China is neither appreciated nor trusted in Indonesia. Still, Chinese tech companies, especially Huawei and ZTE, have become trusted cybersecurity partners for the country. They provide technology and training to much of Indonesia’s cyber security workforce and government officials. These Chinese technological successes in Indonesia offer sobering lessons for the United States, its allies and partners, not only in Indonesia, with a population of more than 270 million, but also in Indo- Wider Pacific.
Unless policymakers in Washington take a few pages from Huawei and ZTE’s playbook, these Chinese tech titans won’t face serious competition as they maneuver to train vast swaths of the digital workforce. of the 21st century. After all, the United States and its allies and partners have worked for years to protect itself from perceived security vulnerabilities associated with reliance on Chinese technology.
Beginning in the early 2010s, staunch US allies such as Australia began to limit Huawei’s involvement in critical information and communications technology infrastructure. This ultimately resulted in strong restrictions—and sometimes outright exclusions—for Huawei and its peers such as ZTE.
But for much of the developing world, the story couldn’t be more different.
With a few notable exceptions, including Vietnam and India, the developing world still welcomes Chinese tech companies as providers of much-needed communications infrastructure and training. Huawei and ZTE enjoyed one of their warmest embraces in Indonesia. First entering the Indonesian market in the late 1990s and early 2000s, these companies have become full-fledged providers of both Indonesia’s critical communications infrastructure and the training that will strengthen the workforce of the country’s burgeoning digital economy. Huawei, for example, already has by far the largest share of Indonesia’s telecom operator equipment market.
As in many other developing countries, the relatively low price of Huawei and ZTE kits is a big part of the appeal. By some estimates, China’s communications infrastructure is up to 30% cheaper than that of its competitors.
Yet, in undertaking to document how senior Indonesian government officials approach the risks of technological dependence on Chinese companies for our new report, Location and technological success of China in Indonesia, we found that the reasons for the expansive role of Chinese technology companies are more complex and numerous than price. Like our interviews with a wide range of Indonesian officials and experts, Chinese tech companies are seen as partners in both realizing the grand goals of Indonesia’s digital economy and addressing its daunting challenges in cybersecurity.
Although the digital economy is at the heart of the Indonesian government’s plans to catapult the country into the world’s Top 10 economies by 2030, the country also faces a massive skills shortage in the field of information technology and of communication, with the World Bank projecting that it will need 9 million of these additional workers by 2030.
Meanwhile, Indonesia is among the most vulnerable countries to cyberattacks in the world. According to Indonesia’s National Cyber and Crypto Agency, the country experienced 1.4 billion cyberattacks or web traffic anomalies in 2021. In 2017, when the number of cyberattacks was closer to 200 million, they were estimated to have cost the country $34.2 billion.
Despite deep mistrust of Chinese tech companies among wealthy liberal democracies, Huawei and ZTE have presented themselves as the solution to Indonesia’s twin challenges of a looming lack of tech skills and widespread cyberattacks.
In 2020, Huawei promised to train 100,000 Indonesians in essential digital skills, including cloud computing and 5G. Despite the ambition of the decision, Huawei is backing its promises with resources.
We’ve seen Huawei partner with local Indonesian universities to offer free short courses and certifications in app development and other key skills. An Indonesian academic we spoke to shared emails showing that Huawei is expanding its reach by seeking to partner with more local universities and education service providers.
Huawei also offers training to the Indonesian government, with the company apparently having trained 7,000 officials since 2019. Indonesia has long been a victim of China’s sophisticated cyber espionage. Despite this, Indonesia sees the training offered by Chinese tech companies as a solution to many of the country’s most serious cybersecurity challenges.
For Indonesia, the threat of state-based cyber espionage is far down the list of security concerns compared to cybercrime by non-state actors, misinformation and disinformation. In addition to financial losses for Indonesian businesses and identity theft and fraud for ordinary Indonesians, these threats endanger the country’s social and political stability.
With Chinese technology companies providing the training, technology and security practices to reduce vulnerabilities to cybercrime by non-state actors and the skills and technology needed to manage the information domain, the Indonesian government is considering companies like Huawei as partners. As a testament to this, the country’s National Cyber and Crypto Agency signed a Memorandum of Understanding with Huawei on cybersecurity capacity building in 2019. This agreement was later upgraded to a tripartite agreement with a leading Indonesian technology institute. in 2021.
For the United States or Australia, the idea that a cybersecurity agency would sign such an agreement with Huawei may seem absurd, especially since the Chinese government can coerce Chinese companies to help it in its intelligence efforts. .
But for Indonesia, these concerns about state security are overshadowed by the training and technology advantages provided by companies like Huawei. As a senior Indonesian government official told us: “If we are constantly afraid, our development will stagnate.
If the United States and its allies and partners want to compete with China in developing countries like Indonesia, then, like Huawei, they must embark on delivering tangible benefits that meet real needs.
The US government should partner with its major tech companies to offer free or at least heavily subsidized technical training programs in Indonesia and elsewhere in the Indo-Pacific. In addition to subjecting Chinese firms’ bids to healthy competition, such moves would be welcomed by key U.S. allies and partners.
Countries like Japan, Australia and India are also concerned about the rise of Chinese tech companies in the Indo-Pacific and would strongly support such a US move. Moreover, these countries could support such a US-led effort by providing additional know-how, funding, and technology. Such a so-called minilateral initiative could also be incorporated into Quad’s exit efforts to provide more public goods in the Indo-Pacific.
The rhetoric of the United States and like-minded countries on the rules-based international order and a free and open Indo-Pacific is not bad. But that won’t persuade developing countries to turn down tangible benefits like technology and training. To shift decision-making to Jakarta and elsewhere, Washington will need to step up technology and training offerings that offer a more compelling value proposition.
None of this is to say that strategic competition with China is the only reason to offer technology training programs in Indonesia and other developing Indo-Pacific countries.
Helping to develop future generations of tech workers in the region is an unequivocally good thing. Many Indo-Pacific countries and their young populations will need these skills to achieve their development goals in the digital future of the global economy.
But in addition to the clear rationale for development to provide these kinds of opportunities, there is a compelling realpolitik rationale. Without training funded and supported by the United States and its allies and partners, Huawei and other Chinese tech companies will only increase their already strong influence on the tech landscape of Indonesia and the wider region.
The United States and its allies and partners have been absent from technology training in Indonesia and other key developing economies in the Indo-Pacific. It’s time for them to get back to the game.