KUALA LUMPUR, 15 MAY – Malaysia has been warned to be wary of China’s ‘juicy’ offer in building Malaysia’s second 5G digital telecommunications network.
A leading analyst from University of Malaya, Collins Chong Yew Keat, cautioned the government from being entrapped by a purported better price and packaging offer from China.
“It appears that for commercial reasons, the China offer looks attractive.
“But in reality, it is being used as the ultimate pretext and justification, at the expense of our long-term risk and vulnerability,” said Chong, an analyst on foreign affairs, strategy, security, higher education and strategic management.
His remarks echoed the pressing evidence and concerns raised by the West and arguments from many quarters, for the need to break the monopoly of Digital Nasional Berhad.
Digital and national security risks, Chong said, remained real despite efforts to portray these as efforts by the West to push back against China.
“We ought to send a clear message to China that Malaysia will not be tempted or influenced by the pressure of the RM170 billion investment as a tool in us accepting the Huawei entry.
“The biggest gainer will be China, yet again in this whole debacle,” said Chong.
Malaysia, he added, remained high on China’s radar in the realm of digital economy and derivation of interests to its strategic calculations.
“Beijing’s Belt and Road Initiative is geared to lead Chinese tech heavyweights to invest in Malaysian companies with greater stakes and spin-offs in e-commerce and others, eyeing Malaysia’s fast growing US$21 billion digital economy.
“It is China’s intent to deepen ties and investments in our digital assets, critically in artificial intelligence, data management, cyber sphere and e-commerce,” said Chong.
Chong opined that efforts to embrace the inclusion of a second network might potentially be dominated by leading Chinese firms, including Huawei and ZTE.
“The European Union and the United States have warned Malaysia over risks to national security and foreign investment, as the government finalises a review of its 5G rollout that can allow China’s Huawei a role in the country’s telecoms infrastructure,” said Chong.
He recalled how EU and US envoys to Malaysia had written to the government, presenting warnings of risks involved.
Huawei, the Chinese equipment maker blacklisted by Washington, has lobbied heavily for another chance at a role in building Malaysia’s network.
“The US and the West have long warned of the risks and the negative chain implications of China’s digital overtures, from Huawei to TikTok.
“These are not being just created for geopolitical considerations and purposes, but based on real observations, evidence and conclusions from the comprehensive work done by the Intelligence Community (IC) of the US and other Western countries.
“There is a compelling reason for them to produce warnings to other countries at the receiving end of these Chinese digital overtures, disguised as a friendly outreach to nations based on their more competitive and cheaper commercial terms,” Chong said.
He added that Beijing was now forced more deeply into the corner with the reawakening of regional fears and concerns from hard-power security to awareness on soft-power influence and espionage vulnerabilities.
“China’s Belt and Road Initiative, and Regional Comprehensive Economic Partnership agenda have also been constrained by a slowing internal economy.
“Their new term under President Xi Jinping has forced China to scramble to halt the West’s growing immediate momentum in providing support and advice to regional players, on the risks of being under the Chinese economic and digital orbit.
“The exodus of top high-impact technological companies and the slowing economy have all forced Beijing to expand its depth of measures to strengthen the remaining openings still beneficial to them, and this includes the digital sphere in the region,” Chong said.
He added that doing so, provided Beijing a critical complement of a crucial platform of potentials and openings for sensitive and critical information derivation, especially on a nation’s security, infrastructure data and information – including military and non-military hardware and software capacity.
“Bringing in China will give a wrong signal and give a very unfair message to others that all future processes or agreements might be vulnerable to last minute changes or about-turns, in the name of external pressure and influences.
“We only weaken our investment and business standing by being seen as too vulnerable to Beijing’s dictate and not having a firm, resolute and principled stance in our own judgment and policymaking.
“Our selection has to be based on transparency, openness and the wisdom to go for long-term security, stability and assurances, rather than be blinded and lured by short-term traps and overwhelming dependence in order to fix our economy,” said Chong.
