Platt Perspective on Business and Technology

The China Conundrum and its implications for international cyber-security – 2

Posted in business and convergent technologies by Timothy Platt on January 10, 2011

A tale of two (or more) Chinas – stability and disconnects in an emerging superpower

I have found myself thinking back to an experience I had while living and working in Latin America that I would start this posting with. That venue is very different than that of China but the core principle highlighted may be much more universal in application.

I was living and working in Guatemala at a time when that country was still run as a military dictatorship and when leadership and power were centralized and enforced by strength of arms from the center. This was a time when those seen as disagreeing with the central government tended to disappear, and many did.

I spent time in Guatemala City and my work required collaboration with and support of their Ministry of Agriculture. My work there took place in smaller and primarily costal communities and I met and had to reach agreement with a wide range of people, and both in and outside of government, national and local. And a very curious pattern began to emerge. Guatemala was ruled by a strictly enforced system of rules, laws and decisions coming from a single central government and propagated down a rigid chain of command and accountability. Guatemala, when viewed worked in and lived in, out of sight of that central authority was perhaps as close to an anarchy as I will ever get to see in the real world in my lifetime.

The harder the central government squeezed and the more finely it sought to micromanage, the weaker its actual hold; whoever was holding the most immediate power locally set the actual rules for the there and then, and primarily on an ad hoc basis. And I also quickly came to see that the people who ran that central government knew this and that they chose their battlefields where they would seek to exert local authority with care. They became reactive with a primary goal of simply retaining power and position in the center.

And the voices of power outside of that center were legion – myriad and every little decision made, sometimes consistently with the goals of the central government but often not, the harder the central government squeezed and the weaker their grasp. People did disappear and I clearly remember meeting one day with one of the people who made that happen, and entirely without my planning or intent. Fortunately, he was not interested in one North American working in collaboration with his country’s Ministry of Agriculture, a couple of local universities and some villages.

The black market was rampant and very powerful in that country and nothing to be challenged, and by either local or national authority. Some of the major land holders and industrialists held vast power. I had to get approval for my work, setting up wildlife habitats from one of them – a man who personally owned a private army that was stronger and better equipped than the Guatemalan national army at that time.

Central control and with an iron hand – anarchy and collapse of central authority out of line of sight: this was the basic dichotomy I worked in as a pervasive context and I keep thinking of this as I work my way through China’s emerging story/puzzle in my mind now.

There is a saying I remember reading in the context of China’s Five Dynasties period when what is now China as a whole was divided into warring factions. As a paraphrase this saying went something like this: “you can do many things with swords but you cannot sit upon them.”

Firm and militaristic central power is good with those swords and their more technically advanced counterparts but you cannot build a stable, long term society or a system you can sit and rest securely on from them.

I read the news and not just the newspapers on China and on what is developing there. I read of their open and acknowledged economy and businesses and of the mirror-image shadowy counterpart to that in their underground economy – and in how even their public and open businesses and economy connect into this shadow world. We all see in the news at least some of the consequences of this with tainted raw materials going into everything from baby formula and children’s toys to building construction with shoddy cement.

I am going to pick up on this with a complex puzzle in my next posting in this series, and that puzzle is one that affects every nation on earth, developed and developing: rare earth minerals and their mining and sale. And some 96% of all rare earth minerals currently under production worldwide are mined in Southern China and for the most expensive and valuable of them, the heavy rare earth minerals that number is more like 99% of all production, globally. And for those heavy rare earth minerals in particular, up to half are mined and sold through that shadow economy and by “criminal gangs.” And that is truly a story of two (or more) Chinas and it is only possible to understand what is happening here if you understand how this overarching system works. I offer this posting as a thought piece in background for that purpose.

On a separate but important note, I grossly oversimplified in Stuxnet, Internet Traffic Rerouting and Next Generation Protocol-Based Vulnerabilities when I simplistically stated that China’s Golden Shield Project is “owned” by their national police. Ownership and enforcement rest in several sets of hands that include their National Police but that also very definitely include their Ministry of Propaganda. And I add that the Kremlin was guarded by more competing and mutually antagonistic power blocks than just the two I cited in that posting as well. When a central government finds itself trapped by the limitations of its power the last thing it would permit would be the placing of too much of that power in any one set of potentially self-serving, special interest hands.

This posting is a direct continuation of a first in a new series: The China Conundrum and its implications for international cyber-security – 1.

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