China, US, and India’s cyber space

In India, the months of May and June often witness sizzling heat waves. Educational institutions, judiciary, and even Parliament observe summer vacation or recess during this period. Rich Indians and business leaders organise holidays and business meets in the cooler climes of Europe to beat the heat. Ministers, top government officials, and legislators also look for opportunities to stay out of the country for as long as possible. The less fortunate ones look for a break in the cooler climes of local hill stations. Few business leaders and political heavyweights from western countries and Japan ever come to India during this season. If the summer of 2016, which has already posted record high temperatures, is making an exception for the likes of Apple’s head honcho Tim Cook and Microsoft CEO Satya Nadella to visit the country, it has to be on the most important business call that can’t wait until the winter.

Cook, Nadella and several other global telecom business bigwigs from the United States, trying to check growing Chinese influence on India’s fast enlarging cyberspace, find it imminent to be in India to unveil their business and investment plans before local industry, clients, and the government before it is too late. China had already emerged as the largest investor in Indian cyberspace, last year, as well as this year, flooding the  market with gadgets, parts, software and so-called research outfits. Can the US stay far behind? For US cyberspace leaders, business heat is obviously more compelling than the climatic temperature in India. Satya Nadella, who has already been to India three times since he became Microsoft CEO, will be in Delhi once again on May 30 after the Apple CEO finishes his multiple-city visit that ended with a meeting with Prime Minister Narendra Modi last week. Apple plans to make a “large” investment in India’s manufacturing sector. Also, it will build its first technology development center outside the US in Hyderabad with an investment of $25 million, employing some 4,500 people. Several other US telecom manufacturing and data services firms are expanding their presence in India. Cybermarket leader Google plans to invest US$ 220 million for a new campus in Hyderabad focusing on three areas — Google Education, Google Fibre broadband services, and Street View.

Yet, these US companies are no match for the large investors from China and electronics manufacturers and service providers from Taiwan. For instance, a less known Chinese mobile handset maker, Coolpad Group, has committed US$ 300 million to set up a research and development (R&D) center and its own assembly line in India by 2017. Foxconn has signed a Memorandum of Understanding (MoU) with the Maharashtra government to invest US$ 5 billion over the next three years. The Karnataka government has signed an agreement with the Taiwan Electrical and Electronic Manufacturers Association to create a Taiwanese electronic manufacturing cluster near Bengaluru airport, with an investment of US$ 469.5 million. Almost all top Chinese electronics players, including much-feared security ware makers Huawei and Zte, are in India. Giving a leg up to the Chinese investments in India, even small and medium-sized enterprises (SMEs) are planning to invest $1 billion across states in various sectors, including telecommunications.

Foreign investment in India’s telecom sector has moved rapidly since 2013-14. The speed has further picked up since the Modi government came to power two years ago. It has earned the status of having the world’s second largest telephone network, next only to China. And, now that China has officially detailed its plan to be the global leader in cyberspace by 2020, the competition to capture the Indian market is heating up. China is sitting on a cash pile of over $3.5 trillion, mostly in reserves, that keeps rising with annual foreign trade surpluses. Despite its recent economic slowdown, China is aggressively spending large funds in modernising its military and mastering the cyberspace. It has been deploying funds in developing nations across the globe, including India’s neighbours Pakistan, Sri Lanka, and Nepal, gaining influence for itself and business for its companies.

China’s cyberspace domination programme aims to achieve global leadership in advanced industries like semiconductors and in the next generation of chip-making, robotics, aviation equipment and satellites, the government said in its blueprint for cyberspace development between 2016 and 2020. Its new draft five-year plan also said the country aims to use the internet to bolster a slowing economy and make the country a cyber power. China aims to boost its R&D spending to 2.5 percent of GDP for the five-year period. This policy, called “Internet Plus”, also applies to health care and education.

As technology has come to permeate every layer of Chinese business and society, controlling technology and using it to exert control have become key priorities for the government. China will implement its “cyber power strategy”, the five-year plan said, underscoring the weight Beijing gives to controlling the Internet, both for domestic security and its growing power in the international governance of the web.

China aims to increase Internet control capabilities, set up a network security review system, strengthen cyberspace control and promote a multilateral, democratic and transparent international Internet governance system. Since President Xi Jinping took office in early 2013, the government has increasingly reined in the Internet, seeing the web as a crucial domain for controlling public opinion and eliminating anti-Communist Party sentiment. “China will strengthen the struggle against enemies in online sovereign space and increase control of online public sentiment,” the plan said. It will also “perfect cyber security laws and legislation”. Such laws and regulations have sparked fear amongst foreign businesses operating in China and prompted major powers to express their concern to Beijing over new laws, including one on counterterrorism.

Since the US government is not openly engaged in the control of cyberspace, which is mostly left to its powerful global companies and defence-linked outlets, its policy seems to be less transparent in this regard. However, there is little doubt about technologically weak India’s emergence as a major cyber chessboard for both China and the US to play in the coming years.  

(The views expressed are personal)