Google executive chairman Eric Schmidt
is brutally clear: China is the most
dangerous superpower on Earth.

Corporate Intelligence reviewed preliminary galleys of Schmidt’s new book, “The New Digital Age,” (Random House) which debuts in April. And Schmidt’s views on China stand out the strongest amid often predictable techno-utopian views of the future.

Some of these views are both cliched and camera-ready . He imagines that soon an “illiterate Maasai cattle herder in the Serengeti” will use a smartphone to “inquire the day’s market prices and crowd-source the whereabouts of any nearby predators.”

Other parts of the book are a much darker take on how authoritarians, extremists and rogues of all varieties are becoming just as empowered as that Maasai herdsman. And the good guys, whoever they are, have yet to work out how to properly defend themselves.

The new book is co-written by Jared Cohen, a 31-year old former State Department big shot who now runs Google Ideas, the search giant’s think tank.

The Schmidt and Cohen partnership has at least one other impressive credit to its name. The two wrote a long essay, “The Digital Disruption,” published in November 2010. In its opening paragraph, it predicted that “governments will be caught off-guard when large numbers of their citizens, armed with virtually nothing but cell phones, take part in mini-rebellions that challenge their authority.”

A month later, a wave of popular uprisings began across the Arab world. As the Egyptian revolution kicked off in January 2011, Cohen, so the story goes, was not only in Cairo: he shared dinner with Google executive and high-profile activist Wael Ghonim just hours before he was snatched from the streets by security forces.

With the Arab uprisings rolling onward, “The New Digital Age” picks up where that previous essay left off, taking a big-picture view on how everything from individual identities to corporate strategy, terrorism and statecraft will change as information seeps ever deeper. And in this all-Internet world, China, the book says again and again, is a dangerous and menacing superpower.

China, Schmidt and Cohen write, is “the world’s most active and enthusiastic filterer of information” as well as “the most sophisticated and prolific” hacker of foreign companies. In a world that is becoming increasingly digital, the willingness of China’s government and state companies to use cyber crime gives the country an economic and political edge, they say.

“The disparity between American and Chinese firms and their tactics will put both the government and the companies of the United States as a distinct disadvantage,” because “the United States will not take the same path of digital corporate espionage, as its laws are much stricter (and better enforced) and because illicit competition violates the American sense of fair play,” they claim.

“This is a difference in values as much as a legal one.”

The U.S. is far from an angel, the book acknowledges. From high-profile cases of cyber-espionage such as the Stuxnet virus that targeted Iranian nuclear facilities, to exports of surveillance software and technology to states with bad human rights records, there is plenty at home to criticize.

And those criticisms will become louder and more politically resonant, Schmidt and Cohen claim, as the distinctions between states that support freedom online and those that suppress it become clearer. The pair even speculate that the Internet could eventually fracture into pieces, some controlled by an alliance of states that are relatively tolerant and free, and others by groupings that want their citizens to take part in a less rowdy and open online life. Companies doing business with the latter could find themselves shunned from the former, the book suggests.

In this roundabout way the pair come close, on occasion, to suggesting western governments follow China’s lead and form closer relationships between state policy and corporate activity.

Take the equipment and software that comprises the Internet. Most of the world’s IT systems were once based almost entirely on Western infrastructure, but as Chinese firms get more competitive, that is changing, and not necessarily for the better, they say:

In the future  superpower supplier nations will look to create their spheres of online influence around specific protocols and products, so that their technologies form the backbone of a particular society and their client states come to rely on certain critical infrastructure that the superpower alone builds, services and controls.

Chinese telecom equipment companies, rapidly gaining market share around the world, are at the front lines of the expansion this sphere of influence, they say: “Where Huawei gains market share, the influence and reach of China grow as well”. And while western vendors like Cisco Systems and Ericsson are not state controlled, the will likely become closer to their governments in the future, Schmidt and Cohen say:

There will come a time when their commercial and national interests align and contrast with China — say, over the abuse of their products by an authoritarian state — and they will coordinate their efforts with their governments on both diplomatic and technical levels.

But for all the advantages China gains from its approach to the Internet, Schmidt and Cohen still seem to think its hollow political center is unsustainable. “This mix of active citizens armed with technological devices and tight government control is exceptionally volatile,” they write, warning this could lead to “widespread instability.”

In the longer run, China will see “some kind of revolution in the coming decades,” they write.