China Smart Cities Development Report

1 China s Smart Cities Development Katherine Atha, Jason Callahan, John Chen, Jessica Drun, Kieran Green, Dr. Brian Lafferty, Joe McReynolds, Dr. James Mulvenon, Benjamin Rosen, and Emily Walz Research Report Prepared on Behalf of the Economic and Security Review Commission January 2020 Disclaimer: This research Report was prepared at the request of the Economic and Security Review Commission to support its deliberations. Posting of the Report to the Commission's website is intended to promote greater public understanding of the issues addressed by the Commission in its ongoing assessment of economic relations and their implications for security, as mandated by Public Law 106-398 and Public Law 113-291. However, it does not necessarily imply an endorsement by the Commission or any individual Commissioner of the views or conclusions expressed in this commissioned research Report i About SOSi SOS International LLC (SOSi) is a leading provider of intelligence, technology, and project management solutions to large government and private sector organizations around the world.

2 We deliver a wide range of services that support the national security interests of the , the security and stability of its allies, and the interests of large, multinational corporations in the defense, oil, gas, mining, construction and manufacturing sectors. This project was conducted within SOSi s Intelligence Solutions Group, a premier open source and intelligence exploitation cell for the intelligence community, Department of Defense, and Federal law enforcement. Staffed by an experienced team of cleared analysts with advanced language skills, SOSi s mission is to provide cutting-edge, open source intelligence support to the collection, analytical, and operational activities of the Government, with the goal of achieving national strategic objectives. SOSi accomplishes its mission through the conduct of objective, independent, and relevant research and analysis, under strict quality guidelines.

3 Comments may be sent to Dr. James Mulvenon. Dr. James Mulvenon Special Programs Division SOS International 2650 Park Tower Drive, Suite 300 Vienna, VA 22180 TEL: 571-421-8359 Email: ii Acronyms Acronym Full Name 3 GPP 3rd Generation Partnership Project ADB Asian Development Bank AI artificial intelligence AMI advanced metering infrastructure ARIA Asia Reassurance Initiative Act ASEAN Association of Southeast Asian Nations BUILD Better Utilization of Investments Leading to Development BRI Belt and Road Initiative CAC Cybersecurity Administration of China CAICT China Academy of Information and Communications Technology CASC China Aerospace Science and Technology Corporation Limited CASIC China Aerospace Science and Industry Corporation CCID China Electronic Information Industry Development CCP Chinese Communist Party CCTV closed-circuit television CEC China Electronics Corporation CEIEC China National Electronics Import & Export Corporation CETC China Electronics Technology Group Co.

4 , Ltd. CIP Division for International Communications and Information Policy, Department of State CISA Cybersecurity and Infrastructure Security Agency, Department of Homeland Security CNNVD Chinese National Vulnerability Database CRBC China Road and Bridge Corporation CRRC China Railway Rolling Stock Corporation CVE Common Vulnerabilities and Exposures DFC International Development Finance Corporation DHS Department of Homeland Security DOD Department of Defense DVR digital video recorder EU European Union FCC Federal Communications Commission FDI foreign direct investment FYP Five Year Plan GB/T voluntary national standard GCTC Global City Teams Challenge GIS Geographic Information Systems GPS Global Positioning Systems HCSEC Huawei Cyber Security Evaluation Centre ICS industrial control systems ICT information and communications technology IEC International Electrotechnical Commission IEEE Institute of Electrical and Electronics Engineers IGF Internet Governance Forum IoT Internet of Things IP

5 Internet protocol ISO International Organization for Standardization IT information technology ITA International Trade Administration ITAN Infrastructure Transaction and Assistance Network ITS intelligent transportation systems ITU International Telecommunication Union iii JTC Joint Technical Commission LTE long-term evolution MIIT China s Ministry of Industry and Information Technology MIT Massachusetts Institute of Technology MOHURD Ministry of Housing and Urban-Rural Development MOST China s Ministry of Science and Technology MOT China s Ministry of Transportation MoU Memorandum of Understanding MPS China s Ministry of Public Security MSS China s Ministry of State Security NB-IoT Narrowband Internet of Things NDRC China s National Development and Reform Commission NIST National Institute of Standards and Technology NSF National Science Foundation NUP National New-type Urbanization Plan 2014-2020 NVR network video recorder OBD on-board diagnostics OPIC Overseas Private Investment Corporation PCAST President s Council of Advisors on Science and Technology PLA People s Liberation Army PPP public-private partnership PRC People s Republic of China R&D research and Development RFID radio frequency identification RMB renminbi RS remote sensing SAC Standardization Administration of China SEZ special economic zone TTP tactics, techniques, and procedures UK United Kingdom UN United Nations iv Table of Contents About SOSi.

