A $500 million undersea fiber-optic internet cable network connecting Asia, the Middle East, and Europe is being developed by state-owned Chinese telecom companies to compete with a comparable U.S.-backed project, according to four persons engaged in the arrangement. The plan is a reminder that a growing tech conflict between Beijing and Washington risks destroying the fabric of the internet.
According to the four people with direct knowledge of the plan, China's three major carriers, China Telecommunications Corporation (China Telecom), China Mobile Limited, and China United Network Communications Group Co Ltd (China Unicom), are developing one of the most cutting-edge and extensive subsea cable networks in the world.
The proposed cable, known as EMA (Europe-Middle East-Asia), would connect Hong Kong to the Chinese province of Hainan before winding its way to Singapore, Pakistan, Saudi Arabia, Egypt, and France, according to the four persons. They requested anonymity since they were forbidden from talking about potential trade secrets.
The people added that China's HMN Technologies Co Ltd, a rapidly expanding cable company whose parent company was majority-owned by Chinese telecom giant Huawei Technologies Co Ltd, would construct and lay the cable, which would cost about $500 million to complete.
They claimed that the Chinese government would provide financial aid to HMN Tech, which is majority owned by the Hengtong Optic-Electric Co Ltd, a company listed on the Shanghai Stock Exchange.
Requests for comment from China Mobile, China Telecom, China Unicom, HMN Tech, and Hengtong went unanswered.
Without specifically addressing the EMA cable proposal, the Chinese foreign ministry stated in a statement to Reuters that it "has long welcomed Chinese firms to carry out international investment and collaboration."
The announcement of the cable comes after a Reuters article last month that detailed how the U.S. government has successfully stopped a number of Chinese underwater cable projects abroad over the past four years out of worry that Beijing could be listening in on internet traffic. The United States and Hong Kong, a territory of China, would have been connected by planned private undersea cables, including initiatives sponsored by Google LLC, Meta Platforms, Inc., and Amazon.com Inc.
More than 95% of all international internet traffic travels on submarine cables. For many years, consortia of telecom and technology corporations have held these high-speed channels, pooling their resources to create these enormous networks that enable seamless data transfer throughout the globe.
Yet, in an intensifying rivalry between the United States and China, these cables—which are susceptible to eavesdropping and sabotage—have evolved into weapons of influence. The superpowers are competing for control of cutting-edge technology that will likely determine economic and military dominance in the coming decades.
The Southeast Asia-Middle East-Western Europe-6 (SeameWe-6) cable, which is currently being built by the American company SubCom LLC and will also connect Singapore to France via Pakistan, Saudi Arabia, Egypt, and a half-dozen other nations along the route, is directly competing with the China-led EMA project.
HMN Tech was first chosen to build the SeaMeWe-6 cable by the consortium, which originally consisted of telecom providers from numerous additional countries in addition to China Mobile, China Telecom, and China Unicom. But, according to sources in March that a successful U.S. government pressure campaign resulted in SubCom receiving the deal last year.
After SubCom won the contract last year and started planning the EMA cable, China Telecom and China Mobile withdrew from the project, according to the four people involved. More than half of the new network is planned to be held by the three state-owned Chinese telecom companies, but they are also entering into agreements with foreign partners, according to the sources.
According to the sources, the Chinese carriers inked separate memorandums of understanding with four telecoms this year: Zain Saudi Arabia, a division of the Kuwaiti company Mobile Telecommunications Company K.S.C.P., Telecom Egypt, Pakistan Telecommunication Company Ltd., and France's Orange SA.
The Chinese businesses have also discussed joining the partnership with Singapore Telecommunications Ltd (Singtel), a state-controlled company, and other nations in Asia, Africa, and the Middle East are also being approached, according to those involved.
Orange opted not to respond. Requests for comment from Singtel, PTCL, Telecom Egypt, and Zain went unanswered.
SubCom, an American cable company, declined to comment on the competing cable. The Department of Justice declined to comment on the EMA cable despite being in charge of an interagency task force to protect American telecommunications networks from espionage and hacking.
The dispute over internet hardware is similar to the conflict over Chinese and American companies' social media apps and search engines.
Due to concerns over national security, the United States and its allies have forbidden the use of the Chinese-owned short video app TikTok on government-owned devices. Concerns about the Chinese government obtaining access to the information TikTok gathers on its users worldwide have been expressed by a number of nations.