Aynne Kokas on the Intersection Between Surveillance Capitalism and Chinese Sharp Power (or How Much Does the CCP Already Know About You?)

Aynne Kokas


Aynne Kokas is an associate professor of media studies and the C.K. Yen Chair at the University of Virginia’s Miller Center. Her most recent book is Trafficking Data: How China Is Winning the Battle for Digital Sovereignty. Her article “How Beijing Runs the Show in Hollywood” was published in this April’s issue of Journal of Democracy.

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The US consumer system is uniquely exploitative. US consumers are exploited by American companies, by French companies, by German companies, by Chinese companies, because there aren’t laws protecting consumer data privacy that extend widely across the US consumer ecosystem. The main difference with Chinese companies is that the Chinese government has established an entire framework that pressures Chinese firms to share their data with Chinese government regulators.

Aynne Kokas

Key Highlights

  • Introduction – 0:50
  • Video Games as Social Media – 3:02
  • Chinese Brands in the US Tech Market – 11:34
  • Party Control of China’s Tech Industry – 19:40
  • America’s Lack of Tech Regulations – 28:36
  • The Big Picture – 37:03

Podcast Transcript

You’ve probably noticed the title for today’s episode is super long. In case you can’t read it on your phone, it’s called “Aynne Kokas on the Intersection Between Surveillance Capitalism and Chinese Sharp Power (or How Much Does the CCP Already Know About You?).” Some of you will notice I snuck in two pieces of political science jargon near the beginning. Maybe you’re familiar with surveillance capitalism and sharp power. Aynne’s research combines those two ideas in a rather unique way. But for those unfamiliar let me put it like this: The Chinese government has access to far more data on ordinary Americans than you’re probably comfortable with. 

Aynne Kokas is an associate professor of media studies and the C.K. Yen Chair at the University of Virginia’s Miller Center. Her most recent book is Trafficking Data: How China Is Winning the Battle for Digital Sovereignty. Aynne explains how the relationship between China and the United States in the realm of technology is asymmetric. Like in so many areas China operates under a different set of rules from America.

Our conversation explores the implications of this asymmetric relationship and how it can affect ordinary Americans. Aynne is also the author of a recent paper in the Journal of Democracy called “How Beijing Runs the Show in Hollywood.” We actually talk about Beijing’s influence on Hollywood on this week’s bonus episode for supporters at Patreon. I’ve included a link in the show notes so you can join or you can just look up Democracy Paradox at patreon.com. But for now this is my conversation with Aynne Kokas…

jmk

Aynne Kokas, welcome to the Democracy Paradox.

Aynne Kokas

Justin, it’s a pleasure to be here. Thank you so much for having me.

jmk

So, Aynne, what I found remarkable in your recent book Trafficking Data was the way that you talked about online games like Fortnite, because I had not thought about those as being almost like social media platforms that really are able to accumulate just vast amounts of data on its users. I mean, the way that you portray it in the book, it seems as if an online game, like Fortnite has the potential to be able to track even more data than a social media platform like Facebook or Twitter. Maybe I’m being a little extreme in that, but I’d like you to take a moment and just kind of explain what kind of data online games like Fortnite and World of Warcraft and some others actually track on their users.

Aynne Kokas

So, this is a really interesting issue which we can see emerging even more as a result of the social life that we’ve kind of grown to experience during the pandemic. So, the gaming world has often been a foundational space for new ways of socializing online and that’s really true in the context of games like Fortnite and World of Warcraft where people have the opportunity not just to have conversations with their friends, spend time with their friends online, or chat with their friends, but they actually get to embody new personalities in a new environment.

That connects to a whole range of things. Self-presentations. So, how one develops one’s avatar or the types of tools or weapons that one is able to purchase to perform or to participate in that game. There are also the types of interactions that different online communities have. So, different groups of friends who are playing together or across different groups. And then now in the pandemic what we’re seeing is these platforms actually being used as steps toward the metaverse with people entering them and attending concerts there. So, at the beginning of the pandemic, Travis Scott had a huge concert on Fortnite, which was at that point, one of the few places where people could actually attend a concert.