6 I Acronyms .. ii Table of Contents .. iv Executive Summary and Key Findings .. 1 Key Findings .. 2 Chinese Smart Cities Policies .. 2 Chinese Smart Cities Development Trends .. 2 Chinese Surveillance .. 2 Chinese Promotion of Smart Cities Technologies Abroad .. 3 Smart Cities in the Context of Relations .. 4 Recommendations .. 4 Introduction .. 7 I | Chinese Smart Cities Policies: History and Current Practice .. 12 Key Findings .. 12 Smart Cities Initiatives in Historical and Procedural Context .. 12 The Path to New Smart Cities .. 14 Xi s Increasing Smart Cities Emphasis .. 16 Xi s Focus on the Xiong an New Area .. 17 Current Smart Cities Policy and the Chinese Regulatory State .. 18 II | Chinese Smart Cities Development Trends .. 24 Key Findings .. 24 Government-led Smart Cities Development .. 25 The Geography of Smart City Pilots .. 26 Smart Cities Goals: Public Services, Management Efficiency, and Economic 27 Growth in Key Technologies: The IoT, big data , and the Cloud.

7 32 Coordinating Governance and Management: Leading Small Groups and big data Management Administrations, and National and International Connections .. 35 Commercial Enterprise Involvement .. 37 Successes to Date, Challenges Ahead .. 39 III | The Masses Have Sharp Eyes: Technology and Mass Surveillance in Chinese Smart 43 Key Findings .. 43 The Evolution of Mass Surveillance in the People s Republic of China .. 44 Smart City Improvements for Mass Surveillance .. 47 Chinese Mass Surveillance in an International Context .. 52 IV | China s Export of Smart Cities .. 55 Key Findings .. 55 Taking Smart Cities Abroad: The Belt and Road Initiative, State-Backed Financing, and International Standards Organizations .. 56 Methodology and Study Limitations .. 58 Identified Smart City Technology Exports .. 60 Case Study: Smart City Platforms in Malaysia .. 62 Case Study: Integrated Security Platforms in Ecuador.

8 65 v Case Study: Surveillance and Smart Payment Systems in Kenya .. 67 Case Study: Investment and Innovation in Germany .. 71 Case Study: Infrastructure and Security Cameras in the United Kingdom .. 74 Future Plans and Trajectories .. 78 Implications for the United States .. 79 V | Smart Cities and Relations .. 81 Key Findings: .. 81 Smart Cities : A Big-Picture, Bottom-Up Approach .. 81 Smart Cities Initiatives Abroad and the Indo-Pacific Strategy .. 86 Comparing Chinese and Smart City Development .. 88 Comparing Cities .. 89 Comparing Constituent Technologies .. 90 Comparing Company Market Power .. 91 Securing Smart Cities in the United States .. 95 Determining Vulnerabilities in Smart Cities .. 97 Managing Supply Chain Risk: Huawei and the United States .. 98 Chinese Smart City Technologies in the United States .. 100 Chinese Imports to the United States.

9 101 Reliance on Chinese Imports .. 102 Beyond Imports: Foreign Direct Investment, Joint Ventures, and Policy Capture .. 106 Implications for the United States .. 109 Global Competitiveness .. 109 National Security Risks and Responses .. 111 Conclusions and Areas for Future Research .. 113 1 Executive Summary and Key Findings Around the world, countries and Cities chasing improved resource allocation, increased efficiency, enhanced public safety, and sustainable growth are turning to a range of networked technologies to help manage everything from government services to traffic patterns. The collective term for these technology solutions has become Smart Cities , first coined in the 1990s but re-introduced with its current meaning by IBM in 2008. Smart Cities can refer to an entire urban ecosystem employing Smart Cities principles or to the constituent technologies and applications that make up that ecosystem.

10 While there is no standard list of Smart Cities technologies and applications, at its core, the term signifies the use of digital technology to collect and share data about municipal operations that had been previously unavailable or disaggregated, allowing for improved municipal management and services. Successful Development and deployment of Smart Cities technologies is likely to have major social and economic impacts as massive amounts of data are collected and used to improve efficiency in daily life and optimize or automate previously burdensome or inefficient governance tasks. China has become a global leader in Smart Cities initiatives, combining embedded sensors, metering devices, cameras, and other monitoring technologies with big data processing and artificial intelligence (AI) analysis to help manage its Cities and public spaces.