Facial recognition: how China cornered the surveillance market

What do Uganda’s police force, a prison in Inner Mongolia and Zimbabwean airports have in common? All three are in the process of testing facial recognition systems and all three have used Chinese technology to do it. At least 52 governments are doing the same thing according to research by the Carnegie Endowment for International Peace.

Chinese facial recognition companies have taken the lead in serving this growing international market not least because of the advantage they have over peers in other countries: a massive domestic market and an authoritarian system where privacy often takes a back seat . According to IHS Markit, China accounted for nearly half of the global facial recognition business in 2018.

“There are protests around the world from Lebanon to Chile and Iraq, and a lot of these governments, whether it’s liberal democracies or more autocratic, are in tenuous positions,” says Steven Feldstein, a fellow at Carnegie, a US think-tank. “Now, there is technology available that allows them to fight back against political mobilisation.”

Critics, and human rights campaigners, have accused Beijing and the surveillance companies of “exporting authoritarianism” via the technology that has been used at home as part of a security crackdown that has led to the detention of more than 1.8m people, predominantly Uighur Muslims, in the Xinjiang region.

Chinese companies may be the most successful, but they are not the only ones supplying surveillance technologies to governments. Rivals from Israel, Japan and America are competing to do the same, while often sourcing components from the US.

Research by Mr Feldstein into the global expansion of artificial intelligence surveillance found that Chinese tech companies — particularly Hikvision, the world’s biggest surveillance camera vendor, Huawei, Dahua, and ZTE — have supplied countries ranging from Australia to Myanmar and Kazakhstan .

“These companies are particularly well-suited to provide [advanced surveillance capabilities],” says Mr Feldstein, “but also they are willing to go to markets that perhaps western competitors are less willing to go to.”

On the roads leading into Nairobi, the Kenyan capital, surveillance cameras flash at every car passing in and out of the perimeter of the urban centre, capturing and analysing the identities of their occupants. Chinese telecoms company Huawei boasts that its cameras led to a 46 per cent drop in the regional crime rate in 2015 . Local government figures suggest the impact was smaller, and only shortlived.

The company, which was blacklisted for allegedly posing a threat to US national security this year, has supplied surveillance equipment — including facial recognition — to roughly 230 cities worldwide stretching from western Europe to large swaths of Asia and Sub-Saharan Africa. It supplies more countries with AI video surveillance than anyone else according to Carnegie.

“Huawei has been investing heavily in the developing world in a way their telecoms provider competitors haven’t. It is perfectly pitched for surveillance projects,” says Henry Tugendhat, a researcher at Johns Hopkins School of Advanced International Studies. “The governments have an interest in security and companies have an interest in selling.”

But the question of who is driving the surveillance rollout is not straightforward. “I would beware of the idea that Africa is a blank slate, where the Chinese arrive bringing their oppressive ways,” says Iginio Gagliardone, author of China, Africa, and the Future of the Internet. “Companies are spinning their products to fit the political demands of African elites.”

Hikvision, which grew out of a government research institute, but is now only partially state-owned, has a growing international presence, supplying video surveillance infrastructure from Brazil to South Africa and Italy. It is one of a clutch of Chinese tech companies — along with Dahua, SenseTime and Megvii, among the world’s leading artificial-intelligence software vendors — to have been blacklisted by Washington over alleged involvement in supplying technology used in Xinjiang.

Yet Chinese domination of the market shows no sign of waning. According to figures from IHS Markit China’s market expanded by 13.5 per cent last year whereas the global market — excluding China — grew by just 5 per cent. In 2017 Chinese state media boasted that the country had built the world’s biggest video surveillance system, employing over 20m AI-enabled cameras.

Chinese companies have previously operated under loose regulation at home and abroad, but are now facing challenges from the public unhappy at the expansion of facial recognition . Some 80 per cent of respondents in the country’s first mass survey on the issue, released on Thursday, feared data leaks from facial recognition operators.

“When you’re arguing with public bodies like the Beijing subway about their use of facial recognition, there’s no point talking to them about data protection,” Hong Yanqing, a scholar at Peking University, told a recent forum in Beijing. “Instead we need to have a debate about the appropriateness and proportionality of using [facial recognition].”

Mr Hong helped draft the government working group’s report on personal data protection standards.

The widespread use of facial recognition in China is in part a reflection of how many activities already require real-name identification. Face scans have replaced or augmented human identity checks in hotels, boarding flights and trains, and at banks and hospitals. Regulations, which came into effect this week, require telecom carriers to scan the faces of users registering for mobile phone services.

But facial recognition is also being used to extend surveillance in new ways, such as tracking the classroom behaviour of students. The country’s rapidly expanding network of facial-recognition cameras means many people are now subject to mass identification. China’s police force already holds the world’s biggest national database of over 1bn faces, captured for the national ID card system. Depending on the quality of these photos, they can be matched to people posing for a face scan.

The industry is beginning to pay attention to the complaints. SenseTime announced last week that it will lead a consortium of 27 companies to help set national standards for facial recognition, under the guidance of a government standards body. “The public is increasingly paying attention to the security problems faced by this technology,” the company wrote in a social media post.

While debate over the use of facial recognition in the EU and the US is focused on the privacy threat of governments or companies identifying and tracking people, the debate in China is often framed around the threat of leaks to third parties, rather than abuses by the operators themselves.

China’s courts received their first challenge to the commercial use of face scans in October. When a zoo in Hangzhou forced season pass holders to submit to face scans for entrance, Guo Bin, a professor at Zhejiang Sci-Tech University, sued the zoo in order to keep his personal information private. Face traits are “sensitive personal data”, he said in a court submission, arguing that the data could be leaked or stolen.

Most Chinese people approve of the use of facial recognition for convenience and improving security, but remain concerned about privacy abuses, according to Beijing’s Nandu Personal Information Protection Research Centre, which conducted the mass survey.

The installation of an in-class facial monitoring system at the China Pharmaceutical University in Nanjing in September sparked widespread online criticism. As part of a new “smart campus” system, the school installed face scanners in two classrooms to track attendance and to catch students dozing, playing on their phones and talking in class. It “effectively solves the difficult problems of managing attendance and low efficiency”, the school says.

In response, China’s education ministry said the department would add restrictions and regulations on the use of facial recognition in schools, and hoped they would be “highly cautious” in using the technology.

While Chinese companies are dominant in the global facial recognition market, their position is coming under pressure from rivals such as Japan’s NEC which supplies similar technology in 14 countries, and US groups like IBM, the software company Palantir and Cisco.

“Companies from other countries including Israel and Russia are very advanced in this space, and are making a play in markets such as the United States, and regions in the Caucasus and Central Asia, which is significantly under-reported,” Mr Feldstein says.

Israeli companies like AnyVision and Elbit Systems have supplied technology to the US, while Ukrainian start-up Riddletag uses Amazon’s facial recognition technology to allow access to passengers in the Tbilisi subway in Georgia.

“US companies, for all the lip service they pay to technology and ethics, are also building surveillance tech, and indeed supplying Chinese companies that produce it,” says Stephanie Hare, an independent researcher of facial recognition technology and ethics, and a former employee of Palantir. “This leaves everyone else with a decision: be spied on by the US or by China? This point was made in the German parliament last week, and the US was very upset about it, saying there can be no moral equivalence between China’s authoritarianism and US values.”

Meanwhile, China’s surveillance industry is already moving on to the next frontier of computer image recognition: identifying people by the way they walk and trying to read their emotions.

Additional reporting by Nian Liu and Ryan McMorrow in Beijing

This article has been amended to refer to a prison in the Chinese region of Inner Mongolia