Chinese Espionage

Chinese tech firms don’t deserve the benefit of the doubt

By Josh Rogin

A man walks past signage for Chinese company ByteDance's app TikTok, known locally as Douyin, at the International Artificial Products Expo in Hangzhou, China, Oct. 18. 

The U.S. government and Congress are grappling with a new and daunting challenge: Chinese are amassing personal data on Americans at an alarming rate. 

But while there’s no firm plan on what to do about it, there’s consensus on the one thing we can’t do: trust Chinese tech firms to protect our data from the Chinese government and preserve Americans’ free speech.
“Parents, if you don’t know what TikTok is, you should. It’s a Chinese-owned social media platform so popular among teens that Mark Zuckerberg is reportedly spooked,” Sen. Josh Hawley (R-Mo.) said at a Tuesday hearing of the Senate Judiciary subcommittee on crime and terrorism. 

“For Facebook, the fear is lost social media market share. For the rest of us, the fear is somewhat different. A company compromised by the Chinese Communist Party knows where your children are, knows what they look like, what their voices sound like, what they’re watching and what they share with each other.”
If that sounds alarmist, it’s because the facts are alarming. 

Representatives from TikTok and pro-China Apple (which was also invited to Hawley’s hearing) declined to testify at Hawley’s hearing, but TikTok defended itself in a statement Hawley read at the hearing.
“No governments, foreign or domestic, direct how we moderate TikTok content. TikTok does not remove content based on sensitivities related to China or any countries. We have never been asked by the Chinese government to remove any content and we would not do so if asked,” their statement said.
TikTok’s claims are contradicted by claims of former employees, who have told The Post that content decisions were made by company moderators in China.
“The former employees said their attempts to persuade Chinese teams not to block or penalize certain videos were routinely ignored, out of caution about the Chinese government’s restrictions and previous penalties on other ByteDance apps,” The Post reported.
ByteDance is the Chinese tech giant that owns TikTok. 

In September, the Guardian reported on internal guidelines that revealed ByteDance had instructed the censorship of content related to Tibet, the Tiananmen Square massacre and the Falun Gong religious sect. 

Chinese tech firms know the punishment if they don’t implement the censorship on their own; the government doesn’t even have to ask.
And, as Hawley pointed out, no Chinese or American tech company can credibly claim it would refuse a request for data on its users if it got a “knock on the door” from Chinese authorities. 

That’s why the Committee on Foreign Investment in the United States (CFIUS) opened an investigation into ByteDance’s 2017 acquisition of Musical.ly, which it renamed TikTok.
Anyone who doesn’t understand that all Americans’ data held by a Chinese tech firm is susceptible to Chinese government exploitation has “a fundamental misunderstanding of how the government in Beijing works,” Klon Kitchen, tech policy lead at the Heritage Foundation, testified at Tuesday’s hearing.
TikTok is only the latest Chinese-owned tech firm operating in the United States to be caught taking direction from its superiors in Beijing after claiming it wouldn’t. 

When Chinese tech giant Kunlun took over the gay dating app Grindr, it gave access of its user database to engineers in Beijing for a period of several months, NBC later revealed.
CFIUS is compelling Kunlun to sell Grindr and ordering it to keep all U.S. user data in the United States. 

But it’s too late. 

Once the sexual identity, habits and health statuses of millions of Americans are in Chinese hands, they can never be taken back. 

There’s zero doubt that Beijing is feeding all that information into the database it’s building to advance its own interests at our expense.
The implications are chilling. 

Just think if Beijing cross-referenced Grindr user data with the 22 million secret files on Americans China stole from the Office of Personnel Management in a 2015 hack. 

The intelligence advantages are obvious and dangerous.
That naturally brings up the question of what can be done apart from banning Chinese tech firms from operating inside the United States.

William A. Carter, deputy director of the Technology Policy Program at the Center for Strategic and International Studies, testified that the U.S. government must drastically increase its efforts to help companies protect Americans’ data, punish those who don’t, and work to establish and enforce international norms in this area.
But it’s not just about Americans’ past behavior and data; it’s also about the future information environment. 

In her company’s statement, TikTok’s U.S. general manager, Vanessa Pappas, identified a future risk in Chinese control over U.S. social media networks: the potential for covert election interference.
“TikTok team, senior staff and myself understand the importance of building a close and transparent working relationship with regulators and lawmakers,” she wrote. 

“This will be increasingly important during the upcoming U.S. election season.”
In other words, if Beijing can censor what Americans see in their social media streams on Tibet, they could censor what we see about President Trump, Joe Biden or Elizabeth Warren just as easily. 

We would never know. 

The algorithms are secret. 

There is no transparency. 

