‚If China is the Question, What is the Answer?‘ – Jeremy Fleming

INTRO

Good afternoon, thank you Shashank, and thank you, Malcolm, for the kind introduction. And to RUSI for inviting me to give this year’s Annual Security Lecture.

You don’t need to be Director GCHQ to recognise that we’re living through an incredibly difficult period. It’s one where the threats we face as a nation are changing rapidly – probably at the fastest of anytime in my 30 years in the intelligence world. It’s one where we are constantly re-thinking what we mean when we say ‘national security’ and what that means for our work.

The result is that, sadly, I’m spoiled for choice when I think about where to focus this Lecture. The way in which different forms of extremism are coming to the fore. The changes we have all felt living through the pandemic. The realisation that resilience is now a completely different concept. The rise of cyber-crime. President Putin’s unprovoked war in Ukraine. The role of non-state actors in conflicts around the World. The so-called ‘grey zone’.

And I could go on.

But today, I want to focus on what I believe is the national security issue that will define our future. The James Webb telescope view, as opposed to binoculars.

PROBLEM

So, I am asking, ‘If China is the question, then what is the answer?’

Everyone in this room understands that China has become – once again – a strong nation. One that is investing in education, developing its industries, growing modern digital and technical capabilities, building a capable Military… In fact, a nation that is evolving into a superpower on its own terms.

As it is for every nation, technological innovation is key to China’s growth. And that’s because it’s so central to how we communicate, how we trade, how we work and live.

It’s also integral to intelligence, to military power, to cyber operations, to health security, to resilience and of course to economic growth. And as such, a provider of strategic advantage to those able to harness its potential.

China understands all that. It’s deliberately and patiently set out to gain strategic advantage by shaping the world’s technology ecosystems.

So, we need to ask ourselves: are we happy with that?

At this point, I think it’s important I’m clear that we have no issue with the nation of China rising up to meet its potential. And we certainly have no issue with the people of China and the Chinese community who contribute hugely to life here in the UK.

The UK wants to compete and to collaborate with a strong China.

But It’s how that strength is used – or misused – by the Chinese Communist Party that’s at the heart of the issues we face.

So, we must also be clear that when it comes to technology, the politically motivated actions of the Chinese state is an increasingly urgent problem we have to acknowledge and address. That’s because it’s changing the definition of national security into a much broader concept. Technology has become not just an area for opportunity, for competition and for collaboration, it’s become a battleground for control, values and influence.

Of course, first and foremost this is about science and engineering. But ultimately, it’s about our way of life.

We and our like-minded allies see technology as a way to enable greater freedoms, greater prosperity, greater global collaboration. And yes, fair competition. But the Chinese leadership’s approach is to also see it as a tool to gain advantage through control: of their markets, of those in their sphere of influence and of course of their own citizens.

In an increasingly complex and interconnected world, we see this as a major risk to our future security and prosperity.

Without the collective action of like-minded allies, the divergent values of the Chinese state will be exported through technology.

Without mindful choices today, we will sleepwalk into a future where technology limits our tomorrow instead of helping to release it.

You don’t need the power of my metaphorical telescope or GCHQ’s covert intelligence to see this happening, or to know that’s a problem.

UKRAINE

Many of you will have heard me speak about cyber power. It was an attempt to provide a framework to explain how in the cyber age, nations gain geopolitical and economic advantage.

We said this comes from their defence of their digital homeland, from their ability to contest and compete in cyber space, and from the shaping of the digital rules of the road based on the rule of law and democratic values.
And all of these elements are underpinned by the technology ecosystem I’ve just touched on.

And if we were to pause briefly on Ukraine, we can see this framework in action.

Ukraine’s resistance to the illegal Russian invasion is a result of their national unity. But that resistance also depends on their access to, and mastery of, advanced technology. The alliances and trust that enable that supply. And, of course, impressive and agile cyber security.

That’s a government-to-government thing. But it’s reinforced by incredible and deep support from the private sector, especially, from the big technology companies.

We’re very proud of the role the UK has played in Ukraine’s defence: that’s over a decade of UK and allied investment in cyber technologies and advanced equipment, together with a willingness to share intelligence to drive operations. It’s enhancing Ukraine’s security in real time. And it’s redefining how cyber can be responsibly used.

So, far from the inevitable Russian military victory that their propaganda machine spouted, it’s clear that Ukraine’s courageous action on the battlefield and in cyberspace is turning the tide.
Having failed in two major military strategies already, Putin’s plan has hit the courageous reality of Ukrainian defence.

