Category: Geopolitics

China Executive Order 14105 Geopolitics

New US Attempt to Contain China: President Biden’s Executive Order on US Investment

By Schiller and Yeo

On August 9, President Joe Biden signed a long-anticipated Executive Order to restrict US outbound financial investments in a “narrow set of technologies” in “countries of concern” – China including the Special Administrative Region of Hong Kong and the Special Administrative Region of Macau.[1] The Order covers three industries: semiconductors and microelectronics, quantum computing, and artificial intelligence. This idea of limiting outbound investment came up during the Trump Administration as part of The Foreign Investment Review Risk Modernization Act of 2018,[2] but was removed from the bill due to pressure from the business sector.[3] There followed a series of measures against China focused on the tightening of export controls. With its embrace of restrictions on outbound investment, the new Executive Order constitutes a stunning reversal of US policy, which for decades has pressed coercively for open cross-border investment. Thus, it offers another sign that the US is turning away from freedom of investment and trade and toward digital protectionism.

The new rules mostly target US venture capital, private equity and joint venture investment, the key drivers of the US/China integration that nurtured the expansion of the Chinese internet sector even as they also enriched US investors. With the current geopolitical tension, US venture capital investment into China has already dropped to a 10-year low at $1.3 billion, down from a high of $14.4 billion in 2018.[4] Private equity plummeted to $ 1.4 billion in the first half of 2023 from a peak $48.48 billion in 2021.[5] It is an open question whether the Executive Order will be sufficient to choke off China’s tech power and Chinese tech start-ups from US capital;however, this move is sure to intensify the existing geopolitical competition and further divide the two largest global economies.

The Biden administration has stated that “national security risk” is the reason behind the measures, emphasizing that these are “narrowly targeted actions to protect our national security.”[6] It is clear, however, that the rationale is economic as well as military. It is intended to further contain and retard China’s tech power in advanced technology and, reciprocally, to make more room for the US’s own market and strategic interests in this key field.

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Free Flow of Information Geopolitics New World Information and Communication Order

Freedom of Information and the Rise and Decline of American Power (Part IV)

By Dan Schiller

In the world’s number-two economy, China, the party-state retained control over its national internet from the outset (the 1990s).  During recent years, China’s Data Security Law, alongside its Personal Information Protection Law and its high-level regulator, the Cyberspace Administration of China, have constructed an evolving framework for close supervision of China’s internet – and for data flows out of and into China.  Other nations, notably in southeast and west Asia, are adopting elements of the Chinese model of internet governance.[1]  Additional countries, including Russia, have strengthened state controls over their national internets.  Meanwhile, citing a variety of factors, at least sixty states have staged internet shutdowns.[2]  Thus, obstacles to unrestricted commercial data flows from and to the US have proliferated. 

In addition, alongside a growing number of other states China and Russia also have been trying to win governmental authority to regulate the global internet – as previous telecommunications networks have been regulated – through multilateral organizations, especially the International Telecommunication Union.  Thus far, they have not succeeded: the US model of “multi-stakeholderism,” which signifies loose control by big corporate capital and the US government – retains its hold.  But the US approach of multi-stakeholderism has been placed on the defensive.  The world economic crisis of 2008 and the historic process of geopolitical-economic redivision that followed it are strengthening divergent nation-state interests.

Evident as well are structural changes, of varied kinds.  During the 1990s – the second highpoint of US global power – the infrastructure of the cross-border internet was based largely in the United States, and most international internet data was transported through the US no matter its origin or destination. However, by the late 2010s the morphology of this worldwide distribution system no longer looked as it had a quarter-century before. The internet’s infrastructure had been expanded and reconfigured.  The network of subsea cables and internet exchanges was extended and thickened. US social media companies had set up data centers outside the United States, to attain faster and cheaper access to foreign markets.  Some powerful new internet companies became established in China. National regulations had mandated that data collected within a country be stored within that country’s jurisdiction; by 2023, 75% of all nations had implemented some kind of data localization rules.[3] Economic policies and antitrust protections, privacy strictures, and national security measures crisscrossed and combined in complex ways to engender these assertions of jurisdictional sovereignty.

