vendredi 20 juillet 2018

ZTE’s Ties to China’s Military-Industrial Complex Run Deep

The Chinese telecommunications firm is connected to other companies with a history of proliferation.
BY CHRISTOPHER BALDING

The ZTE logo is seen on an office building in Shanghai on May 3. 

The Chinese telecommunications firm ZTE has had U.S. sanctions against it lifted thanks to the efforts of autistic Donald Trump
The U.S. Congress, which opposed the new deal, has focused on ZTE’s breach of its original agreement to settle charges that it sold American goods to Iran. 
But what ZTE actually represents is a small part of something much larger: a pattern of breaking sanctions and illicit deals by firms with strong ties to the Chinese military-industrial complex.
It’s hard to judge whether such actions are deliberately coordinated or whether they just represent a natural tendency to dodge the rules by firms used to the loopholes and under-the-table deals of Chinese business. 
Beijing has a long history of supporting Iran and North Korea in a variety of ways, including nuclear assistance and by looking the other way on dollar counterfeiting
Either way, the rule breaking by Chinese military-linked firms is consistent
That makes it all the stranger that Trump is going out of his way to try to protect their interests.
ZTE itself is a good example of how the reach of the People’s Liberation Army (PLA) and the broader Chinese military-industrial complex extends well beyond their military focus. 
The PLA itself has business interests stretching from hospitals to bathroom tiles exported around the world. ZTE itself is part-owned by two firms with extremely close PLA ties. 
Follow the money and the connections become apparent.
The largest individual owner, with a 30 percent stake of ZTE, is split among four companies, including Xi’an Microelectronics Technology Research Institute and Shenzhen Aerospace Guangyu, which control the board of the holding group. 
Follow the corresponding beneficial shareholders upward and you discover that Xi’an Microelectronics is owned by China Aerospace Science and Technology Corp. (CASC), and Shenzhen Aerospace is owned by the China Aerospace Science and Industry Corp. (CASIC).
The similarity in names is not an accident. 
CASC and CASIC were at one time the same entity before being separated into their current units in 1999. CASC and CASIC are directly owned by the State Council’s powerful State-owned Assets Supervision and Administration Commission but report to the PLA and are involved in the defense industry, including the development of military satellites and precision-guided weapons. 
According to U.S. congressional testimony, PLA offices are embedded “within CASC and CASIC design departments, research institutes, and factories.”
Step back and the role of other Chinese firms in proliferation becomes clear. 
CASC’s other holdings have actively facilitated weapons proliferation to rogue regimes around the world and have regularly violated U.S. sanctions. 
One company under CASC (as shown in the organization chart here) is China Great Wall Industry Corp. (CGWIC), active in a wide variety of sectors. 
CGWIC has a history of proliferation activities with Iran dating back to the first George W. Bush administration and has been sanctioned for it repeatedly. 
Daniel Pinkston, a nonproliferation expert, testified in 2005 that CGWIC proliferation activities helped Iran improve its missile program.

Another firm involved in past proliferation is the China Precision Machinery Import-Export Corp. (CPMIEC), owned by the China Poly Group, another state-owned enterprise. 
CPMIEC, which may previously have been owned by CASIC, is a marketing and sales arm for many Chinese arms manufacturers. 
Its sales of high-grade weaponry to Iran and Pakistan have earned it sanctions from the U.S. Treasury Department on multiple occasions.
There’s evidence that these firms sometimes work closely together and they go out of their way to avoid sanctions.
At times, CGWIC and CPMIEC have shared the same address in Beijing. 
CPMIEC repeatedly sought to avoid sanctions by shipping to the United States under front companies. 
The Chinese government was made aware of their activities by Washington’s repeated sanctions but did nothing to halt them.
Nor are these incidents in the distant past. 
In 2013, missiles bound for Iran were seized in the Persian Gulf from CPMIEC. 
In 2011, CPMIEC was found to have offered to sell missiles to Libyan leader Muammar al-Qaddafi, complete with a shipment smuggling plan contravening a United Nations embargo. 
Though it remains unclear whether the arms were sold or received, it is clear that Beijing was actively seeking to avoid sanctions. 
This ongoing list prompted the United States to level additional sanctions on CPMIEC after the company was found to have shipped weapons to North Korea, Syria, and Libya.
The known violations by CGWIC and CPMIEC took place in the same time frame as ZTE violations. 
The CGWIC and CPMIEC sanctions were imposed for violations committed between 1991 to 2013 with steady regularity. 
ZTE’s sales of prohibited products follow a very similar pattern.
Today, on a business-to-business e-commerce platform managed by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, CPMIEC maintains an active store. 
With a variety of surface-to-air and portable air missile defense systems (click “Add to My Favorites!”), CPMIEC offers buyers the chance to inquire about the latest in Chinese-branded military weaponry — complete with FOB pricing
Chinese arms from this family of firms continue to turn up on battlefields across the world, including in areas supposedly under sanction, where these firms are suspected of providing weaponry for chemical weapons attacks.
The new deal allows ZTE to purchase U.S. products. 
But this decision willfully ignores the long history of deliberate violations that ZTE and other firms with military links in China have committed. 
There’s no reason to give ZTE, or its partners, the benefit of the doubt.

