The Political Dilemmas of Digitalisation in Poland

This has meant that the Polish debate on Chinese involvement in digitalisation has been more political than business oriented. The politicisation reached its peak with the arrest of a Chinese citizen who was a Huawei employee on espionage charges in the beginning of 2019. He was indicted in November 2020, with the verdict not expected for at least two years.

The debate this particular case kicked off in 2019 did not however dramatically change the presence of Chinese digital companies in the Polish market. Companies such as Huawei, Nuctech (a provider of airport surveillance and security equipment which recently had its contract cancelled in Lithuania and is sanctioned by the US), or Dahua (video surveillance equipment) keep their regional (CEE & Nordic) branches located in Warsaw. Their activities are marginally discussed in the Polish debate, but are not restricted by state institutions. Chinese companies are also partners of research institutions in Poland, like BGI (which focuses on genome sequencing and prenatal tests) which partners with local firm Genomed. All of these create potential avenues by which private data from Polish citizens might be collected and transferred to China.

Poland has yet to make the political choice on its digitalisation process. The required decision-making is still stuck in a complex mix of development and the balancing of security threats. The country is unsure how to balance the wider implementation of AI tools, 5G, or digital administration, while at the same time keeping safe. The political boundaries are marked for Poland by a number of factors: semi-formal US expectations that were initiated during the Trump administration and have continued under Biden (which is borne out of a strong sense of the centrality of the US security guarantee to Polish defence), and EU member state obligations (as laid out in European legislation such as the 5G Toolbox, and the White Paper on Artificial Intelligence). Digitalisation is viewed through the lens of being part of the potential security challenge from both China and Russia, both in terms of technology (intrusions) but also information (fake news). These concerns are reflected in the current legislative processes and draft documents on cybersecurity, artificial intelligence and digitalisation that were issued for the most part by the Ministry of Digitalisation (that was closed in October 2020 with its competences transferred to the Chancellery of the Prime Minister). But much of the legislation is focused on the long-term economic benefits and goals of such tools, rather than focusing on national provenance of technology or cybersecurity questions.

The one important exemption is a draft amendment to the State Cybersecurity Act (originally adopted in 2018), which can be described as the fulfilment of commitments given the to the US about Chinese threats. It was presented in late 2020 and went through the process of reviews by state institutions and NGOs, with a final draft published on 20 January 2021. The text is currently being finalised by the government. The main thrust of amendments gives the Cybersecurity Collegium the authority to call a hardware provider from outside the EU and NATO an unreliable partner (based on the evaluation of data protection laws, human rights issues and security incidents) and force national telecom companies to replace their equipment within the next 7 years. The debate on the draft bill demonstrated the diversity of public opinions towards digitalisation in cooperation with China. Politicians look mostly through the lens of Poland’s alliance with the US. Most experts consider cooperation with Chinese firms as a threat while only a minority underline the high costs that could result from the possible exclusion of Chinese entities in the digitalisation and 5G development process.

In parallel to the legislation being processed in this manner, the Polish government has also given its vocal support to working with American digital companies such as Google Cloud, which is currently a main partner for state owned banks in building cloud capabilities for administration and the national digital economy. Poland is also looking forward to the implementation of previous American commitments of funding digital projects within the “Three Seas Initiative”, where digitalisation is one of the pillars and Chinese partners are informally excluded. There are also continuous attempts to regulate taxes on the e-commerce activities from China. The Polish government (under European Commission obligations from legislation issued in May 2020) is trying to end avoidance of customs duties and the lack of declaration of value on Chinese sales platforms like AliExpress (and its e-commerce partner AliPay). This is believed to have led to massive losses of revenue by the Polish government. The European Commission has advised member states to lay the foundations to establish VAT e-commerce tax regulations when they are introduced in July 2021. AliExpress has become extremely popular in Polish society due to its low prices which are in part believed to be the result of the false attribution of taxes.

Poland tries to keep it policy balanced between 1) free market participation of Chinese companies, 2) policy coordination with the US and 3) legislation that accords with the EU’s regulations and European digitalisation strategies. In March the Polish government accepted the EU’s Cybersecurity Strategy for the Digital Decade (adopted by the European Commission in December 2020), as well as supported European Commission initiatives to enhance the EU’s capabilities in the cybersecurity domain. Poland, however, has emphasised the need to discuss further the suggestion to create a Member States’ Working Group on Cyberintelligence under the European Union Intelligence and Situation Centre describing the suggestion as “too general and with no procedures”. Poland has also supported the statements of the European Commission and High Representative to start an enhanced discussion within the UN on responsible cybersecurity behaviour, which is politically important from the perspective of Russian and Chinese threats.

Poland finds the transatlantic value of EU-US cooperation on China very important and would support a greater discussion on digital issues. Despite its implementation and support for the EU’s strategies on digitalisation there is not an overwhelming support in Poland for the symmetrical view on the US’s and Chinese Big Tech at the same time. Poland is less interested in the EU’s digital “strategic autonomy” (and new industrial policy) and more in the broad and wide understanding of cybersecurity and digital threats coming from Chinese and Russian activities (and the possibility of their cooperation). Poland’s balanced policy with no restriction on Chinese companies in the Polish market at the same time as anti-Chinese 5G legislation and support for US investment in the digital sector mean it is unlikely to expect a definite ban on Chinese entities on 5G development specifically and digitalisation more generally. But current policy processes could mean an intensification of digital cooperation not only with the US, but also Taiwan, South Korea and Japan, as well as European partners and allies. These would be Poland’s preferred partners, though Warsaw is wary of completely slamming the door on China.

By Marcin Przychodniak, China Analyst, The Polish Institute of International Relations (PISM)

Article category: Digital Technology and R&D