So, what’s really interesting about the online gaming space is it’s a site where people are actually kind of testing out the experience of the metaverse at earlier stages. So, we can think about loot or purchasing weapons or purchasing skins or costumes that one might be wearing in a game as something akin to purchasing digital property that people are discussing now in the context of NFTs or digital real estate. But these are things that people have been doing in games for a very long time. So, it’s this whole scheme of digital property and of digital presentation that’s combined with people’s real names, their social networks, their credit card numbers and where they spend their time, their IP addresses. As people grow up, they maintain these relationships on games over long periods of time as well.

jmk

In a game like Fortnite, where you have a concert like Travis Scott held, what kind of information does a media platform like Fortnite gather about the concert goers? What can it tell about those people?

Aynne Kokas

So, it knows where they’re located, their IP address, where they’re spending their time unless they’re using a VPN or a way to conceal that. It knows who they’re attending that event with. It knows something about their musical tastes. It can also link that concert attending behavior to other games or other times that they’ve spent on the game and their financial status. So, how much money they’re willing to put into their gaming experience. So, these are really, in many ways, social networks that are also linked to procedural gaming practices and how people spend large amounts of time.

jmk

It also surprised me the way that in a game like World of Warcraft or Fortnite, how just the people that you interact with on those games actually communicates so much information about yourself. Can you tell us a little bit more about what these platforms learn about us, what these platforms are able to monetize because they know that kind of information about us, about the type of people that we interact with?

Aynne Kokas

So, in many ways, it’s very similar to what social media platforms can do. They know who you’re connected to, who you spend your time with, what those conversations look like, what money you’re willing to spend, where, how much disposable income you have. They know how competitive you are and how much money you’re willing to put into that level of competition, because these are frequently freemium games, meaning that you can play them for free. But you can also put in a lot of financial resources to advance your position in the game and they are also sites for building social status.

So, it’s a place where game companies can understand what your social status is relative to your peers in the gaming community and actually there is also research that has identified that gaming platforms can also serve as a site for building social status offline as well.

jmk

So, as we’re looking at these games and we’re looking at social media platforms, has the federal government in the United States or state governments begun to look at any kind of regulations to be able, to not monitor, but limit the type of information that these companies are able to gather about us?

Aynne Kokas

So, this is a really great question and it’s much bigger than issues of gaming. In many ways it brings together the questions of US-China relations that I talk about in Trafficking Data as well as larger questions of US data privacy issues. So, there has been scrutiny of gaming platforms in the US by the committee on foreign investment in the United States as well as some pressure on gaming companies to limit their exposure to Chinese government regulatory pressure.

However, one of the challenges, and this is something I talk about a great deal in the book, is that while there’s a huge amount of investment, particularly from the Chinese gaming and tech company Tencent, in the US gaming sector, there’s not a lot of oversight over what type of data that games gather. And particularly in the case of a game like Fortnite, it’s owned by a private company. So, within the US industrial system there’s very little information about how private companies do business. So, really, we’re relying on what a company tells us about how they gather their data and how they share it with other companies which is a real challenge of the US system. That being said, it’s also a reason why a lot of companies want to invest their capital in the US and in private companies in the US.

In many ways, it’s a Catch 22 that these industrial regulations that are in place attract capital and in many ways are a vehicle of the growth of the US tech sector, which is also a vehicle of US national power. At the same time, it presents significant strategic risks related to China, because Chinese firms can invest in the US tech sector in private companies as well as in publicly traded companies and be able to shape the behavior of firms. Again, the only thing that consumers can rely on is what those companies tell us. So, frankly, their incentive is to get people to keep using the platform.

Now, on the other hand, in addition to the concerns about Chinese investment in the tech sector and Chinese government data gathering through Chinese tech firms, because there is a huge amount of Chinese government pressure on any firms that are located in China. Moreover, the Chinese government can engage in data audits of any company that’s based in China and their global operations. So, this is a huge area of concern. That being said in the US there aren’t equivalent regulations like this. So, there are regulations at the state level for consumer data privacy in places like California and Virginia. There are regulations for specific sectors like the health sector or financial data generated in the state of New York.

But right now, we don’t have a national data privacy regulation that protects the type of data that consumers may be sharing with companies as they’re playing games like Fortnite or as they’re going on social media platforms like Facebook or TikTok or any number of consumer platforms.

jmk

So, your book obviously touches on a lot more stuff other than just video games. I mean, it touches on the health sector. It touches on the internet of things. It definitely touches on social media platforms. What are some unexpected products that are owned by Chinese companies? Like unexpected brands that we might be coming across, because you’ve already hinted at the fact that the Chinese government has a lot of influence over Chinese companies in terms of the data that they accumulate and the ability for them to monitor. What are some unexpected brands that we might come across that we don’t think of as being Chinese today?

