirelessly to keep you informed” non-stop throughout the day based on whatever was typed into his system.[4]

The Chinese medical technology firm Ping An Good Doctor set up an unmanned clinic based on its artificial intelligence technology platform.  This system was used to demonstrate one-stop medical and health services for guests and the media at the conference.  Ping An Good Doctor also demonstrated live remote interaction with a physician and pulse-monitoring systems in support of traditional Chinese medicine practices.[5]

 The search giant Baidu demonstrated its facial recognition technology in a practical way at the conference: verifying conference visitors’ identities.  Conference guests staying in Wuzhen used facial recognition instead of passes to grant them entry to various attractions.  Visitors had their pictures taken by the Baidu system when they first entered the park, then Baidu used this to verify their identities at several camera gates around Wuzhen.[6]

China has been working at becoming a world leader in biometric technology.  The concern is that China is extending facial recognition and other biometric systems to more closely track the activities of all of its citizens.  For example, the Beijing-based company IrisKing, a pioneer in digital identification based on irises, claims its tools are being used to help identify refugees in Syria and recover trafficked children in China.  It has also stated that it was working with the Chinese government to develop a data base of all residents in Xinjiang Province, home to the Muslim Uighur minority, within two years.[7]  This could contribute to further control and suppression of this minority.

China Digital Times, a US-based rights monitor that focuses on China, pointed out one major irony about the World Internet Conference.  This year’s attendees at the conference, like last year, were able to connect with the outside world through the conference’s Wi-Fi system which circumvented the Great Firewall censorship system.  This filter-free opportunity, however, was something the Chinese government did not want to advertise to its own citizens.  As part of the regular promulgation of censorship guidance, the government stated on 2 November that “the World Internet Conference provides special internet services to the conference area.  All media must uniformly refrain from reporting, re-posting, and commenting [on this].”[8]

The significant change in both Western and Chinese leadership participation in this year’s Wuzhen conference suggests that hopes for a more integrated and free-flowing Internet, that includes China, are now fading.  Xi Jinping’s continued defense of China’s vision of cyber sovereignty indicates that he is placing control ahead of Internet integration in his priorities.  As in Western countries, Chinese commerce is greatly dependent on the Internet, and the more that the Internet is left unfettered, the better it would be for Chinese business as well.  The Chinese government appears to be betting that it can maintain control over Internet content for political reasons and still do business. 

There is, however, the potential for the Chinese approach to result in two Internets, one under government control in China and one operating freely in the rest of the world.  Such a split would likely have negative effects for business everywhere, perhaps especially in China.  The ever-tightening control of Xi Jinping in other areas, including press control, prosecution of other Party figures, suppression of religion generally, suppression of the Muslim minority in particular, and the renewed promotion of socialist ideology all indicate that his perceived need for “cyber sovereignty” will outweigh any interest in Internet freedom or cooperation.

Contact the Wapack Labs for more information: 603-606-1246, or feedback@wapacklabs.com


Prepared:  Silkworm, Wapack Labs Asian Desk
Reviewed: B. Schenkelberg
Approved: J. McKee

[1] www.bloomberg.com/news/articles/2018-11-07/china-s-grand-internet-vision-is-starting-to-ring-hollow,

[2] www.scmp.com/news/china/politics/article/2172045/chinas-top-leaders-absent-internet-conference-draws-less.

[3] www.nationmultimedia.com/detail/breakingnews/30358059.

[4] time.com/5450141/china-xinhua-artificial-intelligence-news-anchor.

[5] www.stockhouse.com/news/press-releases/2018/11/07/ping-an-good-doctor-unveils-four-major-medical-technology-achievements-at.

[6] www.theverge.com/2016/11/17/13663084/baidu-facial-recognition-park-wuzhen.

[7] www.nytimes.com/2018/11/08/technology/china-world-internet-conference.html.

[8] chinadigitaltimes.net/2018/11/minitrue-open-web-access-at-world-internet-conference.

[1] www.bloomberg.com/news/articles/2018-11-07/china-s-grand-internet-vision-is-starting-to-ring-hollow.

[2] www.scmp.com/news/china/politics/article/2172045/chinas-top-leaders-absent-internet-conference-draws-less.

[3] www.scmp.com/news/china/politics/article/2172045/chinas-top-leaders-absent-internet-conference-draws-less.

[4] chinadigitaltimes.net/2018/11/minitrue-open-web-access-at-world-internet-conference.

[5] www.scmp.com/news/china/politics/article/2172045/chinas-top-leaders-absent-internet-conference-draws-less.

[6] chinadigitaltimes.net/2018/11/minitrue-open-web-access-at-world-internet-conference.

[7] www.scmp.com/news/china/politics/article/2172045/chinas-top-leaders-absent-internet-conference-draws-less.

[8] www.scmp.com/news/china/politics/article/2172045/chinas-top-leaders-absent-internet-conference-draws-less.

[9] kr-asia.com/what-tech-executives-have-said-at-chinas-world-internet-conference-2018.

[10] www.inkstonenews.com/tech/top-us-tech-executives-absent-chinas-world-internet-conference/article/2172492.

[11] www.macaubusiness.com/special-takeaways-from-the-2018-web-summit-about-the-chinese-presence.

 

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