KWR Special Report

Does the 5G conflict reflect the start of a new Cold-War?
By Dickson Yeo

The 5G conflict reflects a contest on the definition of the global market place, despite consistent rhetoric on security and militarization of the global commons. There are three major convergences where this contestation will take place: the convergence of global growth in the Eurasian continent with the Asia Pacific region as the center stage for technology, global demographic trends and resource utilization; the spillover of growth into Africa and MENA which are already emerging as major stomping grounds for the EU, Beijing and Washington; and the contest between the Western led neo-liberal model and the authoritarian markets paradigm of Beijing and Moscow.

Singapore (KWR) May, 20, 2019 - Imagine a scenario by 2029 where 5G and then 6G variants will be ubiquitous. The Internet-of-things (IOT) is now an established global industry and has matured more than half a decade ago beyond mere mobile devices. Halimah is an Indonesian registered nurse and biomed devices lab technician, working out of Java, assisting a major US pharmaceutical firm in local testing procedures, data collection and post-sale device assistance. Indonesia is going through Asia’s worst diabetes epidemic, where a convergence of rice-based dietary habits, influx of cheap sucrose-based beverages and Palm-oil based food products, worsens an already bad situation. Halimah is privately providing financial assistance to diabetic workers in Central Java and using her resources to convince the firm to provide longer payment terms for patients - but she has limited financial power.

The IOT allows remote data collection, device evaluation and safety updates through Halimah’s personal devices. This saves time and allows her to conduct medical social work and work on the sidelines as a Wechat payment banker. Indonesia has a loose record on cross-border electronic payment monitoring and more than a decade ago, Chinese real estate speculators had begun wiring loose cash to fuel the condominium boom in tertiary cities like Bandung and Jogjakarta. Halimah is quietly thinking about how to utilize the Wechat loan-sharks to channel micro-payment schemes for her patients, but the interest rates are simply too high. She has been approaching faith-based charities for technical and administrative assistance.

A few blocks away in Jakarta, Halimah’s former classmate, Nur Sara works as a health-care policy bureaucrat. The latter has been discussing how the bulk of the financial pain is borne by female factory workers whom are juggling health-care costs with child-rearing and paying for family expenses. Decades of industrial pollution in Java have decimated village-level assistance networks and more people are falling by the wayside with every passing year. But the crux of this issue, is that intellectual property payments to the US firm for its research and the various software and bio-science companies, render these implants as unaffordable to all but a few. As part of an indigenous industrial policy, Indonesia has long had work-arounds which break the US firm’s patents, but the firm has built in hardware safeguards implanted into patients’ bodies, that prevent the acceptance of alternative devices. The IOT attack bots literally begin to ravage patients if the bionetwork detects them. Most patients had signed release forms casually without legal representation, and the Indonesian media has been debating the ethical dimension of this for months. The firm has filed lawsuits against Chinese makers whom are able to reverse engineer the implant IOT. Back in the grass-roots, Halimah is fed up and has begun siphoning patient data to local black-market kludges. The firm originally allowed local medical staff to collate the information as a public relations exercise and could easily sever the data flow. The money and data nexus are what the localized Wechat loan-sharks want, Halimah knows this and quietly assists because the local kludge makers lack the financial wherewithal to scale manufacturing or research.

Halimah’s old school friend contacts her cousin who works as a part-time Mufti and research scientist in Mozambique. They link up to Halimah in real-time and understand that she’s channeling information to Chinese servers via the loan-sharks in exchange for lower interest rates. A major Chinese tech firm has a series of tropical disease and agricultural setups in Mozambique, given that the information is flowing to Shenzhen anyway, Halimah’s bureaucrat friend steps in to suggest a collaboration and joint venture that’s quietly assented by Beijing and Jakarta. There are several policy and hardware work-arounds that can break US patents and nullify its case in the WTO; the insulin delivery system is based on animal-derived feedstock which can be pronounced as Haram (non-Islamic). Additionally, the legacy IOT is based on first generation implants in patients’ bodies, that can be disabled by bypassing the software updates. The research work in Mozambique provides plant-based alternatives, which override the original US devices and then hack into the IOT. All of this can be considered innovations. Moreover, the US firm’s case is stretched across several makers and software houses in multiple jurisdictions. Enforcement will be extremely tedious and the optics of calling in police on impoverished female factory workers, would give Jakarta the moral high-ground to ignore any negative judgement.

The data is fed and duplicated in Shenzhen and a Chinese Biomed firm is distributing them at much lower prices to patients across Indonesia, Vietnam and MENA. The diabetes epidemic is even worse in industrial East Asia due to decades of junk-food diets, traditional reluctance to abandon Rice as a carbohydrate staple etc. Chinese and Japanese white-goods makers have long focused on medical therapy and wellness as a crucial market segment. And the initial device run in the emerging markets allows them to accumulate experience in making better products. An ECOWAS-Indonesia Free Trade Agreement, allows almost tariff free exporting of data and equipment between Jakarta and Mozambique; The Chinese tech firm partners a large Indonesian conglomerate and a Chinese appliance manufacturer to design an entirely new eco-system of devices, post-surgery care and lifestyle products. The Japanese look on this in envy and wish to dive in. Through a large Japanese venture capital firm, formidable bio-med and lifestyle tech expertise is added into the fray. The Chinese tech firm debuts a cheaper and much more flexible alternative in North America via a large Japanese distribution network in the US, Canada and Mexico. The US firm tries to cite the Apple versus Google legal precedents to extract revenue from the booming product segment, eventually settling out of court.

The new biomedical IOT implant eco-system swiftly replaces the US firm’s limited system but the data flow is messy and falls into multiple hands. The peripheral devices now sync with home appliances and given the cheap utilization of AI, the built-in safeguards against complex networks “waking-up” and achieving sentience are easily bypassed. A radical religious fundamentalist hate-group in the US, disgusted by the proliferation of development in Indonesia, has been encouraging this sentience by feeding fake-news to some of this AI.

5G has been described as a central nervous system which allows multiple industrial, economic and communications objectives to be achieved in real time, in a seamless flow that makes 4G look like the original telegraph system.

The original rollout of 4G enabled the Social Media revolution and the rollout of China’s complex paperless payment universe. But it remains to be seen what 5G would create as the global South is eagerly awaiting direct participation in industrial-economic research in a meaningful way. In the coming decade, system complexity management and understanding the qualitative nature of markets as they shift across multiple cultures will be at the heart of monetizing the benefits of 5G. From a darker perspective, the weaponization of these markets and the massive flow of information, will become democratized and lead to major changes and challenges in defining the road ahead. These are interesting times indeed.

While the information and opinions contained within have been compiled from sources believed to be reliable, KWR does not represent that it is accurate or complete and it should be relied on as such. Accordingly, nothing in this article shall be construed as offering a guarantee of the accuracy or completeness of the information contained herein, or as an offer or solicitation with respect to the purchase or sale of any security. All opinions and estimates are subject to change without notice. KWR staff, consultants and contributors to the KWR International Advisor may at any time have a long or short position in any security or option mentioned.

KWR International Advisor

Publisher: Keith W. Rabin, President

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