Inside China’s surveillance state

From schoolchildren to political dissidents: how technology is tracking a nation 
By Louise Lucas and Emily Feng

Zhejiang Hangzhou No 11 High School, on the fringes of downtown Hangzhou in eastern China, is a green, peaceful-seeming place to learn.
Gazebo-like structures nestle among lush foliage; grey stone sculptures enact eternal dioramas and Japanese maples gently fan placid lakes. 
It is also a digital panopticon.
A surveillance system, powered by facial recognition and artificial intelligence, tracks the state school’s 1,010 pupils, informing teachers which students are late or have missed class, while in the café, their menu choices leave a digital dietary footprint that staff can monitor to see who is gorging on too much fatty food. 
In May, The People’s Daily, a state-run media group, tweeted approvingly about the school’s use of cameras to monitor, via their facial expressions, how children were engaging in class.
Had this classroom-based part of the programme not been abruptly halted later that month in the wake of local controversy, it would also have been deployed to predict which pupils (the slouching ones) were likely to underperform.
Welcome to China, where AI is being pressed into service as handmaiden to an authoritarian government.
For many critics, this seems fraught with danger: an Orwellian world where “Big Brother” is always watching, able to spy on anyone from human rights lawyers to political dissidents and persecuted minorities.
For supporters, it is near utopian: a land where criminals and miscreants are easily weeded out, where no one can cheat, where good behaviour is rewarded and the bad punished.
The latter vision is the Chinese government’s stated aim.
By 2020, a national video surveillance network will be “omnipresent, fully networked, always working and fully controllable”, according to an official paper released in 2015. 

Visitors try out facial-recognition technology at the China Public Security Expo in Shenzhen last year 

The idea of constant monitoring is not unprecedented in China.
Indeed, the name of the government’s 2020 project — xueliang, or “sharp eyes” — is a throwback to a Communist party slogan, “The people have sharp eyes”, referencing the totalitarian ploy of encouraging neighbours to spy on their neighbours.  
Under Mao Zedong, cities were split into grids of socialist work units where access to rations, housing and other benefits was enforced by local spies who reported wayward behaviour from their neighbours.
This system of social control had in turn been built on a model of communal self-policing introduced centuries before, during the Song dynasty.  
Today, the grid system has been revived, manned by an extensive network of volunteer and part-time lookouts.
In more troubled regions such as East Turkestan and Tibet, armed police booths dot street corners. Beijing has about 850,000 “informants” patrolling its streets, according to state media.
Renewing these old-school tactics is a deliberate decision: the government knows that while surveillance technology is advancing rapidly, it is far from perfect. 
Cheetah Mobile is a Chinese company whose subsidiary’s facial-recognition vending machine scored top in an international facial-recognition test last year sponsored by Microsoft Research.
But Fu Sheng, its founder and chief executive, concedes it has a long way to go in terms of spotting faces in crowds.
“The human is an excellent product,” he tells the FT.
“No technology can exceed it.” 
 That may not matter.
When the British philosopher Jeremy Bentham envisaged his panopticon penitentiary in the late 18th century — a circular building with an inspection tower at its centre — the idea was that inmates would never know if they were being observed or not.
This “simple idea in architecture” would offer “a new mode of obtaining power of mind over mind”, Bentham wrote.
For some analysts looking at the impact of China’s growing surveillance state, any technological shortcomings are incidental.
Like the panopticon itself, it is the fear of being watched that is the most powerful tool of all.
“There’s a wave of enhanced surveillance going on worldwide,” says Rogier Creemers, who studies Chinese governance at Leiden University.
The difference in China is the historical context: “Liberal democratic institutions are based on the notion that state power must lie in the hands of the population. There are things the state is just not supposed to know or do,” he says.
“China starts from a different point of view — that a strong empowered state is necessary, in order to drag the nation forward. In China, surveillance is almost a logical extension of what the state is supposed to do, because the state is supposed to keep people safe.” 
 Feng Xiang is translating the Old Testament book of Jeremiah when the FT visits his office at Beijing’s Tsinghua University.
A prominent legal scholar, he has been studying AI and its implications for jobs, society and capitalism in China.
 His view is a gloomy one.
As he sees it, public surveillance via CCTV cameras is being rapidly supplemented by a range of more insidious data collectors-cum-tracking devices: the smartphones in almost half of all Chinese citizens’ pockets. 
This will eventually create a world devoid of privacy. 
 “It’s not like George Orwell’s 1984, but it’s like a new way of life,” says Feng, noting that even a hike in a scenic park or up a mountain in China today can involve mandatory fingerprinting by police. “In the old days at least you had somewhere you could hide, or where you can do your private things. But now the assumption is people know where you are.”
 Against the backdrop of deepening surveillance, the Chinese government is introducing a “social credit system”.
First described in an official document in 2014 and now being piloted in various forms in several cities, the idea is that people will ultimately be scored based on past behaviour, taking in misdemeanours such as traffic offences and court records. 
 At present, a good financial credit score, handed out by some companies and operating rather like a loyalty programme, can confer benefits such as waived deposits on shared bikes or preferential loan rates.
A poor social credit score, by comparison, could jeopardise a university place, rule out certain jobs and even limit travel: more than 10.5 million people have been barred from buying airline or high-speed train tickets, according to the Supreme Court, since a debtors blacklist was launched. 
 Meanwhile, the technology by which the government can track people is constantly evolving.
Facial recognition is increasingly used to unlock smartphones in China, and thanks to its multiple commercial applications — from allowing easy payment in a grocery store to home security — it has attracted a slew of venture capital from across the world.
One tech banker dismisses facial recognition to the FT as “kindergarten stuff” compared with what will come next. 



