"How should we address this risk?"
Last Saturday, we celebrated an expectedly muted celebration of our 123rd Independence Day, our second under pandemic conditions. Amidst the typical calls for national unity from the President and other politicians, the well said message of US President Joe Biden was, in my opinion, a conspicuously strong affirmation of alliance.
President Biden’s greetings highlighted the deep bonds and history that founded what he called the “strong alliance” between the US and the Philippines. His reference to the 75th anniversary of diplomatic relations and the 70th anniversary of the Mutual Defense Treaty also occurring this year and then leading to his call to work together on “advancing the free and open Indo-Pacific region for all peoples” highlighted what I, and I believe practically all Filipinos, is the serious threat of increasing Chinese aggression in the region, especially in our own exclusive economic zone (EEZ) in the West Philippine Sea. A clear invitation to rally against Beijing’s expansionist agenda.
This was just the latest in a series of strongly worded verbalizations that has now escalated into impressive naval exercises of an emerging intercontinental alliance at a scale and with the most advanced military technology never before seen by the world.
Just recently, Biden issued two executive orders (EO) directly aimed at blocking the risks presented by China’s digital technologies that are potential cyber weapons for compromising their national security. An EO last June increased the list of Chinese companies banned from American investments from 31 to 59 because of these companies’ links to China’s military. The new companies in the list have deployed surveillance technologies being used to stifle and even abet human rights abuses. One of the companies listed in the ban developed the facial recognition software used in what is being called an ongoing genocidal persecution of the Uyghurs, an ethnic minority in the Xinjiang Autonomous Region who are clamoring for their own state.
Another company identified because of its role in China’s defense sector is third telco DITO Telecommunity’s partner, state-owned China Telecommunications who owns a less than a majority stake of 40 percent.
According to The United States Federal Communications Commission, the Chinese government and China’s Communist Party have “substantial control” of China Telecom. Aside from Chinese military links, a U.S. Senate report said that the company is one of the three biggest providers of wireline, mobile telecommunications, and internet access in China. The New York Stock Exchange also announced the start of delisting proceedings against China Telecom Corp Ltd. for its ties with the Chinese military.
The National Intelligence law of China which mandates Chinese-owned companies to comply when ordered to disclose any information to the state intelligence services and the Chinese Data Security Law which requires on demand access to sensitive network security information, even in operations beyond Chinese borders, further reinforces the US’s urgency to crack down on Chinese companies.
These developing dynamics of what looks like a web of state-instigated strategies is seen by some geopolitical thinkers as all in tune with China’s vision for a Sino-centric regional order. Given this context, Philippine security, telecommunications, and policy experts have raised serious concern on the pending Public Services Act (PSA) proposing an amendment to limit the definition of “public utilities” requiring the 60/40 Philippine majority rule only to water distribution, and the transmission and distribution of electricity. This will open up telecommunications to 100% foreign ownership together with broadcasting and transportation which are to be classified as “public services.”
If this provision is not changed and passed into law, and with China Telecommunications’ financial resources, what’s to stop mutually beneficial ownership flip of DITO that will give full control to a country that has been violating our sovereignty and wantonly exploiting and destroying vital marine resources while the former owners feign about the deal’s promising benefits to consumers? If the US with all its might is already banning these Chinese companies from their ecosystem, then given all our military and technological vulnerabilities, shouldn’t our country be raising our shields and seeking help from our allies?
To address this risk, the Senate, in its version, is incorporating safeguard provisions by banning state-owned companies owning capital in “critical infrastructure” and for investments made after the PSA is amended by law, such as China Telecom’s, increasing ownership stake will be prohibited. This is another commendable demonstration of the Senate’s independence as a legislative body.
Except for this issue, we need the PSA to encourage foreign investments in these capital intensive industries to boost our competitiveness and hopefully regain the lost momentum from this deep recession. We must all be vigilant of the developments of this bill. When you see strong objections to the safeguarding provisions of the Senate, you’re seeing the traitorous hand of powerful benefactors at work.
We must shield our critical infrastructure from foreign state control.