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Chinese Smart Cities US government report topAround the world, countries, and cities chasing improved resource allocation, increased efficiency, enhanced public safety, and sustainable growth are turning to a range of networked technologies to help manage everything from government services to traffic patterns. The collective term for these technology solutions has become “smart cities,” first coined in the 1990s but re-introduced with its current meaning by IBM in 2008. Smart cities can refer to an entire urban ecosystem employing smart cities principles or to the constituent technologies and applications that make up that ecosystem. While there is no standard list of “smart cities” technologies and applications, at its core, the term signifies the use of digital technology to collect and share data about municipal operations that had been previously unavailable or disaggregated, allowing for improved municipal management and services. Successful development and deployment of smart cities technologies are likely to have major social and economic impacts as massive amounts of data are collected and used to improve efficiency in daily life and optimize or automate previously burdensome or inefficient governance tasks.

China has become a global leader in smart cities initiatives, combining embedded sensors, metering devices, cameras, and other monitoring technologies with big data processing and artificial intelligence (AI) analysis to help manage its cities and public spaces. Its leadership has signaled the importance of smart cities development, elevating it to a national strategy, and poured government resources to further its growth. China reportedly has nearly 800 smart cities pilot programs underway or in planning, which would be more than half of the total smart cities worldwide. As China’s state-run news service Xinhua recently editorialized, China believes it will win “the global race toward building an intelligent and data-driven society.”

While improving municipal infrastructure is ostensibly benign, the pace, scale, and application of China’s smart cities development pose new and substantive challenges to U.S. interests at home and abroad. U.S. support for global smart cities development is tied to broader foreign policy initiatives to bolster support for a values-led system and offer an alternative to authoritarian development models. While the United States is itself a world leader in developing smart cities technologies, its sustained position is by no means guaranteed, particularly given how aggressively and successfully China has advanced in these areas.

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Moreover, how countries use the data that smart cities platforms collect is a concern. Technologies that, by definition, capture and synthesize massive amounts of real-world, real-time data on people’s daily lives can easily be deployed in a manner that threatens personal privacy or even national security. This is a concern for the United States and other countries considering the risks of including Chinese technologies in their critical infrastructure. China is actively promoting its smart cities solutions abroad via the Belt and Road Initiative’s technology engagement policies, making a thorough understanding of these potential risks, especially promptly.

Open research question of China Smart Cities

  • It focuses on the Chinese government’s policies to promote smart cities and China’s progress in implementing smart cities and key enabling technologies, particularly concerning mass surveillance.
  • The report describes China’s efforts to promote its smart cities technologies abroad and the potential impact of this promotion.
  • The report compares the state of smart cities development in China and the United States, identifies potential risks to and vulnerabilities in U.S. critical infrastructure stemming from Chinese products, and describes the implications of China’s smart cities development for U.S. national security and global security competitiveness.

The research for this report relied on Chinese and English language sources, including government announcements, academic papers, news items, and industry reports.

Chinese Smart Cities Policies

Smart cities are part of a decades-long pattern of Chinese government programs that seek to digitize and “informative” cities to improve China’s comprehensive national power and internal strength.

The central government’s top-down approach to smart cities pilot programs and shift away from city-led initiatives has led to the centralization of decision-making and the decentralization of implementation. This has resulted in a nonlinear and unpredictable development trajectory for smart Chinese cities that allows for course correction and experimentation.

Chinese smart cities policies have begun to merge and standardize after initial experimentation and bureaucratic overlap.

Chinese Smart Cities Development Trends

The development of Chinese smart cities technology is primarily top-down, driven by government investment, and generally aligns with regional development patterns—with the bulk of projects located in China’s more economically developed eastern seaboard.

Estimates of the size of the smart cities solutions market in China vary widely. Their reliability is somewhat unclear; Chinese consulting firms bullishly pegged the market at RMB 7.9 trillion ($1.1 trillion)1 in 2018 and projected a 33 percent compound annual growth rate between 2018 and 2022.

Chinese municipal authorities charged with smart cities development commonly cite transportation, public services, public safety, education, healthcare, and environmental protection as focus areas for Chinese smart cities projects.