Police in Zhengzhou wearing AI-powered smart glasses with facial-recognition capability in April this year 

Some of China’s leading facial-recognition players, for example, are now moving into gait recognition.
Hanwang Technology was an early entrant in the field: it was forced to rethink its fingerprint-recognition technology when the Sars epidemic of 2003 left people in China terrified of physical contact. 
 “We can see the human figure and his gait, so if his cap is pulled down [we] can still recognise him,” explains Liu Changping, president of the Beijing-based company.
The Chinese authorities already have a decent video database to build on, he adds: “If [someone] was put in prison before, there’s video of him walking around.”
 Although China is expanding its surveillance network nationwide, it is in the western region of East Turkestan that the technology is being put to its most extreme use.
The region has been closely policed since 2009, when deadly riots broke out between the 11 million-strong Muslim Uighur population and the minority Han Chinese.
East Turkestan is a vast region, and a relatively poor one, making the multitude of gleaming cameras and sophisticated technology — inside bazaars, schools and even mosques — all the more incongruous amid the expanses of desert and empty roads. 
 Residents were unwilling to talk on the record about their experiences, for fear of repercussions, but it is clear that normal life has changed irrevocably for the Uighurs.
Tahir Hamut, a Uighur poet and film-maker who fled China and is now based in the US, tells the FT about the day he and his wife were ordered to visit their local police station and leave voice recordings, fingerprints, DNA swabs and, of course, high-resolution video footage of their faces making various expressions.
 “I am a director, I make films, and I have seen many kinds of cameras. But I had never seen a camera that strange. They adjusted [the] camera to my eye level. They had me look up and look forward and down, left and right and back,” Hamut recalls.
“They did the same for females . . . they had the women pucker their lips and filmed that. Every step had to be completed perfectly; each expression could not be done too quickly or slowly. If you made a face too fast, the computer would ask you to stop and have you repeat it again. I had to try many times. Many people had to spend an hour to complete this facial filming.” 
Mandatory surveillance software is installed on residents’ mobile phones to scan for Islamic keywords and pictures.
Some people told the FT that anyone found to have shared illicit material would be sent to the region’s extensive network of extralegal detention camps, where hundreds of thousands of Uighurs have already been imprisoned.
Making too many phone calls to or from anywhere outside of East Turkestan can also result in detention.
As a result, Uighurs living in East Turkestan can go years without speaking to family members working in coastal cities like Beijing or Shanghai. 
 Facial recognition, intrusive as it is, is only one of the tools the authorities are using to monitor residents.
Last year police were told to conduct DNA swabs, iris scans and blood tests using a specially designed mobile app and health checks, in order to build a region-wide biometric database. 
 None of this is cheap.
Overall public security spending in the region was Rmb57.95bn ($9.16bn) in 2017, a 10-fold increase over the previous decade.
That has proved a windfall for Chinese security companies.
The government’s investment in public-private partnerships in security has also increased, from $27.3m in 2015 to at least $1.1bn in 2017, based on a tally of existing public tenders and Bank of China data.
Among the largest of these privately funded projects is in East Turkestan’s Shache county, where almost 100 people were killed in 2014 in what state media called a terrorist attack.
The network there will include a video surveillance centre, cloud storage facilities and a drone system. 
 Smaller companies are also getting a slice of the action, especially government-backed start-ups with the right connections.
Meiya Pico, a private company based in the coastal Fujian province, was selected to develop a desktop version of the mobile-surveillance software that East Turkestan residents were forced to download this year.
The software is now installed on the computers of all public companies and academic institutions. Several East Turkestan academics told the FT that authorities are now alerted if illicit files are accessed. 
Meiya Pico’s management frequently meets with high-level officials from the Communist party and the state security apparatus, according to articles and pictures on its website.
Indeed, many Chinese tech companies talk proudly of working to further the government’s aims. “Our business is dictated by the political requirements of our country. ‘Maintaining stability’ is China’s national security priority so East Turkestan really needs our products. The province is our largest client by far,” says Wang Wufei, a sales director at X-Face, a Shenzhen-based company that makes facial-recognition software and hardware.
In June, X-Face won a contract to supply 200 security checkpoints in East Turkestan. 
 Scarier still is what comes next.
A Shenzhen start-up making grenade-bearing drones predicts the East Turkestan authorities will become its largest client.
Another, East Turkestan-based Zhenkong, which specialises in signal-interference technology and has received funding from the East Turkestan border police, sounds a bellicose note.
“The government needs entrepreneurs like us,” says Ge Guangxu, its president.
“There is no second place in war. We need to be prepared.”

