Over the past decade, China and the United States have engaged in a race for the new “gold” of the 21st century: data. As the escalation of state-sponsored cyberattacks during the Covid-19 pandemic has shown, nowadays (inter)national security is most frequently jeopardized in the field of cyberspace.
However, the great power competition for the control of data is not played out exclusively in the digital domain. One of its key parts is taking place in the physical domain, deep beneath the oceans. According to the Information technology & Innovation foundation (Itif), about 99% of global data traffic passes through the submarine cable network, an infrastructure that spans about 1.2 million kilometers and through which $10 trillion financial transactions pass every day.
The cables carry everything from streaming videos and phone calls to credit card and ATM transactions. Controlling and managing the cables — and therefore the data that passes through them — provides crucial economic and political leverage. The interception of undersea cables could provide foreign leaders with valuable information, while the disruption of cables could slow communications between allies significantly. Backdoors could also be inserted during the cable manufacturing process to collect sensitive information.
China and the United States are the major players and competitors of the undersea cable market. Unlike the United States, however, China has only recently begun to invest significant resources in its network under the oceans. Today, five of the seven most significant companies in the global market are Chinese. This has been achieved thanks to a strategic design by the Chinese government that dates back to President Xi Jinping's launch of the “One Belt One Road” infrastructure project and, in particular, the “Digital Silk Road”.
In the Chinese government’s first strategic documents on the global infrastructure plan, explicit reference is made to the objective of expanding the network of submarine cables in the oceans and in the Mediterranean Sea. Moreover, in the "Made in China 2025" plan, the Chinese government set out a precise road map aimed at conquering 60% of the global fiber optic market within the next four years.
Within this legislative framework, several Chinese companies — such as Huawei, Zte, China Telecom, China Mobile and China Unicom — have invested in the construction and maintenance of submarine cables in recent years, either as suppliers or as buyers, by acquiring cables through a consortium from state-owned telecommunications companies. Some of these are state-owned or have direct ties to the Chinese Communist Party. Such is the case with Hengtong Group, China's largest producer of advanced submarine-grade fiber, whose founder, Cui Genliang, has sat on the National People's Congress and was formerly an officer in the Chinese Army.
Since 2015, when the Chinese government encouraged major companies in the industry to expand into the global market, Chinese telecommunications SOEs have begun taking part in major international consortia to build submarine cables. These include the "West Africa Cable System" (WACS), the cable network that connects South Africa to the UK by crossing the entire West coast of Africa for a total length of 14,530 kilometers. Another ambitious project, destined to give rise to one of the largest networks of undersea cables in the world with an extension of 37,000 kilometers, is "2Africa", in which China Mobile International has a major stake.
In recent years, the United States has raised doubts about the security of data passing through the cables managed by consortia with Chinese participation. According to the security apparatus of the US and its allies in Asia and Oceania — such as Japan and Australia — there is a risk that the Chinese government could ask Chinese state-owned companies to steal transmitted data for commercial or military purposes. Growing concern on the part of the United States has led to the ongoing suspension of some major investments, such as the Hong Kong-US undersea cable. The project, an 8,000-kilometer-long cable network that was supposed to connect Los Angeles to Hong Kong, is currently stalled after Facebook announced in March 2021 that it was leaving the Hong Kong-America (Hka) consortium due to warnings raised by the US government about participating Chinese companies.
Another investment that has come under harsh warning from the US security apparatus is the PEACE (Pakistan and East Africa connecting Europe) cable, a submarine network more than 15,000 kilometers long that starts in Pakistan, passes through South Africa, and arrives into the Mediterranean through France. The consortium, Peace Cable International, is led by the Hengtong Group and two of its subsidiaries, Hengton Marine and Huawei Marine, and the cable is a crucial piece of China's Digital Silk Road. A report by the US Senate Foreign Relations Committee states that the PEACE cable connections “could be useful to the PRC government even if the cable is not commercially successful”.
A 2018 document from the US Department of Defense stated that “these projects will also facilitate China’s efforts to expand science and technology cooperation, promote its unique national technical standards, further its objectives for technology transfer, and potentially enable politically-motivated censorship”. As highlighted by a recent report by the European Council on Foreign Relations (ECFR), at the heart of the concerns of American intelligence is the ownership structure of these submarine cable networks and the relationship between cable owners, operators, and cloud providers. Some of the Chinese state-owned enterprises, through a network of consortia created ad hoc, are able to be at the same time the owners and operators of the digital infrastructure. This circumstance could create a security issue since the companies could redirect the flow of data along the cable.
The expanding presence of Chinese state-owned enterprises in the submarine cable market has forced Europe and the United States to review the potential and risks of this infrastructure in a new light. As has been emphasized by the EU Commission for the 5G network, a first, fundamental step is to ensure supplier diversification to lower the level of risk. A one-size-fits-all regulatory solution is difficult to identify, let alone enforce. However, the management of undersea digital infrastructure deserves a strategic rethink. This is particularly true for the EU. While, on the one hand, the EU Commission has significantly updated the European strategy for the external infrastructure, from 5G to the Cloud, on the other hand there remains a serious strategic gap for the management and security of submarine cables in the Mediterranean. This could lay the foundations for a regulation of the market, with a particular attention to the dumping of non-EU countries and support tools for EU companies.
 Doug Brake, “Submarine Cables: Critical Infrastructure for Global Communications”, ITIF, April 2019.
 Chris Devonshire-Ellis, China’s Submarine Digital Fiber Optic Belt And Road, Silk Road Briefing, 17 March 2021.
 Drew FitzGerald, Newley Purnell, “Facebook Drops Plan to Run Fiber Cable to Hong Kong Amid U.S. Pressure”, The Wall Street Journal, 10 March 2021.
 The United States Senate Committee on Foreign Relations, “The United States and Europe. A Concrete Agenda for Transatlantic Cooperation on China”, November 2020.
 US Department of Defense, “Assessment on U.S. Defense Implications of China’s Expanding Global Access”, December 2018.
 Matteo Colombo, Federico Solfrini, Arturo Varvelli, “Network effects: Europe’s digital sovereignty in the Mediterranean”, European Council on Foreign Relations, 4 May 2021.