Political Economy

China’s Plan to Take Over the Global Economy

January 13, 2021

David P. Goldman

Washington Fellow

The following is a lightly edited extract from David P. Goldman’s new book, You Will Be Assimilated: China’s Plan to Sino-Form the World.

Let’s invent a genre-bending script for a new James Bond movie, with a sci-fi angle. A global corporation turns all the world’s smartphones into data collectors in every aspect of human existence. It starts with a health-care app that tests toddlers for congenital eye disease and uploads the data to the Cloud, and soon adds remote testing for blood chemistry, metabolism, and lung function. It adds an environmental app that listens to bird calls to check the stability of avian populations. It allows you to pay for any sort of purchase with a tap of your phone, and transmits every purchase record to the Cloud in real time. It analyzes retail payments and business supply chains, urban traffic patterns, social-media posts, stock-market movements, currency fluctuations, crop yields — every detail of everyday life. This gigantic global brain maintains a profile of every country in the world, with broadband coverage, download speeds, cost of service, physical infrastructure, and smartphone penetration. It plans to assimilate most of the whole world’s seven billion people into its web.

This deluge of data is transmitted to servers through broadband connections at hundreds of times today’s speeds, and analyzed by a gigantic array of high-speed servers designed to detect the significance of minuscule patterns in the data. The global corporation provides the smartphones, the apps, the sensors, the broadband, the servers, and the artificial-intelligence software to mine the data. It links its servers to industrial robots that learn to create their own assembly lines, to shipping terminals, to air-freight fleets that move goods, and to millions of driverless cars and trucks that ferry workers and goods to jobs, stores, and factories. The broadband networks track the location, spending habits, and online posts of every person on the planet, and high-definition cameras installed at hundred-yard intervals verify that the smartphone under surveillance is being carried by its registered owner. Billions of medical records are matched to billions of genetic profiles, while computers use machine learning to identify genetic flaws and invent new pharmaceuticals.

Do you think we could sell it to Hollywood? The movie moguls would advise us not to quit our day jobs. There’s no James Bond villain to boo at — just a vast, persistent, patient, and relentless intelligence that absorbs the people of the world into a network too incredible for moviegoers to imagine.

But we’re not talking about science fiction. Everything I described in our film script is happening now, or scheduled to happen within the next ten or 20 years. China has a plan to assimilate most of the world’s population into a virtual empire dominated by its telecommunications, computation, manufacturing, and logistics. You can read all about it on Huawei’s English-language website, and hear it streamed in the main presentations at Huawei’s Connect 2019 mega-conference in Shanghai. There are no secrets here. China is proud of what it has accomplished at home and what it proposes to accomplish globally.

5G Broadband Changes Everything

5G broadband is the key — the key that unlocks hundreds of doors in the world of 21st-century technology.

U.S. officials warn that Huawei might steal Western data on behalf of China’s intelligence services. That really is beside the point. Spy agencies always exaggerate the importance of secrets; after all, they trade in secrets, and they are as eager to talk up the value of their merchandise as anyone else. Whether Huawei has the capacity to steal data or not is a secondary issue. It plans to persuade the world to give up its data for free, the way Tom Sawyer persuaded his friends to whitewash his fence.

Take the case of health care, which now composes 10 percent of the GDP of the world’s developed nations and may become the world’s single biggest industry as an aging population requires more medical services. Huawei will provide users with a sensor that plugs into a smartphone and slips over the index finger, taking your oxygen level, heart rate, temperature, and blood pressure. Another smartphone sensor will take an electrocardiogram. You will upload your vital signs and heart status to your smartphone, and from there to the Cloud, along with your digitized health records, family health history, and — before long — a genetic analysis of your DNA to detect a predisposition to stroke or heart attack. Huawei’s artificial-intelligence servers will slice and dice your data and cross-grid your information with hundreds of millions of case histories. Your phone will beep if the risk of heart attack or stroke hits a certain probability, and an optional app will have a car-service driver en route to take you to the nearest emergency room. Huawei expects to have half a billion people linked to its Cloud servers within ten years. Why wouldn’t you offer up your data? Of course, you will have helped Huawei create a database for medical research that will force every medical research organization in the world to conduct its experiments on Huawei servers.

