Key Things to Know:

• Geopolitical Tensions: The increasing entry of Chinese smart cars into Western markets amidst ongoing East-West tensions raises concerns over national security and consumer privacy.
• Intellectual Property and Economic Impact: Issues surrounding intellectual property rights violations and the economic implications of Chinese manufacturing dominance highlight the complex trade dynamics between China and the West.
• Security Risks of Smart Cars: The U.S. government’s scrutiny of Chinese-made smart cars underscores fears of espionage, data theft, and the potential misuse of technology in vehicles.
• Data Privacy and AI Development: The collection and use of data from smart cars for AI development pose significant ethical and security questions, emphasizing the need for robust data governance.

As tensions between the East and West refuse to simmer down, there are increasing concerns with Chinese smart cars entering Western markets. But while there are plenty of reasons to be concerned, are we just being a bit a paranoid, or is the sense of danger real? What challenges does Chinese hardware present to the West, why is the US looking closely at Chinese smart cars, and should we all be concerned?

What challenges does Chinese hardware present to the West?

The ongoing difficulties between the East and West continue to disrupt the daily lives of engineers. Numerous restrictions prevent trade on both sides, and the increasing degree of mistrust makes it harder to work with foreign companies. But while these pains certainly hold back advances in tech, they are not completely unjustified, as they aim to protect the sovereignty of nations and the interests of their citizens. 

From the perspective of the West, China has presented itself as a troubling trading partner ever since it rose to manufacturing domisance in the mid-1980s. The low wages (relative to the West) made it very easy to manufacture in the Far East, but this often resulted in exploitation and modern slavery practices.

While consumers rarely cared about such issues during the technology boom, modern consumers are far more mindful regarding where their tech is made and the quality of life of those involved with the process. Furthermore, the damage to the Western economy caused by effectively destroying the manufacturing industry has many wanting to see a return of such work, thus making Chinese-sourced products increasingly unpopular. 

Shifting Consumer Awareness and Intellectual Property Concerns

However, China’s low cost is not the only challenge it has presented to the West. One major issue that persists even today is the widespread violation of intellectual property rights. Simply put, millions of fake products are produced in China daily, being sold as the genuine article, while others simply copy a product outright and place their own logo on it.

The issue of intellectual property rights violation extends beyond economic losses, posing a significant challenge to innovation and trust in international trade. The U.S. administration’s efforts to address these concerns reflect a broader strategy to protect domestic industries and maintain global competitiveness. By understanding the implications of these actions, we can better appreciate the complex dynamics at play in the global tech landscape.

Due to large-scale subsidisation by the Chinese government, Chinese suppliers are also able to provide such products to the West at a discount rate. This means that not only do original IP holders lose out on sales, but potentially dangerous products that do not conform to the same quality standards as laid out by authentic products are easily placed onto the market. 

To make matters worse, as China has slowly moved towards mass surveillance (with a hyper obsession to keep its population under control), it is believed that many smart devices being shipped out from China are potential targets for large-scale attacks. Even if these devices are not used to launch cyberattacks, they could very easily provide data for Chinese actors, who will likely be subject to no rules or restrictions on how that data is used, even going as far as to give that data directly to the government.

Why is the US looking closely at Chinese-made smart cars?

In recent news, Joe Bide, President of the US, announced that he will be launching an investigation into Chinese-made smart cars on national security grounds. This concern arises from the ability of smart cars to track and monitor occupants, whose data can be sent back to China (outside of US control), and that such vehicles have the ability to be remotely controlled.

The investigation into Chinese-made smart cars by the U.S. government highlights the intricate relationship between technology and national security. The potential for these vehicles to serve as conduits for data collection and surveillance by foreign entities raises critical questions about privacy, sovereignty, and the future of automotive technology. This move by the U.S. is a clear indication of the importance of cybersecurity measures in the evolving landscape of connected vehicles.

While such concerns may be considered “overkill” by some, it should be remembered that China has demonstrated numerous examples of espionage and data theft. An excellent example of this was found in servers utilised by major tech companies whereby Chinese manufacturers had installed a miniature chip providing backdoor access to critical systems. 

Another example of China demonstrating poor data protection was during a random inspection of government cars. It was found that SIM-based devices were installed inside the parts of critical systems, which allowed for remote monitoring. While its use in a civilian environment presents minimal risk, its use in a government capacity introduces serious dangers as people of particular importance can be tracked.    

The Dual Threat: National Security Risks and Economic Implications

Yet, not only are Chinese smart cars a potential threat to national security (and the privacy of a nation’s citizens), but the ability of Chinese manufacturers to undermine Western suppliers adds another layer of threat. As such vehicles could be competitively priced (while offering far more features), it becomes more tempting for those living in the West to go with Chinese-made vehicles, especially when considering the ongoing cost of living crises.

The economic implications of Chinese smart cars entering Western markets cannot be understated. Competitive pricing and advanced features present a tempting offer to consumers, yet they also underscore the need for rigorous standards and regulations to ensure that these vehicles do not compromise national security or consumer safety. The balance between innovation and security is delicate, and the U.S. government’s actions reflect an attempt to navigate this complex terrain.

Navigating the Risks: Innovation vs. Security in Smart Cars

Finally, having vehicles with smart features and remote capabilities introduces serious concerns with regards to driver safety. It is well known that Chinese-made hardware often lacks the same degree of security that Western designs incorporate, meaning that it could make such vehicles a prime target for hackers. Furthermore, it is not outside the realm of possibility for rouge actors to take control of vehicles and eliminate people of key interest (something which nations such as China and Russia frequently partake in). 

If prompted, it is possible that new regulations could be introduced that prevent Chinese-made vehicles from incorporating key technologies, including cellular connections, internal cabin monitoring, and vehicle-to-everything systems. Such a move would prevent a ban, thus alleviating the threat of unfair regulations, but would help to protect citizens from bad actors.

Regulatory measures targeting the technological capabilities of Chinese-made vehicles represent a nuanced approach to mitigating potential threats. By focusing on specific technologies such as cellular connections and vehicle-to-everything systems, policymakers aim to strike a balance between preventing misuse and fostering innovation. This strategy highlights the importance of adaptability and foresight in addressing the challenges posed by the integration of technology into everyday life.

Should we be concerned with Chinese vehicles?

In reality, the threat from Chinese vehicles is likely minimal, except for their potentially poor security practices. Considering that the average person in the West is arguably an extremely boring target, it is highly unlikely that the Communist Party in China is watching over us.

However, where Chinese interests likely lie is in AI, and it is this interest that threatens Western nations. It cannot be understated the importance of AI, being incorporated into everyday life, but with regards to military, finance, and research, having the best AI provides a serious advantage over others.

But in order to create such powerful AIs, large amounts of training data is required. Normal rules and regulations limit what companies can do with data collected from consumers, but in China, these rules are virtually non-existent. Thus, China having millions of smart cars in the West, all of which gather valuable data, allows for the training of cutting-edge AI systems.

While it may be hard to imagine, training data gathered by these smart cars could be used to empower AI defence systems, military drones, and large-scale cyberattacks. Thus, the danger presented isn’t in the cars themselves but in the data that they gather.

The strategic value of data in the development of AI underscores the dual-use nature of technologies like smart cars. The potential for this data to enhance military and cybersecurity capabilities is a testament to the importance of establishing robust data governance frameworks. As nations navigate the complexities of technological advancement, the focus on data security and ethical AI development becomes increasingly critical.

So, should we be worried about cheap Chinese EVs flooding the Western market? Probably, but primarily for quality reasons. Will these vehicles be a threat to the West? This is hard to answer, but in times like these, it is better to be safe than sorry.