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2023). These formal and customary institutions underpin and reinforce dollar dominance and provide the United States with instruments to target and isolate geopolitical rivals. Even US allies such as the EU are not exempt from the long shadow cast by the US dollar, and they have little choice but to comply with US policy (de Goede, 2021).

For developing countries, the combined threat of vulnerability to dollar outflows, alongside the growing threats from Washington to weaponize the dollar, create strong incentives for targeted countries (including China) to bypass these systems. Countries directly targeted by US sanctions and financial power – including China – are eager to find an alternative to the dollar. Even US allies have expressed frustration with the dollar dominated financial system, because they are subject to ‘secondary sanctions’. The Russia-Ukraine war has substantially accelerated efforts to break dollar dominance, since the United States and European Union took exceptional measures to restrict Russia’s access to the global financial system, leveraged points of integration (including SWIFT) against it, and froze Russian dollar and euro deposits held by Western central banks.

These factors have given a major impetus to China’s efforts to construct an alternative monetary and financial architecture to the dollar (Choyleva, 2022). China’s Cross-Border Interbank Payment System (CIPS) – established in 2015 – provides an integrated alternative to the combined functions of SWIFT and CHIPS. It combines messaging services with clearing and settlement functions, largely bypassing the existing US-centric financial system (although the two remain interoperable) (Nölke, 2022). CIPS remains roughly 10% the size of SWIFT and CHIPS, but has grown very rapidly. In addition to promoting use of RMB in its bilateral trading relationships, China has also worked to denominate a growing range of assets (such as its abundant rare metals) and associated financial instruments in RMB (Liu, 2024c). To facilitate such efforts, China has built up RMB swap lines with over forty foreign central banks and made \$500 bn worth ofRMB available to partners (McDowell, 2019; Steil et al., 2024). The RMB’s share of all trade financing remains at 7% of world total. However, the share of China’s own cross-border payments and receipts denominated in RMB hit a new peak of53% in 2024, with its use ofthe dollar to settle trades falling to just 43%. Not surprisingly, the RMB is used amongst China’s major trading partners to a considerable degree more than other countries. This has led the IMF to warn of ‘geoeconomic fragmentation into currency blocs (Gopinath, 2024).

China’s efforts to build an alternative to the US dollar system are interdependent with the digitalization and platformization of money. Digital tokens are increasingly issued by large platforms and circulate as forms of money. They offer real-time clearing capabilities, while their creators may gain unprecedented transaction-level data. Here, China has a strong first-mover advantage. Its principle private digital currencies (operated by Alibaba Pay and Tencent’s WeChat) already accounted for around \$7 trillion of transactions in 2022. Their payments are cleared by the central bank’s Netsunion system, which captures detailed, real-time transaction data. The People’s Bank of China has also developed a central bank digital currency (CBDC), made interoperable with existing private digital currencies by political pressure (Kynge and Sun, 2021). For example, QR-code payment systems for e-CNY now function over Alipay. China’s public and private digital currencies appear set to become increasingly merged into the future.

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Further, a cross-border, real-time and ledger-based payments system, mBridge, is being developed in tandem with the Bank for International Settlements, the Hong Kong monetary authority, and the Thai, UAE, and Saudi central banks (Jones, 2024).⁵ Tencent was involved in designing its architecture, and the project successfully settled a \$22 m transaction in 2023. mBridge and the e-CNY raise the possibility of a multi-central bank digital currency bypassing US financial infrastructure (Nölke, 2022). Moreover, private systems like Alipay and Wechat Pay’s overseas adoption and interoperability with foreign payments systems are boosted by large-scale Chinese tourism and trade invoicing (Chorzempa and Spielberger, 2025). Choyleva (2022) suggests that the transition to an e-CNY could potentially make China more likely to liberalize its capital accounts, because it offers authorities the capacity to monitor real-time data on inflows and outflows in granular fashion. In theory, authorities could pre-empt capital flight, negating the need for broadbased and permanent capital controls.

