Information

Date:  July 14 (Wed.) 2021, 14:00-16:00（on live）

Location: Online service only

Moderator:

• Ting-Yi (Nicole) Chan, Vice Chair, Digital Transformation Association (DTA)

Panelist:

• Chien-Huei Wu, Associate Research Fellow, Institute of European and American Studies (IEAS), Academia Sinica  
• Kenny Huang, Managing Director & CEO, Taiwan Information Network Center (TWNIC)
• Shih-che Tang, Professor & Department Chair, Department of Communications, National Chung Cheng University
• SsuYuan Peng, Deputy Director, Economic Development Strategic Planning Center, Taiwan Institute of Economic Research

Session details:

The EU Commission published Shaping Europe’s Digital Future in February and Digital Compass in March. Illustrating EU’s digital policy framework in the coming decade, both proposals aim to advance digital transformation of the industry while emphasizing the necessity of strengthening EU’s technical sovereignty, reducing reliance on both the United States and China.

China claimed in 2000 that the Internet within Chinese territory is under the jurisdiction of Chinese sovereignty. In the World Internet Conference in 2015, Xi Jinping stressed again that the international community should respect the “Internet sovereignty” of individual countries. On the other hand, the Clean Network Program published under US former president Trump was also referred to as the American version of ‘Internet Sovereignty.’ The world’s top 3 economies are all constructing their vision of digital sovereignty. Taiwan has trading relations with all of them and technical strategic ties with some of them. How should Taiwan understand these digital sovereignty claims and policies? What does Taiwan do in response?

Minutes

Nicole Chan opened the session with a brief background introduction. According to Nicole, the public attention towards today’s topic—digital sovereignty—was mostly intrigued by the recent movement of major countries in the digital space. On the one hand, the European Commission published the draft of the Digital Market Act (DMA) to ‘ensuring fair and open digital markets.’ On the other hand, the Chinese government has noticeably strengthened its hold over tech giants within the country, cracking Alibaba, Didi, Tencent down with its revised antitrust law.

These events marked a significant shift of the governments’ attitude and approach to the Internet; it might even encourage opinions arguing that the sovereignty claims in the digital space are on the rise. Whether such arguments are accurate or not, we should keep in mind that different states can have very different ideas of what accounts for sovereignty—for instance, the United States has been the strongest advocate for a ‘free and open Internet’ while the EU is starting to entertain the idea of digital sovereignty, albeit their conceptualization is remarkedly different from the Chinese claim of ‘Internet Sovereignty’—and their practices of such ideas also vary accordingly.

Digital sovereignty is complicated not only because it means differently for different countries but also that it embeds a wide array of issues, ranging from a country’s ambition to challenge the existing world order to regional union’s desperate effort to regain its advantage in the competition of digital innovation.

This was why, before jumping into the panel discussion, Nicole invited two panelists of different disciplines to give a short presentation on digital sovereignty. The first panelist, Chien-Huei Wu, shared his insights on the authoritarian turn of the global cyber order. With a Ph.D. in Law, Wu analyzed various species of sovereignty claims through the lens of international law and multilevel constitutionalism.

Wu’s presentation was built on his thesis Sovereignty Fever: The Territorial Turn of Global Cyber Order (to be published on The Zeitschrift für ausländisches öffentliches Recht und Völkerrecht (ZaöRV)/Heidelberg Journal of International Law (HJIL)). Wu suggested that there are at least three variants of sovereignty in cyberspace. The first is cyber sovereignty, often used interchangeably with Internet sovereignty; first seen in 2010 in China’s White Paper on the Internet, cyber sovereignty has been what China and its allies (majorly the BRICS) upheld as the ideal Internet governance model. The second variant, digital sovereignty, is relatively recent but gaining popularity among democratic countries such as the EU. Last but not least, there is ‘data sovereignty,’ which, according to Wu, is an attempt to reclaim and retain control, autonomy and sufficiency over data flows. India, for example, is one of the main advocates and practitioners of this view.

