This is a translated and slightly adapted version of an article originally published in Romanian.
Moldova, get ready for 5G! This is what prime-minister Pavel Filip heralded following a meeting with folks from the Chinese tech giant ZTE in late January. In addition to “promoting new technology”, as befits a former communications & IT minister, Filip promised the usual new jobs and some vague “concrete benefits for the general public”. The Chinese would in turn be interested in “the stability and attractivity” created by the government for Moldova’s business environment.
Ironically enough, the next day prime-minister Filip met with the U.S. Ambassador Dereck J. Hogan to talk elections and, among others, the need “to boost cooperation in the fields of information technology and cyber security”. Apparently the prime-minister didn’t know the Americans were considering ZTE and Huawei technology a threat to their security. So what is this Chinese 5G scandal all about, what does it mean for Moldova and what risks it might hold? How about this one for a start: combine the documented appetite of the Moldovan authorities for wiretapping with China’s infamous privacy track record and you’ll get a recipe for abuse.
The US-China 5G Race and cyber security issues
In short, the fifth generation networks, or 5G is a technology under development that promises speeds nearly 100 times faster than the 4G standard currently in use. Other advantages include ultra-low latency (a fancy word for delay), a greater bandwidth (think of it as a massive pipe) and extended battery life. The first time we heard prime-minister Filip speak about 5G was last September, but it were the guys from Orange who planned to field-test the technology in Moldova
Today there are multiple companies developing the technology in parallel and in competition with one another. Unlike our prime-minister, not all the countries have welcomed so readily the prospect of a Chinese-led 5G nationwide field test. The governments of some countries including the United States, New Zealand, Australia, Japan or the United Kingdom, as cautioned by their intelligence communities, have both rejected cooperation and made steps to block the use of Chinese equipment for the future rollout of the 5G networks.
5G is so incredibly fast and versatile that it will run on everything from smartphones and tablets, to self-driving cars to military drones. But its advantages are great news not only for users, but also for cyber trespassers: the larger the bandwidth, the easier it is to spy on someone without being detected. Whoever controls the networks will surely have control over the data flows as well. And one concern of the western nations is that China’s secret services would be enabled by this new system to collect private or confidential information. In other words, not just your layman calls and chats would be vulnerable, but also a government’s secret or strategic communications.
Even in the United States it is common to see battles between the government attempting to gain access to user data under the pretext of preventing terrorism and other public security threats, on one side, and telecom/internet providers on the other trying to refuse said access. In America, such disputes are usually resolved in courts. China however is not exactly your democracy champion, being notorious for its mass surveillance practices rather than for defending (any) people’s rights to privacy and confidentiality.
A recent report by the U.S.-China Economic and Security Commission to Congress has noted that the Chinese government “exerts strong influence over its firms”, meaning providers like ZTE or Huawei wouldn’t mind doing their government a small favor.
Moreover, a law exists in China that essentially turns its every citizen or firm into a potential spy, on China’s soil or anywhere:
“Any organization or individual shall, under the [National Intelligence] Law, support, provide assistance, and cooperate in national intelligence work, and guard the secrecy of any national intelligence work that they are aware of. The state shall protect individuals and organisations that support, cooperate with, and collaborate in national intelligence work”.
In the last few months, the White House has been working on an executive order that would ban the use of Chinese equipment in telecom networks. For now, this would only cover government networks.
We’re wondering if Pavel Filip and Ambassador Hogan broached this subject when discussing cyber security. We already know that the Moldovan authorities don’t mind using a little bit of eavesdropping in excess, and the Chinese furtive technology might be a boon to this effect. However, a partnership with ZTE will also likely have implications for our country’s external orientation. Can Moldova be friends with the United States and at the same time buy from its rival some technology that it regards hostile? Or is this what Pavel Filip and Vlad Plahotniuc meant by their fourth way – one that goes through Beijing?
A brief history of Moldova seeking China’s embrace
It’s true that Moldova sporadically sought stronger economic ties with China long before the Democratic Party monopolized the government. The Communists were considering a billion dollar loan for a period of 15 years right before the IMF agreement was set to expire in April 2009, which wouldn’t be an entirely different situation from what the Democratic government has found itself in after losing EU financing. A week before the July 2009 election, the Communist government already had the contract signed with Beijing. The coalition government that took power after the election decided not to go through with it and preferred another IMF deal instead.
