Should We Give Up Our Digital Sovereignty to China or the US?

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or centuries, national sovereignty has been the main foundation of the current Westphalian international system. Yet, the emergence of new technologies such as artificial intelligence (AI) and 5G brought with them a new industrial revolution. This, therefore, translates into novel challenges for the current international system and, above all, the concept of national sovereignty itself.

The third industrial revolution (3IR), known also as the digital revolution, in conjunction with the third wave of globalization, brought into existence a global digital ecosystem dominated by Western norms and values. As interconnectedness started to dominate the state of international affairs, the concept of national sovereignty began to some extent to be undermined. A new domain was brought to the concept of sovereignty: digital sovereignty.

Digital sovereignty refers mainly to a nation’s right and ability to control its own digital data and destiny. In the third industrial revolution, the system was dominated exclusively by the West, with most nations having no other choice than trusting and acting in accordance with the West’s norms and values. For this reason, there were not many discussions in terms of the rise of the importance of digital sovereignty.

Yet, the same does not stand true for the current industrial revolution as China has emerged as an alternative to the Western dominance of technology. Specifically, China, which has been deprived of the advantages of the previous industrial revolutions, is on its way to become a global leader in technologies such as AI or 5G. The emergence of another power besides the West has brought a fragmentation or decoupling to the digital ecosystem which, in turn, has led to the rise of digital sovereignty.

Caught in the rivalry between the U.S. and China, most states have started to focus more on their digital sovereignty for two main reasons: First, states are primarily afraid of losing access to essential digital components, such as the case of semiconductors. The second reason, mainly in relation to 5G, is the lack of control over the data of citizens and the international flow of this data. The rise of digital sovereignty is best understood within the framework of the 5G race between the U.S. and China, and, at the same time, the responses of other states to this race.

The 5G race

5G provides users with faster download speeds, lower latency, higher connectivity, and bandwidth. Indeed, not only will 5G be critical for faster internet access, smart city applications, and autonomous vehicles, but it will also expand mobile communications from the human-centric ecosystem to the Internet of Things (IoT), the metaverse, etc. Simply put, 5G is considered the “central nervous system of the 21^st century economy.” In this line of thought, the combination of 5G with other technologies such as AI or IoT, makes it possible for these technologies to reach their full potential with both economic and strategic benefits.

Data is crucial for 5G to work and currently we are living in a world where data is power. Having control over the 5G core network gives the responsible company/state a great advantage over others and, as a result, 5G has taken a front place in the ongoing great power competition between the U.S. and China.

While no American company has the capability to fully construct a complete 5G network, Chinese Huawei does have this ability and is currently dominating the market. Specifically, Huawei has been a global leader in 5G core solutions since 2019, and at the same time, it has been leading the 5G patents technology. Besides Huawei, only Ericsson (Sweden) and Nokia (Finland) have the capability of building complete 5G networks, but at much higher costs.

Despite not providing a clear alternative to Huawei, the U.S. has viewed the Chinese company as a threat not only to its national security, but also to its position within the international system. Following mainly a reactive approach towards Chinese policies, the U.S. has been trying to hinder the Huawei/Chinese rise in the sector.

The 5G race between the U.S. and China intensified during the Trump administration while the Biden administration has followed in the same line. The United States’ main rationale is the risk of espionage by Huawei, considering that the company is legally bound to serve the national interests of China. While such an assessment is not accepted by Huawei, several investigations have shown that it may have, or, at least has the capacity, to eavesdrop on calls.

Generally, the U.S. has founded its discourse on the dichotomy of Western liberaltarianism, freedom, and innovation vs. Chinese authoritarianism, surveillance, and control. By using this dichotomy, it has not only restricted the operations of the Chinese companies Huawei and ZTE in the U.S., but has forced its allies – especially European states – to choose between Huawei and itself.

Some U.S. allies, such as the Netherlands, the UK, Canada, and Australia, have positively responded to the American call to stop cooperation or remove the Chinese company from their 5G networks. Yet, even though U.S. policies have limited Huawei’s operations, they have not stopped Huawei from extending its sphere of influence. Currently, the number of states that are already using or are likely to use Huawei’s networks is much higher than those that have either banned, restricted, or are unlikely to use Huawei in their 5G infrastructure.

This can be explained mainly by the fact that the U.S. has not been able to provide an alternative to Huawei. Primarily as a result of the Chinese government’s supportive policies, Huawei dominates the market as the cheapest available option.

Towards a new order in the digital ecosystem

The Western dominance of the digital ecosystem has come to an end. A rising China with the ability to leapfrog the U.S. in many technological and digital areas is posing a direct threat not only to the norms and values of the digital ecosystem, but also to its structure.

The question that arises naturally is whether the current bipolar/multipolar international system will also be manifested in the digital ecosystem. The fact that the U.S. is forcing most states to choose a side makes the creation of two digital camps and powers competing for digital influence inevitable. For this reason, a bipolar digital ecosystem seems to be the most probable scenario. Furthermore, the United States’ reactive and containment policy towards China will push the latter to further its innovations and develop itself in areas where it is currently lacking or lagging.

In a bipolar digital ecosystem, other states will have to choose a side by focusing primarily on their digital sovereignty. As a matter of fact, the risks with 5G networks are always present, regardless of the provider. Specifically, the provider of the 5G network to another state will have the capability and strategic advantage to shut down the network completely at its own discretion, and to control IoT devices (i.e., autonomous cars, drones, etc.) and even to turn them into weapons.

So, the question is not whether a state will have to choose between Western or Chinese norms, as presented by the U.S., but to whom a state is willing to give up its digital sovereignty. As a state becomes reliant on another state, it must accept both the advantages and disadvantages of doing so.