Silicon Valley’s scramble for China
In August 2012, China launched one of its first major “smart city” projects for the remote oil town of Karamay in the autonomous province of Xinjiang. “Information technology is not just about technology. It should be integrated with all aspects of life in our city and make people’s lives more convenient,” said then Karamay Mayor Chen Xinfa. “For Karamay, it’s not the future, but what’s happening now.”
Chen said that bus stations in Karamay, a city with 400,000 residents, were equipped with electronic screens displaying travel information. In homes, ageing residents could push panic button to alert emergency services or relatives. If the social security system recorded an increase in unemployed people, officials would know right away — all thanks to Karamay’s smart city web of 2G, 3G and Wi-Fi networks.
Karamay was an early adopter in a smart city trend that will reshape much of the world, and China remains a leader in the field. According to the British financial services firm Deloitte, there are currently just over 1,000 smart city projects in countries like Brazil, Saudi Arabia and the United Arab Emirates. Around half of them are in China, making the country home to the world’s largest concentration of smart cities.
Those in the smart city industry lionize these projects as the cutting edge of urban planning. A report released last year by subsidiary Deloitte China, titled “Super Smart City: Happier Society with Higher Quality,” celebrates China’s drive to build “super smart cities” which integrate data across services like health care, transport, education and public safety.
“Drones, wearable computing, facial-recognition, and predictive video help law enforcement fight crime and maintain public safety,” the report says. “Agencies pre-empt crimes by tapping into all streams of data including social and crowdsourced data.”
Billed by Deloitte as a virtual utopia, China’s smart cities represent the biggest and most intrusive surveillance architecture ever built by any single nation, according to experts and analysts.
Early smart city projects like Karamay have since blossomed into a computerized police state in Xinjiang, home to the most comprehensive surveillance architecture ever built. Versions of Karamay have spread across Xinjiang to track some 2.5 million residents, targeting the province’s Uyghur Muslim minority.
Persons who are flagged for suspicious activities — such as praying — can be investigated by Chinese intelligence and detained in “re-education” camps. Currently, some one million ethnic Uyghur Muslims have been interned in what has been described by the United Nations as “a massive internment camp that is shrouded in secrecy.”
Western governments have widely condemned the emerging police state in Xinjiang. But Western tech companies, in the name of building smart cities, helped build that police state.
The New Surveillance Paradigm
Western government agencies have recently raised alarm bells about the dangers of exports from Chinese technology companies like Huawei. Last week, President Trump cited national security concerns when he blocked U.S imports from Huawei and another Chinese company, ZTE Corp. The U.S. Commerce Department also stated that Huawei would be forbidden from buying new products like computer chips from American companies.
Huawei has been the primary target of these measures. Last year, the heads of six U.S. intelligence agencies warned U.S. citizens to avoid using Huawei products. In December, Huawei’s chief financial officer Meng Wanzhou was arrested by Canadian authorities at the request of the U.S. government on the grounds of misleading banks about Huawei’s dealings with Iran in breach of U.S. sanctions.
It is true that Huawei helps the Chinese government surveil its own citizens, by helping build smart cities among other things.. But government studies, corporate documents, leaked official reports and public records reveal that China did not invent the paradigm of the smart city by itself. It did so with the help of a number of Western governments and major Silicon Valley companies, including IBM and Microsoft.
The seeds of China’s smart city projects were first planted by IBM in its “Smarter Planet” concept in 2009 when the company engaged with over 200 city mayors across China and established a joint “Eco-City” research lab with Northeastern University in Shenyang City, funded with $41 million from the local government.
The following year, IBM announced a 10-year smart city development strategy for China at a conference in Beijing. Future cities would use mass data collection to tackle issues like transportation, food safety, manufacturing, water resources management, energy and public services. A 2012 IBM investor briefing titled “Smarter Cities” said the company had established 82 IBM branches across China, encompassing research, innovation and software development — including in Xinjiang’s emerging “smart city” of Karamay.
Among the company’s early smart city projects was the installation of its flagship Intelligent Operations Center (IOC) for Smarter Solutions in the city of Zhenjiang in 2012. Although the project focused on the real-time monitoring of traffic, buses and passenger behavior, IBM’s IOC was also designed to integrate data for “security” purposes.
