Page:2020-06-09 PSI Staff Report - Threats to U.S. Communications Networks.pdf/20

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III. BACKGROUND

This section discusses China's development of and control over its domestic telecommunications industry and carriers. In addition to exercising control over the domestic telecommunications industry, China has encouraged its carriers to expand internationally. During the past two decades, Chinese state-owned telecommunications carriers have established operations across the world, including in the United States. Finally, this section highlights the Chinese government's cyber and economic espionage efforts targeted at the United States and U.S. government officials' warnings about how the Chinese government may use its state-owned telecommunications carriers to further China's national interests.

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

  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).

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