Aynne Kokas

Well, I think that’s a great question. I just want to really emphasize here that it’s not just that Chinese companies are uniquely exploitative as it relates to gathering consumer data. The US consumer system is uniquely exploitative. US consumers are exploited by American companies, by French companies, by German companies, by Chinese companies, because there aren’t laws protecting consumer data privacy that extend widely across the US consumer ecosystem. The main difference with Chinese companies is that the Chinese government has established an entire framework that pressures Chinese firms to share their data with Chinese government regulators through national security audits, through extraterritorial control over Chinese firms through requirements that they store their data in China.

So, this isn’t necessarily about Chinese firms being uniquely exploitative. It’s about Chinese firms facing a very, very difficult environment in their home country in order to be able to continue to do business. Now, what I see in a lot of my research is that while there are big companies that we can think of where there’s a huge amount of attention being paid to them, (TikTok is one great example; WeChat is another great example; Tencent and its investments in the gaming sector are another example), there are just a lot of products that are gathering consumer data in the US that are from Chinese firms that are not really gaining as much attention because they’re smaller and this is frequently things in the internet of things.

So, for example, eufy, E U F Y, is a big company in the home security sector. They gather data about users’ exterior and interior home life. There are multiple cases where they are sending data to Chinese servers. DJI is a major drone manufacturer which has gained some attention from the US government for its major dominance in the US drone market. But it still is a major supplier of toy drones and commercial drones in the US. There are baby monitor companies. There are sex toy companies that are gathering video and sound information from people’s homes.

These are small consumer product companies that have very low security standards. They’re inexpensive products and people, frankly, are not looking at what the data security issues are for a lot of their connected home devices, because they’re just trying to buy something that’s inexpensive. This is a really interesting intersection of the kind of US consumer addiction to inexpensive electronics and the major data security risks that we’re embedding into our homes.

jmk

Did you write in the book that GE appliances has been purchased by a company in China? That GE divested that segment of their company? Because when I look at something that’s from GE appliances, I mean, to me that’s like American soft power. Is that now owned by a Chinese company?

Aynne Kokas

Yes. So that’s a great example and I’m so glad that you brought it up. It was such a funny experience how that came to be part of the book. I was traveling to China as part of a delegation of congressional staffers with the national committee on US-China relations. For my first book, Hollywood Made in China, we were visiting a film studio that was in Qingdao, which is a coastal city in the north of China. We were meeting up with the people in Qingdao and they were like, ‘We really want to take you to this consumer goods company.’ And everyone on the team was like, ‘Well, this film studio was pretty fun. I don’t know what we think about going to the refrigerator manufacturer, but sure.’

So, they took us to Haier, which is really best known in the US for making small dorm refrigerators. That’s their big niche. So, we went and everyone was pretty tired and jet lagged. As we were going through, I was kind of paying attention, but I was a bit tired and jetlagged as well. Then as we went from these kind of small dorm refrigerators to these really fancy connected kitchens, the person who was leading the tour said, ‘Well, we no longer consider ourselves a consumer electronics company. We consider ourselves a data company.’ I was like, that’s really interesting that this company that was making what we could consider quintessential dumb appliances has moved into this very data driven sector.

Then as we were asking them questions about the platform, they were like, ‘Oh, well here we have all these GE consumer appliances. That are now owned by Haier and they’re running on the back end of Baidu Uconnect. Baidu is another major Chinese company. It’s considered to be China’s equivalent to Google. So, they’re running the back end and they’re doing all the data collection. Then I went home to my house, looked at my appliances and realized that I had a full house of GE consumer appliances. Fortunately, I’m kind of cheap. So, they’re old and they weren’t connected. But they could have been newer if I were fancier. So, it really can happen very seamlessly without you even knowing, because how many people are really paying attention to who’s running the back end of their refrigerator.

jmk

It’s fascinating that they said that they’re now a data company rather than a consumer electronics company, because that means that they’re really not interested in selling you the appliance. They’re interested in selling you an appliance that’s connected to the internet of things. And as a consumer, a lot of times, the internet of things seems really silly to me. I don’t need to connect my coffee maker to the internet. I don’t need to connect my refrigerator to the internet in any way shape or form. But it comes across to me that in the long-term, these companies are going to phase out those dumb appliances. Because it’s not valuable to them anymore, they’re going to focus exclusively on those. Is that right? I mean, are they doing that even though there isn’t necessarily always demand from consumers for some of those products?

