from Net Politics and Digital and Cyberspace Policy Program

The Rise of China's Security-Industrial Complex

SenseTime surveillance software identifying details about people and vehicles runs as a demonstration at the company's office in Beijing, China on October 11, 2017. Thomas Peter/Reuters

Echoing former U.S. President Eisenhower's concerns, a new security-industrial complex is emerging in China. Unlike Eisenhower, however, China's leaders are embracing the security companies, who see them as critical to regime survival.

July 17, 2018

SenseTime surveillance software identifying details about people and vehicles runs as a demonstration at the company's office in Beijing, China on October 11, 2017. Thomas Peter/Reuters
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Valentin Weber is a DPhil candidate in cybersecurity and a research affiliate with the Centre for Technology and Global Affairs at the University of Oxford. You can follow him @weberv_

In 1961, U.S. President Dwight D. Eisenhower coined the term “military-industrial complex” in his farewell address, warning that the combined interests of the military and private sector could undermine democracy and have unchecked influence in policymaking.

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China is witnessing a similar phenomenon at the moment via the emergence of a security-industrial complex, made up of politicians dependent on security-related industries, private security companies, and the Ministry of Public Security. Much like a military-industrial complex in the United States and elsewhere that fuels arms races, the security-industrial complex pushes China’s leaders to increase security spending. The Communist Party is all too happy to oblige given that the extra security keeps it in power, creating a symbiotic relationship between the security industry and Beijing. This new phenomenon has several important implications.

China’s private security industry is crucial in keeping Zhongnanhai’s modern authoritarianism running. The country is already the largest market for security and surveillance equipment. China’s police alone will be spending an extra $30 billion on new gear over the next few years. Thousands of private censors, and multibillion dollar companies, have become a non-negligible force in the security field. They offer smartphone surveillance equipment, facial-recognition technology, deep packet inspection gear, and application filtering, amongst others. One such company, Hisign Technology boasts that it can retrieve information from mobile phones and recover deleted data that could be used in police investigations. 

As the Chinese government relies increasingly on security-enhancing technology to keep a lid on potential dissent, the importance of technology companies providing such equipment will only continue to grow. Some companies have already begun integrating China’s social credit system into their products, making it easier for authorities to determine who poses a security threat.

Chinese officials have shown resolve to impose their views on companies when it comes to enforcing security interests. As the security-industrial complex has grown, so too has Beijing’s efforts to nationalize it and insert itself in company decision-making. Communist Party committees, for example, are common in major technology companies and government-backed venture capital helps support Chinese start-ups.

China’s security-industrial complex is also looking to export its approach to other markets. China has been a major proponent of the concept of “Safe Cities” throughout the developing world. Huawei, the world’s largest telecommunication provider, rolled out the Safe Cities model to Nairobi, Kenya and installed 1800 surveillance cameras as part of the initiative. Although the cameras can help fight crime, they can also be used to monitor activists and protests. Huawei has deployed its systems across 100 cities in approximately thirty countries worldwide. Exports of such technology are being coupled with Chinese government-backed grants that create dependency of the importing country on Chinese-produced gear and incentivize further purchases of such equipment.

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China’s exporting of surveillance goods is a critical component of its “Digital Silk Road.” As the technology analogue to Beijing’s bigger Belt and Road Initiative, the Digital Silk Road aims to increase digital trade between China and others, creating new export markets, sustain China’s growing tech companies, and to promote the adoption of Beidou network, China’s satellite system akin to the United States’ Global Positioning System. All of this is intended to enhance China’s domestic security by maintaining economic growth and project power abroad.

Similar to a military-industrial complex, China’s growing security-industrial complex has its benefits. If the trend continues, China will eventually become the primary supplier of technology-based security products, much like the United States has become the world’s preeminent arms exporter. Unlike the military-industrial complex which Eisenhower warned could undermine U.S. democracy, China’s security-industrial complex has cemented the power of the Communist Party, increasingly concerned with controlling the actions of those it governs.

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