Wu contributed the ‘sovereignty fever’ to four key factors: political ambition, economic value, security concerns, and human rights values. The four factors, Wu emphasized, were not clear-cut as they are often interdependent or intertwined.

China is the perfect manifestation of political ambition being the driving force of the state’s promotion of Internet sovereignty. China has always aspired to overthrow the existing world order in cyberspace and set new norms. On the other hand, and more importantly, asserting that the Internet within the Chinese territory is under the jurisdiction of Chinese sovereignty also serves as the cornerstone of the country’s capacity to control and regulate information flows within its border. Upholding the view of Internet sovereignty is just another means for the Chinese Communist Party to justify its surveillance regime and ensure its authority stays unchallenged.

Economic value is also a vital driving force for countries’ sovereignty claims. For China, the exclusion of foreign Information Communication Technology (ICT) enterprises from the domestic market, complimented with heavy subsidies for local business, was the magic sauce of China’s ICT industry’s success. On the other hand, the EU has been anxious about lacking behind the United States and China in technical innovation. Both the Digital Market Act (DMA) and Digital Service Act (DSA) were the EU’s attempt to curb the American’s ICT oligopoly while establishing its strategic autonomy in the digital space.

As suggested above, countries’ interpretations and pursuit of sovereignty in cyberspace vary. The same can be said for cybersecurity, as the US and its democratic allies sit on the one side of the spectrum while China and Russia far away on the opposite side. China and Russia refer to ‘information security’ in discussions of security in cyberspace. They are also the most vocal opponent of the current cyber norms, which they perceive as a US-led, hegemonic attempt at global dominance and potential regime subversion. For the US and EU, cybersecurity refers to criminal activities online, and what concerns them the most are the state-sponsored cyberattacks by China and Russia.

The human rights value is what the EU distinct itself from both the US and China in its position regarding particular issues such as privacy and data governance. Both the European Charter of Fundamental Rights and General Data Protection Regulation (GDPR) are the EU’s justification of guarding its citizen’s personal data, while the US has been the hardcore defender of free data flow.   

The second panelist was SsuYuan Peng, Deputy Director of the Economic Development Strategic Planning Center at Taiwan Institute of Economic Research. He analyzed the digital sovereignty discussions from an economic point of view. According to Peng, the pivot of the digital sovereignty debate was actually ‘who has the authority to develop standards?’

This echoes Wu’s points in his presentation. China and Russia are unhappy with the current system and are pushing for new standards; the EU, on the other hand, is aligned with most values the US uphold while trying to gain its lead in the future by publishing universally binding regulations. One can argue that the current US hegemony in the ICT industry is less the administration’s deeds than the tech giants. This was also why Peng thought that the digital sovereignty debate would depart from the contest between countries and become the tug of war with states and businesses on the opposite side.

Peng shared some numbers to better illustrate his points. According to Kantar BrandZ Most Valuable Global Brands 2021 by Kantar, 56 of the Top 100 brands are American brands, accounting for 74% of the Top 100’s total value. This is astonishing considering the US (the country) only takes up 24% of global GDP. Out of the top 10 brands, 8 are US brands and 7 are from the tech sector. Moreover, China has consolidated its lead over Europe. Chinese brands have grown from 11% to 14% of the Top 100 value in the past ten years while European brands now represent only 8% of the ranking’s value versus 20% in 2011.

Peng pointed out that the tech giants accounting for the most valuable global brands actually are richer than most countries in the world. When a handful of companies control such a significant portion of the global economy, governments are inevitably alarmed and developing plans to counter such power.

