Above page content

    Site map  Cookie policy


Clash of politics and tech means a Splinternet is coming

The internet has an asymmetric threat to open societies such as the UK. Countries such as China, Russia and Iran censor content already so have some protection from external political interference.

The internet has an asymmetric threat to open societies such as the UK, as countries such as China, Russia and Iran censor content already so have some protection from external political interference.
Garry white employee

Garry White

in Features


Huawei could soon be allowed to do business with US companies again, according to leaks ahead of the current trade talks between the US and China. Don’t be fooled – we have been here before only to be disappointed. This appears to be, as usual, a sop to the markets as any trade progress is likely to be no more than pedestrian.

Last week, we have seen further evidence that the fractures in the global order are increasing – and that they are being driven by technology. Not only has Donald Trump banned several Chinese artificial intelligence (AI) companies from doing business with US companies, but the European Union (EU) has issued a warning about cyberattacks from state-backed companies that have equipment in the bloc’s 5G networks.

Chinese state media has attacked Apple for providing a map that has assisted protesters in Hong Kong, forcing it to withdraw the application. And it now looks unlikely that pre-season basketball games for the Brooklyn Nets and Los Angeles Lakers in China will go ahead because of controversy surrounding a tweet sent by Houston Rockets general manager Daryl Morey showing support for anti-government protesters in Hong Kong. The Splinternet – a division of the internet between East and West – is now looking more likely than ever.    

Superpower clash

The issue is not only about a clash of value systems between authoritarian and democratic states, it is a race for global dominance. The US does not want China to get ahead in technological terms, particularly when the country has “stolen” a lot of the intellectual property from Western companies.

China has by far the most ambitious AI programme in the world. Beijing plans to achieve global dominance in AI by 2030 and it is having some success for distasteful reasons. It has been developing technology as part of its oppression of its Uighur Muslim population and start-ups in the country have built algorithms that the government uses to track individuals. This includes sophisticated facial recognition technology and is the first known example of a government intentionally using AI for racial profiling.     

The US Commerce Department has put 28 Chinese public security bureaus and companies on a US trade blacklist over the treatment of Uighur Muslims. Being placed on the Entity List means that these organisations must apply for additional licenses in order to purchase products from US suppliers. But approval is difficult to obtain, which essentially means they are blocked from doing business with American companies.

The decision is already impacting US businesses. Goldman Sachs said it will review its involvement in the planned stock market listing of Chinese AI group Megvii. The company is best known for its facial recognition algorithms and is reportedly seeking a valuation of up to $1bn (£800m).

Democracy at risk

There are many other issues that are driving this split. The global nature of the web allows clandestine espionage activity that could undermine democratic nations. In 2010, when Hillary Clinton was US Secretary of State, she called the internet a “new nervous system for the planet.” She claimed the open internet could help open-up closed societies and support “peace and security.” In fact, the US intelligence community concluded that Russia used the open internet against her in the 2016 election – and it appears to be preparing to take similar actions next year.

A recent report from cyber-security group Check Point indicates that preparations are already being made. “It is unequivocally clear to us that the Russians invested a significant amount of money and effort in the first half of this year to build large-scale espionage capabilities,” the study warned. “Given the timing, the unique operational security design, and sheer volume of resource investment seen, Check Point believes we may see such an attack carried out near the 2020 US elections.” As technology and influencer techniques gets more sophisticated, democracies will need to continue to protect themselves from such interference. This implies that barriers will need to be raised by democracies as they fight this information war.

The internet has an asymmetric threat to more open societies such as the UK and US, as countries such as China, Russia and Iran censor content already so have a layer of protection from external political interference. Should we see significant attempts to influence the 2020 US election – which seems inevitable – action in the West will become more urgent.

5G and spying

The EU has recognised this threat. This week it issued a report on cybersecurity risks to next-generation 5G mobile networks. It warned of increased cyberattacks by state-backed entities and groups from outside the EU. “In this context of increased exposure to attacks facilitated by suppliers, the risk profile of individual suppliers will become particularly important, including the likelihood of the supplier being subject to interference from a non-EU country,” it said. It did not mention China or Huawei, but it is clear that’s what it meant.

So, despite the optimistic statements leaked by China and the US ahead of the Washington discussions, technology will continue to be problematic. The clash of value systems and security concerns means the slow fracturing of the internet is likely to continue until a true Splinternet results. This will provide both opportunities and threats for business. But the clash of technology and politics means the world will become less open. This is deglobalisation in action.    

A version of this article appeared in Friday’s Daily Telegraph.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

Get in touch

Find out more

Our focus on clients has endured since the foundation of Charles Stanley in 1792 and has helped make us one of the UK's leading wealth management firms. Your interests give shape to everything we do.

Please call us to talk about your circumstances or complete the enquiry form.

020 3797 1783

Make an enquiry

If you have some questions we'd be happy to help.

Get in touch

Stay updated

Subscribe to our weekly email newsletter.

Subscribe here

Local Office

Your local office

Your local Charles Stanley office can help advise you on a wide range of investment management services.

Select an office


Newsletter banner signup