Internet Security Will Require Combined Global Effort
By Li Qiaoyi
Global Times
2017/7/2 19:53:39
Derek O'Halloran Photo: Li Qiaoyi/GT
Editor's Note: With the likes of WeChat and Alipay becoming household names across the globe, the Chinese economy is increasingly associated with Internet firms. Along with the excitement, however, there are also increasing concerns over cyber risks. In an exclusive interview on Wednesday at the "Summer Davos" forum in Dalian, Northeast China's Liaoning Province, Derek O'Halloran (DO), head of Digital Economy and Society System Initiative and member of the Executive Committee of the World Economic Forum (WEF), talked with Global Times reporter Li Qiaoyi (GT) and gave some valuable suggestions about how China can be more secure in a connected world.
GT: What do you think are the major reasons behind the rise to global prominence of big Chinese Internet firms such as Alibaba, Tencent and Baidu?
DO: One is that they have taken a very innovative approach to reaching out to the market. They've taken some great ideas that you see in Western platforms and then they've innovated beyond that. Some of the Chinese platforms have integrated multiple services in ways you probably didn't see in the first-generation platforms in the West and that makes them quite interesting and keeps the customers on board for a longer journey. Of course the other part is the significant market size in China.
GT: What do you think is the biggest challenge facing the oversight of China's Internet sector and its Internet economy?
DO: I think the challenge for China is the same as for any country when we connect people through digital technologies and increasingly we connect things into a global network - it means that a lot of the different opportunities as well as the different challenges or risks we develop in different markets and different institutions suddenly can press in together because the same piece of data you can use for multiple things, for instance, to buy and sell a product, to protect privacy or national security. So how that data is used becomes very difficult to govern even in a domestic setting and of course once you put that together with multiple countries each trying to do that, it becomes very challenging. I think the challenges China faces there are the same as for everybody. It requires new ways for different ministries, different businesses and governments, as well as countries, to work together.
GT: Compared with other countries, how effective has China been in regulating its Internet sector without strangling the growth of innovative and disruptive business models?
DO: It's really about trying to strike the right balance. Clearly you see organizations like Alibaba and Tencent - there's a huge surge of innovation that's enabled there. And if you look then at the way some of those companies are approaching the market, you can see great benefits there as well. When you look at some of the industrial space, and the Internet of Things, how we really understand it and use it for a competitive advantage, I think China is probably one of the countries that are at the forefront of that.
How to collaborate across ministries is a very difficult challenge and China has developed some interesting approaches there. The creation of the Cyberspace Administration of China could be an example. How it works with different ministries is of course something you must figure out and I'm sure that's still a work in progress. But trying to at least think about how to coordinate across different sectors is important, because the same information about the citizen will be important both for transport and for health for example, and if each ministry is just developing its own approach to managing data, you may end up with a situation where you have a different and more fragmented policy.
Still, these are very early days. This is the process we have to go through, I think, over the next several years.
GT: Could big data help resuscitate the planned economy, as Alibaba founder Jack Ma has put it?
DO: I don't think there will be a reversion to some previous model. I think what we'll see is the creation of a new model that will combine different aspects of decentralized economies and different aspects of planned economies.
GT: With China at the forefront of digitalization, will the country pioneer some efforts in governing big data?
DO: The field of how to govern big data or data in general is in its very early stages and it's wide open for anyone to innovate. We've already started some pilots at the WEF around types of data to see whether we can understand different contexts and situations where you may want to use data and who are the different parties, stakeholders involved, whether they be individuals, some different companies or the government. So, can you design a set of governance mechanisms for the data that is fair to all of the people involved? Using some technological solutions, maybe you can do that, because maybe you don't need to share all of the data. You only share small pieces of data in order to allow health delivery or criminal justice, or in order to enable a transaction for somebody to buy something on the Internet. That road will be around being more nuanced around different types of data and pieces of data rather than thinking about big data as one big thing.
GT: How vulnerable do you think China is to cyberattacks?
DO: I wouldn't comment on the sort of technical capabilities, because that's something that is as well documented in the public domain as anywhere. I would say that for any country, any organization, I don't think one can ever be completely secured. It's the nature of the digital world we're in. We can reduce the risk and improve our ability to respond, but it's very difficult to completely eradicate risk. Now there are different types of attacks and there are different motivations and different things that people would bring to that. Not every attack comes from the outside. The vulnerability is not something that is a Chinese government issue, so if we want to innovate around policy and regulation, we need to do that collectively. Because the challenges are ones that no one party can solve by themselves. Even all the governments together won't be able to solve these issues. You need the government, businesses, probably academia, civil society and various different groups in order to be able to contribute different pieces to define what roles and responsibilities they each have.
GT: What should be most urgently done for China to defend itself against cyber attacks?
DO: There are two types of challenges in cyber security. One is that there's a whole bunch of stuff that we know we should be doing that were not doing. For most of the digital infrastructure and most of the users, it's very distributed, so it's not owned by just the government or just the State-owned enterprises or just the private sector and then the individual users. There could be vulnerabilities anywhere. There are lots of good practices that have been developed over the past 15, 20 years that most companies still don't do. So the first thing we need to do is to educate businesses and also citizens about doing the things we know that we should be doing.
The second set of challenges that are emerging are things that are quite difficult and we actually don't know the right answer yet. As we start to connect lots of things to the Internet, some may no longer be supported and there may be a gap. That's a discussion you would have to have between the private sector and the government. Because many products made in China will be sold elsewhere. You also have to have that discussion with industry associations and governments in other countries.
We're only going to become more secured if we do this together. We also need to build trust at the global level. In a connected world, we're either all safe together, or we're unsafe together. There is nothing in between.
