October 13, 2024

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China Is Winning the Middle East’s Data, Cyber, and Technology Race

China Is Winning the Middle East’s Data, Cyber, and Technology Race

Washington must integrate data, cyber, and technology into the heart of its foreign policy in the Middle East. Currently, the United States is deprioritizing the Middle East as its main theater of interest and refocusing its strategic footprint worldwide on its main ascending rival, China. One of the leading Chinese instruments of geostrategic influence is Beijing’s use of technology and innovation policy, such as Huawei’s hardware and technology education in Chinese universities. Chinese geo-tech influence is virtually unprecedented and aims to position China as a significant player in global geopolitics without the use of traditional military expansionism. Rather, Beijing is building a geo-technological niche through its active 5G diplomacy, technology infrastructure, and education.

This is the driving force for Washington’s campaign against Huawei, ZTE, and the crippling of China’s semiconductor industry. In the Middle East, U.S. partners are stepping up their technology cooperation with China. Under these circumstances, they are not necessarily falling into Beijing’s technology and cyber trap, but there is growing distrust of American technology and Washington’s unreliability as a security guarantor which pushes these nations to pursue cyber-sovereignty-centered policies.

These new policies are focused on building their own domestic cyber and technology capabilities independent of Washington, a trend that poses long-term threats to U.S. national security interests. New geopolitical lines will be drawn around technology networks and the flow of information, whereby historically they were formed geographically. As a result, Washington should develop a cyber and technology doctrine that informs its regional partnerships and alliances while repositioning the United States for strategic leadership in the Middle East. 

The Fight For 5G

Over the last twenty years, Huawei has gone from being a low-cost information and communications technology (ICT) vendor to being a fully-integrated technology partner for many U.S. allies, such as Egypt, Morocco, and the Arabian Gulf states. While Chinese technology and cyber encroachment on U.S. allies have not impacted U.S. bilateral relations with these allied nations yet, the trend should still concern policymakers in Washington because it would ultimately undermine alliances that were built over the last seventy years. 

Fortunately, the Biden administration has a springboard to deter its regional partners from integrating fully with Chinese technology companies. In Europe, the Trump administration pursued an aggressive strategy to dissuade its Western allies from allowing Huawei to build 5G networks in the region. In 2020, Washington launched the Clean Network Initiative (CNI), where many European nations committed to banning Huawei. 

For instance, Israel excluded Huawei from its 5G network; France blocked telecom operators from renewing their licenses for Huawei’s 5G equipment, a de facto ban that would phase Huawei out of France’s 5G networks by 2028. London also banned Huawei from the United Kingdom’s 5G network and will remove existing Huawei equipment by 2027. The Biden administration should build on the CNI and continue to persuade its allies to join the initiative. 

Additionally, Washington has other policy options to dissuade allies from integrating with  Chinese-built 5G networks. The United States should condition military support, intelligence sharing, and development aid for allied nations on excluding Huawei and other Chinese firms from their infrastructure. 

For low- and middle-income countries using a purely cost-benefit analysis—for whom Huawei is an indispensable partner—the United States should consider creating a G7-backed fund to subsidize these nations as they switch their 5G networks from Huawei to a designated list of CNI-approved vendors, such as Samsung, Ericsson, and Nokia. Under the Trump administration, Washington pledged $1 billion dollars to finance Brazilian telecom companies’ purchases of 5G equipment from Huawei’s competitors. While this pledge’s status is in question, it represents a model that could be used elsewhere in coordination with G7 nations. 

Data-Sovereignty is the New Norm

An overlooked trend in the Middle East is the rise of data sovereignty. To prepare for a post-oil future, Saudi Arabia, the UAE, and Egypt—the Arab World’s three biggest economies—have been working hard to implement large-scale digital transformations. In doing so they are actively attracting multinational technology companies, developing high-tech smart cities, and investing in their human capital. 

However, the three governments have also joined a growing global trend of localizing their citizens’ personal data. As the region enacts new legislation addressing the treatment of consumer data, Middle Eastern governments appear to be shunning the U.S. approach to data privacy in favor of the European General Data Protection Regulation (GDPR) model.

In February 2020, Egypt passed the Personal Data Protection Law No. 151, which restricts the transmission of personal data to receivers outside of Egypt unless the Egyptian Data Protection Center grants approval. The UAE likewise implemented the Personal Data Protection Law, another GDPR-style national data law, as part of its National Cybersecurity Strategy. Similarly, in 2022, Saudi Arabia began enacting the core tenets of its Personal Data Protection Law (PDPL), which is set to be fully implemented in 2023, with the goal of addressing the treatment of its citizens’ and residents’ personal data by entities beyond the kingdom’s borders. Whether for commercial, privacy, national security, or intelligence-gathering purposes, data sovereignty is the new norm in the Middle East and worldwide.

While the European Union, China, and Russia have developed their own data frameworks, Washington has failed to reach an agreement on domestic federal data regulations or a consistent strategy for data sovereignty policies enacted by both allies and foes. The United States should abandon the notion that data is “incompatible with existing territorial notions of jurisdiction,” and develop a framework for personal data collection and cloud storage within their respective borders. 

Formulating a well-articulated and easy-to-implement U.S federal approach to data transfer is foundational to Washington’s engagement with U.S. partners in the region. The aim of the U.S. government’s engagement is to establish a bilateral and multilateral data transfer framework with partners and allies in the Middle East. The recent U.S.-EU transatlantic data transfer pact can be a model for cyber relations with its partners in the Middle East, especially with nations that have embraced the data-sovereignty model, such as Saudi Arabia, the UAE, and Egypt.

Diplomats and Tech

There is a clear lack of understanding in Washington of the new Geotech map in the Middle East and the motives behind U.S. allies’ and partners’ quest for data and technology sovereignty. The lack of understanding can be traced to focusing too heavily on the Middle East from a regional studies perspective. Many policy practitioners are not equipped with the technical expertise needed to understand and lead on issues such as data localization and transfer, emerging technologies, artificial intelligence, and 5G/6G networks. 

Many foreign policy leaders have also called for reforming the U.S. State Department in regard to technology and innovation. For instance, Linda Thomas-Greenfield, a former professor and current U.S. ambassador to the UN, and Ambassador William Burns, director of the CIA, made the case that a “chief technology officer should help diplomats grapple with disruptive technologies and leverage private-sector talent.” All U.S. embassies and consulates need a technology officer who looks into the emerging technology trends and their impact on bilateral relations. Without this in place, there will always be a flaw in Washington’s understanding of its allies’ and partners’ strategies and motives in this era of “great tech decoupling.”

Simply put, to counter the Chinese technological hegemony Washington should keep as many of its allies outside of China’s technology networks as possible until the United States can develop the needed framework, incentives, influence, and power to take the lead on the development of 6G and its subsequent information revolution. Washington also needs to recalibrate its bilateral relations with its allies and partners in the Middle East to focus on data transfers similar to the U.S.-EU transatlantic data pact. Centering data and technology within U.S. bilateral relations in the region will answer Washington’s strategic needs despite a technical deficiency in its foreign service. Still, the foreign service must develop the capabilities to understand the global Geotech map and, eventually, the priorities of regional policymakers, especially in an era of great power competition and great decoupling.

Mohammed Soliman is a global strategy advisor and a nonresident scholar at the Middle East Institute. Follow him on Twitter @thisissoliman.

Image: Reuters.

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