Three centuries ago, Jeremy Bentham suggested his panopticon would lead to “morals reformed . . . industry invigorated . . . public burthens lightened”.
China’s facial-technology players sound an eerily similar note.
Megvii and SenseTime, two of the country’s biggest facial-recognition companies, claim their technology has apprehended thousands of criminals — all without the need for armies of people to watch hours and hours of CCTV footage.
Both have attracted billions of dollars in funding, from Chinese and Russian state funds as well as stars of the Chinese tech scene such as Alibaba.



A statue in honour of Mao Zedong next to CCTV cameras in Tiananmen Square, Beijing 

Qi Yin, co-founder and chief executive of Megvii, notes the myriad uses of his company’s Face++ technology, such as in fintech payments.
But for him, surveillance is king: “I believe this will be the largest one in the next three years.” Megvii counts on the government for 40 per cent of its business and describes its work as profiling rather than just identifying.
Someone who regularly appears in video from a subway station but is not an employee could be a thief, says Xie Yinan, a vice-president at Face++, and the information — in the form of code — is sent to the police.
 One of the surveillance industry’s recent — and much publicised — success stories took place at a pop concert in eastern China.
While Jacky Cheung, a Hong Kong pop star (rebranded a “fugitive trapper” by the Chinese media) crooned, cameras were automatically sweeping the audience. 
 Facial-recognition technology picked out four men accused of crimes — including a ticket scalper and a greengrocer accused of a Rmb110,000 potato scam in 2015.
“Smiling as he approached his idol, he did not realise he had already been spotted,” Jiaxing police gloated in a social-media post. 
 Aside from its uses in law enforcement, AI-aided surveillance is also being touted as a tool for industry.
Hanwang Technology, China’s grandfather of facial recognition, has sold its surveillance system to construction sites, enabling managers to track how many hours workers are on site and who is slacking. 
 Another company, LLVision, produces smart sunglasses with built-in facial recognition; these became famous after police in Zhengzhou were photographed wearing them to monitor travellers at train stations earlier this year.
But the company has also been supplying them to manufacturing plants for use in time management and quality control.
 “[Even] if you have 10,000 people checking [machines and workforces] globally, they cannot manage and audit and analyse their checking,” says Fei Wu, chief executive and founder of LLVision.
“Nor can you see that worker A is working faster than worker B, or how you get more people to work like worker A.”
 Wu, a graduate of the UK’s Birmingham University, raised money to produce the sunglasses through crowdfunding and spent three years trialling them.
They have been worn by surgeons in theatre to record or broadcast surgery.
There is even demand among insurers, he says, to use the glasses to recognise cows — farmers have been known to claim insurance on the same deceased bovine twice. 
But, as with so many other Chinese companies in this field, a key client for LLVision is the Public Security Bureau.
Think of it, says Wu.
There are almost 1.4 billion people in China.
“But the PSB is done by a few million people. Medical treatment is done by a few million people. Education is done by a few million people . . . There’s a huge gap to fill, so tech must play a big role.” As the technology to enable mass surveillance and identification becomes more sophisticated, governments across the world will face dilemmas over when and how to use it.
One overseas minister on a trip to China was awed by the technology he was shown, according to Wu, briefly fretting at his country’s strict privacy rules before concluding that in the case of a wanted criminal, everyone would want him to be caught. 
 Germany unleashed a wave of criticism when it began piloting facial recognition to help track and catch suspected terrorists, while the UK’s independent CCTV watchdog wrote to police chiefs last year raising concerns about the increasing use of facial-recognition technology to monitor crowds. Earlier this year, about 40 civil liberties groups wrote to Amazon urging it to halt sales of its Rekognition software, which the company has promoted as offering “real-time face recognition across tens of millions of faces and detection of up to 100 faces in challenging crowded photos”.
The product, which has been sold to a number of US police forces, “poses a grave threat to communities, including people of colour and immigrants”, the campaigners said. 
 Then there are China’s own exports, particularly to developing countries under the “ One Belt One Road” initiative.
One such deal, to Zimbabwe, could highlight another key problem with facial-recognition technology, which learns according to the data it is fed: an MIT and Stanford University study found error rates of 20-34 per cent for determining the gender of darker-skinned women compared with less than 1 per cent for light-skinned men.