Global Times
2017/7/2 19:53:39
Derek O'Halloran Photo: Li Qiaoyi/GT
Editor's Note: With the likes of WeChat and Alipay becoming household names across the globe, the Chinese economy is increasingly associated with Internet firms. Along with the excitement, however, there are also increasing concerns over cyber risks. In an exclusive interview on Wednesday at the "Summer Davos" forum in Dalian, Northeast China's Liaoning Province, Derek O'Halloran (DO), head of Digital Economy and Society System Initiative and member of the Executive Committee of the World Economic Forum (WEF), talked with Global Times reporter Li Qiaoyi (GT) and gave some valuable suggestions about how China can be more secure in a connected world.
GT: What do you think are the major reasons behind the rise to global prominence of big Chinese Internet firms such as Alibaba, Tencent and Baidu?
DO: One is that they have taken a very innovative approach to reaching out to the market. They've taken some great ideas that you see in Western platforms and then they've innovated beyond that. Some of the Chinese platforms have integrated multiple services in ways you probably didn't see in the first-generation platforms in the West and that makes them quite interesting and keeps the customers on board for a longer journey. Of course the other part is the significant market size in China.
GT: What do you think is the biggest challenge facing the oversight of China's Internet sector and its Internet economy?
DO: I think the challenge for China is the same as for any country when we connect people through digital technologies and increasingly we connect things into a global network - it means that a lot of the different opportunities as well as the different challenges or risks we develop in different markets and different institutions suddenly can press in together because the same piece of data you can use for multiple things, for instance, to buy and sell a product, to protect privacy or national security. So how that data is used becomes very difficult to govern even in a domestic setting and of course once you put that together with multiple countries each trying to do that, it becomes very challenging. I think the challenges China faces there are the same as for everybody. It requires new ways for different ministries, different businesses and governments, as well as countries, to work together.
GT: Compared with other countries, how effective has China been in regulating its Internet sector without strangling the growth of innovative and disruptive business models?
DO: It's really about trying to strike the right balance. Clearly you see organizations like Alibaba and Tencent - there's a huge surge of innovation that's enabled there. And if you look then at the way some of those companies are approaching the market, you can see great benefits there as well. When you look at some of the industrial space, and the Internet of Things, how we really understand it and use it for a competitive advantage, I think China is probably one of the countries that are at the forefront of that.
How to collaborate across ministries is a very difficult challenge and China has developed some interesting approaches there. The creation of the Cyberspace Administration of China could be an example. How it works with different ministries is of course something you must figure out and I'm sure that's still a work in progress. But trying to at least think about how to coordinate across different sectors is important, because the same information about the citizen will be important both for transport and for health for example, and if each ministry is just developing its own approach to managing data, you may end up with a situation where you have a different and more fragmented policy.
Still, these are very early days. This is the process we have to go through, I think, over the next several years.
GT: Could big data help resuscitate the planned economy, as Alibaba founder Jack Ma has put it?
DO: I don't think there will be a reversion to some previous model. I think what we'll see is the creation of a new model that will combine different aspects of decentralized economies and different aspects of planned economies.
GT: With China at the forefront of digitalization, will the country pioneer some efforts in governing big data?
DO: The field of how to govern big data or data in general is in its very early stages and it's wide open for anyone to innovate. We've already started some pilots at the WEF around types of data to see whether we can understand different contexts and situations where you may want to use data and who are the different parties, stakeholders involved, whether they be individuals, some different companies or the government. So, can you design a set of governance mechanisms for the data that is fair to all of the people involved? Using some technological solutions, maybe you can do that, because maybe you don't need to share all of the data. You only share small pieces of data in order to allow health delivery or criminal justice, or in order to enable a transaction for somebody to buy something on the Internet. That road will be around being more nuanced around different types of data and pieces of data rather than thinking about big data as one big thing.
GT: How vulnerable do you think China is to cyberattacks?
DO: I wouldn't comment on the sort of technical capabilities, because that's something that is as well documented in the public domain as anywhere. I would say that for any country, any organization, I don't think one can ever be completely secured. It's the nature of the digital world we're in. We can reduce the risk and improve our ability to respond, but it's very difficult to completely eradicate risk. Now there are different types of attacks and there are different motivations and different things that people would bring to that. Not every attack comes from the outside. The vulnerability is not something that is a Chinese government issue, so if we want to innovate around policy and regulation, we need to do that collectively. Because the challenges are ones that no one party can solve by themselves. Even all the governments together won't be able to solve these issues. You need the government, businesses, probably academia, civil society and various different groups in order to be able to contribute different pieces to define what roles and responsibilities they each have.
GT: What should be most urgently done for China to defend itself against cyber attacks?
DO: There are two types of challenges in cyber security. One is that there's a whole bunch of stuff that we know we should be doing that were not doing. For most of the digital infrastructure and most of the users, it's very distributed, so it's not owned by just the government or just the State-owned enterprises or just the private sector and then the individual users. There could be vulnerabilities anywhere. There are lots of good practices that have been developed over the past 15, 20 years that most companies still don't do. So the first thing we need to do is to educate businesses and also citizens about doing the things we know that we should be doing.
The second set of challenges that are emerging are things that are quite difficult and we actually don't know the right answer yet. As we start to connect lots of things to the Internet, some may no longer be supported and there may be a gap. That's a discussion you would have to have between the private sector and the government. Because many products made in China will be sold elsewhere. You also have to have that discussion with industry associations and governments in other countries.
We're only going to become more secured if we do this together. We also need to build trust at the global level. In a connected world, we're either all safe together, or we're unsafe together. There is nothing in between.
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