GIS Dossier: 5G geopolitics

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May 19 2021


	China Mobile workers do maintenance on a telecommunications tower in Anhui Province. China is a leader in 5G mobile infrastructure equipment and services (source: Getty Images)
	GIS Dossiers aim to give our subscribers a quick overview of key topics, regions or conflicts based on a selection of our experts’ reports since 2011. This survey reviews our analysis of the geopolitical implications of fifth generation mobile technologies. Internet speeds over a hundred times faster than today’s. Appliances, buildings and vehicles all communicating with each other seamlessly. A world transformed by mobile digital integration. This is the world that 5G – the fifth generation of mobile wireless technology – promises. The innovation it brings about could revolutionize entire economies. But as with any breakthrough, the opportunities come along with a host of dangers. Security breaches could sabotage states and businesses, and lead to new, deeper invasions of privacy. Whoever has the upper hand in influencing and controlling 5G will have tremendous geopolitical sway.

Connection speeds on 5G are already far faster than other technology, and they will rise rapidly in the coming years (source: macpixxel for GIS)

That’s why 5G has become the focus of so much maneuvering among global powers, especially the United States and China. As the world gears up for its introduction and the global rivals jockey for dominance, GIS experts have examined various facets of the race to determine how 5G will be implemented and used.

5G and cyber insecurity

Greater reliance on 5G networks will equate to greater cyber insecurity, warned GIS expert Diane Katz in a May 2019 report. The U.S. and its allies are deeply concerned that this heightened vulnerability is coinciding with the peaking of China’s command of wireless technology, both as a manufacturer of electronics and as an aggressive (and subsidized) financier of 5G deployment across Eurasia, she wrote.

The prominence of China’s technology, through companies like Huawei, which makes both telephones and much of the 5G infrastructure, poses a dilemma for countries as they roll out their networks. Chinese firms are legally compelled to work with the country’s intelligence services. In fact, Huawei was founded by Ren Zhengfei, a former officer of the Chinese People’s Liberation Army. According to NATO, “the fear remains that adopting 5G technology from Huawei would introduce a reliance on equipment which can be controlled by the Chinese intelligence services and the military.”

Chinese companies can offer their services for much cheaper than Western firms

But since the Chinese companies are subsidized by the state, they can offer their equipment and services for much cheaper than Western firms. That’s an attractive advantage for small and cash-strapped governments.

Under President Donald Trump, the U.S. tried to discourage allies from using Huawei equipment. “If a country adopts [Chinese technology] and puts it in some of their critical information systems, we won’t be able to share information with them, we won’t be able to work alongside them,” said Secretary of State Mike Pompeo at the time.

Nevertheless, warned Ms. Katz, the EU was still wavering in its decision on whether to allow Chinese 5G technology. “The lure of lower-cost deployment and other investment appears to be trumping security,” she wrote. Since then, however, several EU nations, including Germany recently, have enacted laws barring the use of technology from “untrustworthy” suppliers.

Some have argued that the U.S. and other Western governments should subsidize their own 5G technology providers to compete. But, Ms. Katz wrote, “there is no way for the U.S. to out-China China.”

Chinese smartphone and telecommunications equipment maker Huawei’s revenue was increasing in almost every region until last year (source: macpixxel for GIS)


	Chinese smartphone and telecommunications equipment maker Huawei’s revenue was increasing in almost every region until last year (source: macpixxel for GIS)
	“The best the U.S. can hope for is to counter the security threat with superior security and/or an alternative to the current 5G cell technology,” she concluded. “Therein lies its comparative strength and its best hope for a more secure future.” Who’s winning the race? In an update six months later, Ms. Katz pointed out that the U.S. was ahead of China in 5G commercialization and applications. She said that characterizations in the media that the U.S. is lagging behind in the technology rollout were “erroneous.” “The installation of cells, antennas and optical fiber that will constitute the 5G network is a mammoth task that will take a decade or more in developed countries and trillions of dollars to complete. It is more of a slog than a race,” she wrote. Once the final rollout is achieved, however, the benefits will be enormous – and the advantages do not necessarily come with who launches the services first, but from the technological leaps that spring from “the ‘intelligent’ systems and immersive activities that will harness 5G’s blazing download and upload speeds, its unparalleled capacity, and ultra-low latency.”
	Fudging the numbers The Information Technology and Innovation Foundation, a Washington, D.C.-based think tank, recently released a report called “The Great 5G Race: Is China Really Beating the United States?” In it, the organization explains how China manipulates its 5G numbers to make it look like it is ahead, when in fact the race is very close. It makes several key points, among them: China’s reporting of 5G “package subscribers” should not be conflated to mean the number of 5G users. Not every 5G subscriber has a 5G-capable device, nor does every 5G subscriber actually have access to a 5G network China’s mobile operators tend to count base stations, whereas U.S. operators report physical sites. Usually, there are multiple base stations for each cell site or tower, so it’s important not to conflate these numbers A larger 5G network does not guarantee superior network performance. All else being equal, China will need roughly 4.5 times as many cell sites as the United States to support its substantially larger population Adjusted by the size of population served, the U.S. and China have a similar deployment pace. In 2019, the U.S. companies built 1 cell site for every 7,134 people; China was projected to build about 1 site for every 6,965 people by the end of 2020
	Such innovation – in software and other areas – is the U.S.’s strategic edge, she wrote, pointing out that the country has lagged in the deployment of previous generations of wireless networks, but ultimately excelled in applications of new technologies. But China outpaces the world in the regulatory realm, including spectrum allocation and infrastructure siting, by virtue of its centralized, authoritarian government. Those benefits, however, also undermine innovation. “The ultimate winners,” she concluded, “will be nations that unleash innovation and investment from the government’s grip, and that trust free enterprise and individual liberty to create life-enhancing technologies.” Microchip factor Another factor putting the U.S. ahead in the development of 5G is its lead in semiconductor (microchip) manufacturing. In a March 2021 report, GIS expert Dr. Junhua Zhang explained that China is well behind in its semiconductor technology. “Local chip manufacturers in mainland China produced a total of only $8.3 billion worth of chips in 2020, accounting for only 5.9 percent of the Chinese market and only 2.1 percent of the global market share.” Taiwan is the global leader, but there are several leading U.S. firms that design and produce microchips as well.