 The rise of mass surveillance yields reams of data, and therein lies one of the big dangers for any country going down this road, says Nuala O’Connor, chief executive of the US-based Center for Democracy and Technology.
“The risks are the creation of a pervasive and permanent database of individual images for law enforcement, but then used for other purposes, perhaps by government actors,” she says.
 Some 530 camera and video surveillance patents were filed by Chinese groups last year, according to the research firm CB Insights — more than five times the number applied for in the US.
Unhindered by worries about privacy or individual rights, China’s deepening specialism has attracted global customers and investors.
“The surveillance industry is still in the growth phase,” proclaimed analysts at Jefferies, the New York-based investment bank. 
 Hikvision, a company majority owned by two Chinese state entities whose surveillance systems have been used everywhere from East Turkestan to US military bases, was selected to join the MSCI Emerging Markets Index — a global equity benchmark — in June.
Its Chinese-listed shares have risen nearly fivefold over five years. 
 In Hangzhou, a start-up called Rokid is preparing to release augmented-reality glasses next year. Outside its lakeside office, the company’s founder Mingming Zhu — known as Misa — demonstrates a prototype pair to the FT.
The glasses are aimed at consumers rather than law enforcement: walking into a party, for example, their facial-recognition technology means you could immediately see the names of guests superimposed above their heads; the glasses could potentially also add information from their social-media feeds. 
 They look cool, but there is something spooky about getting the lowdown on people without so much as a “hello”, and Misa sounds a note of caution.
“We are making something happen but we have to be very careful. With AI we have a bright side and a dark side. The most difficult thing you are working on right now might bring you to someplace wrong.”

jeudi 19 juillet 2018

Dr. Peter Navarro: "We have to defend ourselves"

Peter Navarro said that China is in a "zero-sum game" with the rest of the world when it comes to trade.
By Mike Calia

Dr. Peter Navarro, director of the National Trade Council.

Dr. Peter Navarro, one of President Donald Trump's top trade advisors, said Thursday that China is in a "zero-sum game" with the rest of the world when it comes to trade.
Dr. Navarro, who spoke to CNBC's Joe Kernen on "Squawk Box," is known for his pragmatic economic stances on China.
Under President Trump, the U.S. has engaged in a trade war with China, as both nations have issued and threatened billions of dollars of tariffs on each other's products.
"We have to defend ourselves," Dr. Navarro said, citing Chinese theft of U.S. intellectual property on technology. 
"They're attacking our crown jewels. They make no bones about it."
Recently, President Trump threatened to impose new tariffs on $200 billion of products from China as the U.S. pushes the country to take a harder line on protecting intellectual property. 
Larry Kudlow, President Trump's top economic advisor, said on Wednesday that Chinese dictator Xi Jinping was holding up progress and refusing to budge over his country's trade policies. 

FBI Director Christopher Wray: "China is the broadest, most significant threat to the US and its espionage is active in all 50 states"

  • There are economic espionage investigations linked to China in every US state, and China wants to become the sole dominant superpower.
  • China's intelligence success is due to its ability to act in a whole of state effort, and its capacity to take a patient, long-term view.
By Tara Francis Chan

FBI Director Christopher Wray speaking at Aspen Security Forum.

Amid rampant discussion about Russia's election interference and espionage activities, FBI Director Christopher Wray has deemed China the largest and most concerning threat to the US.
Speaking at the Aspen Security Forum on Wednesday, Wray was asked about whether he sees China as an adversary and, if so, to what level
"China, from a counterintelligence perspective, represents the broadest, most challenging, most significant threat we face as a country," Wray answered.
"And I say that because for them it is a whole of state effort. It is economic espionage, as well as traditional espionage, it is non traditional collectors, as well as traditional intelligence operatives, it's human sources, as well as cyber means.
"We have economic espionage investigations in every state, all 50 states, that trace back to China. It covers everything from corn seeds in Iowa to wind turbines in Massachusetts and everything in between. So the volume of it, the pervasiveness of it, the significance of it, is something this country cannot underestimate."
The comments follow a 2017 US Trade Representative report which accused China of "trade secret theft, rampant online piracy and counterfeiting, and high levels of physical pirated and counterfeit exports." 
The report found intellectual property theft by China was costing the US cost up to $600 billion annually.
It seems a far more strategic and wide-ranging effort than Russia's ongoing interference efforts which returned to headlines this week amid President Donald Trump's panned summit with Vladimir Putin.
Wray acknowledged that Russia needs to be dealt with "aggressively," but far more concerning is China's efforts to position itself as "the sole dominant superpower, the sole dominant economic power."
"They're trying to replace the US in that role and so theirs is a long-term game that's focused on just about every industry, every quarter of society in many ways. It involves academia, it involves research and development, it involves everything from agriculture to high tech. And so theirs is a more pervasive, broader approach but in many ways more of a long-term threat to the country," Wray said.
This isn't the first time China's patience and willingness to play the long game has been described as the reason its interference campaigns are more successful than those of Russia.
John Garnaut.

Earlier this year, John Garnaut, who led a secret government inquiry into China's political influence in Australia, told the US House Armed Services Committee that Russia prefers "focused, sharp strikes" while Beijing's actions are more incremental.
"Unlike Russia, which seems to be as much for a good time rather than a long time, the Chinese are strategic, patient, and they set down foundations of organizations and very consistent narratives over a long period of time," Garnaut told the committee.
Garnaut's report found China has attempted to influence politics at all levels in Australia
The Australian government has since introduced new foreign interference laws— much to Beijing's ire — and the issue is frequently discussed and debated in the public sphere.
It's this widespread shift towards a consensus on China's influence and interference attempts that Wray describes as "one of the bright spots" since he became FBI director just over 10 months ago.
"It's one of the few things I've seen that, in a country where it feels like some people can't even agree on what day of the week it is, on this I think people are starting to come together," Wray said.
"I see it in the interagency, I see it up on the Hill when I'm talking to the intelligence committees across the spectrum. I think people are starting to wake up and rub the cobwebs, or sleep, out of their eyes. And my hope is we're in a moment where we can pivot and start to take this much more seriously."