China’s medical application of information technology had a test of fire in early 2020, when the coronavirus epidemic burst out of Hubei province and threatened to engulf the country. According to Chinese business executives familiar with the exercise, the Chinese government and information-technology companies matched locational data for hundreds of millions of smartphones to the results of mass testing for infection, in what appears to be the largest artificial-intelligence application on record. Chinese government algorithms can estimate the probability that a given neighborhood, or even an individual, has exposure to COVID-19 by correlating the location of smartphones to known locations of infected individuals or groups. The authorities use this information to deploy limited medical resources more efficiently by, for example, directing tests for the virus to high-risk subjects identified by the artificial-intelligence algorithm.

During the past several years, the Chinese government has combined smartphone locational data with facial recognition, making it easy to verify that the person carrying the phone is the registered user. China also uses electronic records of medicine purchases to identify sick individuals who may have attempted to flee quarantine.

Tencent’s WeChat messaging app allows users to take their temperature and other vital signs and send them to the Cloud in real time. Chinese citizens in quarantine were required to use a smartphone app to monitor their medical condition. An algorithm determines when the user is healthy enough to leave isolation and creates a “healthy status” page that users must display to gain entry to public buildings and shopping malls. South Korea employed smartphone apps to warn users when they were in proximity to a possible source of infection, but the Korean system is not as comprehensive, nor as intrusive.

Big Data will transform medical diagnostics, pharmacology, preventive care, and emergency treatment. It has already transformed public health.

Popular culture gives a poor idea of what artificial intelligence entails. No one is going to build robots that think like humans and make their inventors fall in love with them, except perhaps for the geeks who live in their mothers’ basements and have conversations with Siri. AI is a giant data mill that allows computers to distinguish between a random mark on a chest X-ray and a tumor, between a harmless variation in blood chemistry and a possible symptom of disease, between a banana peel that goes into the organic bin and a plastic spoon that goes into recycling, and so forth. “Machine learning” doesn’t mean that machines will learn to think like humans. It means, rather, that computers need to compare vast numbers of photographs, recordings, statistics, or other data to “learn” to distinguish one thing from another.

Medical services already compose 18 percent of America’s GDP, compared to 11 percent for manufacturing and 6 percent for housing — and as America’s population ages, health care’s share of the economy will continue to grow. The triad of smartphones, fast broadband, and artificial intelligence will transform medicine in ways we can only begin to imagine.

In principle, China’s virtual empire is just an extension of what Facebook, Google, and Amazon have been doing for years. They don’t steal your data, although you may not be aware of how much personal information you hand over to them every day. You give them your data in exchange for services that make your personal life more convenient and your business life more productive. Facebook provides a communication and news platform gratis. Google gives you internet search, email, browsers, access to millions of books published over the centuries, a library of free apps, as well as a smartphone operating system. In exchange, Google and Facebook get your likes and dislikes, your internet searches, your online purchases, your location, and an array of other data. Their computers crunch all the numbers and determine which advertisements are most likely to trigger a purchase.

That’s huge business. Google’s advertising revenues in the second quarter of 2019 topped $27 billion, while Facebook took in $17 billion. Google’s efforts to apply the same methods to other fields than advertising haven’t worked out as well. American companies spend $200 billion a year on advertising, the bread and butter of Google’s business. But Americans spent almost 20 times as much — $3.65 trillion — on health care in 2018, roughly one-fifth of the entire U.S. economy.

We can barely imagine what could be accomplished with a large database of electronic health records. Think of the way the best doctors diagnose disease. They have treated thousands of patients and read the medical journals, and are alert to slight anomalies in a patient’s CAT scans, blood analysis, or MRIs. Their experience and acuity helps them identity medical conditions that less-experienced practitioners might ignore. With artificial intelligence, computers can sort through diagnostic tests, medical histories, and genetic information to compare an individual patient’s case to billions of other cases. So-called machine learning, which simply means massive trial-and-error analysis of possible predictors of medical problems, can extract patterns from the data faster than any human physician. The humblest triage nurse in a rural medical clinic would have access to diagnostic tools that would astonish television’s Dr. House.