And based on the record of the Chinese government and Chinese tech firms, we would be stupid to just take their word for it.

By Taking Aim at Chinese Tech Firms, President Trump Signals a Strategy Shift

In blacklisting surveillance companies, the United States is the first major government to punish China for its crackdown on Muslims.
By Paul Mozur and Edward Wong
Hikvision cameras in a mall in Beijing in May. The company was among those blacklisted by the Trump administration this week.

SHANGHAI — The world has largely sat by for nearly two years as China detained more than one million people, mostly Muslims and members of minority ethnic groups, in concentration camps to force them to embrace the Communist Party.
Now, the Trump administration is taking the first public steps by a major world government toward punishing Beijing. 

In doing so, it is opening up a new front in the already worsening relationship between Washington and Beijing: human rights and the dystopian world of digital surveillance.
Trump administration officials on Monday placed eight Chinese companies and a number of police departments on a blacklist that forbids them to buy American-made technology like microchips, software and other vital components. 

The companies are at the vanguard of China’s surveillance and artificial intelligence ambitions, with many of them selling increasingly sophisticated systems used by governments to track people.
The White House cited their business in East Turkestan, a colony of northwestern China that is home to a largely Muslim minority group known as the Uighurs. 

More than one million ethnic Uighurs and other minorities have been locked in concentration camps there.On Tuesday, Secretary of State Mike Pompeo announced visa restrictions on Chinese officials believed to be involved in the detention or abuse of Muslim ethnic minorities.
The announcements suggest that the Trump administration is increasingly willing to listen to the advice of American officials focused on the strategic challenges posed by China and who are concerned about its human rights abuses, even if President Trump himself never seems to pay much attention to those.
The restrictions were announced just two days before American and Chinese officials were set to begin a 13th round of trade talks, most likely putting a chill over the negotiations.
More broadly, the White House, in its blacklist announcement, signaled a willingness to take aim at China’s technological dreams. 

China has plowed billions of dollars into companies developing advanced hardware and software to catch up with the United States. 

Some of the companies added to the list on Monday are among the world’s most valuable artificial intelligence start-ups.

A showroom video promoting Megvii’s facial recognition abilities.

Much of that technology — including facial recognition and computer vision — can be used to track people. 

That includes smartphone tracking, voice-pattern identification and systems that track individuals across cities through powerful cameras. 

Washington officials have grown increasingly worried about China’s ambitions to export its systems elsewhere, including places known for human rights abuses.

“This is an important first step in making some of the companies that have benefited the most from the concentration camps system in East Turkestan feel the consequences of their actions,” said Darren Byler, an anthropologist at the University of Washington who studies the plight of the Uighurs.
He said the move signaled that abuse of minority groups in East Turkestan“is real and justifies a political and economic response.”
It is also a potentially groundbreaking use of a powerful tool that the American government typically uses against terrorists. 

The Chinese companies and police departments were placed on what is called an entity list, which forbids them to buy sensitive American exports unless Washington grants American companies specific permission to sell to them.
Use of the entity list over a human rights issue may be a first, said Julian Ku, a professor of constitutional and international law at Hofstra University.
“As far as I know, it was the first time Commerce explicitly cited human rights as a foreign policy interest of the U.S. for purposes of export controls,” he said, referring to the Department of Commerce, which manages the entity lists. 

“This is not an implausible reading of the regulations, but it is new and has potentially very broad applicability.”

The immediate effect on the Chinese companies is likely to be minimal, because many have stockpiled essential supplies, but they could feel increasing pain if they stay on the blacklist for months or years.
Perhaps more important, it can put a cloud over the companies’ reputations, limiting their sales in the United States or elsewhere and keeping them from hiring the world’s best technology talent.
“The U.S. move today puts up a big roadblock on the road to internationalization,” said Matt Sheehan, a fellow at MacroPolo, the think tank of the Paulson Institute.
“Most global technology companies are setting up labs abroad, partnering with the best universities around the world and looking to recruit top talent from everywhere,” he said. 

“That all just got a lot harder now that they’re marked with the scarlet letter of the entity list.”
The move followed more than a year of internal debate over how to punish China for its persecution of Muslims in  East Turkestan.
Senior officials on the National Security Council and in the State Department have pushed for the use of the entity list to target Chinese companies supplying surveillance technology to the security forces in  East Turkestan. 

They have also urged President Trump to approve sanctions that would penalize Chinese officials and companies involved in the abuses.
But top American trade negotiators, including the treasury secretary, Steven Mnuchin, have cautioned against policies that would upset trade talks. 