However, China’s closed capital accounts, the shallowness of its financial markets, and its mostly inconvertible currency mean that the e-CNY and its private-sector digital currencies do not appear to be viable candidates for replacing the dollar in the near to medium term (Deng, 2024). Indeed, while they may be used to settle bilateral trade, they are unlikely to be used as a reserve currency, for transactions not involving China, or for asset denomination. Nor would the present role of the United States as consumer of last resort be upset by more widespread adoption of an e-CNY alone (Eichengreen, 2021). The US role as a backstop consumer, alongside its deep and liquid financial markets, creates an ‘organic’ demand for dollars (Schwartz, 2019).

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⁵ Concern regarding China’s role prompted the BIS to withdraw from mBridge in October 2024, but the project continues to expand.

China’s attempts to undermine the hegemony of the US dollar are also hastening US innovation in this area. In response to both Chinese advances and the emergence of Diem (Meta’s ultimately failed digital currency), US Treasury Secretary Janet Yellen initiated exploration of a US CBDC. Discussing the mooted FedCoin, the Federal Reserve (2024) states that ‘a CBDC would be the safest digital asset available to the general public, with no associated credit or liquidity risk’. Adoption of a CBDC, however, has been temporarily rejected by the second Trump administration, which favours the use of private cryptocurrencies. The United States prefers to mobilize the dollar’s existing global role by supporting its fintech platforms, which in turn offer it enormous surveillance power over global transactions. Payment platforms like Paypal and Venmo operate globally, building ‘rails’ between the dollar system in which they are rooted – where ‘real’ money flows and clears slowly – and the token-based currencies they issue and front (O’Dwyer, 2023). The spread of US-backed fintech firms vastly enhances its surveillance and sanctioning capabilities. Using the Bank Secrecy Act (1970), the Patriot Act (2001), and the Anti-Money Laundering Act (2020), US regulators – especially its powerful Financial Crimes Enforcement Network (FinCEN) – have virtually unrestricted access to transaction-level data from US platforms. The United States has been highly active in carving out global market access for its fintech firms (Jutel, 2021).

US-China rivalry in platform-based fintech and digital currencies initially had distinct implications for their conventional banking sectors. In the United States, traditional banks have broadly benefitted from fintech from the outset, partnering with platforms and tech giants to leverage digital payments and data analytics capabilities without significant displacement of incumbent power. In contrast, China’s state-dominated banking sector initially saw fintech giants (such as Ant Financial and Tencent) as threats, as they displaced existing payment infrastructures and lending functions. However, the technology sector crackdown and e-CNY rollout have served to partly reassert state control over financial infrastructure, and made the Chinese state more prepared to back its private digital currency expansion overseas. Thus, fintech rivalry has bolstered US banks through market-driven alliances, while stabilizing yet constraining China’s platforms through enforced collaboration and oversight from state banks. While the open global financial system continues to favour the dollar, its dominance may erode as China’s digital currency infrastructure grows, offering alternative trade and finance channels that reduce US leverage to punish or exclude rivals.

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6 Cybersecurity

Early in November 1971, Captain John McNish of the USS Halibut stared at a grainy image on a control room screen. The Halibut, a vintage nuclearpowered submarine from the early 1950s, was anchored at a depth of 120 metres in the Sea of Okhostk off the Kamchatka peninsula – deep inside Soviet territorial waters. McNish watched anxiously via video link as saturation divers, wearing liquid-heated suits, left the submarine’s decompression chamber and entered the murky depths. Moving slowly, they used airguns to blow accumulated silt offa bump in the ocean floor, revealing a thick telephone cable that connected the peninsula’s naval base to the Russian mainland, and carried unencrypted conversations between senior commanders. After the dust settled, they spent hours fixing a large battery-powered recording device to the cable, before gathering a sample ofthe voices it transmitted. The Halibut would return to Okhostk every six months for the next nine years, gathering and replacing tapes and devices, and returning a treasure trove of strategic intelligence to the Pentagon’s analysts in Washington DC (Sontag et al., 1998).

