China’s Race to 5G: Overestimated or Real Threat
Western industry and security experts worry about their falling behind China in the competition for 5G communication development and deployment consequently leading China to become dominant in the new area which is supposed to revolutionize the communication technology forever. The concern lies inside the ceremonious characters of 5G which is altogether different from its predecessor (3G,4G) in the view that it has the capability to induce the next industrial revolution. Barring it from being simply faster iteration of 4G, it offers a paradigm shift in mobile connectivity with ultra-high speed, low latency, and high throughput. Moreover, the ‘Race to 5G’ between United States and China appears to become stiffer given its potential economic benefits that one country reap of being first movers and adopters of technology; the expanded economic schema of 5G technologies is unparalleled knowing its capability in realizing the full potential of ‘Artificial intelligence’ and ‘Internet of Things’ that will expand the frontiers for industries and commercialization of digital economy.
China has been actively mobilizing its industry and government support to become the leader in 5G technologies. Sought to exploit the first mover's benefit, China leads in setting the 5G standard, building 5G equipment, and deploying 5G infrastructure. Lagged in the development of 3G and 4G, Chinese government is determined to achieve the first mover's benefit. It had undertaken the task to build the robust digital infrastructure of optical fiber, Chinese R&D spending has been splendid in 2020 with 10.3 percent increase which is set to increase further. All the Chinese companies has a rush to learn and outcompete others in new emerging and critical technologies such as Artificial intelligence, Machine Learning, Block chain, Internet of things and cloud computing etc. In the context of much awaited forth industrial revolution pillared on the mentioned technologies 5G has a consequential role to play; autonomous vehicle designed to depend on the faster speed provided by the 5G, future cities will rely on the increased connectivity, improved automation will increase production and smart healthcare and even agriculture could benefit from the unprecedented offerings of 5G. While China aiming to finish the work of deploying the 5G infrastructure during the 14th five-year Plan period it had built the largest 5G network in the world with over 718,000 5G base stations throughout the country by the end of decade.
But before asking why China is undertaking this grandiose task so rapidly, one needs to understand what China expect by doing so and what are the imperatives it follows; As the great power competition returns China wants to take the competition to its greatest extent stretching it from strategic to technological arena without provoking the direct confrontation with Washington. It has been working on the digital BRI that will run parallel to the original BRI, blend of the domestic and foreign policy initiative, which will focus on the enhance digital connectivity abroad and furthering China’s ascendance as the global tech leader. China’s bid to become technological giant lurks around its desire to become the focal point to infuse the physical digital infrastructure including 5G equipment and data centers across the globe, recognizing the importance of the commercialization of digital product and its indispensable role in furthering its rise as the superpower Beijing investing heavily on the new technologies such as quantum computing, satellite navigation system and AI. Moreover, the emerging technologies fields such as cyberspace and 5G are largely ungoverned for which China has increased digital diplomacy to establish the international norms that would be in sync with its domestic digital industry needs and capability. In the new sphere of 5G China hope to command in standardization specially after diversion from the global norms in the 3G and 4G, leaving its imprint on the standardization of 5G will help China to gain the edge of influence globally and generate significant economic impact globally. The promise of 5G in military domain also compelled China to achieve the mark well before any country sought to reach there; The increased data speed and connectivity could facilitate data fusion and enhanced situational awareness with improved command & control which will provide significant operational advantage in real time.
Chinese technological corporations are running in the race to 5G much faster than its nearest contender USA and South Korea. The Chinese tech giant Huawei has concentrated all the information around itself, be it negative or positive, regarding the development of 5G, Huawei claim itself private company having opaque and contested structure of ownership with its apparent linkages of Chinese military and intelligence. Nevertheless, it has a largest research and development budget more than $15billion a year leading in telecoms, electric cars, renewable energy and other fields overlaps the communist party desire to become the world leader in the same. In every aspect Huawei appears to be a serious contender to win the race; it has the highest number of patents to its name with the only equipment provider that provides the end-to-end 5G products and solutions, successfully launched the world's first 5G field trail of low and high band and completed the inter-operability development testing with mainstream chip and network vendors. However, there are other Chinese companies such as ZTE to provide 5G equipment but Huawei has been clearly leading domestically and globally with total 50 commercial 5G contracts that span at least 30 countries and a significant portion of Europe. With being one of the few players that provides mature and cost-effective equipment for 5G system integration, Huawei has shipped more than 150,000 5G base stations worldwide as of June 2019.
United States responded with diplomatic efforts to constrain Chinese expanding influence by invoking international security risk pertaining to the Huawei 5G system exportation which has received considerable public attention, many countries including India have halted the Huawei 5G deployment and some others like UK, France and Canada have blocked Huawei from partaking in the domestic 5G development. It has been two years since United States put Huawei in the ‘Entity list’ that has banned the commercial interaction between Huawei and US companies leaving Chinese companies without semiconductors which have drastically changed the company’s business practices. The biggest problem arises from the ban that Huawei lacked the chip-making know-how which needs to deals with great technological sophistication. Taiwan, South Korea and the US are currently leading in semiconductors manufacturing, Taiwan Semiconductor Manufacturing facilities (TSMC) is the world’s largest and most advanced contract manufacturer upon which the world is dangerously dependent for chip production. It has to be headed with concern that the China appears to be unsuccessful in achieving the national target of making the 70 percent chip for domestic consumption by 2025 which barely struts around 16 percent as per latest report. The dependence of the world on Taiwan chip making capabilities known as ‘Silicon Shield’ mean the world will save Taiwan from Chinese attack however the shield may have holes within as surging demands and the infusing technological nuances to build chip leaving island vulnerable for Chinese invasion which lacks capacity to participate in the $400 billion annual global revenue generator industry of semiconductors.
In addition, the vast gap between the high expectation of the 5G relative to the current maturity of the technologies also contributes in the obstacles to develop 5G. The required investment in the 5G in near term is very high but the future business model that enables it to become profitable for operators remain unclear. Notwithstanding the challenges China still leads the global race to 5G and will be the main competitor to the U.S. the great power competition turns technological cum geopolitical in which USA needs to concentrate on a holistic approach to take down China or to corroborate with Beijing in the international efforts to develop robust 5G infrastructure that will enable more human friendly use of other technologies such as AI, machine learning, Block chain and Internet of Things.
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Pic Courtesy- Mario Caruso at unsplash.com
(The views expressed are those of the author and do not represent views of CESCUBE.)