Aynne Kokas

Yeah, absolutely, because there’s a clear financial incentive. These are very low margin products and gathering consumer data through them offers a really rich potential financial stream that could be very lucrative depending on the type of data that firms are able to gather. This is the sort of thing where it’s interesting to look at it now. Then it’s interesting to see how things project out in the next five to 10 years, because the idea is to get the appliances in your home, patch them, and enhance the services that are available to increase your dependence and increase the type of data that you’re sharing with the company.

Also, for all of you who use your connected devices or have like old, old home appliances and new ones, you realize that the new ones break down a lot more quickly. They’re just so much more complex. So, there’s also this planned obsolescence issue. If there’s this effort to get in to enhance the connected appliances so that they’re ever more complex, then it’s an incentive for consumers to try to buy the next best thing, even though we’re not really sure why we even want them. But that’s the job of the marketing department.

jmk

So, you already kind of mentioned that the whole idea of data extraction is not something that’s exclusive to China. And we’ve been talking about that for years now at least since Shoshana Zuboff wrote her important book, The Age of Surveillance Capitalism. I mean, we’ve been thinking about how Facebook and these different companies are extracting data and that we’re essentially the product rather than the consumer. But what I found fascinating about your book is that you’re connecting this idea of surveillance capitalism and the type of surveillance capitalism that the United States’ lack of regulations has allowed to proliferate and linking it back to the idea of Chinese sharp power. Indeed, the way that it’s able to manipulate and control and have influence on markets, on people, and on politics.

Some of this is potential. Some of this isn’t a reality yet, but there’s an interesting line in your book where you write, “Chinese government regulations prioritize party control over legal transparency.” Can you take a moment and explain what party control means for the tech industry in China?

Aynne Kokas

So, I’m so glad that you brought this up, because it means there are many different levels at which this operates. On the one hand, there’s been an increased pressure, not just on public sector firms, but also private sector firms in China to have party committees within individual companies that serve as a guiding compass for the ethical and philosophical framing of how that company operates. Party committees have grown in importance during the Xi Jinping era. They appear to be continuing to grow in importance. So, that’s one area of party control.

Then there’s also pressure on major leading figures or anyone who really wants to advance professionally in China to become a member of the Chinese Communist Party which brings entrepreneurs into the Chinese political system in a really significant way. It makes them beholden to the political system in a way that entrepreneurs in other countries don’t necessarily face that same type of pressure. Then there is, also, the legal frameworks that the Chinese government has developed as a part of its efforts to enhance control over the tech sector and over the data of Chinese citizens. That happens through things like the 2017 cybersecurity law which requires all critical data, all critical infrastructure data, to be stored on Chinese government run servers. That includes foreign and domestic firms. It includes private and public sector firms.

There is also the 2021 data security law which requires data audits of Chinese firms to make sure that their data is being used properly and in accordance with the Chinese cyberspace administration. We’ve seen that this has really significant, far-reaching effects that are not necessarily immediately obvious from how that law is written. One great example is the case of the mobility platform Didi which was subject to a Cyberspace Administration of China National Security Audit. The rumor is that Didi was reluctant to adhere to the cyberspace administration of China’s requirements and did their IPO on the New York Stock Exchange even after the Cyberspace Administration of China said that they were not compliant with a data security audit.

Regardless of the specific turn of events, it’s very difficult to know precisely what the data security auditors were saying, but what we do know very clearly is that Didi did their IPO on the New York Stock Exchange and then almost immediately the Chinese government removed all Didi apps from the app store. So, clearly, they had run afoul of Chinese regulators in a very meaningful way that not only tanked Didi’s business, but it also tanked the shares of lots of people from around the world who had purchased its stocks on the New York Stock Exchange.

jmk

And it affected a lot of other tech companies because people who looked at the influence that the Chinese government had on Didi got concerned about other companies like Alibaba, Tencent, and others. The tech sector in China’s done horribly in terms of its market capitalization since then.