The new prime-minister Vlad Filat didn’t turn his back on the Chinese entirely, though. He signed a four-year cooperation agreement and returned from a Beijing visit with a fairly modest grant, some Huawei equipment and a road rehabilitation loan.
In 2013, it’s time for Vlad Plahotniuc to come into the scene as his Moldovan Association of Business People holds a Moldova-China investment forum. Around that time, the Chinese government gave Moldova a $5 million grant to set up a traffic surveillance system. Indeed, the only complaint that can be put forward about the Chinese and surveillance is that they are too good at it.
A year later, Vlad Plahotniuc travels to China. Around that time, purely by coincidence and totally unrelated to the Democratic leader’s oriental voyage, a Moldovan commercial tribunal outlawed the NGOs Falun Dafa and Falun Gong Moldova for being “extremist”, echoing the accusations of the Chinese government. Later the Constitutional Court found the decision to be in violation of the freedom of assembly and expression, but the Supreme Court never got around to annulling it.
The Falun Dafa case can thus be regarded as a precedent to the de facto extradition of the “terrorist” Turkish teachers in exchange for other oriental gifts, this time from Ankara. Some clear examples of money talking. And whereas the money from the west comes with more or less transparent terms and conditions, the oriental gifts never come burdened with the irritating respect-for-democracy-and-human-rights nonsense and can often carry some hidden, darker costs.
Last year, from March to December, four negotiation rounds took place on a free trade deal with China. A number of experts had difficulty understanding the Ministry of Economy’s enthusiasm. The expected benefits “are not supported by empirical calculation”: “China’s tariff policy is already liberalized for many Moldovan key exports [...] the benefits of the Agreement will likely be insignificant for the Moldovan exporters”.
China’s debt trap for third world economies
This eagerness of the Democratic government to approach China can fit into a broader international pattern. As part of its Belt and Road Initiative, a generous China is splashing out billions to support projects in 78 countries. A Financial Times analysis shows that most of these 78 economies are also among the world’s riskiest. Nations that are too poor or undemocratic to secure financing from the west see in China’s investment and ambitions a life belt. An easy way to develop national infrastructure without spending too much of your own resources and without the constraints of all sorts of principles and values. Eventually though these countries are brought down to earth under the burden of their huge debts.
For example, unable to make the payments on a multi-billion loan taken out to revamp a major port, Sri Lanka had to hand over an 80 percent stake in that same port to a Chinese company. Moreover, the Chinese comrades took the port on a 99-year lease, seizing Sri Lanka’s means of production, so to speak. Djibouti is also about to cough up an important port to China. Pakistan is, too, heavily indebted to its “all-weather friend” China, and was at the end of last year in a desperate search for a $8-10 billion bailout to avoid default. In Europe, Montenegro has found itself in a similar situation because of an ambition to build a major highway. Now Montenegro owes over $800 million to China for a project it can’t afford to finish.
Now guess which country recently initiated talks with China Citic Bank Corporation Limited for a €288 million to build roads. None other than Moldova. Or, more recently, another unspecified loan was discussed to tighten up the belt (way) around Chisinau.
Pavel Filip’s eagerness to accept the Chinese 5G proposition seems to be another confirmation of a worrying trend. The Chinese investment, some trifle amounts really from Beijing’s perspective, could enable a prospective Democratic government to make do without western financing, and without the burden of EU and IMF standards, too.
The risks are plenty, though. The desirable Chinese 5G technology looming at our gate could make our private data even more vulnerable. What’s more, the government communications could be compromised as well. Politically, the Falun Dafa case showed that Chinese money can easily influence political and judicial decisions. Economically, the examples of other not so well-to-do countries which sought China’s support show that Beijing is a stricter lender that won’t have second thoughts about seizing your assets when the time comes.
BT removing Huawei equipment from parts of 4G network, theguardian.com ↩︎
Curtea Supremă de Justiţie din Moldova: Amânări dubioase pe dosarele Falun Dafa, epochtimes-romania.com ↩︎
Curtea Supremă de Justiţie din Moldova: Amânări dubioase pe dosarele Falun Dafa, epochtimes-romania.com ↩︎
REALITATEA ECONOMICĂ Analiza trimestrială a economiei și politicilor
, expert-grup.org ↩︎
China’s Belt and Road projects drive overseas debt fears
, Financial Times ↩︎
Will Djibouti Become Latest Country to Fall Into China’s Debt Trap?, foreignpolicy.com ↩︎
Pakistan: indebted to China, Saudi Arabia, and IMF, lowyinstitute.org ↩︎