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Threats to U.S. Networks/Section 3A

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​A. China Views the Telecommunications Industry as Critical to National Priorities

The Chinese telecommunications market is the largest in the world, in terms of number of subscribers.[1] Telecommunications services in China are divided into two categories: basic telecommunications services ("BTS") and value-added telecommunications services ("VATS").[2] BTS provide "basic facilities of public networks, public data transmission as well as basic speech communication" and include services like fixed line and mobile calls, internet, international communication facilities, and satellite communications.[3] VATS include the "telecommunication and information services using the basic facilities of public networks" and includes e-mail and online data processing and database storage.[4]

In 2006, the Chinese government's State Council released the National Medium and Long-Term Program for Science and Technology Development, designating development of science and technology as a key Chinese strategic goal.[5] China aimed to become an "innovation-oriented country" by 2020 and a leader in science and technology by 2050.[6] To further this goal, China issued its Made in ​China 2025 ("MIC 2025") plan, which targets ten strategic industries deemed critical to China's economic competitiveness and high-tech growth.[7] According to the U.S. Chamber of Commerce, MIC 2025 "appears to provide preferential access to capital to domestic companies in order to promote their indigenous research and development capabilities, support their ability to acquire technology from abroad, and enhance their overall competitiveness."[8] The U.S. Chamber also found that, in concert with China's state-led development plans, MIC 2025 constitutes a "broader strategy to use state resources to alter and create comparative advantage[s] in these sectors on a global scale."[9]

The telecommunications industry is among those China deemed critical. In MIC 2025, the Chinese government outlines its goal for the information and telecommunications industry to "enter the ranks of powerful countries" by 2020.[10] China also seeks to be the leader in 5G international standards, technology, and industry and to reach 50 percent share of the international market for next generation internet.[11]

  1. ↑ China Telecommunications Market, Int'l Data Corp., https://www.ide.com/getdoc.jsp?containerId=IDC_P39849 ("In addition, in 2018, Chinese mobile subscribers reached 1.57 billion, which is the largest single mobile communication market in the world."); Dr. Daouda Cissé, "Going Global" in Growth Markets—Chinese Investments in Telecommunications in Africa, Stellenbosch Univ. Centre for Chinese Studies (2012).
  2. ↑ See Regulation Concerning Telecommunications of the People's Republic of China, Order of the State Council No. 291. Art. 8 (promulgated Sept. 25, 2000) (English translation), http://www.fdi.gov.cn/1800000121_39_2537_0_7.html.
  3. ↑ Id. at Art. 8, Appendix - Catalogue of Telecommunications Business.
  4. ↑ Id.
  5. ↑ Micah Springut, Stephen Schlaikjer & David Chen, China's Program for Sci. & Tech. Modernization: Implications for American Competitiveness, Centra Tech. Inc. 6, 43 (Jan. 2011), https://www.uscc.gov/sites/default/files/Research/USCC_REPORT_China%27s_Program_forScience_and_Technology_Modernization.pdf (prepared for U.S.-China Econ. & Sec. Review Comm'n).
  6. ↑ James McGregor, U.S. Chamber of Commerce, China's Drive for 'Indigenous Innovation': A Web of Indus. Policies 4, 17 (2010).
  7. ↑ See U.S. Chamber of Commerce, Made in China 2025: Global Ambitions Built on Local Protections 6 (2017).
  8. ↑ Id.
  9. ↑ Id.
  10. ↑ Id. at 65, 69.
  11. ↑ Id. at 66.
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