With little effective internal challenge, Putin’s decision-making has proved flawed. Yesterday’s attacks in Kiev are another example. It’s a high stakes strategy that is leading to strategic errors in judgement. Their gains are being reversed. The costs to Russia – in people and equipment – are staggering. We know – and Russian military commanders on the ground know – that their supplies and munitions are running out.

Russia’s forces are exhausted. The use of prisoners as reinforcements, and now the mobilisation of tens of thousands of inexperienced conscripts, speaks of a really desperate situation.

And the Russian people have started to understand that too. They’re seeing just how badly Putin has misjudged the situation. They’re fleeing the draft, realising they can no longer travel. They know their access to modern technologies and external influences will be drastically restricted. And they are feeling the extent of the dreadful human cost of his war of choice.

TECH AND NATIONAL SECURITY

Wars are always partly decided by the application of technology. And one of the most important legacies of WWII was that our predecessors realised the power that comes from staying ahead in the technology race. Of embracing global markets, global R&D, and global standards.

The prosperity that followed fuelled collective security. Amazing new technologies, especially those that led to leaps in global connectivity and computer science, underpinned incredible gains in living standards. I’d argue they also played a large part in enhancing the great Alliances of our age – those that formed the basis of what we know as the rules-based order.

And they showed that technology, security, economics and statecraft are entangled and mutually dependent.

China benefitted from these developments too. Their economic growth has been stellar since the country opened up in the 1970s. Millions of people have lifted themselves out of poverty.

That has been accompanied by equal growth in its science and technology. China has led the way in patent filings for the past decade. In 2019 the country accounted for 43% of the world’s total patent applications. 11% of the UK’s research output now includes Chinese authors.

With that financial and scientific muscle came an understanding from the Chinese leadership that if all arms of the state could be harnessed to accelerate this further, it would help sustain these incredible levels of growth required to maintain China’s development. And it could also be used to strengthen their military reach. To coerce those with a different World-view. And of course to maintain their control at home.

And we see that approach is playing out in the Chinese armed forces, their large and well-funded intelligence agencies, and increasingly in the way the Chinese state is projecting its interests beyond its immediate borders.

Much of this is very public; declared strategies like the BRI – The Belt and Road Initiative – and the SRI – Scientific Relations and Initiatives.

But much is also undeclared: using debt leverage, obfuscated investments in critical industries, old fashioned spying to steal intellectual property and garner influence. Ken McCallum and Chris Wray talked about this in their joint speech earlier this year – and we’re all seeing plenty of activity from the Chinese Intelligence Agencies.

Taken together, overt and covert, we must conclude that Beijing is using all of the levers to challenge the international post-war consensus on economics and technology. And that it intends to rewrite the rules of international security, both close to home and further afield, in ways frankly that none of us have ever faced before.

CHINA ‘PARADOX’

There is an obvious paradox at play here. The Chinese leadership believes it draws its strength, its authority, from the closed, one-party system. They seek to secure their advantage through scale and through control. This means they see opportunities to control the Chinese people rather than looking for ways to support and unleash the potential of their citizens’. They see nations as either potential adversaries or potential client states, to be threatened, bribed or coerced.

The Party has bet their future on this approach, shutting off the many alternative futures for the Chinese people in the process. They hope that future success, based on this system, will be inevitable.

But underlying that belief, and here’s the paradox, is a sense of fear. Fear of its own citizens, of freedom of speech, free trade, open tech standards and alliances – the whole open, democratic order and the international rules-based system. It’s therefore, no surprise that while the Chinese nation has worked to build an advanced economy, the Party has used its resources to implement draconian national security laws, a surveillance culture, and an increasingly aggressive military.

And we’re seeing that fear play out through the manipulation of the tech ecosystems which underpin our everyday lives – from monitoring its own citizens and restricting free speech to influencing financial systems and new domains.

I think that’s the wrong choice if you’re serious about investing and building world-leading science and technology solutions. And I know it’s the wrong choice if you’re serious about unleashing the potential of your people.

CITIZENS

This plays out in the intelligence World too. Many of you will remember the debates we had in the UK almost a decade ago around the intelligence agencies’ license to operate. They centred on the need for greater transparency and they led to the passing of new legislation, debates about the use of bulk data, stronger safeguards for individual privacy, and deeper thinking about ethics. We welcomed all of that debate.

In Beijing, I believe that the leadership took away very different lessons from that time.