Aynne Kokas

Right. Exactly. This is actually a really interesting question. It is one area where I feel like while the Chinese government has been rapidly expanding its impact (this is something I see in my first book, Hollywood Made in China as well), there’s this perpetual tension between Chinese government efforts to expand their global influence and efforts to control companies in such a way that it actually works against those efforts. And that’s a really interesting tension that we see also operating in the tech sector.

jmk

So, I want to be careful not to describe Chinese businesses as good guys. The companies themselves I don’t think of as necessarily making like moral choices, but rather making choices that are best for their business. So, the fact that Didi didn’t want to share their data with China, I think demonstrates the fact that they’re concerned about competing internationally. If they’re having to have such strong links to the Chinese government and share their data there, does that really put them at a competitive disadvantage against companies from around the world when they try to expand beyond just the Chinese domestic market?

Aynne Kokas

It’s a really interesting balance. On the one hand, Didi, as long as they remain in compliance with Chinese government regulations, they have this captive, huge domestic market which is a good for their business. It allows them to invest in things like autonomous vehicle technologies and upgrading with an economy of scale that most companies would dream of. So, that’s one element of it. Then there’s the fact that as the Chinese government becomes more activist in their control of Chinese firms, there is definitely a lot more skepticism from countries around the world about Chinese apps and more skepticism and scrutiny of the type of data that they might be gathering. Especially when there is the possibility of selecting other different apps instead of those Chinese apps.

So, there is a kind of tension here. One of the things that I think is really interesting about the Didi case is it demonstrates there is a really clear case for why entrepreneurs may want to be able to raise capital and exit their firms and exit their dependence on the Chinese market that is a real potential challenge for the Chinese government.

jmk

Well, even with American companies, I mean, for a long time, people said the same thing about the United States. That there’s this enormous domestic market. What does it matter if they compete internationally? And the American population has continued to grow yet, it’s pretty much just understood that if you want to get the kind of dynamic growth that these companies are pursuing, you have to go global. So, even if the Chinese market continues to offer opportunities for growth as more and more people go online, I would just imagine that these companies are going to eventually hit a point where they need to be able to expand internationally to be able to continue to grow. I mean, the Chinese market, as large as it is, is still finite. And if you can’t go internationally, you’re not going to be able to grow beyond that market.

Aynne Kokas

So, this I think is a great point. One of the things I think is important to recognize is that Chinese firms aren’t necessarily always trying to grow in the US or in Europe. So, for example, Southeast Asia is a really robust and rapidly growing market and there aren’t robust data security regulations in Southeast Asia nor in a lot of cases is there a lot of pushback against Chinese investment. And if there is, there is an equal amount of pushback against American investment. Countries like Indonesia or Thailand are eager for capital investment and infrastructure and are interested in whoever is willing to put capital there.

So, we’ve seen that with China’s Belt and Road Initiative while there have definitely been stumbles, there are also a lot of countries that have been very willing to bring on Chinese capital. Frankly Chinese state capital through the Belt and Road Initiative is something that draws much more scrutiny than private tech investment from Chinese firms.

jmk

So, when we think about China’s influence globally, especially when we think about the Belt and Road Initiative, one of the things that they’ve done is try to build infrastructure, not just in terms of physical infrastructure, but also in terms of data infrastructure. They’ve been exporting artificial intelligence technology to a lot of developing countries, places like Africa and the Middle East. I would imagine that the type of data regulations that China is imposing on these companies is also being exported, because when a major economy places regulations on its companies, oftentimes smaller economies follow suit. Are we seeing a lot of that happening? And if so, is the United States losing an opportunity to set the standard for tech regulations by its lack of taking the initiative in setting some of those regulations?

Aynne Kokas

So, I think this becomes a really interesting question, particularly as it relates to establishing connected municipal infrastructure such as connected cities and security infrastructure. So, there’s a scholar named Sheena Greitens who does really great work on global tech security and China’s influence there. Those are really interesting areas where there hasn’t been much uptake in the United States. So, in Trafficking Data, I talk more about the types of firms that are gathering data in the US market, but in areas like security and municipal infrastructure we’re seeing in places like Latin America, Africa and the middle east, there’s a much higher uptake of that type of infrastructure from Chinese firms. It’s shaping practices of governance there. It’s shaping practices of municipal management. So, this becomes a really interesting question of the types of influence that the Chinese government is able to exert through Chinese firms.

jmk

Well, it’s fascinating to me that the United States hasn’t taken more of a lead on tech regulation itself, because its failure to be able to regulate the tech industry and to prioritize growth over good governance seems to leave a blind spot where it’s ceding that power to other actors whether it be the European Union, China, or other major economies like maybe Japan, South Korea or others. Are we seeing a development of an international regulatory framework for some of the technology for data collection that really leaves input from the United States out?