Operation Ivy Bells was one ofthe Cold War’s most elaborate and significant espionage missions. US analysts credit the intelligence it provided with laying the basis for the 1979 SALT II nuclear arms agreement. Today, US agencies continue to tap undersea cables. In 2005, it was revealed that the USS Jimmy Carter had cable splicing capabilities which were used to intercept undersea fibre optic networks (Weichert, 2024) – cables which extend over 1 million kilometres and are estimated to carry 99% of all global internet traffic. The US Navy’s ongoing efforts to purchase a replacement Virginia-class nuclear attack submarine for the Carter, modified for spy usage and including cable tapping and cutting capabilities, signal their ongoing significance (Honrada, 2023).

However, such efforts form only a small part of the National Security Agency’s (NSA) arsenal. Far more common is the collection of data from fibreoptic cables’ landing stations (as captured in Trevor Paglen’s photography).⁶ Typically conducted with the consent of cables’ operators, devices are placed onto the transition points where undersea cables connect with terrestrial infrastructure networks, refracting the light travelling through them and beaming the mirrored data to US intelligence operatives (Khazan, 2013). Edward Snowden’s 2013 leaks revealed the mass data gathering provided by so-called ‘upstream’ collection programs FAIRVIEW, STORMBREW, BLARNEY, and OAKSTAR, which developed these techniques (see Figure 2). The NSA was able to undertake such expansive surveillance initiatives thanks to the ‘extreme willingness’ ofits corporate partners to assist with data collection (Angwin et al., 2015). And unlike wiretaps like Ivy Bells, today’s security services can gather far more than simply voice communications.

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⁶ See Sohn (2015). For detail on the vital role of British intelligence services in the NSA’s global data gathering operations, see Mainwaring (2020).

Undersea fibre-optic internet cables have become a major site of platform investment. Until 2010, legacy telecoms firms like AT&T and Verizon accounted for most investment in subsea cables. But platforms like Meta, Google, and Amazon have driven a \$20 bn investment boom in this infrastructure over the past decade. Between 2020 and 2023, Meta, Microsoft, Amazon, and Google accounted for approximately 90% of capital expenditure on new transatlantic cables and 70% of that for transpacific cables (Hamilton and Quinlan, 2024, 98). Platform giants today are also the biggest users of subsea bandwidth by far, accounting for nearly three quarters of all traffic (Salgado, 2023). As such, US firms (both platforms and telcos) own (fully or in part) more than 90 cables, and represent the dominant investors in future projects (Dufetre, 2023).

Much of this new cabling infrastructure transmits platforms’ internal data transfer needs (unlike that provided by the telcos operators, which lease capacity to external users). Platforms’ exploding investments in physical infrastructure of the internet are directly related to their efforts to expand digital service offerings such as cloud computing, and cement their dominant competitive position. As Blum and Baraka (2022) write of Google’s investments in cabling: ‘Once the cable is up and running, Google’s network managers can prioritize Google’s own data traffic, ensuring the performance and reliability of their cloud services – while using that reliability as the services’ key selling point.’ To lay infrastructure, platforms typically form consortiums with key cable suppliers such as SubCom (US), ASN (France), and NEC (Japan), who produce and lay physical cabling, and telcos like AT&T which provide expertise in deployment, maintenance, and operations.

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Internet cables represent an important source of intelligence for those who have access to their data. However, securing them is a monumental task because new market entrants are emerging to meet spiralling demand. While dominated by US platforms, telcos and cabling firms, Chinese operators have also recently become important players in the subsea cabling market. HMN – a spinoff of Huawei now owned by Hengtong (a Chinese private-sector national champion) – is now the world’s fourth largest cable supplier. Moreover, China’s telcos like China Telecom and China Unicom have become major players in international cable consortia. China’s firms privilege cable projects in the Asia Pacific and Eurasia. Alongside their direct commercial objectives, these cable projects can be understood as boosts to China’s Digital Silk Road strategy for expanding the activities of its platform giants (Pitron, 2023).

