Ministers have been warned that China has the ability to spy on millions of people in the UK by “weaponizing” microchips embedded in cars, appliances and even light bulbs.
“Trojan horse” technology poses a “wide-ranging” threat to UK national security, according to a report sent to the Government by a former diplomat who advised Parliament on Beijing.
The modules collect data and then transmit it over the 5G network, giving China the opportunity to monitor the movements of intelligence targets, including people, weapons and supplies, and use the devices for industrial espionage. Millions of them are already used in the UK.
According to a report released Monday by Washington-based consulting firm OODA, the potential threat to national security outweighs the threat from Chinese-made components in cell phone poles that led to the Government ban on Huawei products used in mobile infrastructure.
“We are not yet vigilant against this threat”
The report states that ministers have utterly failed to grasp the threat posed by the “pervasive presence” of modules known as cellular IoTs – a concern echoed by senior lawmakers. It urges ministers to take urgent action to ban Chinese-made cellular IoTs from goods sold in the UK before it’s too late.
“We are not yet vigilant against this threat,” said Charles Parton, the author of the report. China has seized an opportunity to dominate this market, and if it does, it could collect a lot of data and make foreign countries dependent on it.”
Having spent 22 years of his diplomatic career working in China, Taiwan and Hong Kong, Mr. Parton has advised the State Department and the EU on Chinese affairs and was the China special adviser to the House of Commons foreign affairs committee.
Cellular IoTs, which stand for the Internet of Things, are small modules used in everything from smart refrigerators to advanced weapon systems to monitor usage and transmit data back to the owner, and often the manufacturer, using 5G.
Earlier this month, it was revealed that security services dismantled ministry cars and found at least one of the devices hidden inside another component. There were fears that China had the ability to track the movements of everyone, from the prime minister down to the bottom, using these modules.
But the report warns that the problem goes far beyond ministry cars.
Three Chinese companies – Quectel, Fibocom and China Mobile – already have 54 percent of the global market in devices and 75 percent in connectivity.
Like all Chinese firms, they must hand over data to the Chinese government if ordered, meaning that the Chinese Communist Party can gain access to as many devices as it wants.
Customers of the three Chinese firms include computing firms Dell, Lenovo, HP and Intel, car maker Tesla and card payment firm Sumup.
Broad espionage potential
Devices containing the modules include: laptops; voice-controlled smart speakers; smart watches; smart energy meters; refrigerators, light bulbs and other appliances that can be controlled via an app; body worn police cameras; doorbell cameras and security cameras; debit card payment machines, cars and even hot tubs.
The potential for espionage is vast. The report suggests that when combined with artificial intelligence and machine learning to process massive amounts of data, it can track US arms sales movements, for example, to understand whether China is selling arms to Taiwan.
It can also examine the identities and addresses of royal and diplomatic bodyguards, then monitor their cars during advanced security scans to determine where ministers should visit.
China can also track the movements of destinations through debit card payment terminals and even calculate who they contacted and when. The report also suggests that data collected from cellular IoTs could be used to identify potential sources of intelligence by identifying who is handling sensitive information and then finding ways to bribe or blackmail them into spying for China.
Sabotage is another concern if China decides to attack national infrastructure by disabling devices.
Even innocuous practices such as farm machinery that also use devices can help the Chinese detect vulnerabilities in Western supply chains, such as the bad harvest of a particular crop, and then seize market share by lowering the price of British suppliers, making the West even more dependent. in Chinese exports.
Allowing China to establish a monopoly on the manufacture of devices subsidized by the Chinese state to make them cheaper than their Western rivals would also make the West completely dependent on China for the supply of a strategically important component.
The report states: “The data generated by automated logistics, production, and transportation systems … can be invaluable as a way to ensure that the owner’s economic interests thrive over the economic interests of a competitor.”
He says the information gathered from cellular IoTs “equals to a data-driven form of insider information.”
Countries ‘should ban Chinese modules’
Short for the Observe, Direct, Decide, Act mantra used by fighter pilots, the OODA report says the fact that many Western firms also manufacture the devices means that China’s dominance is not a “lost case”, in part because of its global market share. The control of the three firms includes the sizable domestic market in China.
“Time to wake up,” the report says. “Free and open countries should ban Chinese-made IoT modules from their supply chains as soon as possible.”
It recommends a full inspection of government property to replace devices as needed, and recommends that companies operating in sensitive areas such as defense be told to get the job done by the end of 2025.
The Internet of Things, defined in the report as “the central nervous system of the global economy”, is used in many applications from security to manufacturing and transportation to supply chains, agriculture to smart homes. The data collected by the devices can be used for everything from energy supply planning to traffic flow improvement or supply chain management, but it will also have nearly unlimited uses if it falls into the wrong hands.
Internet of Things is a term used to describe devices that connect and exchange data with other devices over the internet. Cellular IoT devices, usually smaller than 5x5cm, are the component that makes devices “intelligent”, so a “smart” security camera uses a C-IoT to connect to your mobile phone. They can also connect to each other, for example an electric car can “talk” to charging stations to find out which ones are in use.
Besides talking to other devices, they can send data back to manufacturers for quality control purposes and to enable over-the-air updates to their software, but this provides a potential gateway for hostile states to collect data about the people using the devices.
‘There are European alternatives’
Deputy Alicia Kearns, chairman of the Commons foreign affairs select committee, said: “Because they are found in many of our ordinary everyday objects, the risk is substantial should someone arm them.
“For example, you can follow someone and calculate where the prime minister will be, and that would be very useful information for terrorists.
“We don’t look at it strategically. We need to understand that in everyday products, we need to focus on components that reveal important data about the user, whether it’s location, interests, or things that can be used for blackmail.
“National security considerations unfortunately fell short when it came to industrial strategy. There are European alternatives to this. We must eliminate them gradually. I think there are a number of Huawei-sized decisions we haven’t made yet, and we need to put national security and strategic resilience at the center of everything we do as a country.”
Quectel, Fibocom, and China Mobile were all contacted for comment.