China has begun banning projects to lay and maintain undersea internet cables through the South China Sea, as Beijing seeks to exercise more control over the world’s data transmission infrastructure.
Long approval delays and strict Chinese requirements, including permits for work outside internationally recognized waters, have pushed companies to develop routes that avoid the South China Sea, according to multiple industry sources.
The under-construction cable called SJC2, which will connect Japan to Singapore and Taiwan to Hong Kong, has been delayed for more than a year due to Chinese opposition and lengthy permitting issues, according to two industry executives.
China has held a license to monitor the submarine cable – owned by a consortium that includes China Mobile, Chunghwa Telecom and Meta – for several months in its territory around Hong Kong. Authorities have cited concerns that the contractor may conduct espionage or install external equipment, according to one person directly involved in the project who asked not to be identified.
“China is trying to exercise more control over submarine activities in its region, in part to prevent American surveillance systems from being deployed as part of submarine cable deployments,” said Bryan Clark, a former U.S. submarine commander and senior Navy officer.
“The Chinese government wants to know exactly where the undersea infrastructure is being installed for its own purposes,” added Clark, of the Hudson Institute think tank.
Disputes over who owns, builds and manages the fiber cables that transmit the Internet around the world have increased sharply since 2020, when the US government began to block Chinese involvement in international consortium projects. Washington has also denied permission for submarine cables connecting the US mainland to China and Hong Kong.
Several industry sources said China’s policing of its waters – including maritime areas marked on maps by the “nine-dash line” – is a response to Beijing’s exclusion from international affairs and fears that companies could use the cables as a starting point for espionage.
According to international law, states or companies that lay and maintain internet cables need government permits to access the sea within 12 nautical miles of the country’s territory. But generally permission is not required in waters anywhere within 12 nautical miles of 200 nautical miles from the country, known as the country’s “exclusive economic zone”.
Chinese authorities have made the process of obtaining permits within a distance of 12 kilometers long and difficult, according to three industry executives with direct knowledge of the situation.
China is also among a handful of countries in Asia that have begun asking for permits to lay cables in seas of more than 12 miles, apparently in violation of international maritime law, according to executives at two of Europe’s largest submarine cable companies and two lawyers. and companies in the region.
Beijing claims almost the entire South China Sea and often interferes with its claimants’ use of oil exploration and fishing.
“The law from (the Chinese Communist Party), which was passed by local government representatives, is that you need permission in their EEZ,” said one submarine cable official. “The last thing you want is to get close to Chinese waters and have a gunboat come out and stop you. It’s really tough out there (and) the cost of not doing that means that people are going to have to apply (for permits).”
Requiring permits for cable work gives China oversight and influence over businesses that control steel-enclosed fiber lines that carry data in Asia. It also gives Beijing the power to demand a seat at the table for infrastructure projects by asking its companies, ships or workers to participate.
The South China Sea is a popular undersea cable route, providing a highly efficient way to connect east Asia with the south and west of the continent, as well as further into Africa.
About 95 percent of all intercontinental internet connections – data, video calls, instant messages and emails – are spread over less than 400 active cables spanning 1.4mn km.
Clark said China’s demands were “inconsistent” with the United Nations Convention on the Law of the Sea, noting that its permit requirements extended beyond its EEZ to cover almost the entire South China Sea. “A large part of this area is actually the EEZ of China’s neighbors,” he added.
China’s Ministry of Environment and Ministry of Defense did not respond to a request for comment.
Several sources said that to avoid having to deal with permits, subsea cable consortiums are now looking to build new routes that avoid the so-called Chinese waters.
Two cables under construction, called Apricot and Echo, will transport data from Singapore to Japan and the US, respectively, avoiding the South China Sea by going around Indonesia.
“No one has the courage to carry out activities without clear permission. . . that will never come,” said a European submarine cable executive. Some projects under procurement will avoid the area because of these problems, he added.
Contract costs for cable installation and maintenance boats can be as high as $100,000 per day, making companies reluctant to risk any activity that could be blocked or destroyed.
Avoiding the waters claimed by China is “double punishment,” the official said, because it is more expensive to lay the cable on a new route as the shallow waters near Borneo require additional layers of protection around the cable.
“It means it’s farther and more expensive to build,” said a Singapore-based executive at a global technology company. “It’s the fragmentation of the digital infrastructure.”