It sounds benign, even beneficial. If the Chinese want to reduce the cost and boost the quality of health care, why not welcome them? There’s a gigantic catch — artificial intelligence is the crown jewel of 21st-century technology; if China dominates AI, it also will dominate all the technologies that spin off from AI.

In a digital world, there are binary outcomes. You’re either Facebook or MySpace, Excel or Lotus 1-2-3, Google or AltaVista. Networks’ effects dictate that there will be only one winner in each field of digital technology. When everybody farmed, it didn’t matter whether your farm was slightly better or worse than your neighbor’s. But when the product is software, your offering is infinitely scalable. That is, the cost of adding an additional user is zero. If you had to do research in an old-fashioned library, you would have to keep adding more books, more card catalogues, and more librarians to accommodate more searches. Not so Google: The internet-search monopoly might have to add the odd server farm to manage the 6 billion searches it performs each day, but that is a drop in the bucket compared with its revenues. Google exploits a network effect: The more people who search Google, the better Google becomes. China kept Google on the far side of the Great Firewall of China. It did so to allow Tencent, Baidu, and other Chinese companies to come up the learning curve without getting stifled in the cradle by American competition.

The Control Point

Paul Scanlan became chief technology officer of Huawei Technologies in 2016. If you look 20 years ahead, I asked him, and if everything goes the way you would like it to go, what do you think the world will look like, and what do you think Huawei will have done to change it?

Paul Scanlan replied, “We’re looking for what’s called the control point.” He explained, “This is what we mean by the control point. We don’t want to do everything ourselves. If you are a pharmaceutical company, you won’t have to duplicate our investment in AI. You simply rent time on the Cloud, using our AI servers, and obtain access to our data. The key is gathering and porting the data to servers where it can be put into usable form. That’s our contribution. We don’t want to control everything. We want partners who are best in class in every field.”

The Machines Become Sentient

The combination of machine learning and 5G will allow robots to talk to each other and work out production processes without the help of human engineers, Paul enthused.

“Let’s take robotics today,” he told me. “5G changes everything. Typically, 5G is spoken about in terms of download speed, but that’s not the most important advantage. For industrial processes, autonomous vehicles, and other applications, the latency — the time it takes for one device to acquire and respond to a signal from another device — is more important. On a factory floor today, Robot A does its instruction, passes the bit to Robot B, and it’s the same thing. Now if we put very low latency inside each of the robots — and they can be robots from different manufacturers — and put them in a room and give them the rules, like “go” or like chess, to enable them to connect in real time — milliseconds, lightning fast — then put a bit of plastic in view and say, I want you to make a plastic cup, the robots will organize themselves much better than we would have thought. You’re going to push the plastic flat, you’re going to extrude it this way, you’re going to finish it that way — that’s the way we think, and that might be the first attempt of the robots. Then afterwards we can talk about cutting down the amount of wastage, or the time it takes to make these things, or other key performance indicators, and they will start to do things differently. What we saw when we did this is collaboration between robots from different manufacturers — ABB, Kawasaki, and others. Connectivity allows you to move from very basic stuff to very sophisticated stuff. This connectivity requires a platform enabled with AI.”

Huawei’s chief partner in robotics is ABB, the world’s largest maker of industrial robots, with more than 400,000 machines installed worldwide.

Sentient industrial robots that design their own production procedures, robo-surgery by remote control, and augmented-reality mining coal may sound like science fiction, but Huawei and its partners — the heavyweights of the medical technology and robotics world — have already built the technology. If we fell into a coma and woke up ten years from now, we wouldn’t recognize some basic industries.

Huawei is building the world’s biggest Cloud computing capacity and racing to design the world’s fastest artificial-intelligence processors. And behind Huawei stands the Chinese government’s massive commitment to supercomputing, and — most ominously — to quantum computing. The conversation with Huawei’s Paul Scanlan was a blast of cold air. Americans are busy with the valuation of competing providers of streaming video, the relative merits of e-commerce platforms at Amazon and Walmart, and the profitability of the 110th smartphone dating app. The Chinese want to transform the way we live. They do the physics, and we do the apps. We are becoming geeks in a new Roman Empire.

* * *

Originally published by National Review Online.