Aynne Kokas

Yeah, this is a great point. We’re definitely seeing that. For example, the Trans-Pacific Partnership had a data governance framework that was embedded within it. So, when the US left there was a group of countries that were involved in the Trans-Pacific Partnership that spun off what’s now called the CPTPP and are engaging in that type of transnational data governance themselves. And both Taiwan and the People’s Republic of China have requested to enter the CPTPP. Meanwhile, the US is still not a member. So, we’ll see how that all plays out. Of course, there are data protection regulations in Japan, Korea and the European Union General Data Protection Regulation. So, it’s really interesting because we’re seeing a lot of our major democratic trade partners develop really robust data governance frameworks and the US is not.

Now part of the kind of historical influence of the US in tech regulation has been through the development of something called a multistakeholder system. Where US companies through the lobbying of the US government have been able to take a major role in establishing global tech standards through different multistakeholder organizations. So, an organization like the United Nations would be a multilateral organization that focuses on different countries, but the US has been able to, in some ways, historically stack the deck in its favor by having these really strong tech companies that speak out in multistakeholder organizations to establish new tech standards and use the interests of the United States through US companies.

Now, a key difference that we’re seeing is that US companies, aren’t only interested in the US market. So, these multistakeholder systems don’t necessarily effectively represent US national interests. They represent the interests of transnational corporations.

jmk

So, one of the things that fascinated me in the book was you actually mentioned some of the states that have developed more robust data protection and privacy laws. It was interesting to me, because it’s obviously not based on partisan ideology. It’s not based on whether or not the Republicans or the Democrats control the state. It’s got much more to do with whether or not the state has extensive interests and extensive experience with the tech industry itself. States like California and Texas both have laws about data privacy. It’s fascinating for two reasons. I mean, one is that both Republicans and Democrats have been able to get on board on this except not in something that’s coherent at the federal level.

But at the same time, it’s the states that have the largest tech industries that have actually put on the most innovative data privacy laws in states like California and Texas whereas other states like, I don’t know, Indiana, Ohio, some of those other states that don’t have those sophisticated tech industries still lack those data privacy laws. Is this a partisan issue that I just don’t realize? Is this something that cuts across partisan lines? What’s really holding the United States back from developing some of these laws?

Aynne Kokas

So, this is a great question. And with respect to why certain states develop these laws and certain states don’t, I mean, some of it has to do with who’s in charge and how they think about these different leadership questions. A lot of it also has to do with talent. So, one thing I always joke about… So, I lived in Arlington County for a little while, which is right outside of DC. And Arlington County was filled with people who loved working in government. It’s basically a town full of former student council presidents. So, we were the best governed county I’ve ever lived in in my entire life.

I think in many ways, when you look at places like California, there’s a huge tech sector. So, even people who aren’t in the tech sector but are living in Sacramento are at the doorstep of the tech sector. So, it’s a much more immediate question than it would be in a place like Indiana or Iowa where there isn’t this kind of immersion in these issues and this deep well of talent of people who are able to make policy in these areas. So, I think that’s one side of it. In places like California, Texas, Illinois, and New York where we see that there are these really robust industries, there is a kind of need to govern. There’s also talent in the legislature to be able to address a lot of these issues.

Now with respect to the partisanship of questions of data privacy. It’s quite interesting actually, because there is a bipartisan interest in protecting user data. We see that by how far something like the American Data Privacy and Protection Act has gotten in Congress. There’s also partisan conflict. So, in tech sector regulation on the Republican side, the question of free speech on tech platforms is a big issue. On the Democratic side, questions of privacy are a much bigger issue. But we also see that data privacy and free speech can fall along partisan lines as they relate to specific issues.