I think they saw the potential of cyber to seize an advantage over their competitors, or to clamp down on consent. They recognised the needed to bend international flows of data around the Indo-Pacific region towards interception platforms inside China. They sought to steal data from deep within the critical infrastructure of countries across the world, especially those selling raw materials to Beijing, hosting allied military bases, or with industries competing with those owned by the Party elite.

In China of course there was no open debate on this new global surveillance system. Indeed, its targets were as much its own citizens as other nations. They saw an opportunity to bolster the “Great Firewall” to restrict free speech and to throttle the growth of Western tech firms by slowing or blocking their services. Today, that surveillance system appears ever more established, and we think it’s dangerous.

STANDARDS

Now much of this is playing out beyond China’s own borders and in the way they are seeking to subvert global security standards in a bid for more control. To see what’s at stake here, you only need to look at the ‘New IP’ standards that China put to the International Telecommunications Union (ITU) in 2018. Now this appeared to come from Chinese industry, the hand of the Chinese State is very clear: major Chinese tech companies are rarely allowed to move in this space without direction from the Party.

New IP’s proponents portray it as a revolutionary system that will prepare the internet for the future. But we can see it would fundamentally change some of the principles which underpin the internet. It would reduce interoperability and therefore increase the fragmentation of systems. And it would cause a move away from the multistakeholder model, towards greater government control and tracking with all that implies for human rights.

Thankfully, this proposal has not taken root in the ITU. The UK had a role in this. But it won’t be the end of the story – we can see many other proposals in other standards bodies. Together with our allies, we need to remain alert to make sure these ideas don’t take root elsewhere.

DIGITAL CURRENCIES

Control is also a major driver for Beijing as it seeks to build a centralised, digital currency. Yes, it introduces efficiencies and new ways of settling payments. But the way it’s being implemented allows the monitoring of citizens and it forces companies to use the service. It might, in future, also enable China to partially evade the sorts of international sanctions currently being applied to Putin’s regime in Russia. Be in no doubt, the Chinese Communist Party is learning the lessons from that conflict.

SPACE

And we’re even seeing how that fear and desire for control affects new domains like space. China’s development of the BeiDou satellite system – a rival alternative to the established GPS network – is moving quickly, it’s providing navigation to aircraft, submarines, missiles and commercial services. The Party has used every lever to force Chinese citizens and businesses to adopt it – and for it to be built into Chinese exports to more than 120 countries now around the world.

On its own, this might just feel like sharp-elbowed competition. But if we price in the motivations I’ve been describing, you can see it’s part of a concerted strategy. Many also believe that China is building a powerful anti-satellite capability, with a doctrine of denying other nations access to space in the event of a conflict. And there are obvious fears that this technology could be used to track individuals too.

So where does that leave us? Perhaps the Chinese Communist Party is right. Perhaps that is the future of strength in the 21st century.

But I don’t agree. In the longer run, control is no substitute for the advantage that comes from empowered citizens, open societies and standards, secure alliances. Nonetheless, that paradox of great strength combined with fear is driving China into actions that could represent a huge threat to us all.

SOLUTION

I count myself lucky to live in a free democratic society, open for global trade with truly collaborative global partnerships. While the Communist Party in China see weakness in how we choose to live, we know that this is in fact the source of our strength.

I believe that it is by leaning into this difference that we can prosper and find an answer to the question of China.

So, what are our strengths that set us apart?

STRENGTHS

Firstly, we see the value in collaboration. We are a nation of innovators. We invest in science. Host world-leading academic institutions. Encourage and value expertise. And we are not afraid to share any of this with the world.

Secondly, we are a rule-making nation. The UK has deep experience of setting workable, international tech standards, informed by open, democratic values. And we are at the heart of the international and allied efforts to make them stick in a really harsh geopolitical world.

Thirdly, we have strong legislative and policy frameworks which we use to protect technology and markets. Through the National Security and Investment Act and other legislation, government has new powers to intervene in transactions that pose risks to our national security. But it’s not all about protection. We’re also investing in emerging tech start-ups, including through the National Security Strategic Investment Fund, to gain the benefits of innovation and make sure they don’t fall for the promise of alternative, cheap capital.

Fourthly, we have responsible, powerful national institutions with the capabilities and experience to actively take on threats to our national interests.

And that goes for our covert work too. Wherever we act, including in new operational areas like those undertaken by the National Cyber Force, we do so in accordance with international law and our own domestic legislation. It is an ethical, proportionate and legal approach that really does set us apart from our adversaries.

And lastly, we have deep and enduring international partnerships based on mutual interest and shared values.

