from Net Politics and Digital and Cyberspace Policy Program

Reviewing a Multipolar Tech World in 2019: China, United States, and EU-Japan

European Commission President Jean-Claude Juncker and Japan's Prime Minister Shinzo Abe attend the conference Communication Connecting Europe and Asia, in Brussels, Belgium September 27, 2019. REUTERS/Francois Lenoir

While multilateral efforts to establish standards governing emerging technologies have attracted publicity, the reality is that countries continue to pursue their own technological initiatives globally. The United States, European Union (EU), Japan, and China are doing so according to their own competitive advantages. Other countries need to observe these trends closely to understand the forces shaping global technology governance.

November 14, 2019

European Commission President Jean-Claude Juncker and Japan's Prime Minister Shinzo Abe attend the conference Communication Connecting Europe and Asia, in Brussels, Belgium September 27, 2019. REUTERS/Francois Lenoir
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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

Chan Jia Hao is Research Analyst at the National University of Singapore’s Institute of South Asian Studies.

The views expressed in this article are solely those of the author and do not reflect the perspectives of the National University of Singapore.

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In January 2019 at the World Economic Forum in Davos, leaders, including those from China and Japan, called for regulation of the global technology sector. On the sidelines of Davos, over seventy WTO member-countries gathered to kick-start negotiations on e-commerce trade rules. A G-20 Global Smart Cities Alliance on Technology Governance was also formed in June to establish universal norms for the implementation of smart city technologies. Despite their publicity, these multilateral efforts appear to be making sluggish progress in setting standards for emerging technologies. The reality is that countries continue to pursue their own technological initiatives globally. The United States, European Union (EU), Japan, and China are doing so according to their own competitive advantages.

The United States remains active in expanding its technological reach. In 2018, under its Free and Open Indo-Pacific Strategy, the Donald J. Trump administration contributed an initial $25 million to The Digital Connectivity and Cybersecurity Partnership (DCCP) to help improve its Indo-Pacific partner countries’ digital connectivity and boost U.S. technological exports; Market data suggests that despite perceived close competition between the United States and China in the technology sector, the domestic industry values of U.S. IT hardware, services, and software industries in 2018 were at least five times the size of China’s. The DCCP is accompanied by a series of institutional efforts targeted at the Association of Southeast Asian Nations (ASEAN), such as the U.S.-ASEAN Cyber Policy Dialogue and the U.S.-ASEAN Connect’s Digital Economy Series. While they are government initiated, they aim to incentivize the U.S. private sector to share its technological best practices with these emerging foreign markets—some of which continue to be at risk due to their lack of data protection frameworks. Hence, for the United States, the export of technology, risk management, and best practices requires the involvement of the private sector.

The EU and Japan represent another set of international players keen on boosting their exchange of technological products, services, and capabilities under the latest EU-Japan Economic Partnership Agreement (EPA). In 2015, the ICT sectors of the EU and Japan provided 4 and 9 percent of their GDP, respectively. On the surface, the EPA is about eliminating tariffs between the EU and Japan. However, as early as 2015, both sides were already pioneering a project, known as The International Digital Cooperation on ICT standardisation (InDiCo), aimed at coordinating standards and policies in areas including Internet of Things, cybersecurity, and automated mobility. Both sides also agreed to cooperate in technical standards—such as towards a global spectrum harmonization of the 26-28 gigahertz bands to enhance international roaming and interoperability for 5G telecommunication networks. Under the latest EPA, the EU and Japan also agreed on several concrete digital trade policies, such as not obliging companies to reveal their source code and ensuring levy-free electronic transmissions between both sides—which by broad definition include digitized products and services like e-books, films, and software.

Perhaps most important, Japan has closely aligned itself with the EU’s standards on data protection, prompting the European Commission to endorse Japan as offering equivalent data protection as the EU. As a result, both implemented an agreed Framework for Mutual and Smooth Transfer of Personal Data in January 2019, which allows personal data to flow freely between them.

In comparison to the United States, EU, and Japan, the Digital Silk Road, China’s effort to expand its technological influence and increase digital connectivity, is more grounded on hardware and investment than institutional frameworks, like data privacy and best practices. To date, over six thousand Chinese internet enterprises and ten thousand technological products have spread across overseas markets. Broadly, they include Chinese enterprise-led 5G telecommunication and fiber-optic infrastructures, BeiDou satellite services, smart city projects, and data centers across Asia, Africa, and Europe. But, not all Chinese tech firms enter new markets by establishing themselves abroad. For instance, rather than directly competing with Grab, the leading ride-hailing service in Southeast Asia, Tencent and Didichuxing invested in it.    

More on:

Digital Policy

China

European Union

United States

Technology and Innovation

As we can see, there are already multiple countries that are shaping the global technological landscape. Some use institutional frameworks to push for data protection, while others prioritize boosting private sector participation and investment. Countries need to observe these trends closely to understand the forces shaping global technology governance.

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