According to an IBM handbook published the same year, the IOC is capable of combining vast quantities of information across city functions including “security agencies” and “other levels of government.” Sources include feeds from “weather, citizens, law enforcement, social welfare, video” that can help run the city more efficiently. The handbook also identifies the potential of Sentiment Analysis, which learns what citizens are saying about city services and policies through social media.
But though smart cities are couched in the language of urban planning and good governance, they contain the seeds of dystopia.
According to Fan Yang, a privacy expert specializing in Chinese smart cities at Deakin University in Victoria, Australia, “Mass surveillance inherently comes along with the smart city campaign, not just in the context of China but also in the global scenario.” Smart cities inherently rely on “citizen’s data collected in real-time from all walks of their life,” she said.
Yang added that while most Chinese citizens are aware of surveillance, they are often “not aware or conscious that their privacy is at risk on their way to work, on their way home, when they order dishes or make purchases on WeChat, or when they borrow public bicycles by scanning QR codes.” What is remarkable about Chinese surveillance is not just that it happens, but the extent to which all levels of behavior are ingested and analyzed. In China, Fang says, “mass surveillance has already gone beyond the monitoring of individuals, but [also] their networks and behaviors.”
IBM’s Dance with Huawei
Karamay was just the first project in a bigger plan to connect cities across Xinjiang. In the first half of 2014, 5,000 4G mobile stations were installed across Xinjiang’s 16 main cities and 63 counties. By the end of that year, a total of 12,000 4G base stations would be built.
By 2016, as smart city infrastructure was expanded across Xinjiang, IBM was still operating in Karamay, and began introducing “cognitive IoT” (Internet of Things) according to the city’s local government website. IBM’s technology was built around the Watson IoT platform, an artificial intelligence (AI) system that can find patterns and relationships across vast amounts of different types of data.
According to a former IBM Watson product manager, the platform’s power lies in its ability to ingest and analyze any form of data, in almost any format, and to search for correlations with other types of data. The platform can process weather data, scientific articles, fleets of vehicles, environmental sensors, or audio-visual feeds and is extraordinarily well-suited for a wide range of surveillance applications.
How exactly the Watson platform was practically applied in Karamay is unclear. IBM declined to respond to questions for this article. But Karamay is home to many Uyghur “re-education” camps, whose inhabitants are often detained by police for wearing Muslim clothing or having long beards. These practices are automated by the city’s extensive surveillance networks — first established under IBM’s “public security” platform, they have evolved into Huawei’s “Safe City” program.
Over the last decade, Huawei has established dozens of Safe City programs across China in cities including Shanghai, Jiangsu, Guangdong and beyond. In May 2018, Huawei continued its work in Xinjiang’s capital, Urumqi, with a new partnership with the Public Security Bureau, establishing an “intelligence security industry” innovation lab. According to a senior Huawei official, the lab would create a cluster of expertise for the region to “unlock a new era of smart policing and help build a safer, smarter society.”
Among the technologies now being applied in Xinjiang is advanced facial recognition designed to search exclusively for Uyghurs based on their appearance, ushering in what the New York Times has called “a new era of automated racism.” Huawei did not respond to questions about whether its work in Urumqi supports the emergence of such technologies.
IBM has a longstanding business relationship with the Chinese company. Huawei’s tremendous growth would have been impossible without significant support from IBM. As early as 2000, IBM signed an agreement with Huawei providing it with unprecedented access to its microelectronics division’s R&D facilities.
And according to Huawei’s founding chief executive Ren Zhengfe in a 2016 interview with China Daily, the Chinese telecoms giant pays IBM more than $100 million every year in management consultancy fees. Like IBM, Huawei did not respond to requests for comment.
Friends in High Places
As part of its anti-Huawei campaign, Washington has painted the company as a dangerous organization with the potential to surveil anyone at the behest of the Chinese government. A closer look reveals that it was foreign companies, and not just IBM, who helped Huawei build its surveillance capabilities within China.
In 2017, Huawei signed agreements for its “Safe City” program for video analytics and facial recognition technologies produced by three companies: Agent Vi, an Israeli firm one of whose investors is the U.S.-based telecoms giant Motorola Solutions; Ipsotek, a British security firm specializing in intelligent video analytics that is accredited by the U.K.’s Home Office; and Xjera Labs, based in Singapore.