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Free Flow of Information Geopolitics New World Information and Communication Order

Freedom of Information and the Rise and Decline of American Power (Part II)

By Dan Schiller

Decolonization became an irresistible force throughout Africa and Asia during the 1950s and 1960s. However, as Kwame Nkrumah, the president of Ghana – the first sub-Saharan state to attain independence (1957) – declared in the year he was deposed in a coup (1966), “Although political independence is a noble achievement in the struggle against colonialism, neocolonialism and imperialism, its effectiveness is superficial unless economic and cultural independence is also achieved.”[1] A Non-Aligned Movement grew, among dozens of newly decolonized states, joined by some Latin American countries. At its Third Summit, convened in Zambia in 1970, Tanzania’s president Julius Nyerere announced that “the real and urgent threat to the independence of almost all nonaligned states thus comes not from the military, but from the economic power of the big states.”[2] Somewhat uncomfortably joined, after the mid-1970s, by the Soviet Union and its East European allies,[3] and finding support from some western European countries, the NAM sought comprehensive redistribution. Its demand was for a New International Economic Order. An outgrowth of this NIEO was a focused effort to establish a New International Information Order or, as it was sometimes called, a New World Information and Communication Order [NWICO].[4]  Opposition to the US-centric system of international communications and the free-flow policies that helped sustain it attained a charged intensity in this context. “Freedom from the ‘free flow’” had become a necessity, declared Herbert I. Schiller, an engaged analyst of the prevailing inequitable system.[5]

For NWICO advocates, imbalances and disparities needed to be inventoried across their range.  Then they needed to be addressed – remedied. Through continuing and often well-publicized research and a succession of international conferences, both sometimes supported by or connected to UNESCO, and in votes at the United Nations General Assembly, the United States was placed on the defensive in communications and information.[6] An influential commission convened in 1977 by UNESCO to study global communications problems reported three years later that it had been “convinced that structural changes in the field of communication are necessary and that the existing order is unacceptable to all.” In keeping with NWICO’s redistributionist precepts, the report went on to assert that “the obvious imbalances in communication supported the view that ‘free flow’ was nothing more than ‘one-way flow’, and that the principle on which it was based should be restated so as to guarantee “free and balanced flow.’”[7]

Outraged at these transgressions, US leaders determined to take back the initiative.[8] This was not only because the interests they represented benefited from the inequitable status quo, but also because the NAM’s NWICO threatened to obstruct US transnational corporations’ project of innovating a powerful new communications technology – computer networking. Cross-border (and still mostly proprietary) computer networks were crucial to enabling an audacious corporate reintegration. The state-mobilizations that helped sustain NWICO were set to collide with this capital-led program, which would later be called “globalization.” Something had to give. 

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Free Flow of Information Geopolitics United States

Freedom of Information and the Rise and Decline of American Power (Part 1)

By Dan Schiller

For a special summer post, IO is releasing a four part series on the free flow of information doctrine. This is the first in the series.

*

With little public notice, a foundation-stone of US global power has begun to crumble. The US free flow of information doctrine rose to dominance during World War II. Though repeatedly challenged, it enjoyed international supremacy for eighty years. Now, however, its hold is finally slipping. To clarify this vital change requires historical elaboration.

The US press became an advertiser-based big business only over the course of the 19th century.  As this occurred, the nation’s leading newspapers embraced a narrow libertarian reading of the protection they gained from the Bill of Rights. The First Amendment to the U.S. Constitution stated, simply, that Congress should make no law abridging the freedom of the press. If, on one side, this did not preclude government press subsidies then, on the other side, neither did it disallow the possibility that municipalities or states or other communities might impose public responsibilities on the press. Publishers were eager to avail themselves of subsidies, such as massively reduced postal rates for transmission of newspapers through the mails. However, they roundly rejected community responsibilities. Thus, they insisted on an essentially self-serving interpretation: press freedom meant no government interference in their business and editorial affairs – leaving publishers free to pursue their own ownership, political and social class interests.   

Throughout the first four decades of the 20th century, individual newspapers consolidated into increasingly extensive chains. During the 1930s came other salient industry developments.  Newspapers took cross-ownership interests in radio stations. Film studios began to provide regular sound newsreels for screening by the nation’s cinemas. Weekly magazines led by Time, Newsweek, and Life became highly successful news purveyors. Television was being rapidly innovated. All this signified that the working definition of “the press” had come to encompass the media system at large.[1]

By the outbreak of World War II, this multi-media US press – alongside the news agencies that gathered and distributed much of its content – became intent on (additional) global expansion.[2]  Trade groups were organized to accomplish this, under the banner of “freedom of information.” With sustained aid from high government officials, they insisted that “the free flow of information” should prevail throughout the postwar world. They held aloft the banner of the US press’s libertarian conception, which still made no room for any greater social responsibility.  “Freedom of information” now harbored two overriding objectives.[3] 

World War II marked a transformational shift in the global political economy, as the United States dislodged its former capitalist rivals and labored to assert a preponderance of global power against the Soviet Union.[4] Prior to the war, the US press and media industry possessed limited access to the colonial markets controlled by the leading powers and, indeed, to the markets of the leading powers themselves. Three European news agencies – British Reuters, the French Havas, and the German Wolf – had formed a longstanding cartel with which they dominated most of the world news market and attempted to limit inroads being made by the US’s United Press and Associated Press (AP) agencies.[5] US films and recordings enjoyed much greater market access, but they still faced restrictions.

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