Geopolitical tensions are growing globally over the cutting of two subsea cables in the Baltic Sea — one that linked Finland and Germany, and the other linking Sweden and Lithuania. Finland and Germany suspect “intentional damage,” with European authorities investigating Chinese-flagged cargo ship Yi Peng 3.

Laid on the ocean floor, fiber optic subsea cables are the arteries of international communication. They carry roughly 95% of the world’s internet, data and voice transfers, and are considered to be the fastest and most reliable route of data transfer. They have been critical to the process of globalization and are essential to the modern global economy, with a daily transactional value of over $10 trillion.

Today, only an estimated 600 subsea cables span 1.4 million kilometers of the ocean floor. But with these few cables accounting for most of the world’s internet, it is no surprise that there is a fight for dominance over them.

Due to the high risks and costs associated with laying new undersea ecosystems, these cables are usually owned by a consortium of parties.

Nations and companies investing in these cables not only face the risk of being damaged by tsunami-like natural disasters, fishing nets, ship anchors and marine life, but also face sabotage, spying and data theft.

That these pipes have little protection, are no thicker than a garden pipe, and yet power financial, government and military communications has become a cause of concern for governments across the world.

Historic coalition vs. Chinese player emergence

Three companies — America’s SubCom, Japan’s NEC Corporation and France’s Alcatel Submarine Networks — have historically dominated the construction and laying of the fiber-optic subsea cables. But in 2008, a seismic shift took place when HMN Technologies (then Huawei Marine Networks) entered the market. It is one of the world’s fastest-growing companies and has increasingly occupied the market. By 2020, HMN had built or repaired almost 25% of the world’s cables and supplied 18% of them between 2019 and 2023.

Wary of losing their underwater ascendancy, the three companies began to pool efforts to oust HMN Tech and other Chinese firms to retain influence over the subsea cables. 

At the core of this competition for subsea dominance is America’s fear of conceding a critical component of the digital economy to China. US President Joe Biden’s push to bolster cooperation in the region on cybersecurity including undersea cables and whisk regional submarine plans away from China are beseeching Beijing to respond. 

America’s “techo-diplomacy,” through which it urges its allies and telecoms from partnering with Chinese companies, could stoke tensions with China. Notable is the involvement of alliances such as the Quad in a bid “to support and strengthen quality undersea cable networks in the Indo-Pacific.” 

According to Reuters, a 2023 campaign by America helped SubCom beat HMN Tech and  flipped a $600-million contract to build South East Asia–Middle East–Western Europe 6 cable (SeaMeWe-6 cable). This was done through incentives and pressure on consortium members, including warnings and threats of sanctions and exports controls. As Reuters points out, “This was one of the six private undersea cable deals in the Asia-Pacific where the US government intervened to prevent HMN from winning the contract, or forced the rerouting or abandonment of the cable deals.”

The US efforts to control the subsea cables have shone, with HMN Tech’s market share expected to contract to a mere 7%. Though SubCom grabbed a mere 12% of the total contracts between 2018 and 2022, it in turn accounted for 40% of the total undersea cable network laid.

Thus, China soon struck back by announcing a $500 million Europe-Middle East-Asia internet cable. Known as PEACE (Pakistan and East Asia Connecting Europe), the project directly rivals the SeaMeWe-6 with 15000+ km in service and a planned length of 25,000+ km, superseding its rival project of 21,700 km and providing even higher bandwidth for the participating countries. This marked an escalation of underwater geopolitical rivalry between the two powers.

The fears that monger this tech-war

Many have dubbed subsea cables as “a surveillance gold mine” for world intelligence agencies.

In 2020, the success of HMN Tech firm pricked up the US Department of Justice (DOJ)’s ears, who then raised national security concerns about China’s “sustained efforts to acquire the sensitive personal data of millions of U.S. persons.” In 2021, Washington added HMN Tech to the list of entities that acted “contrary to the foreign policy or national security interests of the United States.” As recent as March this year, US officials have voiced concern that the Chinese repair ships could be used for spying, though there is no evidence of such an activity either.

In 2018, the US placed sanctions on Russian firms and nationals in suspicion of aiding its domestic security service, the FSB (Federal Security Service), in improving its “underwater capabilities” — specifically in relation to subsea cables. As recently as 2023, NATO countries have observed Russian-registered vessels with equipment capable of undersea damage, as well as vessels carrying “unusual” communications equipment. These have brought forth fears of sabotage, in addition to suspicions that Russia is gaining intelligence through mobile “listening posts.”

The recent cable-cutting incident is the second such incident in the Baltic Sea with Chinese involvement. In October 2023, the anchor of a Hong Kong-flagged, Chinese-registered vessel named Newnew Polar Bear damaged two subsea data cables and a gas pipeline in the Baltic Sea. 

However,  there is no “publicly available” evidence that subsea cables are being or have been actively tapped or sabotaged by any country — be it China or Russia. Some recent speculations have seen such threats as overblown. 

Labeling concerns vis-à-vis “tapping into cables to derive, copy or obfuscate data” as “highly unlikely,” a European Union report in 2022 found “no publicly available and verified reports” indicating deliberate attacks, including from China. “The large-scale scenarios of a complete loss of connectivity … seem to be built not on prior incidents but on overall assessments of the geopolitical and threat landscape,” it said. It also added that the threat scenarios “could be exaggerated and suggest a substantial risk of threat inflation and fearmongering.”

Ironically in 2013, the Guardian’s investigations revealed that the UK’s spy agency, Government Communications Headquarters (GCHQ), had tapped into more than 200 fiber-optic cables to access a huge volume of communications including between entirely innocent people, and shared sensitive personal information with its American partner, the NSA. These investigations were into documents disclosed to them by the US National Security Agency (NSA) whistleblower Edward Snowden. The documents also showed that the US was eavesdropping on its own allies in the so-called intelligence alliance named Five-Eyes: Australia and New Zealand.

The need for international cooperation

Most analysts believe that the biggest risk isn’t espionage, sabotage or even rogue anchors rather an uneven spread to the cable infrastructure that threatens the very promise of digital equity. 

This leaves a need for interstate cooperation to protect the flow of information they electronify.

But the US is stonewalling cooperation in an area that delivers international bandwidth and is necessary for global digital transition. It has clearly proclaimed its intentions, such as the comments made in the ‘Joint Statement on the Security and Resilience of Undersea Cables in a Globally Digitalized World’ released on the sidelines of the 79th session of the United Nations General Assembly.

It aspires to advance cooperation between the joint statement endorsers to “promote the selection of secure and verifiable subsea cable providers for new cable projects” as well as “protect cables and anticipate risks of intentional or unintentional damage as well as risks of communications and data being compromised.”

Cooperation between multinational companies has been the catalyst of submarine expansion and is crucial for the development of the digital economy especially in the Global South. 

But the kiasu approach of asserting a closed-group dominance over the underwater ecosystem is threatening to black out cooperation and divide the world in two geopolitical blocs — with each country forcing other states to choose its digital infrastructure. 

This simmering struggle for subsea supremacy must be lulled before it boils up and compounds global challenges.

[Yaamini Gupta edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.