- High-tech restrictions
- Great power ‘rivalry’
- Gulf states face risks
Gulf countries risk being dragged into the great power “rivalry” between China and the United States when it comes to advanced technology, forcing them to pick a side.
As high-tech restrictions are rolled out by Beijing and Washington, the days of buying state-of-the-art semiconductors from the US while installing China’s 5G networks might be over, according to industry insiders.
Mohammed Soliman, director for strategic technologies and cybersecurity at the Middle East Institute, says GCC countries have so far managed to strike a balance between exploiting Chinese technology and maintaining strong ties with the US.
“However, the intensifying US-China rivalry will make accessing both tech ecosystems increasingly difficult, impacting supply chains, intellectual property and talent flows,” Soliman warns.
It appears to be already happening. Companies in the Gulf, such as the UAE’s artificial intelligence group G42, have agreed to sever Chinese ties in order to access advanced American chips and AI technology.
Still, there is another side to the argument, illustrated by the powerful telecom industry.
By 2023, Egypt, Turkey, Saudi Arabia, the UAE and 13 other countries in the Middle East had signed up for the Digital Silk Road, part of China’s Belt and Road Initiative.
The aim of the project is to export high-tech infrastructure, according to the latest annual report of the US-China Economic and Security Review Commission.
National security
Chinese telecom group Huawei, which is banned in the US over national security issues, is expanding 5G networks in the six GCC countries, as well as Egypt, Turkey, Iran, Lebanon and Jordan, the bipartisan advisory panel to the US Congress found.
“Chinese technology companies have had market presence in the region for decades and are working to deploy telecommunications equipment and other technology infrastructure across the region in wealthy and underdeveloped countries,” the commission reported.
In November, China Telecom – one of the five largest mobile carriers globally – formally established a Gulf affiliate in Riyadh.
At the launch event, executive director Liu Guiqing said the Chinese company would bring infrastructure and expertise in “5G, cloud computing, artificial intelligence” and other communication services “to Saudi enterprises, institutions, and consumers”.
Huawei and STC Kuwait have also been collaborating since February in the development of 5.5G networks.
Telecom infrastructure
In October, the UAE fixed line operation e&, formerly known as Etisalat, and Chinese telecom group ZTE entered into a preliminary partnership to build infrastructure and develop 5G networks.
ZTE also formed a partnership with Qatar’s Ooredoo in December to establish a 5G Innovation Lab at Dhofar University’s College of Engineering in Oman.
Oredoo had previously linked up with Huawei to help Qatar, Kuwait, Oman, Iraq, Tunisia, Algeria and the Maldives upgrade telecom infrastructure to 5.5G.
But these sort of deals come with conditions, despite “China’s seemingly ‘no-strings-attached’ tech offerings”, according to Alessandro Arduino, an affiliate lecturer at the Lau China Institute of King’s College London.
They include fibre-optic cables, data centres, smart cities and related standard-setting, Arduino says.
“Beijing firmly asserts that Chinese cyberspace is an extension of its national territory, a concept that triggers laws beyond the digital domain and into the realm of national security,” Arduino tells AGBI.
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Last year Joseph Webster and Joze Pelayo at the Atlantic Council in Washington wrote that the growing presence of Chinese telecom companies across the GCC threaten to cover the region with “a surveillance blanket”.
They said that Western countries should offer “credible” alternatives in 5G and beyond. For many US officials, the G42-Microsoft deal provided a template for future tech relationships.
“In a place like UAE … where you had G42 working very closely with Huawei, for example, we have an interest in changing that picture,” White House technology adviser Tarun Chhabra said at the Council on Foreign Relations in Washington in June.