While there are numerous noted examples of the successful deployment of smart cities solutions in China, many challenges still exist, including long-term program sustainability, insufficient information-sharing mechanisms between governing authorities, and an absence of accurate information about actual progress in smart city development funding and implementation. Together, these deficiencies hinder a more widespread embrace of smart cities across the country.

Chinese Surveillance

Chinese government officials embrace smart cities technologies—especially the Internet of Things (IoT), mobile internet, cloud computing, and big data—to expand, improve, and automate information collection and analysis for mass surveillance.

Much of the implementation of this “smart surveillance” occurs at the local level, although local surveillance programs are increasingly tapping into national-level information and network resources.

Massive local implementation of smart cities surveillance has created difficulties in upgrading surveillance equipment and fostered a low degree of standardization and integration for systems deployed in different regions and localities in China.

Even as China embraces smart cities technologies to surveil its people, it uses volunteers to monitor the general population’s actions and augment smart city surveillance. This practice of “mass defense, mass rule” is a continuation of historical Chinese Communist Party (CCP) surveillance efforts that stands to benefit greatly from the increased use of smart cities technologies.

China’s current mass surveillance efforts and the industry that supports them are some of the largest and most prolific globally, but China’s future ambitions for domestic mass surveillance likely dwarf the size and scope of its current extensive surveillance state. The CCP intends to deploy 626 million video cameras by 2020, widening the adoption of artificial intelligence and functionally nonexistent civil rights protections to lay the groundwork for a digital panopticon.

Chinese Promotion of Smart Cities Technologies Abroad

Chinese technology companies have been successful in promoting and installing smart cities technologies around the world. Analysts identified 398 reported instances of 34 different Chinese firms exporting smart cities technologies through involvement in smart cities development projects in 106 countries.

The Belt and Road Initiative (BRI), China’s signature foreign policy, highlights smart cities as a “strategic opportunity” for Chinese firms to expand abroad. While these plans do not include specifics about future expansion likely, smart city promotion as part of the Belt and Road Initiative will continue to be an international priority with backing from the highest levels of the Chinese government.

In developing nations, smart cities projects focused on installing surveillance technologies and network infrastructure have been notable successes of Chinese national champions like Huawei, often with the financial backing of state-owned banks like the Export-Import Bank of China.

Chinese firms see more developed countries as valuable sources of technology and expertise and markets for Chinese technology, frequently developing partnerships and establishing joint laboratories in these countries. These partnerships are used to promote Chinese technology standards, expand access to advanced technology, and improve international perceptions of Chinese firms.

Though clear information on data sharing arrangements between Chinese technology firms and local governments abroad could not be found, expanding access to global data sets to include these firms gives them a market advantage and may aid Chinese intelligence collection efforts.

Through all of these avenues, the growth of Chinese smart cities exports presents a serious economic and security challenge to the United States.

Smart Cities in the Context of U.S.-China Relations

The United States government has adopted a bottom-up approach to smart city development that stands in contrast to China’s top-down model, taking a “convening” rather than a leading role and encouraging localized implementation, with a policy focus on security and privacy as “first-order design principles.”

The United States has tied its promotion of smart cities abroad to larger policy initiatives under the Indo-Pacific strategy that emphasize a values-led system as an alternative to authoritarian development models (namely, China’s BRI).

Challenges in capturing and categorizing data make comparisons of U.S. and Chinese smart cities technologies difficult. Still, evidence suggests that Chinese hardware is broadly on par with U.S. products, while Chinese software lags behind U.S. offerings.

What makes U.S. smart cities policies lasting and sustainable in the long run—the bottom-up approach that leverages local skills and advantages—also makes these communities vulnerable to compromised technologies in city infrastructure and systems, Chinese or otherwise, as the focus has historically been more on local priorities and needs than a unified, national approach to privacy and security.

While the U.S. government has taken steps to secure ICT systems and supply chains, Chinese smart cities products are still in use across the United States, despite known vulnerabilities and suspected potential for compromise through PRC legal mandates requiring Chinese firms to share information with their government.

Full report: HERE

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