The People's Republic of China, led by the Communist Party, is consciously undermining the influence of the West, the report, released on Tuesday, says. It is trying to push international relations towards a multipolar world order that takes into account the principles and interests of authoritarian regimes. A technological ecosystem independent of the West is being created.

"The rise and global proliferation of Chinese technology are not solely the result of Chinese talents' diligence and entrepreneurship; it is part of China's strategic efforts to enhance its political influence alongside exporting its standards. China aims to reach a point where integrated technological solutions cannot be replaced by Western technology due to both incompatibility and deep interconnection," the yearbook states.

The VLA says China is building an "integrated political and technological ecosystem based on its own standards and an amalgamation of solutions from various Chinese technology companies". Ten years ago, discussions about exporting technology and creating dependence on it were already widespread in China, but people in the West still fail to "recognize its potential as a threat" as of today.

"Nonetheless, over the past decade, China has systematically wielded influence within international technical committees to champion the advancement of standards that favor Chinese technology," the VLA writes.

It also says Chinese state-owned enterprises often have favorable access to capital, which gives them a competitive advantage in both private and public sector procurements and allows them to expand their market positions.

"Both the public and private sectors should take forward-looking measures to prevent the proliferation of Chinese technology, as it is highly likely that, in the not-so-distant future, a painful decision to abandon Chinese technology may be necessary due to geopolitical developments and security concerns," the VLA warned.

Huawei's new target – solar parks

The agency also highlighted the removal of the Chinese technology company Huawei from the development of 5G communication networks in the Baltic countries. It pointed out that the same company has now targeted cloud services and solar and wind farms.

Huawei and other Chinese companies want to equip Estonian electricity grids with inverters and energy storage systems connecting solar and wind farms to electricity grids.

An inverter is a device that makes the electricity produced in a solar panel usable by the customer, but to manage the solar plant, inverters are connected to the Internet, which means that they can be used to influence the operation of solar plants from afar, the agency outlined.

"As with other electronic devices, inverters require software updates and adherence to the manufacturer's recommendations. However, providers of products with critical functions must be trusted not to manipulate the device and, consequently, the critical service it provides. The more Estonia relies on solar farms for its power generation, the more significant the impact such manipulation could have on the country's electricity production capacity. It is, therefore, essential to avoid a situation where a third party can exploit the country's electricity supply for intelligence gathering or exert economic and political pressure," the VLA wrote.

"The introduction of Chinese inverters and energy storage systems into Estonian electricity networks could lead to a repetition of the 5G scenario sooner or later. Both the business sector and the government must be acutely aware of the implications of introducing Chinese technology into Estonia's critical infrastructure. Huawei's work in Estonia is persistent, comprehensive and systematic, and it is coordinated with its headquarters in Shenzhen."

With Lidar systems, China records the environment of other countries

A "new wave" of threats stemming from Chinese technology is marked by the increasingly widespread use Lidar systems, "from household electronics to self-driving cars", the agency says.

These devices use Lidar systems to scan their surroundings for independent operation. In addition to surfaces, they also scan objects to detect potential hazards behind them. For example, self-driving cars must assess whether a ball could roll onto the road behind a parked car or a child might move in that direction, requiring the parked car to be scanned.

"A significant challenge with Chinese technology companies is their potential state affiliation," the VLA wrote.

"We have credible information about a Chinese manufacturer working on Lidar systems for self-driving cars that are intended to scan the car's entire surroundings and transmit the information to a database in China. While a device collecting data for autonomous operation should delete any non-essential data, this Chinese company aims to transfer the complete environmental data to a Chinese database. This raises concerns that Chinese technology-enabled self-driving cars could be vulnerable to exploitation for intelligence purposes."

A similar threat also applies to ordinary household electronics, such as robot vacuum cleaners, which scan their entire environment, the agency believes.

"Furthermore, there is a risk that personalized services offered by Chinese technology companies, combined with accounts for mobile applications, collect information about consumers based on their behavior," it added.

The VLA also raised concerns about the threats from the social media app TikTok.

On Tuesday, the LVA published its ninth public report "International Security and Estonia 2024", in which it gave an overview of external security threats affecting the country.

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