The “big four” IT companies in China are referred to collectively as BATH — an acronym made from the initials of search engine Baidu, shopping site Alibaba, chat app and game producer Tencent and hardware manufacturer Huawei. In terms of their technical and economic clout, the four are said to be approaching rough parity with America’s GAFA, which is taken from the initials of Google, Amazon, Facebook and Apple.
Aggressive moves by the U.S. government to exclude Huawei, which has been pitching its next-generation 5G high-speed mobile communications, are being closely watched by Japan’s media. More recently, the administration of U.S. President Donald Trump has demanded the Tencent group sell off its popular TikTok app to an American company as a condition for operating in the United States.
What’s this dispute all about? The Sept. 4 issue of weekly magazine Friday delivered a salvo titled “The real aim of China’s information strategy.”
“Use Chinese applications, smartphones, personal computers or anything that connects to the internet without precautions, and credit card data, bank account numbers and other information can be leaked to China,” warns Toshiyuki Inoue, a journalist specializing in the IT sector. “In the worst case, Japanese corporate data can be pilfered, which might even result in bankruptcy.”
Friday also noted that the government of India has banned smartphone apps from China. (On Sept. 3, the number of banned items was increased from 59 to 118.) Australia and the U.K. are reportedly weighing similar restrictions.
Morikazu Iwami, a data risk adviser, tells the magazine that “China is trying to hijack the networks and communications infrastructure of other countries.”
“Chinese-made products are configured with a so-called back door that enables them to be operated remotely,” Iwami says. “It’s smart to assume they are configured that way from the get-go. Low-priced Chinese-made net products are readily snatched up by consumers. This not only places individual and corporate data at risk, but secret government data as well.”
Data is not the only thing getting stolen.
The magazine cites figures from the Japan Credit Card Association, which reported that losses due to credit card theft in Japan during 2019 totaled ¥27.4 billion. About 80 percent of the violations are estimated to have resulted from hacking into personal computers or smartphones. The portion involving Chinese hackers, however, was not specified.
“Smartphone apps are currently flourishing, and if a game is excluded from the shops operated by media platforms, it has no chance of survival,” game authority Tsuyoshi Iijima tells weekly magazine Spa (Sept. 8-15). “Tencent is the world’s largest game company and, if its products are locked out, I suppose the world market for games will undergo drastic changes.”
The stakes are enormous: A sidebar to the Spa article shows that annual Tencent-related transactions in Japan via WeChat Pay reached approximately ¥170 billion in 2019.
Spa explains that Japan’s game makers are unable to market their products in China without tying up with a local partner. Japanese makers such as Konami and Bandai Namco enter that market through joint development with Tencent. Nintendo sells Nintendo Switch through major online sales outlets like Jingdong (aka JD dot com), in which Tencent holds a large share.
Any crackdowns on Chinese IT products pose other risks.
“If Japan were to emulate the United States and impose controls, it would invite retaliation by China,” says Takamoto Suzuki, an auditor at trading firm Marubeni’s China subsidiary. “For instance, since the Fukushima nuclear reactor meltdown in 2011, China blocked imports of agricultural products from 10 of Japan’s prefectures. The ban is expected to be lifted through trade agreements. Also a poll of Chinese travelers named Japan as the country they most want to visit after the pandemic ends. If Japan starts applying restrictions, it would delay the opening of the China market and reopening of tourism.”
As if to confirm an old adage — gishin anki (once something looks suspicious, everything else will look suspicious) — Japan’s media has also become more circumspect concerning the activities of the Chinese government-funded Confucius Institute, which from 2005 to 2019 established tie ups with 15 Japanese universities.
Yukan Fuji (Aug. 29) says that last month the U.S. State Department designated the institute, which operates 67 branches in the U.S., as a “foreign mission of the People’s Republic of China.” The announcement was critical of the institute’s “opacity and its state-directed nature.”
“There’s been talk about espionage and so forth, but we haven’t seen anything like that,” says the program coordinator at Okayama Shoka University. “These are just Chinese language courses and cultural events, with no political activities.”
“In Japan we’ve never heard about any trouble involving the Confucius Institute,” educational journalist Reiji Ishiwatari tells Yukan Fuji. “To shut it down without a reason would raise the risk of stopping student exchanges from China and our exchanges with other Chinese universities.”
Ishiwatari adds that while a dozen branches opened from 2005 to 2009, only three more have opened over the past decade.
“This tapering off might be a natural result of concerns over propaganda activities,” he says.
Unlike Chinese IT products, which seem to have few defenders, at least some individuals are willing to give the Confucius Institute the benefit of doubt.
“An American friend who taught calligraphy at a CI told me the program was pure language and culture, with no propaganda,” a former U.S. State Department official who is now teaching graduate level courses in the Washington area tells The Japan Times. “A couple of my students also had good things to say about the programs.
“Sure, the institutes are tools of a public diplomacy program to build up China’s image overseas, but they also promote understanding of the country’s language and culture at a time when everything from China is seen as suspect.
“Japan has a similar program, Japan House, though it is just only getting started,” he says.
Big in Japan is a weekly column that focuses on issues being discussed by domestic media organizations.
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