In the same year, Huawei also signed a Memorandum of Understanding with Frequentis, an Austrian technology firm specializing in the supply of communications and information systems for government agencies that provide public safety services like air traffic management and emergency services. Frequentis provides its technology to over 140 countries including the U.S., U.K. and across Europe. Its customers include the U.K.’s Ministry of Defense, London’s Metropolitan Police, NASA and the U.S. Navy.
According to national security expert Anders Corr, a former analyst for the U.S. military’s Pacific Command, such partnerships pose serious potential risks.
“Western and allied corporations have a fiduciary responsibility to maximize shareholder value. Expecting these companies to act according to any other ethic is misguided,” said Corr. “This is why we need government to regulate our corporations to protect national security, personal liberties and human rights, including the human rights of Chinese citizens.”
In reality, the opposite has happened. Despite the Trump administration’s frequently stated hostility toward Chinese tech firms, the U.S. government has long encouraged American companies to capitalize on China’s digitalization drive with few qualms, though Trump’s recent anti-Huawei executive order does limit exports to China.
In the summer of 2017, the Department of Commerce published a country guide for U.S. companies who want to invest in China, identifying investment opportunities across Big Data, IoT, AI, cloud computing, and “smart city development.”
Three months later, the Commerce Department partnered with the Chinese government-funded Shanghai Pudong Smart City Research Institute to host the “U.S.-China Smart Cities Forum” in Shanghai.
The British government, which recently approved the supply of equipment from Huawei for a new 5G network, has also tried to capture China’s attention by providing direct funding through its China Prosperity Strategic Program Fund (SPF) for joint smart city projects in both U.K. and Chinese cities. The project introduced British firms “into the Chinese smart city market,” but also sought to leverage research on Chinese smart city practices for implementation at home.
Eyes Wide Open
If Western governments appear ignorant of the potentially authoritarian applications of foreign technology in China, a report on smart cities published by the EUSME Center — an E.U. Commission-funded project based in Beijing — suggests they are in fact happy to play a part in building China’s security state. The Center’s purpose is to help small and medium sized enterprises in Europe prepare to do business in China.
The EUSME smart city report, which is not publicly available, was published in January 2016 and prepared by officials from a group called the China-Britain Business Council, which delivers China business development services for the U.K.’s Department for International Trade and works closely with the British Foreign Office.
The document acknowledges that smart city opportunities include innovations around “public safety” and “public security.” The report also points out the goal of integrating data collection across any city is to provide “population management” that supports “intelligent city security systems,” for a range of stakeholder agencies including “policemen.”
Made in China? Or the USA?
Silicon Valley giants like IBM and Microsoft have not been transparent about their role in helping build China’s smart city surveillance paradigm. As a result, the mechanisms and any safeguards on how technology and data is shared by private firms, central and municipal governments remain unknown.
“The seemingly innocuous partnerships between Western companies like IBM and Microsoft and certain oppressive regimes are most concerning,” said Privacy International’s Eva Blum-Dumontet. “Under the pretense of building smart cities or facilitating the flow of information for government services, some of the companies can effectively play a part in human rights abuses.”
But China is just the beginning. In coming years, the smart city is set to become the dominant paradigm of urban government. “Most smart cities built in the Far East have unfortunately become smart cities of surveillance, tracking your every move,” said Dr Anne Cavoukian, former Information Commissioner of Ontario, Canada, and Member of the International Council of Smart Cities
Huawei’s official literature on the “Safe City” program claims to have exported the model to over 230 cities around the world.
Among the early adopters of Huawei’s safe city solutions have been countries with a history of authoritarianism and internal violence, including Russia, Pakistan, Laos, Angola, Armenia, Azerbaijan, Tajikistan, Ukraine, Uzbekistan, Kyrgyzstan, and Kazakhstan. In Serbia, Huawei was contracted for public safety in the capital of Belgrade, where its facial recognition cameras systems have been heavily criticized by digital rights watchdog the Share Foundation for violating citizen privacy laws.
“It is now hard to tell whether it is the Western city paradigm that has more impact on China’s smart city design or vice versa,” said Fan Yang.
By 2025, the global smart city market will be worth $2.5 trillion dollars. Dominated by Chinese companies like Huawei, it is a market which no serious Western technology firm and few governments want to be excluded from.
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