The NSA’s experience with tapping landing stations and co-opting cable providers drives concern that China could use similar mechanisms the more it cements its role as a global connectivity provider (Brock, 2023). The United States has sought to contain China’s control over internet infrastructure in a number of ways, including inhibiting its firms from investing in projects which interconnect with China. In 2021, for example, the US FCC withdrew permission for Google and Meta to activate the Pacific Light cable – which ran between LA and East Asia – due to its passage through Hong Kong (FitzGerald and Purnell, 2021).

US pressure has also been extended internationally. The SeaMeWe-6 cable, currently under construction, will connect Singapore and France via nine other countries. The international consortium that planned to lay the cable initially involved Chinese firms including HMN. The project was disrupted in 2023 when the United States sanctioned HMN and successfully pushed for SubCom to replace HMN as a supplier. This drove Chinese telcos out of the consortium, and they subsequently announced their own project, EMA (Europe-Middle East-Asia). EMA is a \$500 m project that will connect Hong Kong and Hainan with Singapore, Pakistan, Saudi Arabia, Egypt, and France, and thereby undermine US efforts to isolate Hong Kong from the global internet (Brock, 2023). However, currently no new subsea cables are planned to connect either mainland China or Hong Kong internationally beyond 2025. This demonstrates the effectiveness of the US campaign to limit China’s connectivity (Takeda and Ban, 2024).

In addition to the upstream cable-tapping programs revealed by Snowden was the downstream ‘PRISM’ program – mass data-gathering conducted directly from platform companies’ servers with their full cooperation. Because platform firms remain domiciled within the United States, they are effectively defenceless against such state claims upon their data. Section 702 ofthe Foreign Intelligence Services Act (FISA) provides legal pretext and a framework for the NSA to gather communications data from foreign citizens and (to a more limited degree) access US citizens’ data. Recent reports show that Section 702 is in widespread use for gathering US citizen data (Ackerman, 2023). It was also recently reported that another key plank of the PRISM program, XKeyscore, ‘continues to operate with no judicial and limited congressional oversight despite its potential to capture Americans’ communications’ (Nakashima, 2021). XKeyscore gathers data on individuals’ emails, social media activity, and browsing history from internet service providers and platforms to build detailed user profiles searchable by intelligence analysts. The US CLOUD Act of 2018 permits state access to any US-domiciled cloud provider’s overseas data servers (if not contested in court). Since over 70% of global data flows through Loudon, Virginia, due to the intensive clustering of data centres in the city, such provisions are rarely required. Executive Order 12,333 – a piece of Cold War legislation subsequently updated by George W. Bush – offers another legal avenue for surveillance activities to be conducted outside of the FISA framework and rulebook.

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The data collected by platforms is increasingly recognized as a geopolitical asset (Gu, 2023). Concerns about election interference, data leaks, industrial espionage, and cyberattacks have fostered moves towards the ‘securitization of everything’ by governments (Newlove-Eriksson, 2022). The US government’s strategy to enhance cybersecurity contributes to the deepened incorporation of American platform firms into the military-industrial complex. Historically, the US government understood cyber threats as ‘technical problems to be solved primarily with a combination of defensive and limited deterrence measures’ (Alperovitch, 2022, 46). But cybersecurity is increasingly becoming an active field of geopolitical and geoeconomic competition in the face of incidents like the Solarwinds and Volt Typhoon hacks. Donald Trump’s first administration responded by making the US Cyber Command a unified combatant command within the US military, and establishing the Cybersecurity and Infrastructure Security Agency (CISA) in the Department of Homeland Security (DHS).