Sina Delenda Est

Steve Bannon: China will blink in trade war with US
By Carleton English

Steve Bannon

Trade wars, while perhaps nerve-wracking, are winnable, according to former White House chief strategist Steve Bannon.
“How [the trade war] ends is in victory,” Bannon said Wednesday at a Manhattan investor conference. 
Donald Trump is not going to back off this. The Chinese are going to blink.”
Earlier this month the US and China levied tariffs of $34 billion on each other’s goods, with the Trump administration then threatening more tariffs in response to China’s theft of US intellectual property.
“I think the No. 1 thing you’re going to see out of the trade war is the reorientation of the complete supply chain of Japan, Western Europe, the United States, and Southeast Asia,” Bannon added, noting that “the regime in China is in deep trouble.”
But for all his excitement over his former boss, Bannon conceded that he doesn’t speak directly with the president.
“I talk to guys in the White House all the time,” the 64-year-old said at the CNBC Institutional Investor Delivering Alpha Conference. 
“But with the president I make sure we go through lawyers.” 
Bannon said the ongoing Mueller investigation is why he leans on lawyers when reaching out to Trump.
Earlier at the conference, National Economic Council Director Larry Kudlow painted a rosy picture of the economy, saying: “There’s no recession in sight right now.”
Kudlow’s bullishness stems from the possibility of an unprecedented capital spending boom and the return of capital to US from Europe and China at levels unseen since the 1990s.
Those factors could contribute to GDP growth in excess of 4 percent for a quarter or two, Kudlow noted.
Kudlow’s remarks come as many from Wall Street to Washington have worried about a more volatile stock market and the brewing trade war between the US and China.
But when it comes to trade, the ball is now in Xi Jinping’s court to end the battle, Kudlow said, adding that his sources indicate that many in China want a deal to be made.

The Japan-China rivalry is playing out in Cambodia's election

  • Japan's support of Cambodia's general election is a strategic maneuver to counter Chinese influence in the developing state.
  • Tokyo's actions are a direct backing for Hun Sen's authoritative regime.
  • Japanese Prime Minister Shinzo Abe may ultimately need to decide between maintaining economic power in Cambodia or upholding democratic standards.
By Nyshka Chandran

July 8, 2018: An election poster with images of Heng Samrin, Honorary President of the Cambodian People's Party, and Prime Minister Hun Sen, in Siem Reap.

Cambodia's general election on July 29 has become a proxy theater for competition between China and Japan as the two vie for influence in the Southeast Asian state.
As Phnom Penh's largest foreign investor and economic benefactor, the world's second-largest economy has donated $20 million in polling booths, laptops, computers and other equipment to the National Election Committee, an agency that supervises elections, according to the Associated Press. Tokyo, also one of Cambodia's top donors, has provided over 10,000 ballot boxes worth $7.5 million, Reuters reported.
Those contributions aren't surprising since both Asian heavyweights hold historically deep ties with the frontier economy. 
But Tokyo, concerned about Beijing's rising influence across Southeast Asia, is likely acting with strategy in mind.
"Japan’s economic footprint is starting to be dwarfed by the scale of Chinese investment in the country, through Belt and Road projects, and Chinese political influence," said Champa Patel, head of the Asia-Pacific program at London-based policy institute Chatham House. 
For Japanese Prime Minister Shinzo Abe, "maintaining relations with Cambodia will be to act as a counterweight to Chinese influence in the country and the wider region," she continued.
Chinese dictator Xi Jinping's administration has offered Cambodian Prime Minister Hun Sen's government billions in development assistance and loans through bilateral frameworks and the continent-spanning infrastructure program known as Belt and Road
That, in turn, has produced a flood of Chinese commercial ventures in the country, including economic zones, casinos and industrial parks.
Beijing's economic leverage is also believed to have translated into political clout: During a 2016 ASEAN meeting, Phnom Penh was acting as an agent of China when it blocked mention of an international court ruling that rejected Beijing's territorial claims in the South China Sea in the group's official communique.
Meanwhile, security-research firm FireEye announced last week that it found evidence of a Chinese hacking team infiltrating computer systems belonging to Cambodia's election commission, opposition leaders and media. 
It wasn't immediately clear if any data was breached, but FireEye said the episode likely provided the Chinese government with visibility into Cambodia's election and government operations.
Amid those developments, Japan is looking to ramp up its presence in the developing state — the two nations signed a grant and loan agreement totaling over $90 million in April.
"Japan's foreign policy does seek to counter China's influence in Cambodia," said Paul Chambers, lecturer and special advisor on international affairs at Thailand's Naresuan University: "Japan, under Abe, wants to show Cambodia that trade and investment matter more for it than human rights — a consideration which has been of prime focus among Western countries."
Japan's support of the July 29 election translates to direct backing for Hun Sen's authoritarian regime.
The vote has been called a democratic sham amid the absence of the country's main opposition faction, the Cambodia National Rescue Party, which was dissolved by the Supreme Court on government orders late last year. 
Because that party is unable to participate, Hun Sen and his ruling Cambodian People’s Party are likely to emerge victorious.
Hun Sen, a former Khmer Rouge commander, is the world’s longest-serving premier. 
His 33-year rule has been marked by numerous allegations of corruption, politically motivated prosecutions and crackdowns on civil liberties.
The United States and the European Union have suspended funding to the National Election Committee, which is meant to be independent, but is widely believed to be controlled by the ruling party. 
The United Nations, meanwhile, has warned that the election won't be "genuine" and urged Phnom Penh to lift a ban on the CNRP, which is advising Cambodians to boycott the vote.
According to CNRP Deputy President Mu Sochua, Tokyo should withdraw its cooperation: "Cambodia needs to move forward, and it can only do so with democracy ... that's why we continue to explain to Japan that the only chance to help Cambodia is to side with democracy."
The CNRP has tried reaching out to Beijing to explain its argument, but so far has been unsuccessful, Sochua told CNBC over the phone.
"To support Hun Sen is to support dictatorship and with dictatorship, no government can protect their investments," she said, adding that "Hun Sen will keep giving more concessions to Chinese companies, so if Japan wants to protect its investments, it should stay on the side of democracy."
In recent public comments, Japanese officials have urged Phnom Penh to hold free and fair elections, but didn't touch on on the government's human rights violations. 
Japan's embassy in Cambodia told CNBC that Tokyo's assistance was aimed at enhancing the credibility of the electoral process.
"Although Japan supports the technical and logistical aspects of the electoral process, they are not, at least in their own view, necessarily endorsing the legitimacy of the election itself," echoed Deth Sok Udom, a political science professor at Phnom Penh's Zaman University.
Ultimately, Abe may find he has to choose between maintaining economic power in Cambodia or upholding democratic standards.
"I suspect that Japan would opt for the first strategy," Chambers said.

