China Dominates International Submarine Cable Market as Western Companies Face Restrictions

China’s Growing Dominance in Submarine Cables Market

The Global Market for Metallic-Clad Fiber

Approximately 1.4 million km of metallic-clad fiber crosses the world’s oceans in order to seamlessly accelerate Inte traffic across the globe, where companies from France, the United States and Japan dominate and compete in the supply and installation of these cables.

But the Chinese government has begun to prate successfully in this global market, after successive US administrations succeeded in freezing Chinese movement years ago, due to espionage concerns and concerns about what Beijing might do to destroy strategic assets managed by Chinese companies in case of conflict.

Chinese Companies’ Adaptation in the Face of International Restrictions

However, while regularly barred from international submarine cable projects involving US investment, Chinese companies have adapted by building international cables domestically and for many allied countries.

This has raised fears of a serious split in who owns and operates the infrastructure on which the World Wide Web is based, according to a Financial Times report.

While China’s ambition to become a major competitor in the global cable market has been thwarted, it is still looking for ways to turn a profit.

Industry insiders revealed that China’s state-owned telecommunications companies have been trying to shift their focus to areas in which they still have commercial and political influence.

Price wars

In turn, a person who works for the Chinese government said: “China is in able to lead projects in some Asian, African and Latin American countries, mainly because state-owned telecommunications companies can fight price wars well.”

In Asia, where the demand for bandwidth and the cables that carry it is growing faster than in many other regions of the world, China Telecom, China Mobile and China Unicom are currently leading several major projects via cable, including two that will connect China, Singapore and Japan.

And the building of a Chinese infrastructure empire around Africa and Europe has been successful for many years.

China Unicom was a major investor in the Sail Line, a 5,800km cable linking Brazil to Cameroon that started operating in 2020.

China Mobile has also been important to the major union via cable, 2Africa, which connects large areas of Africa to Europe and which started operating in 2020, in in which Meta and Vodafone are significant investors.

International Restrictions

However, Chinese companies today are unlikely to have the freedom to build a cable with Western groups and connect it to European ports.

But the Peace Line, the cable launched last year to connect Pakistan to France via Kenya, was financed and built entirely by Chinese companies, including HMN Tech, thus bypassing the need for groups to be invited to the negotiating table by western companies.

Two industry executives working on projects in China have revealed that Beijing has other tools it can use to push back against international restrictions.

As well as becoming more protective of its offshore territory in overall, it has begun to put a lot of pressure on companies that lay cables across Chinese waters and the South China Sea to use cables made by HMN Tech, according to the two sources.

Concerns about Espionage and Sabotage

The Chinese companies have also commissioned three cable-laying and maintenance vessels to reduce the country’s dependence on foreign vessels, according to Mike Constable, who served as chief strategy officer of the largest Chinese cable supplier until March of questyear and CEO at the time in which the company was owned by Huawei.

Growing concern about the vulnerability of cables to espionage and sabotage has led some governments to better protect their territorial waters, causing delays in obtaining permits for cable laying and maintenance.

Many countries, including Indonesia and Canada, are starting to allow only certain vessels and personnel to lay and maintain cables within their exclusive economic zones, industry executives say.

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