Chong added that aligning with China could result in Malaysia losing out on greater US and Western support on systems and initiatives that strengthen our economy and defence capacity.
“If we blatantly disregard such real advice, we risk being vulnerable and being harmed on our critical national infrastructure, security, and sovereignty.
“Our national assets, digital, cyber networks and data can be compromised, setting off long term negative chain effects.
“This in turn will deter the US and the West from further providing the needed defensive, technological and economic support which will also harm their assets and infrastructure should we have Chinese providers in our inventory,” warned Chong.
Institutionalised Chinese networks in our system, he added, could further limit economic and investment inflow as foreign firms would remain wary of the risks posed.
“We risk losing our credibility and image as a responsible, normative, value-based and business friendly nation, by being fragile and too easily succumbing to Chinese influence and pressure.
“We have to stand up to global norms and values as a responsible emerging regional and global player, by being firm on openness, trust, rules-abiding commitment, assurances of ethical and rightful adherence to investment and business rules.
“We should keep open our options and not send a very ingrained negative message to the world and the West, that we are very much pro-China and China-friendly in our policy approach and overtures,” said Chong.
He cautioned Malaysia not to be entrenched and overly dependent with China, as it could leave us vulnerable to Beijing’s potential economic and security blackmailing.
“We will be left hapless in our defensive and deterrent capacity by succumbing to the Chinese pressure and economic tool of promises and assurances of investments.
“This will expose us further to dangerous security risks, lapses on espionage, sabotage and being held ransom in real-time conflict.
“The West will be unable to support us, as it will also render their systems to high risks, and we will be trapped yet again with the worst outcome.
“Our rights in the South China Sea and our territorial integrity will be compromisingly entangled in the common sphere of the overarching ties with China, particularly on our digital and critical security networks,” Chong said.
Already, Huawei controls 13.8 percent of Malaysia’s mobile phone market and has also long been Malaysia’s dominant supplier of internet modems, while Xiaomi accounts for another 11 percent of the market.
In total, Chinese suppliers collectively provide about half of all mobile phones in Malaysia, providing ample vulnerability settings on digital security.
Chong further warned that China’s dominant presence in Malaysia would embolden and strengthen its grip on almost the entire chain of our security vulnerability – from transport infrastructure to capital support, petrochemicals, semiconductors and rare earths.
By providing a state backed support in terms of capital and competitiveness in terms of pricing, Huawei and other firms often enjoy the benefit of commercial advantage, which will definitely lure regional players to opt for the Chinese option, as with other overtures through.
“China is bent on capitalizing on state-owned enterprises as an effective tool in trapping regional players and forcing nations to opt for their firms for better commercial values and higher returns, as opposed to the higher priced Western alternatives that come with the ‘baggage’ on labour standards, human rights and others,” he said.
The best option, he added, was to proceed quickly with the existing agreement with Ericsson, and to provide a stabilising and reassuring tone and message to other future firms for investment confidence,
Chong said Chinese major tech firms including Alibaba, Huawei and Tencent were driven to play the leading role in Malaysia on investment returns and fulfilling the broader agenda of Beijing’s strategies for the region.
He quoted Britain’s spy agency Government Communications Headquarters director Jeremy Fleming that China was using its financial and scientific muscle to manipulate technologies that risk global security.
“The Chinese leadership seeks to use technologies including digital currencies and its Beidou satellite navigation platform to tighten its grip over its citizens at home, while spreading its influence abroad.
“This is Beijing’s manifestation to control the potential of the Chinese people – rather than support their talent and freedom – through threats, bribes and coercion to suit Beijing’s interests.
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The report also highlighted China agencies called APT40 and Threat Activity Group 16 (TAG-16) which used over 400 unique servers in Southeast Asia to infiltrate networks, targeting diplomats and top officials in their governments and militaries.
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