5G will have an enormous impact in terms of security and innovation, but also in terms of economics, as these figures show (source: macpixxel for GIS)

The U.S. also has the lion’s share of the world’s best scientists and continues to attract the best minds. In basic research, the U.S. is well ahead, Dr. Zhang wrote. Though China is ahead in artificial intelligence (AI), America’s overall technological superiority gives it a decisive advantage in the 5G rollout.

Europe’s dilemma

All this puts Europe in a tricky position. By April 2020, GIS expert Dr. Frank Umbach wrote that European countries were beginning to take the dangers of working with Chinese firms seriously. Officials at Britain’s National Cyber Security Centre (NCSC) warned that Chinese state actors “have carried out and will continue to carry out cyberattacks against the UK and [its] interests.” In a 2019 report, it confirmed that the Chinese company has made “no material progress” in addressing “major defects” and significant security concerns already being raised the previous year.

The tide was turning against Chinese firms in Germany as well. At the end of 2019, the U.S. government reportedly gave the German Foreign Ministry proof of Huawei’s collaboration with Chinese security agencies. Earlier, the German Foreign Intelligence Service (BND) had warned against including Huawei in the 5G rollout. Even the Federation of German Industries was against the company’s participation if no sufficient security guarantees can be provided, he wrote.

Restricting Huawei’s participation could be extremely costly

In France, that country’s largest telecom, Orange, opted for Nokia and Ericsson instead of Huawei for the deployment of its 5G network.

But not cooperating with Huawei comes with its own drawbacks, since much of the 5G infrastructure will be built on that which already exists. “Restricting Huawei’s participation would require dismantling some of the company’s technology, which could be extremely costly,” wrote Dr. Umbach.

At the time, several European countries were moving full steam ahead with Huawei technology. By the end of February 2020, the company had already won 47 commercial 5G contracts in Europe and had become the world’s largest 5G network provider.

What Europe really needs, argued Dr. Umbach, are cybersecurity investments that could mitigate the threats presented by the disparate approaches taken by countries across the continent. However, as long as cybersecurity investments are considered a liability rather than a competitive advantage, the security of the European Union’s critical infrastructure is unlikely to improve.

According to Dr. Umbach, the most likely scenario would see most EU member states not banning Huawei altogether, but instead trying to restrict its involvement to periphery networks.

Italy’s risky business

Among European countries, Italy has been particularly eager to work with China. In January 2020, GIS expert Walter Lohman examined this risky relationship and explained that Huawei was already “deeply embedded” in Italy’s telecommunications network.”

Officially, Rome had taken the stance that it was unconvinced of any threat that Huawei posed to its national security. However, it did adopt a legal framework for vetting high-tech investments, giving the government the right to veto foreign investments in critical infrastructure if it judges them to jeopardize national security. Italy’s parliamentary intelligence oversight committee also released a report warning against the inclusion of Chinese companies in the buildout of 5G.

All concerned are trying to create legal frameworks that can safely accommodate Huawei’s participation

Nevertheless, Mr. Lohman warned that the new law could prove insufficient if business determines moving forward is worth the risk. “All concerned are trying to create legal frameworks that can safely accommodate Huawei’s participation, or at least, not explicitly rule it out,” he wrote.

The GIS expert expressed confidence that Rome would coordinate with the EU and NATO so as not to move too far ahead of them. Yet consumer and commercial interest is intense, he explained. If Huawei were to become part of Italy’s 5G network outside of coordination with allies, it could provoke a crisis in relations with the U.S.

Divided internet

In a June 2020 report, GIS Guest Expert Klon Kitchen wrote that the U.S.-China 5G battle portends a divided internet. Both countries will use 5G to advance their geopolitical goals, he argued, saying that the competition over 5G “will determine who shapes the fundamentals of the new economic order.”

Washington and Beijing see 5G as a way to promote their competing models of governance: for the U.S., free-market capitalism that advances economic and political progress around the world; for China, state-run capitalism combined with authoritarianism facilitated by technology. Both intend to export their respective models to like-minded nations.

Energy implications

One crucial factor about 5G that does not get much attention is the effect it will have on energy usage. In his report on energy megatrends for 2021, GIS expert Dr. Frank Umbach writes: “The worldwide introduction of 5G could dramatically increase network electricity needs, like with the 3G and 4G deployments. This could even double the energy consumption of communication service providers.”

“The outcome of the 5G race will set the conditions for other equally consequential technology struggles between the U.S. and China – such as robotics, autonomous vehicles and advanced manufacturing,” wrote Mr. Kitchen. “Washington and Beijing know this and are competing accordingly. The outcome of this competition, however, is far from clear.”

The most likely scenario, Mr. Kitchen says, is that global wireless networks, and therefore the internet itself, could fracture into competing spheres of influence.

In much the same way that the world was divided into competing spheres of influence between the West and the Soviet Union during the Cold War, the world’s networks may soon be divided between a Western and Chinese internet – each with its own norms, rules and infrastructure. China, Russia and others are already building regional internets in the name of cybersecurity. There is little the U.S. can do to prevent these efforts from maturing.

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