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4 April 2023

China and US increasingly decouple their submarine cable networks

By Luc Braun

Submarine communications cables may prove the next casualty of the growing geopolitical rivalry between the US and China.

As this struggle progresses from rhetoric to action, Chinese and Western projects are becoming increasingly decoupled, and extending to provision of essential global infrastructure where cooperation had become well established.

Recent media reports have unearthed a comprehensive effort by the US to deny Chinese submarine cable supplier HMN Tech lucrative contracts in large international projects around the world, most notably the SeaMeWe-6 cable connecting Southern France with Singapore by way of Egypt, Djibouti and India.

China for its part has sought to increase its capabilities and compete globally through its own specialist companies. This threatens to end the dominance enjoyed until recently by US-based firm SubCom, Japan’s NEC Corporation and France’s (Nokia’s) Alcatel Submarine Networks.

The US in turn has attempted to sanction companies such as Huawei Submarine Networks formed in 2008 and then rebranded as HMN Technologies following its acquisition by Hengtong Group in 2020. This latter move came after the opening salvoes of the Trump’s US-China trade war saw Huawei placed under an expansive sanctions regime and unable to source components for its submarine division from the West.

Similar to Huawei, it offers highly competitive prices which has helped gain traction in the developing world especially. Also, like Huawei, it forms part of the Chinese government’s charm offensive to gain influence and backing for its global foreign policy goals in developing nations around the world.

According to TeleGeography’s submarine cable map, its deployments are mainly focused around Southeast Asia (SEA), providing a number of domestic projects for Papua New Guinea, Indonesia, the Philippines, Malaysia, Cambodia and Thailand.

TeleGeography map of global submarine cable routes

In addition to SEA, HMN launched the 2020 33Tbps SAIL cable linking South America and Africa through landing points in Brazil and Cameroon, along with some domestic projects in Chile, Peru, Venezuela, Angola, Equatorial Guinea, Senegal and Cabo Verde.

Its most significant project to date is the recently activated 192Tbps PEACE cable connecting Mombasa in the south via Saudi Arabia and Egypt to Marseille and, via a separate branch, to India and Pakistan. Further Peace branches will eventually also see Somalia and Djibouti connected, with a longer branch reaching all the way to Singapore.

HMN is also contracted not surprisingly to deploy large international projects emanating from mainland China, mainly the 160Tbps SEA-H2X cable with landing points the Philippines, Malaysia, Thailand and Singapore, and the newly announced 144Tbps Asia Link Cable landing at Singapore and Brunei.

The most recent revelations revolve around HMN’s participation in the SeaMeWe-6 cable. The US was said to apply heavy pressure on consortium members, including Bharti Airtel, Microsoft, Orange, Singtel, Telecom Egypt and Telekom Malaysia.

HMN initially submitted a bid for $500m while SubCom’s bid came in at $750m. The consortium initially, and tentatively, agreed to use HMN while keeping SubCom in reserve should issues arise with the former.

US ambassadors in six countries including Singapore, Bangladesh and Sri Lanka wrote letters to local telcos urging them to accept SubCom’s bid and spurn HMN, while hinting HMN could find itself sanctioned similarly to Huawei.

In the end, the bid was awarded to SubCom, with state-owned consortium members China Mobile and China Telecom withdrawing from the project, where before they had been slated for 20% of project funding.

Concerns centered around the possibility of the Chinese state eavesdropping on global communications, although as usual without concrete allegations, raising once again suspicions that the specter of security is being used as a smokescreen to stifle more competitive Chinese alternatives.

Other projects have experienced similar treatment in recent years. One example is a World Bank-led plan to lay cables between the Pacific island nations of Nauru, Kiribati and Micronesia in 2021. The US government again intervened, warning of security vulnerabilities and the prospect of sanctions. Again, the project was canceled.

China at its end also increasingly interferes with submarine cable projects, especially in the South China Sea. Claiming authority over the South China Sea, even as far as the territory included in Beijing’s “Nine Dash Line”, the Chinese government invoked an authority to regulate and control submarine cable projects in the region without any international agreement or consultation.

Most recently, construction of the SJC2 cable, operated by a consortium consisting of Chungwha, Meta and China Mobile, was halted after the Chinese government delayed sea-prospecting approvals for several months around Hong Kong territorial waters.

Its concerns in some ways echo those of the US, around covert installation of US navy and military surveillance equipment alongside the civilian projects.

Also, as a result of the US-China conflict, cable routes are changing. Where previously the South China Sea was the major connecting route between Japan, Korea and other Western allies such as Australia, majority Western-led cables have avoided the South China Sea in recent years, preferring a route around Indonesia, despite that adding considerable distance and cost to new projects.

The US is loath to lay critical communications infrastructure within striking range of China’s military and navy, which is suspected of routinely damaging and cutting the cable connecting Taiwan to its Kinmen island group off the coast of China, most recently in early February.

Conflict between China and the US is like to heat up before it cools again, though in the meantime, countries in the developing world, especially Southeast Asia, will be caught between the two powers in a conflict very similar to US efforts to restrict Huawei’s influence and presence around the world.

This means additional costs certainly, but also increases chances of technology and standards fragmentation as data streams are increasingly divided into more and more isolated American and Chinese domains.