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With the US and the Philippines holding the largest ever military drills in the South China Sea, followed by China and Singapore holding their own, tensions are heating up.
As one of the world’s most important shipping lanes for oil, minerals and food, whoever dominates the South China Sea will control more than a fifth of global trade. But the biggest economic asset up for grabs in the region is Big Data – and the future of the entire internet depends on who wins the battle to dominate this strategic waterway.
Illustration: Dionne. Credit:
More than 486 undersea cables carry more than 99 per cent of all international internet traffic globally, according to the Washington-based research firm TeleGeography. The bulk of them are controlled by a handful of American technology giants, namely Google-owner Alphabet, Facebook-owner Meta, Amazon and Microsoft.
South-East Asia’s internet economy is expected to reach $1 trillion in value by 2030. Whoever controls the Asia-Pacific’s subsea cabling infrastructure will not only dominate this booming economy, but control the global internet.
Internet data flows, carrying everything from emails and banking transactions to military secrets, are more valuable than oil. As such, the world’s subsea cabling infrastructure is increasingly vulnerable not only to sabotage but also to espionage – spy agencies can easily tap into cables on their own territory.
That’s why geopolitical rivalry between the US and China has increasingly focused on controlling the world’s subsea cabling networks.
Live fire drills with the US in the Philippines last month.Credit: Getty
China is now planning a $500 million undersea internet cable network to create a superfast connection linking up Asia with the Middle East and Europe. It is also impeding US-backed projects for subsea internet cables through the South China Sea by delaying licensing approvals and creating stricter operating restrictions.
Meanwhile, the US government has thwarted several Chinese subsea cabling projects in the Asia-Pacific over concerns about Beijing’s surveillance capabilities.
At least six private undersea cable deals led by Google, Meta and Amazon that would have connected the US with Hong Kong were blocked by Washington, to keep at bay HMN Tech. A subsidiary of the sanctioned Chinese firm Huawei, HMN Tech has won praise from Beijing as a model of “civil-military integration”, and acknowledges that its activities “offer powerful support for the modernisation of our country’s national defence”.
To bypass Chinese control, American tech giants Facebook and Google are building Apricot, the first intra-Asian subsea cable avoiding Hong Kong. The 12,000 kilometre cable will connect Japan, Taiwan, Guam, the Philippines, Indonesia and Singapore – but excludes Malaysia, which has fast become the linchpin of US and Chinese competition to dominate the global internet.
Malaysia’s involvement in Apricot was scuppered due to a 2020 “cabotage” ban on foreign vessels in the autonomous Sabah region of eastern Malaysia to protect the local shipping industry from foreign competition.
In response, Facebook, Google, Microsoft and Amazon wrote to the Malaysian government complaining that the ban would obstruct the new cable venture, and requesting an urgent meeting with the prime minister. The request was ignored. As a result, Malaysia has been excluded not only from the Apricot route, but from the Echo and Bifrost cable routes across the South China Sea, which are also backed by Facebook and Google.
Local frustration over Malaysia’s “cabotage” ban has revived demands in Sabah for greater autonomy from the federal government. This dovetails with an international legal case on behalf of heirs of a colonial-era sultanate in the remote Sulu archipelago of the Philippines. The sultanate purportedly leased the region of Sabah to British colonists in 1878 in return for an annual payment, which the petitioners have used to justify undermining Malaysian sovereignty in Sabah, claiming a percentage of oil and gas profits there.
Chinese navy ships take part in a military drill in the Taiwan Strait in April.Credit: CCTV via AP
The lawyers representing the Sulu heirs have deep ties with the same US tech giants competing to dominate subsea internet cables in the South China Sea. Paul Cohen, a former speechwriter on the Clinton-Gore presidential campaign, currently serves as president of the Silicon Valley Arbitration and Mediation Center where he works in “dialogue” with these US tech firms. Cohen’s colleague, Elisabeth Mason, is a board member of US charity All Star Code alongside three senior Google executives, and founded the Stanford Poverty and Technology Lab with support from both the Obama White House and Facebook founder Mark Zuckerberg.
This close proximity of the Sulu heirs’ lawyers to the tech giants that bypassed Malaysia to pursue US-backed subsea internet cable routes will exacerbate Malaysian perceptions of Western hostility to its national interests.
Indeed, Malaysia’s exclusion from the US-backed subsea cabling projects has already accelerated the country’s alliance with China. In 2022, Malaysia joined the 5000 kilometres China-backed South-East Asia Hainan-Hong Kong Express Cable System (SEA-H2X) linking Hong Kong, China, the Philippines and Thailand to eastern Malaysia and Singapore.
The future of the global internet is at stake. If Malaysia falls under Chinese dominance, it will have major repercussions across the 10-member Association of South-East Asian Nations, potentially triggering a domino effect.
Yet the US has a fresh opportunity for rapprochement under Malaysia’s new government led by long-time democracy activist Anwar Ibrahim. Given the latter’s first global trip to China securing $38 billion of investments, the US should act fast to ensure Malaysia recognises the benefits of digital co-operation with the West.
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