Underwater Cables: An Overview

Importance of Underwater Cables

• More than 500 cables run across seabeds globally
• Carry over 95% of intercontinental data
• Essential for various communications: emails, bank payments, military
• Estimated value of data transported: trillions of dollars daily
• Center of US-China power struggle
• Target for espionage and surveillance

Global Leadership in Cable Installation

• US leads in cable installation alongside Europe and Japan
• Companies from these regions installed over 85% of cables
• China entered the cable sector in 2008

China's Involvement and Investments

• Investment encouraged by Chinese government for economic success
• Focus on companies producing chips, cables, and data processing equipment
• Huawei Marine Networks established in 2008, becoming a leader in the industry
• Peace Cable project: 15,500 miles long, cost $425 million, launched in 2022
  • Connects Asia, Africa, and Europe

Strategic Goals and Concerns

• China's cable investments aligned with Belt and Road Initiative
• Aims to expand economy, improve diplomatic relations, and economic ties
• US concerns about potential espionage via Huawei technologies
  • Huawei sold stakes in its marine cable company to alleviate concerns, rebranded as HMN Tech
  • US fears surveillance threats from Chinese-owned cables

US Policy Responses

• US policies to exclude Chinese companies from internet infrastructure
• Example: Dropped plans for direct L.A. to Hong Kong link
• Efforts to sway national governments and private companies to avoid Chinese parts
• White House involvement in securing projects for American companies
  • Example: $600 million project for Subcom, linking Southeast Asia and Europe

Ongoing Competition

• Chinese companies like HMN Tech expanding their capabilities
• Investment in new ships and factories for cable installation and repair
  • High global demand for cable repair services
• Shortage of repair ships worldwide; China's shipbuilding industry expanding rapidly

Geopolitical Impact on Cable Infrastructure

• Increased government involvement in cable-building decisions
• National interests influencing financing and construction
• The cable business is tough and competitive; significant stakes for domestic industries

Conclusion

• Continued US-China competition in undersea cable arena is expected
• National governments likely to meddle more in the cable infrastructure business in the future.