China turns to Japanese IoT Expertise to Reduce American Dependency

China turns to Japanese IoT Expertise to Reduce American Dependency

An article by Ludovic F. Rembert, Head of Research at Privacy Canada.

Since the Trump administration took office in early 2017, the United States and China relationship has varied between hot and cold. First there was a trade war as President Donald Trump attempted to keep a campaign promise to revamp trade deals around the world to make them fair to America. It didn’t take long until he was butting heads with China and soon the tariffs were flying fast and furious from both sides.

But then that cooled down and the relationship seemed to be making progress until coronavirus reared its ugly, invisible head and has Trump blaming the Chinese at every opportunity. Understandably, this made leaders of the world’s second largest economy a tad nervous and looking for technical help and expertise elsewhere in their bid to dominate the growing world of IoT manufacturing in industries such as health care, agriculture, and energy to name a few.

It turns out Japan is making great strides in that area.

Rise of the IoT

For those who haven’t been paying attention, which might not include this reading audience, the IoT has become something of a thing lately, not only with consumers but in the manufacturing space as well. While estimates of the growth rate vary, most experts peg the number of internet-connected devices that make up the IoT to reach 25 billion globally by 2021. Additionally, the rise of IoT has led to a number of other important developments, such as making our everyday devices significantly more powerful and helping businesses to break beyond the barriers of centralized cloud networks through edge computing.

In other words, this is a big deal. If the US were to decide to limit or eliminate knowledge-sharing, China’s bid to become the number one global high-tech manufacturing epicenter of the world by 2025 would suffer a serious setback. As the Beijing brain trust began looking around the world for a way to reduce their reliance on the US, they noticed that Japan seemed to have a slam-bang IoT industry going.

Before long, the calls to Tokyo were flying fast and furious.

Welcome to the IIoT

Though not terribly creative, the acronym IIoT has been informally adopted to refer to the Industrial Internet of Things. See what they did there? They just added another “i.” Regardless, this designation allows us to refer to that part of the IoT which has been incorporated into large industrial corporations and especially the manufacturing process.

The IoT created the capability of collecting and analyzing huge data sets much faster than had ever been done before. This makes for a more efficient process, though one we’ve recently discovered has an Achilles heel. When it comes to manufacturing, they who possess the greatest efficiency tend to make the most money and rule the roost. Let’s look at an example of why the IoT has become so darn important to manufacturers.

Yaskawa Electric, a Japanese company that builds systems controls and various other industrial products, has over a thousand motors installed in various devices in its one manufacturing space. Using advanced IoT methods, Yaskawa monitors all these motors in real time and can ascertain each one’s operating status at a glance.

Yaskawa manufacturing robots

Here’s why that matters.

Assume there is a motor about to fail. Rather than wait for the moment of death that could unexpectedly shut down the manufacturing line for some length of time, line workers can see the failure coming, thanks to the IIoT, and get a replacement into position to take over before the original one croaks. Presto. The line stays up and running with zero interruptions.

China Comes Courting and Japan is Suspicious

Most of the Japanese IIoT advancements have come as a result of a 300 member group of leading companies called the Industrial Value Chain Initiative. These companies are working together to set a nation-wide data exchange for the benefit of all members, and Beijing is jealous. Or maybe desperate.

Unsurprisingly, China has taken to rolling out the red carpet by inviting IVC member representatives to a series of Chinese symposiums addressing the IoT topic. These jaunts have been ritzy, all expense paid trips for the obvious purpose of inculcating joint ventures between the two countries.

China has asked the IVC to help out with forming an international organization that focuses on researching and implementing better IIoT technology in the workplace. Also unsurprisingly, Japan is curious about how this organization benefits the home team? Questions from IVC member company Nikkei regarding what the true aim of the proposed organization will be have gone unanswered by Beijiang.

Presently, China is concerned not only about their lagging IoT capabilities but resistance to hacking attempts by their good friends in the CIA and elsewhere. While the problem is improving, IoT devices are still one of the most notorious security risks overall.

These risks can be minimized through segmenting IoT devices across VLANs, avoiding IoT devices with a physical vulnerability such as a hardware factory reset button, and actively monitoring them to discover attacks, and securing devices with VPN services. Free VPN services are rarely a good option, as most are known for installing malware and selling private user data. Three quarters of all free Android VPN apps, for instance, run on third party tracking software and 82% will request access to private user data.

China Lags in New School Tech

As manufacturer-to-the-world, it’s no secret that China knows how to run old-school assembly lines and manufacturing processes, many of which rely on decades-old technology and even hand-crafting in some instances. The bottom line is that present Chinese manufacturing methods are a long way from being able to implement the latest technologies.

They lack the specific knowledge that the U.S., Japan, and a few other countries possess. But, as China has shown in the past, when the national will is applied to a problem, it tends to get solved one way or another.

With the government focused like a laser on making up ground, Japan is concerned that cooperating on the IoT issue would be akin to ceding the technical high ground. They will likely move very slowly in building any sort of strategic alliance with China unless they see a benefit for themselves.

USA China trade war

Final Thoughts

Currently, it’s hard to guess how the U.S. and Chinese relationship will go. Though President Trump seems to be good at the brinkmanship game of pushing an opponent to the edge and then backing off, there is also always the potential for a Soviet-style Cold War to emerge between the two countries.

The Covid-19 pandemic has only exacerbated matters, with various Trump administration officials referring to it publicly as the Chinese virus, since it appears to have originated in the Chinese city of Wuhan. Obviously, the Chinese aren’t terribly fond of that name.

It didn’t help that recent days have raised the issue that, along with the World Health Organization’s complicity, China might have underreported the number of people who were stricken with and died from the disease.

The Bottom Line

President Trump has already threatened to pull U.S. funding from the WHO, and it wouldn’t be a complete surprise if he takes aim to try to punish China in some way for fudging numbers in the midst of a global crisis. If the government in Beijing fears the American tech pipeline will be shut off, who could blame them for seeking technology anywhere they can find it?

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