Through the creation of bodies like the DHS’s Innovation Programme and its Science and Technology Directorate, Washington has increasingly ‘sought to play a market facilitation role with the broader internet technology sector to encourage [state-firm] cooperation’ on cybersecurity (Aggarwal and Reddie, 2018, 454). The Department of Defense (2023) National Security Strategy established a Bureau of Cyberspace and Digital Policy to boost US platforms’ international expansion under the guise of embedding its firms as global cybersecurity providers. When Microsoft purchased a stake in UAE’s flagship AI firm G42, on the pretext of securing sensitive data by beating out Chinese investors, the Bureau’s Ambassador commented that he had ‘been in close contact with UAE Government, with G42, and with Microsoft to help ensure that that investment’ (Fick, 2024).

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China, meanwhile, has sought to develop a complex assortment of internet management tools and mechanisms to assert control over domestic internet content. These practices enlist platforms as partners and further their commercial ambitions. President Xi formed the Cyberspace Administration of China (CAC) in 2014 to integrate cyber-security policy with the development of the digital economy. The CAC formalized state control over the domestic internet with the National Cyber Security Law of 2016, which formally grants the state substantial legal authority over online content, cross border flows, and jurisdiction over foreign cyber operations inside China (Hong and Goodnight, 2020).

China has moved to restrict usage of US technologies across swathes of the Chinese technology stack by developing greater domestic capabilities. This represents an urgent task given that Creemers (2020, 116) cites Chinese research claiming that in 2014, ‘82 percent of servers, 73.9 percent of storage equipment, 95.6 percent of operating systems and 91.7 percent of databases’ employed in China were provided by foreign, principally US-based, firms (e.g., Microsoft, Cisco, Apple). In an attempt to weaken the position ofAmerican technology firms in China, China’s SASAC (which oversees its state enterprises) issued Directive 79 in September 2022, directing state firms to remove all foreign software and hardware from their enterprises by 2027 (Lin, 2024). Further, China’s stringent data localization requirements have meant significant stores of data have been shifted from foreign servers to Chinese joint-ventures – such as Apple’s Chinese user data, formerly hosted in the United States but subsequently moved to Guizhou-Yunshang’s servers, a firm backed by the Guizhou provincial government (Kokas, 2018). China’s data localization regime appears to have given Chinese platforms an edge when operating in similarly restrictive environments overseas, which pose a greater challenge to US models predicated upon widespread data export (O’Grady, 2024).

A more expansive conception of data and cybersecurity driven by concern about data flows is fuelling concern amongst US policymakers about Chinese platforms’ commercial expansion. While the case of Huawei is well known (Liu, 2021), more recently controversies have surrounded digital platforms such as Bytedance’s TikTok, the fast-fashion platform Shein, and the e-commerce app Temu – all of which have penetrated global markets to significant degrees. Despite finding no evidence of ‘backdoors’ being designed into such digital technologies by the Chinese state for surveillance purposes (Gray, 2021), policymakers have aimed to curtail the influence of such platforms by raising security concerns. For example, US lawmakers cast aspersions on TikTok’s parent company ByteDance for potentially sharing US user data with the Chinese state (Bartz and Dang, 2021). And the chair of the UK Parliament’s Foreign Affairs Committee, Tom Tugendhat (2021), warned of Shein’s recommendation algorithms as a ‘sinister cross between surveillance and capitalism . . . [deploying] a data collection network to rival many ofthe world’s intelligence agencies’. Temu’s advertisements during the 2024 Superbowl drew condemnation from US lawmakers, with Republican Senator Tom Cotton posting on X that Temu ‘must allow the Communist Party unfettered access to its data’.⁷ Such hyperbolic logic is intelligible if‘cybersecurity’ is interpreted to mean control by the United States and its allies over critical stack infrastructures into the future, which growing Chinese commercial prowess is beginning to erode (Tang, 2020).