Where we and other like-minded nations collaborate to enable greater security and prosperity, authoritarian states use each other only when it’s in their own interests to do so.

ACTION

These strengths give us a foundation for action.

From where I sit, I think we need to continue to make deep investments in the next generation of key national security technologies. For example, we know our security and prosperity will depend on mastering Quantum capabilities – systems which are exponentially more powerful than our current digital technologies that push at the edge of known physics.

These are on the horizon and may be closer than we think. Our companies, universities and intelligence agencies cannot afford to be late to that Quantum revolution, or to be relaxed about the extent to which others – especially those perhaps in China, are watching our progress.

We must continue deep engagement with the global market, whilst recognising the risks this brings. The manufacture of advanced semi-conductor chips is an obvious case in point. They enable everything today from our smart phones to the advanced weapons that are being used to defend Ukraine.

Taiwan has patiently invested in their semi-conductor manufacture and it now supplies the world. In the UK, we cannot recreate the scale of their manufacturing capabilities. As a result, events in the Taiwan Straits – any risk to that vital supply chain – have the potential to directly impact the resilience of the UK and global future growth.

That’s just one example of why the UK tilted its national security and defence efforts towards the Indo-Pacific in the 2021 Integrated Review. To be resilient at home, we have to be resilient globally. And that means working closely with Allies.

Of course, some Nations don’t know which way to face. And for them, we must continue to offer a credible alternative so they can retain their sovereignty in technology and their national security.

Many are looking on with concern at China’s actions around the World. For example, in the Solomon Islands they see huge Chinese loans paying for Chinese technology upgrades. They see countries reaching deals with serious strings attached. This may be offers of new technologies, like smart cities, which have the potential to export surveillance and data. Or they might be demands for new bilateral security treaties.

Mortgaging the future by buying into the Chinese vision for technology may be attractive to some in the short term – particularly for those nations suffering the stress of higher energy and food costs resulting from Russian’s invasion of Ukraine. We need to offer alternative solutions that are practical, that are affordable, and that are backed by international funding or market investment. If we don’t, in the longer term, the hidden costs of China’s cheap technology solutions will become very obvious.

In a future crisis, Beijing could exploit information covertly extracted from client economies and governments, or use its monopoly to demand compliance in international fora. To catch a glimpse of that future, one only needs only look at how China has already sought to do just this, leveraging its influence over many smaller nations in votes over technology, ethics and foreign policy.

So, if China is the question, and science and technology is part of the answer, what should we do next?

Our task as a community is to understand the challenge, to know that Chinese tech domination is not inevitable. To take action.

My ask of all of you is to think beyond the illusion of the inevitable. To lean into the strengths we have as a nation to develop ethical approaches and collaborative partnerships. And to recognise that creating an alternative, competitive and compelling offer for technology is an opportunity for the whole of society that we can’t afford to miss.

Across the UK, we need businesses and academia to be alive to the threat I’ve described today and to make choices accordingly. While governments can set the conditions, this isn’t about a single grand plan. I think this is going to play out in your boardrooms, in your labs, in your team meetings. You should be protecting your systems and your IP. You should actively manage the potential threat in your dealings with China. The seemingly small daily choices around cyber, investment, IP protection and more, all matter.

Across the World, our Allies are clear eyed about the threat and together – both at the nation-state level and with the private sector – I know we can offer a credible alternative.

This isn’t a call to exclude or marginalise China – even if we could. It’s a call for a China to recognise that it’s to its advantage to play responsibly inside the global system. If it does so it can help to co-create the rules of tomorrow. But if it chooses not to. To play a disruptive role in international security, technology and markets, then that will come at a cost too.

These are all massive geopolitical issues and choices. And I think their resolution will define our age.

My organisation will contribute within its remit. Especially, to bring together interested parties.

We can see three particular strands of work:

Firstly, understanding the risks and threats posed by Beijing’s tech policies. What are the partnerships, architectures and norms needed to enable the open, democratic national security community?

Secondly, enhancing the collective offer from industry to protect and shape technologies, generate compelling alternatives, and enable the next generation of international standards.

And finally, investing more heavily in the technologies where we must maintain an advantage if we are serious about seizeing the big opportunities for security and growth.

At GCHQ it is our privilege and duty to help the nation navigate the sliding door moments of history. This feels like one of those times. Our future strategic tech advantage rests on what we as a community do next. I’m confident that together we can tilt that in our collective favour.

Thank you.

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Source and Image: https://www.gchq.gov.uk/speech/rusi-asl