mercredi 18 juillet 2018

Taiwan is the kind of society that Liu Xiaobo envisioned for China

What a New Sculpture Reveals About Tensions Between China and Taiwan
By SUYIN HAYNES/TAIPEI

A sculpture of the Chinese Nobel peace prize recipient Liu Xiaobo who passed away one year ago can be seen outside City Hall on July 13, 2018, in Taipei, Taiwan.

Artist Aihua Cheng has worked feverishly for the past four months in her scenic Baisha Bay studio on Taiwan’s northern coast. 
For her latest project, the oil painter and sculptor read the extended works of the late Chinese Nobel Peace Laureate Liu Xiaobo—while creating a three-part sculpture dedicated to the writer and dissident, who died as a political prisoner last year. 
“I completed the work just yesterday,” she told TIME, shortly before her creation was shown to the public for the first time outside Taipei’s city hall on July 13.
Titled I Have No Enemies, Cheng’s piece incorporates a line drawing of Liu looking out over a bronze open book inscribed with his writings. 
“I hope that his books and thoughts can continue impacting China,” she says. 
Unveiled on the one-year anniversary of Liu’s death, the sculpture was planned by exiled democracy activist Wu’er Kaixi as a tribute to his former mentor. 
“Taiwanese people joining us in erecting this sculpture are telling China that we have not forgotten our values,” says Wu’er, who was forced to flee China after the Tiananmen Square protests and settled in Taiwan in 1996.
That message will resonate with many on this island, which began to embrace democracy after nearly four decades of martial law ended in 1987. 
The mainland still views Taiwan, an island of 23 million people that lies 112 miles off China’s coast, as its sovereign territory despite the island’s breakaway in 1949 at the end of the Chinese Civil War.
Supported by Reporters Without Borders, the crowdfunded sculpture project is intended to represent the ideals of freedom and democracy championed by Liu in his co-authored Charter 08 manifesto. 
Liu encouraged Chinese citizens to envisage a democratic future, “a modern means for achieving government truly ‘of the people, by the people, and for the people.’” 
That document ultimately led to his arrest in 2009, his Nobel Peace Prize the following year and his imprisonment until he died from late-stage liver cancer.
But the commemoration of a Chinese dissident comes at a time when tensions with Beijing are already running high. 
Taiwan is struggling for international recognition as China ramps up efforts to isolate the island. 
The day after the statue was unveiled, the head of China’s Taiwan Affairs office released a statement saying that “the vain separatist attempts for ‘Taiwan independence’ will only lead to a dead end.” Add an unpredictable U.S. President and a snowballing trade war between the world’s two biggest economies into the mix and you have a cross-strait relationship that is more fragile—and perhaps more dangerous—than ever.
When the news of Liu’s death was announced last year, Taiwan’s President Tsai Ing-wen tweeted a statement expressing Taiwan’s hopes that Chinese people could one day “enjoy the God-given rights of freedom and democracy.” 
The statement, issued in both Chinese and English, was seen as an affront to Beijing—much like Tsai’s presidential victory in January 2016.
Tsai’s Democratic Progressive Party promised “an era of new politics in Taiwan,” breaking with the Nationalist Party (KMT) government policy, which favored closer ties with China. 
Under the 1992 Consensus, China and Taiwan agreed that there is one China—allowing each other to disagree about the status of Taiwan. 
Tsai’s election changed that. 
Her party supports independence and refuses to acknowledge the Consensus. 
Since Tsai took office in May 2016, China’s dictator Xi Jinping has not met with her but has continued relations with the KMT opposition party.
The lack of any diplomatic relations with Beijing does not seem to have deterred Tsai.
“She will continue to build on the belief that democracy can be integrated into an ethnically Chinese society and the idea that Taiwan can be an example to China in this sense,” says Sheryn Lee, a lecturer in security studies at Macquarie University.
Taiwan looks like the kind of society that Liu Xiaobo envisioned for China. That makes tributes to him contentious. 
According to Reuters, supporters of him and his widow Liu Xia were pressured by Chinese authorities to not hold any commemoration events. 
And although Liu Xia was released from eight years of house arrest on July 10, the move came amid a growing crackdown on dissidents in China. 