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The United States had long favoured a laissez-faire approach to data flows, supporting stringent restrictions on data localization and privacy requirements, to the benefit of its world-spanning platform firms. But Katherine Tai, then US Trade Representative (USTR), formally reversed the US position on digital trade at the WTO in September 2023 in favour of a more restrictive approach to data flows. Domestically, this was understood as a pitch battle between the ‘antimonopolist’ Tai and the National Security Council, which favoured upholding free digital trade (and the predominant position of US platform giants) at all costs. However, the shift in the USTR position signals that the United States is responding to the growing success ofChinese platforms’ internationalization by adapting its own data regime and understanding of cyber-security in ways enable states to raise protections against Chinese data exports. Domestically, the Biden administration passed Executive Order 13873 and the Protecting Americans’ Data from Foreign Adversaries Act of 2024, both of which set up a framework for limiting bulk data flows to a list of ‘adversary’ countries (including China). Trump’s second administration has upheld these restrictions. Internationally, as Ruiz and Savona (2023) argue, creating ‘regulatory space within digital trade could mean precisely setting up parameters on how data flows may be protected from undue interference’ – assisting the United States in rebuffing Chinese platforms’ advances (particularly in the field of AI) through stricter regulations on data exports. For both the United States and China, then, the goals of advancing platform prowess and state power are converging on an expanded notion of cybersecurity.

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https://x.com/SenTomCotton/status/1757055483217604697?lang=en.

7 Standards

The setting ofglobal standards may seem like an arcane field. But when it comes to standards for frontier technology, it is also a field of intense geopolitical rivalry that entangles firms as well as governments. A recent White House (2023, 3) strategy document starkly sets out the significance ofstandards setting for the United States:

Strength in standards development has been instrumental to the United States’ global technological leadership . . . Today, however, the United States faces challenges to its longstanding standards leadership, and to the core principles of international standard-setting that, together with likeminded partners, we have upheld for decades. Strategic competitors are actively seeking to influence international standards development, particularly for [critical emerging technologies], to advance their military-industrial policies and autocratic objectives.

Technical standards are of unique significance in platform competition, because standards underpin the compatibility and integration of hardware, software, and services across layers of the technology stack (Bergsen et al., 2022). Control of standards consequently allows platform firms to orchestrate greater control over market structures and industrial ecosystems, enhancing their infrastructural power.

The United States has been able to define the standards that govern the internet and make its transnational expansion possible. Its power over internet standards got off to an inauspicious start. Vint Cerf and Bob Kahn, a young Stanford professor and an ARPA engineer who had worked on aspects of the ARPANET, locked themselves in a hotel conference room in the summer of 1973 and wrote the protocols for TCP/IP – the packet switching rules which continue to enable networking to this day (Levine, 2018). Initially designed for military purposes, Cerf, Kahn and ARPA’s success in interconnecting networks eventually spawned the civilian internet. As its creation began to take off, ARPA established the Internet Engineering Task Force (IETF), a private body ofsixteen researchers and engineers, to oversee and codify its burgeoning suite oftechnical standards for networking devices. As Yates and Murphy (2022, 10) write:

IETF’s process differed significantly from that of other private standards bodies; it had no membership (anyone could attend any meeting), no formal/voting, no required balance of stakeholders, no system for representing different parts of the world, and a famously raucous, argumentative style.

Today, the IETF remains the single most important standards-setting body ensuring interoperability in internet governance. But despite its reputation as an ‘open’ and meritocratic organization, US platform giants increasingly dominate proceedings: ‘[M]ost IETF participants are from large corporations and key proposals are concentrated into a small group of companies which sponsor individuals’ participation in the form of time and travel to annual meetings’ (Harcourt et al., 2020, 38). Other important bodies covering internet technology standards include industry-led fora like the W3C, 3GPP, and the IEEE, alongside intergovernmental bodies like the ISO/IEC and the ITU. A recent Atlantic Council study demonstrates that the United States retains overwhelming dominance across these various standards developing organizations (SDOs) (Neaher et al., 2021). And despite their reputation as industry-led and multistakeholder fora, US state agencies have long worked to ensure that US platform firms enjoy influence within SDOs. SDOs function as an important source of international political economic power as they create a smooth global playing field for US tech giants and encode their innovations as the standards upon which in global technology stacks operate (Hill, 2014; Powers and Jablonski, 2015).

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