The Research Group on 'Security and Emerging Technologies' #3
"Research Reports" are compiled by participants in research groups set up at the Japan Institute of International Affairs, and are designed to disseminate, in a timely fashion, the content of presentations made at research group meetings or analyses of current affairs. The "Research Reports" represent their authors' views. In addition to these "Research Reports," individual research groups will publish "Research Bulletins" covering the full range of the group's research themes.
In recent years, the United States and China have entered into a new conflict over advanced science and its application in emerging technologies. China places particular emphasis on artificial intelligence (AI), blockchains, quantum information science, and neuroscience applications as emerging technologies that could impact security in the future. In the following paragraphs, I will take blockchain technology as an example and discuss how China, which places importance on this technology, aims for "technological hegemony" through dual use (both military and civilian use).
China focuses on blockchain technology
At the 19th Meeting of the Academicians of the Chinese Academy of Sciences and the 14th Meeting of the Academicians of the Chinese Academy of Engineering on May 28, 2018, Xi Jinping, General Secretary of the Central Committee of the Communist Party of China (CPC), President of the People's Republic of China, and Chairman of the Central Military Commission, mentioned the blockchain as representative of next-generation information technology alongside AI, quantum information, next-generation mobile communications and the Internet of Things (IoT). The blockchain is one of the next-generation information technologies that China has been intensively researching and developing over the past few years, with Chinese IT giant Alibaba Group having the largest number of patent applications in the world.
On October 25, 2019, the 18th Group Study Meeting of the Political Bureau of the CPC Central Committee learned about the current state and trends of blockchain technology1. This was a rare case and the first time that a particular technology had been discussed at a group study meeting of the CPC Central Political Bureau since AI in October 2018. The fact that the CPC leadership has learned about blockchains is evidence that the CPC places importance on this technology as an essential technology just behind the Internet and AI.
At the meeting, Xi said that the application of blockchain technology has been extended to many sectors, expediting the development of blockchain technology and innovation-driven industrial development. Xi stressed that "coordinated key-task tackling should be advanced and breakthroughs in key technologies should be accelerated to provide safe and controllable technological support for blockchain development and its application."
Remarkably, Xi also said that "more efforts should be made to strengthen basic research and boost innovation capacity to help China gain an edge in theories, innovation, and industries in this emerging field." In addition, Xi emphasized "the importance of stepping up research on the standardization of blockchain to increase China's influence and rule-making power in the global arena." This point is widely regarded as reflecting China's aim to become a "technological hegemon" in the blockchain.
Wide range of applications for blockchain technology
Blockchain technology is famous for its application to digital currencies such as Bitcoin. However, as Xi pointed out, its applications are comprehensive, including digital finance, IoT, smart manufacturing, supply chain management, and digital asset trading. Since Xi's remarks on the need to increase investment related to blockchain technology and step up the development of industrial innovations, public and private efforts are accelerating to apply the technology to a wide range of fields2.
Blockchain technology can keep information transparent by encrypting and preventing tampering with sensitive data. Liu Yang, dean of the China Blockchain and Industrial Finance Research Institute, said, "China's application of blockchain technology aims to strengthen the management and protection of digital information and commercial transactions" and "its ecosystem extends to all economic and social aspects of China."3
The People's Bank of China established a digital currency research institute in 2018 and has since been actively researching digital currencies based on blockchain technology. There has also been a spate of technological applications and platforms in various fields, including asset management, medical care, government services, logistics, and industry4. They are all being pursued in the context of strengthening supervision and control of digital information and commerce, and China is using the transparency of this information for national security.
In this sense, the primary purpose of China's blockchain ecosystem initiative is to strengthen the management and protection of domestic digital information and commerce. On the other hand, China attaches importance to blockchain technology not only because there is a wide range of applications in the civilian sector but also because it recognizes the need for the CPC to manage the technology to maintain its political system.
Centralized state with a focus on distributed blockchain technology
Again, blockchain technology, as applied to bitcoin and other digital currencies, has strengths in data security, tamper resistance, transparency, and information distribution. The CPC is actively conducting research and analysis on the safety risks of the blockchain. It is proceeding with institutionalizing blockchain technology to manage it under the "Cybersecurity Law of the PRC" and "Regulation on Internet Information Management."
On January 10, 2019, the Cyberspace Administration of China (CAC) released the "Administrative Provisions on Blockchain Information Services" (23 articles in total), which went into effect on February 155. These provisions stipulate that "Blockchain information services providers should report to the CAC and local Internet Information Offices any newly developed product, application or function for a safety assessment" (Article 9).
They also specify that "the Provisions prohibit blockchain information service providers and users from using the services to engage in activities prohibited by laws or administrative regulations that endanger national security, disturb social order, or infringe the legitimate rights and interests of others. They must not generate, copy, publish, or disseminate information content prohibited by laws and administrative regulations." (Article 10).
It can be pointed out that behind the progress of such institutionalization is the CPC's "open innovation" of technology. At the same time, it has "a closed view of technology that justifies technocracy that excludes citizen intervention" (Andrew Feenberg) to centralize technology management for national security6. In other words, the CPC is concerned that blockchain technology, characterized by data immutability and decentralization of systems, may shake China's political system.
China seeks military use of blockchain technology
On the other hand, China is exploring the use of blockchain technology for military purposes. Prior to China's moves, various government departments in the United States, including the Defense Advanced Research Projects Agency (DARPA), the Navy, and other federal agencies, had been paying attention to technology that optimizes existing processes and applied research on blockchain technology in the field of national defense is underway7. It can be inferred that China has been quick to grasp these trends in the United States and is aiming for "technological hegemony."
In fact, the PLA Daily points out that "in recent years, based on the potential for the application of blockchain technology in the military field, foreign armed forces have been exploring the military applications of blockchain technology one after another, anticipating a new military revolution boom." The article also mentioned that "we (the PLA) must reinforce the idea that science and technology are the core of combat power, accelerate the military application of the blockchain, and continually broaden the breadth and depth of its application."8
How blockchains can be applied to information systems and autonomous swarm weapons is also being analyzed. [*]9 It is envisioned that blockchain information can effectively prevent information attacks and node destruction, thereby improving the information's reliability on the battlefield. It can be applied to autonomous swarms' operational management. Tasks are distributed and sensed cooperatively, decisions made cooperatively, and targets attacked through preset common recognition mechanisms and smart contracts.
Another article considers that "Blockchains have a wide range of applications in the military field, including tracking the lifespan of weapons and equipment, military human resources management, military procurement, and military logistics."10 As China pursues military-civilian integration as a national strategy and military "intelligentization," the military use of blockchain technology will inevitably lead to technological development, social implementation, and military applications (diversion).
Response to blockchain technology as a dual-use technology
In the name of protecting digital information from hackers, terrorists, and adversaries, blockchain technology will be widely applied in the future. There is a possibility that this will strengthen national sovereignty. The application of blockchain technology is still in its infancy. Technical evaluation is important to accurately grasp the problems and issues in introducing and operating the technology in actual application scenarios, as well as the blockchain's risks as a dual-use technology and its military and security aspects.
On the other hand, technology management efforts, particularly the formation of international systems, take much more time than technology R&D. At the very least, from the perspective of proactive deterrence rather than reactive measures, technology management, export controls, and end-user/end-use controls are urgent issues. Furthermore, in light of these developments in China, it is necessary to consider the research, development, and introduction of blockchain/anti-blockchain technology from the viewpoint of defense technology.