A day later, China sentenced prominent democracy activist Qin Yongmin to 13 years of imprisonment for “subversion of state power.”
As well as quashing dissent at home, Xi’s newly consolidated grip on power has allowed him to increase pressure on Taiwan—just as Tsai is trying to strengthen her position ahead of midterm elections in November. 
“Beijing probably wants to remind the Taiwanese public that they are paying a price for supporting Tsai and her party,” says Richard C. Bush, former Chairman of the American Institute in Taiwan, the island’s de facto U.S. embassy.
A visible reminder of that price is the ratcheting up of military actions in the Taiwan Strait. 
In April, Chinese state media reported that the navy held its largest ever military display in a spectacular show of force in the South China Sea as well as the first naval military exercises with live fire drills in the strait since 2015.
Analysts say such exercises signal Beijing’s intention to send a message to the U.S. amid rising trade tensions and closer ties to Taiwan. 
While the U.S. formally endorses the “one China” policy, it has had an unofficial relationship with Taiwan since 1979. 
And President Donald Trump has broken an un-precedented series of protocols since his Inauguration, such as accepting a congratulatory phone call from Tsai; passing the Taiwan Travel Act, which encourages U.S. officials to visit the island; and unveiling a new $250 million de facto embassy building in Taipei. 
“No one really expected the level of interference that Trump had. He broke all of the rules that have been set down with China-Taiwan relations,” says Lee.
These moves have also been accompanied by gestures of U.S. military support for Taiwan, right under Beijing’s nose. 
Last year, Trump approved a deal to sell Taiwan $1.42 billion worth of arms in a massive deal that was immediately condemned by China. 
On July 7, two U.S. warships passed through the Taiwan Strait—merely a day after Washington imposed tariffs on $34 billion of Chinese imports in the last shot fired in the superpower showdown.
Despite Trump’s seemingly strong commitment to Taiwan, the backdrop of a trade war has nevertheless worried local politicians. 
“We share the same fundamental values as the U.S.,” says Huang Kuo-chang, chairman of the pro-independence New Power Party. 
“But we are not so naive as to be unable to understand that sometimes we become the bargaining chip between China and the United States.”
China has also accelerated efforts to diplomatically isolate the island. 
Since taking office, Tsai has lost allies in Burkina Faso, the Dominican Republic, Panama, and São Tomé and Príncipe, leaving only 18 others worldwide
“Some say that in a few years, the number of allies Taiwan has could drop to zero,” says Rwei-Ren Wu, a research fellow at Taipei’s Academia Sinica. 
A prominent advocate for Taiwanese independence, Wu was barred from entering Hong Kong to speak at a conference last year.
Taiwan aspires to be a member of the U.N., but is not officially recognized. 
In May, for the second year in a row, it was denied access to the World Health Organization’s annual assembly—a move denounced by both Tsai’s government and independent watchdogs as a surrender to pressure from Beijing.
That pressure has started to affect private companies. 
In recent months, airlines and retailers have clashed with Beijing over references to disputed territories, including Taiwan and Tibet. 
In January, authorities shut down the Chinese websites of Marriott International after it listed Taiwan as an individual nation; in May, Gap apologized for a T-shirt with a map of China that omitted Taiwan. 
Beijing has also demanded that foreign airlines edit references to Taiwan to reflect the island as part of the mainland. 
Dismissed by the White House as “Orwellian nonsense,” U.S. airlines including Delta and American now have a July 25 deadline to comply with Beijing’s line on the issue.
In Taipei, the memorial sculpture is accompanied by an empty chair, symbolizing Liu’s absence at the 2010 Nobel Peace Prize ceremony because of his imprisonment. 
Cheng acknowledges that a sculpture alone is unlikely to impact China. 
“But I think the words, the thoughts of Liu Xiaobo will,” Cheng says. 
The sculpture—previewed only briefly on July 13—is still waiting on permanent approval from the city. 
For Taiwan too, the road ahead looks uncertain. 
“There is no reason for us to be treated as second-class global citizens,” says Huang. 
“If our goodwill toward China is unilateral, what do we gain from maintaining the status quo?”