Singapore, April 7 (BNA): Chinese state-owned telecom companies are developing a $500 million undersea fiber-optic internet cable network that will link Asia, the Middle East and Europe to rival a similar US-backed project involving four people. The deal told Reuters.
The plan is a sign that the escalating technology war between Beijing and Washington risks tearing at the fabric of the internet, Reuters reports.
China’s three major carriers — China Telecom (China Telecom), China Mobile Limited and China United Network Communications Group Ltd. (China Unicom) — are laying out one of the most advanced and far-reaching submarine cable networks in the world, according to Four Networks. People with direct knowledge of the plan.
The four people said the proposed cable, known as EMA (Europe, Middle East and Asia), would connect Hong Kong to the Chinese island province of Hainan, before making its way to Singapore, Pakistan, Saudi Arabia, Egypt and France. They asked not to be named because they were not allowed to discuss potential trade secrets.
The people said the cable, which will cost about $500 million to complete, will be manufactured and laid by China’s HMN Technologies Ltd., a fast-growing cable company whose previous company was majority owned by Chinese telecoms giant Huawei Technologies Co Ltd.
They said HMN Tech, which is majority owned by Shanghai-listed Hengtong Optic-Electric Co Ltd, will receive subsidies from the Chinese state to build the cable.
China Mobile, China Telecom, China Unicom, HMN Tech and Hengtong did not respond to requests for comment.
China’s foreign ministry said in a statement to Reuters that it “has always encouraged Chinese companies to carry out foreign investment and cooperation,” without directly commenting on the EMA cable project.
News of the planned cables follows a Reuters report last month that revealed how the US government, concerned about Beijing eavesdropping on internet data, has thwarted a number of Chinese submarine cable projects abroad over the past four years. Washington has also blocked licenses for planned private undersea cables that would have connected the United States to the Chinese mainland of Hong Kong, including projects led by Google LLC, Meta Platforms Inc, and Amazon.com Inc.
Undersea cables carry over 95% of all international Internet traffic. These high-speed channels have for decades been owned by groups of telecom and technology companies who pool their resources to build these vast networks so that data can be transmitted seamlessly around the world.
But these cables, vulnerable to espionage and sabotage, have become weapons of influence in an escalating competition between the United States and China. Great powers are fighting to control advanced technologies that could determine economic and military supremacy in the coming decades.
The Chinese-led EMA project aims to compete with another cable currently being built by the US company SubCom LLC, called SeaMeWe-6 (Southeast Asia – Middle East – Western Europe – 6), which will also connect Singapore to France, via Pakistan, Saudi Arabia and Egypt and half a dozen other countries along the way.
The consortium on the SeaMeWe-6 cable — which originally included China Mobile, China Telecom, China Unicom, and telecom companies from several other countries — initially chose HMN Tech to build that cable. But a successful US government lobbying campaign flipped the contract over to the subcommittee last year, Reuters reported in March.
The US blitzkrieg included offering multimillion-dollar training grants to foreign telecom companies in exchange for the subcommittee choosing over HMN Tech. The US Department of Commerce also slapped sanctions on HMN Tech in December 2021, alleging that the company intended to acquire US technology to help modernize the Chinese People’s Liberation Army. The move undermined the project’s viability by making it impossible for owners of HMN’s built-in cable to sell bandwidth to US technology companies, usually its largest customers.
China Telecom and China Mobile pulled out of the project after SubCom won the contract last year and, along with China Unicom, began planning an EMA cable, the four people involved said. The three state-owned Chinese telecom companies are expected to own more than half of the new network, but they are also cutting deals with foreign partners, the people said.
This year, Chinese carriers signed separate memorandums of understanding with four telecom companies, the people said: France’s Orange SA, Pakistan Telecom Company Limited (PTCL), Telecom Egypt and Zain Saudi, a unit of Kuwait’s mobile operator KSCP.
Chinese companies have also been in talks with Singapore Telecom Ltd., a state-controlled company known as Singtel, while other countries in Asia, Africa and the Middle East are being approached to join the consortium as well, the people involved said.
Orange declined to comment. Singtel, PTCL, Telecom Egypt and Zain did not respond to requests for comment.
US cable company SubCom declined to comment on the competing cable. The Justice Department, which oversees an interagency task force to protect US communications networks from espionage and cyberattacks, declined to comment on the EMA cable.
A State Department spokesperson said the United States supports a free, open, and secure Internet. Countries should prioritize security and privacy by “completely excluding untrusted vendors” from wireless networks, terrestrial and undersea cable, satellite, cloud services and data centers, the spokesperson said, without mentioning HMN Tech or China. The State Department did not respond to questions about whether it would campaign to persuade foreign telecom companies not to participate in the EMA cable project.
China’s foreign ministry said in its statement that it opposes “the United States’ violation of well-established international rules” on undersea cable cooperation.
“The United States should stop making up and spreading rumors about so-called ‘data surveillance activities’ and stop defaming and defaming Chinese companies,” the statement said.
division of the world
Large subsea cable projects typically take at least three years to go from concept to delivery. Relevant people said that the Chinese companies hope to complete the contracts by the end of the year and get EMA cable online by the end of 2025.
One of the people involved in the deal told Reuters the cable would give China strategic gains in its conflict with the United States.
First, it would create a new high-speed connection between Hong Kong, China and most of the world, something Washington wants to avoid. Second, it gives state-backed Chinese telecoms companies greater access and protection should they be excluded from US-backed cable in the future.
“It’s as if each side is arming itself with bandwidth,” said a communications executive working on the deal.
The four people involved in the project said that building parallel cables backed by the US and China between Asia and Europe is unprecedented. This is an early sign that global Internet infrastructure, including cables, data centers and mobile networks, could fracture over the next decade, two security analysts told Reuters.
Countries may also have to choose between using Chinese-certified internet equipment or US-backed networks, cementing divisions around the world and making the tools that fuel the global economy, such as online banking and global positioning satellite systems, slower and less reliable. Timothy Heath is a defense researcher at the RAND Corporation, a US-based think tank.
“It appears that we are on a path where there will be an internet led by the United States and an internet system led by China,” Heath told Reuters. “The more the United States and China pull away from each other in information technology, the more difficult it becomes to carry out global trade and essential functions.”
The internet works so well because no matter where data needs to travel, it can travel through several different routes in the time it takes to read that word, said Antonia Hamidi, an analyst at the Berlin-based Mercator Institute for China Studies.
Hamidi said that if the data has to follow the tracks approved in Washington and Beijing, it will become easy for the United States and China to manipulate and spy on this data; Internet users will suffer from degradation of service; It will become more difficult to interact or deal with people around the world.
“Then all of a sudden, the whole fabric of the Internet doesn’t work as it was intended,” Hamidi said.
The eye-to-eye battle on internet devices mirrors the struggle over social media apps and search engines created by US and Chinese companies.
The US and its allies have banned the use of the Chinese-owned short video app TikTok from government-owned devices due to national security concerns. Many countries have raised concerns about the Chinese government’s access to the data that TikTok collects on its users around the world.
Meanwhile, China already restricts which websites its citizens can see and blocks the apps and networks of many Western tech giants, including Google, YouTube, Facebook and Twitter.
AOQ