Again, different countries have different strategies when it comes to the battle with the tech giants. EU’s response is to develop regulations and policies with global scope; GDPR, DMA, and DSA are all examples of the EU’s struggle to reassert its authority in the ever-expanding digital space. In the US, the Biden administration, in contrast to Trump’s indulgence of unfair competition, is committed to reining in powerful tech companies by appointing long-term and powerful critics of tech giants to powerful regulatory positions. Unlike what many people are warning about China’s rising, Peng considered China rather passive in this geopolitical power play in the digital space. According to Peng, China has been struggling inside and out of the country’s border. Domestically, the Chinese government already has too much on its plate with the unstable financial market, an aging and hugely imbalanced population, and a currency detached from the global monetary system. The one belt one road ambition is also facing a lot of fightbacks and accusations from the partnering countries. For now, the Chinese government is relying heavily on domestic demand, what Xi calls the ‘internal circulation.’ The state-sponsored digital currency, electronic Chinese yuan (e-CNY), is another attempt of Beijing to boost its sluggish economy. Still, the result is yet to be seen as the Chinese Yuan has never gained much significance in the international monetary system.

To open the panel discussion, Nicole presented three questions for the panelists.

• As leaders of powerful countries begin to embrace the view of digital sovereignty, should Taiwan follow their examples? If yes, how should we practice the idea considering Taiwan’s peculiar global political circumstance?
• Taiwan has technical strategic partnership and trade relations with all three of the economies—the US, EU, and China. There are also unavoidable complications taking into account Taiwan’s particular geopolitical situation. How does Taiwan respond to the global trend of digital sovereignty where the biggest 3 economies are apparently the major players?
• Are there any global, regional, or national regulation developments Taiwan should be paying attention to regarding the digital economy?

Professor Shih-che Tang from the Department of Communications at National Chung Cheng University admitted that he was no expert on the issue of digital sovereignty, but he would try his best to answer the questions from a public communication perspective. EU’s digital strategy could be a good example, according to Tang. The strategy’s purpose is to provide digital solutions that put people first, which Tang thought should be the path we follow when countering the digital transformation.

Of course, an example should only be taken as an example and not be copied in full. Tang argued that the embedded humanitarian values in the EU’s digital strategy are the most valuable takeaway for Taiwan if we are to initiate any similar plans. He also noted that Taiwan enjoys many geopolitical advantages entering the digital era. We are at the crux of many undersea cables, and the administration has always welcomed global tech’s plans of data localization. Google, for instance, established its data center in Taiwan along with Microsoft. In terms of the global supply chain, Taiwan is the most critical chokepoint when it comes to semiconductors, the quintessential element of our digital future.

To foster a people-first digital environment in Taiwan, Tang suggested that we consider seriously how the government and society could address Taiwan’s heavy reliance on tech giants’ data. One of the possible solutions is to invest more in the local content-creating sector.

Kenny’s technical background naturally orients him to the developments and emerging trends of the Internet infrastructure. His point was that many common practices dealing with the Internet infrastructure developed and standardized organically without state government’s interference. Take domain dispute resolutions for example, the most common resort is Uniform Dispute Resolution Policy (UDRP), which was developed by the global ICANN community using its multistakeholder policy development process.

One cannot, however, fully escape from the geopolitical implications even in an allegedly multistakeholder environment. Kenny mentioned that the US is the only country in the world that is able to confiscate domains under generic top-level domains (gTLDs). Governments in other countries, authoritarian or democratic, only have authority over their own country code top-level domains (ccTLDs). The prestige of the US government does not come from it being the ‘inventor’ of the Internet but the fact that ICANN is a non-profit organization incorporated in California. This, of course, is the source of serious concerns for governments in other countries, especially those who are not especially friendly with the US. However, due to technical issues on Kenny’s side, he was cut off several times and could not deliver his points fully. In closing, Nicole reminded the audience that we have to be careful when learning about other countries’ digital regulatory initiatives. Each country/economy has its distinct cultural, historical, social, and economic background, and we have to always consider the context before we want to imitate the approach. Every country is unique in its own way, and the best path for Taiwan to the digital future should be developed and explored with our unique context in mind.