In 1996, when only a few hundred thousand people were online in China, the government issued a historic edict.
At the time, few people noticed Beijing’s move to bar unfiltered access to the global Internet.
But this was the origin of the so-called “Great Firewall” – a separate Chinese Internet which over the years has become increasingly different from its more free-wheeling, and often problematic, western alternative.
Since then, China has pumped billions of dollars into building up, rigidly enforcing and censoring its version of the web – which is now used every day by close to one billion of the world’s estimated 4.5 billion Internet users.
It is a very different place – where the country’s government exerts far greater control and where citizens, broadly speaking, struggle to access information the state does not wish them to see.
Nearly a quarter of a century later, as tensions between the US and China have intensified in recent months over trade and Covid-19, there is mounting evidence that it is not just the Internet which is splitting in two.
Across a range of different spheres – from the semiconductors embedded in all of the world’s smartphones to the AI on which governments and businesses increasingly rely, from the satellites orbiting the earth providing communications and surveillance, the global technology industry is splintering.
Put simply, two distinct technological worlds are taking shape – one dominated by the US and the other by China. It’s a trend that seems certain to grow.
“If we didn’t have an internet that worked globally, it would be a nightmare,” says Dame Wendy Hall, chair of the Ada Lovelace Institute, a research body focusing on data and artificial intelligence. “We cannot afford to let those universal technical standards go.”
But a splintering has long been on the cards.
Even with sites like Facebook and Google banned today, China has developed its own thriving internet economy for retailers, payment apps and games.
But its efforts to reinforce its firewall are not the only ambitions to secure independence in the tech space. Far from it.
Two years ago, President Xi Jinping outlined ambitions for independence, and to rewrite the rules for the world’s internet usage – turning China into a “cyber superpower”. The plans included new technical standards and governance for the internet, all of which would offer more centralised power to China’s net.
China has been investing in technologies such as 5G and artificial intelligence, throwing state money at research and development to take on the US in next generation innovations.
In 2017, China spent $496bn (£395bn) on research and development, just shy of America’s $549bn, according to the National Science Board.
It also received more patent grants than US institutions for the first time, securing 58,990 international patents compared to the US’s 57,840, according to the World International Patent Office.
In 2015, it unveiled its 10 year strategy, known as the “Made In China 2025”, which aimed to encourage China to assert its technical independence.
Increasingly, its firms are creating rival products and services to those pioneered in the US. Domestically, such initiatives are viewed as key to accelerating its economy from relying on low-skill manufacturing, mining and agriculture into a high-tech economy that could boost GDP and wages.
“There has been a huge human benefit to opening up China, lifting people out of poverty while being good for consumers,” says Matthew Lesh, head of research at the Adam Smith Institute, “but there are elements to balance.”
China hawks are cynical. The nation’s ambitions, they argue, are to reinforce its techno-authoritarian state that has seen censorship and human rights abuses, such as those in Xinjiang province against Uighur muslims.
“Their state strategy is ‘unrestricted warfare’,” says Matthew Henderson of the Henry Jackson Society. “They are interested in anything AI related, robotics, unmanned devices, weaponised drones, quantum and supercomputing and anything to do with high-end communications.”
Another concern is if Chinese officials use its Belt and Road initiative (BRI), an international infrastructure spending plan, to lock governments in developing nations to their technological standards. This could create a “split digital ecosystem worldwide”, Dr Nicol Turner Lee, a researcher at Washington think tank Brookings Institute warned in her latest research.
While such efforts may affect technologies of the future, right now consumer devices are the focus. The US has repeatedly accused China of stealing technology, and under President Trump, Washington is on the offensive.
This has involved blacklisting firms, such as Huawei, the telecoms and smartphone giant, and putting pressure on allies to drop them as partners. The US has barred Huawei’s 5G technology, despite the UK and several European countries allowing the Chinese telecommunications giant to continue to work on their telecoms networks.
Last year, it reinforced its rules to prevent blacklisted firms from using US-origin intellectual property, enforcing a split between US technology firms and the Chinese companies they have supplied for years.
The most obvious impact is in the smartphone sector. Google can no longer work with China’s Huawei to license its Android operating system (the most widely used in the world). This has led Huawei to rapidly develop its own rival operating system, HarmonyOS.
In December, Beijing ordered all government offices to remove foreign computer equipment and software within three years, potentially impacting HP, Dell and Microsoft. Analysts calculate that American technology companies take $150bn a year in revenue from China.
The nuts and bolts
Among the most contentious technologies in the struggle between China and the US are semiconductors. The nuts and bolts keeping crucial gadgets and telecoms gear online are at risk of being divided into two camps.
The Made in China 2025 plan lays out its goal of becoming not only a consumer for its electronics assembly plants, but a manufacturer of advanced semiconductors.
The aim is to boost its self-sufficiency in the high-tech space to 70pc by 2049. The plans have seen it raise $100bn for its domestic semiconductor industry.
State-backed investors also control 51pc of Arm China, a spin-off from the Cambridge company that builds the semiconductor IP behind billions of smartphones.
China has also moved “red chip” silicon maker SMIC, a Chinese rival to TSMC, to delist from the New York Stock Exchange and relocate to a new bourse – Shanghai’s STAR market.
But China’s semiconductor ambitions remain under threat. It is still many years from realising its own rival patents, according to sector sources.
America’s latest round of sanctions also bar foreign firms from supplying Huawei, such as Taiwan’s TSMC, the largest foundry for smartphone chips.
China is also on the verge of disconnecting itself from GPS. The satellite navigation system, while used almost universally, is run by the US Air Force, making it a strategic challenge for a rival like China.
China is in the process of launching its own rival Beidou network, which aims to create a standalone rival to GPS.
At a cost of $10bn, the network aims to keep its armed forces secure with their own satellite navigation systems around the globe.
And its technology gathering has also helped fuel more powerful weaponry to rival that of the US. China’s advanced military tech has already made its way into missile defence systems deployed in the South China Sea, says Henderson of the Henry Jackson society. “They don’t have to fire a shot because they are now masters of that technology.”
A tech Cold War?
Whether China will be successful in its plan to create bespoke hardware and software is up for debate. It takes more than just money to build innovative, patent-worthy products. As Dr Lee says: “these huge investments are not automatically translating into immediate success for Chinese companies”.
One area that could see the dramatic implications of this splintering in the immediate future is coronavirus.
With the West and China both working on vaccines, any efforts to limit access to these pharmaceutical advances could further strain tensions. There are those that say rather than appeasing China, the US should not flinch at making it harder for China to realise its technological goals.
“We need to recognise and behave as if there is an evolving type of Cold War split and countries need to be treated as extensions of the larger framework,” Christopher Balding, a professor at Fulbright University in Vietnam and a critic of China, wrote earlier this month.
Others firmly disagree “The worst thing that could happen is for two major players in this world of technology to be at odds with each other,” Dame Hall says. “Allowing technology to become a pawn in an economic war would be detrimental”.
China’s position, however, has been resolute. In an op-ed last month in the state-backed China Daily, editors issued a warning: “The US attempts to crush Huawei have severely poisoned the political atmosphere and are threatening to not only upend the global telecommunications sector, but also raise fears of an upcoming China-US tech war, as part of the broader new Cold War that Washington is trying to wage.”
Leading US companies, it said, should “expect to be in the firing line”.
Additional reporting Sophia Yan, in Beijing