So, for example, post- and pre-Dobbs decision as it relates to abortion rights in the United States, the question of privacy has a very different valance. So, pre-Dobbs it was possible to talk about it without discussing things like the data privacy of period tracker apps or other technical tools that might document when a woman was getting an abortion. Post-Dobbs it’s impossible to have those conversations. So, in some ways, I think that the data privacy conversation and the data security conversation gets mapped onto other tense political debates which makes it very difficult to talk about just consumer data by itself.

jmk

So, to kind of wrap up, I want to bring this back to the heart of what your book and the heart of the argument that you’ve been making is. Which is that the lax regulation and the surveillance capitalism that has proliferated in the United States has created an abundance of data that’s really an asset for companies.

But that has meant that as Chinese investment comes into the American tech sector and as Chinese companies begin to introduce their products into the American market, it means that our data is being shared with Chinese companies that are oftentimes housing their data in China. That opens up the door for the Chinese government to have access to data and information about us. What is your greatest fear about Chinese access to this type of information and to this data? What are you most worried about with them having access to this information?

Aynne Kokas

So, I think that the risks break down into three key areas. The first one is the most obvious to us which is just the surveillance of individuals. This is the one that feels the most creepy and the most immediate where we’re concerned that Chinese government surveillance will extend to individuals in the United States. That is obviously not desirable, but most people, frankly, are not really interesting surveillance targets. It takes a lot of work to drill down and get that information about an individual to track. So, it’s obviously something that is a concern, but I think that there are two other risks that I see as being more profound and more transformative. These are the risks which are more difficult to perceive and occur over a longer period of time.

So, the second risk is economic competitiveness. The Chinese government or Chinese firms are currently dominant in the Chinese market. But if they’re able to become dominant globally, then they’ll be able to develop more robust algorithms, better products, and enhance their global dominance as platforms. That has direct impact on US economic competitiveness globally. So, US tech firms for the most part cannot operate within the Chinese markets. There’s this asymmetry which prevents US firms from developing the same type of rich algorithms that Chinese firms can develop if they’re able to also access the US and other global markets. That I think is a really significant long-term risk.

Then there are national security considerations that are connected to Chinese tech investment in the US and in other countries, specifically the influence that the Chinese government can have on Chinese tech firms. So, in this case, I’m thinking sectors like precision agriculture, precision medicine, and critical communications. In these cases, when we see Chinese government influence on Chinese firms, it’s very possible to see national security risks as they are associated with a dependence on Chinese firms in sectors like agriculture, health, or critical communications. I think there is also a longer-term national security concern in areas like space and satellite development. So, these are the bigger, longer-term questions that I think about as more profound and longer-term issues.

The way that I think about this and one of the reasons why I wanted to write this book is it’s very similar to issues of climate change where there are small changes that occur over time that shift how we do things and that shift the overall security of the infrastructure that we use to live. Moreover, the tipping point happens before you really know it. So, I just want people who read the book and people who listen to your podcast to go into this with open eyes and realize that when they’re sharing their data with a firm that depends on the Chinese government for its very existence, they’re contributing to those concerns about long-term economic and national security competition.

jmk

I think it’s also not just the idea of them tracking any one person, but tracking larger sociological demographics, if you will, where they can understand on a big picture how people might feel about certain things, what people’s concerns are, or what people’s worries are. And after dealing with the influence of Russia in the 2016 election, if China has immense amounts of data on individuals through so many different sources, I would just think that that would give them tremendous opportunity to be able to influence elections in the United States or elections in Taiwan or anywhere else in the world that they have that data and that information. Just imagine if they were going to go to war with a country. They’ve got information on what people might be afraid of, what might scare people more than other things, and what might affect different demographic groups in very specific places. I think it just opens up a whole can of worms that changes how we think about national security completely.

Aynne Kokas

I completely agree with you. And it’s not really a hypothetical, because we’ve already seen that TikTok has limited the types of ways that people can talk about the war in Ukraine on the platform, particularly in accounts in Eastern Europe. So, this is a reality and TikTok is a company whose parent company is ByteDance which is headquartered in Beijing. We’re already seeing how that plays out in one global conflict and I don’t necessarily want to see how it plays out in more.

jmk

Well, thank you so much for taking the time to talk to me today, Aynne. This is such an important topic and I’m so glad that you’ve taken the time to do the research. So, thank you so much for writing your book. Once again, it’s called Trafficking Data: How China is Winning the Battle for Digital Sovereignty. Thank you.

Aynne Kokas

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