Mr. Trump has said he wants to reach a trade deal with China.
Until now, other top officials, most notably Mr. Pompeo and Vice President Mike Pence, have denounced China’s policies in East Turkestan but not enacted punitive measures. 

This month, American customs officials blocked products from a Chinese garment maker in East Turkestan, but they had held off on stronger action.
The Chinese companies on the list include Hikvision, a major maker of surveillance cameras, and the well-funded artificial intelligence start-ups SenseTime and Megvii.

A Hikvision camera in downtown Beijing. American officials worry that China will export its surveillance systems.

SenseTime said it set “high ethical standards for A.I. technologies,” while Megvii said it required “clients not to weaponize our technology or solutions or use them for illegal purposes.” 

It added that it had generated no revenue from within East Turkestan in the first half of 2019.

New York Times reporting showed that four of the companies on the list — Yitu, Hikvision, Megvii and SenseTime — helped build systems across China that sought to use facial recognition to automate the detection of Uighurs.

Government procurement documents, company marketing materials and official government releases tied all eight companies to various business operations and sales in East Turkestan. 

The many local East Turkestan police bureaus on the list buy commercial American technology like Intel microchips and Microsoft Windows software, according to procurement documents.
President Trump’s next step could be imposing sanctions on specific Chinese officials working in East Turkestan. 

Among the officials discussed is Chen Quanguo, a Politburo member who is the party chief in East Turkestan and an architect of the system of internment camps and surveillance.
The blacklist action is a sign that strategic advisors have become even more influential in the administration in recent weeks.
Matthew Pottinger, the senior director for Asia and an architect of policies aimed at countering China, was promoted to deputy national security adviser last month. 

Earlier, Robert O’Brien, the administration’s top hostage negotiator, replaced John R. Bolton as national security adviser. 

Mr. O’Brien has written that China poses an enormous challenge to the United States.
“This East Turkestan package has been in the works now for months,” said Samm Sacks, a cybersecurity policy fellow at New America, a think tank. 

“So the fact that it comes out now just ahead of the next round of trade talks sends a signal from those in the administration who want no deal.”

Lawmakers Take Aim at Chinese Tech Firms

Bipartisan groups introduce amendment to scuttle Trump’s deal with ZTE, scrutinize Huawei’s ties to Google
By Siobhan Hughes, Kate O’Keeffe and John D. McKinnon

The deal that the Trump administration announced Thursday with China’s ZTE Corp. was immediately opposed by a bipartisan group of U.S. lawmakers as a threat to national security. 

WASHINGTON—Lawmakers in Congress lost a battle over ZTE Corp. when the Trump administration announced a deal Thursday to resuscitate the Chinese telecommunications giant, but they made it clear their war against Chinese technology companies is far from over.
Hours after the Commerce Department announced a deal that would prevent ZTE’s collapse by allowing it to resume buying components from U.S. suppliers, a bipartisan group of lawmakers introduced an amendment to a must-pass bill in an effort to undo the deal.
Members of Congress have also begun scrutinizing Google’s relationship with China’s Huawei Technologies Co. 

A group of lawmakers that includes some of the biggest critics of Huawei—Sens. Tom Cotton (R., Ark.) and Marco Rubio (R., Fla.) and Reps. Mike Conaway (R., Texas) and Robert Pittenger (R., N.C.)—is looking at Google’s operating-system partnership with Huawei.
Sen. Mark Warner (D.,Va.) issued his own open letter early Thursday to Google parent Alphabet Inc. and Twitter Inc., asking for information about any data-sharing agreements between the two companies and Chinese vendors. 

He also asked for information from Alphabet about separate partnerships with Chinese phone maker Xiaomi Corp. and Chinese tech giant Tencent Holdings Ltd.
The effort to reverse the ZTE deal marks the second time this week that the Republican-led Senate has threatened direct confrontation with Donald Trump over a signature policy issue.
A group of senators is also seeking to undo tariffs that Trump recently imposed on aluminum and steel imports from Canada, the European and Mexico. 

They have taken a dispute that was a war of words into the more serious realm of legislation that could handcuff the president.
Trump has made trade, and particularly fixing what he views as an unfair global trading system, a centerpiece of his agenda. 

That has entailed confronting both China and close allies, and threatening tariffs on a range of goods. When Trump last month said he was planning to reverse the penalties on ZTE, as the administration was pushing Beijing to commit to buy more U.S. exports, lawmakers from both parties accused him of conflating trade and national-security issues. 

The administration denies that.
While some Republicans have shied away from confronting Trump over his trade agenda, they appeared more prepared on Thursday to challenge the deal with ZTE, where national- security issues are more clear-cut. 

U.S. officials have warned for years that the telecom firm’s equipment, along with equipment made by rival Huawei, could be used to spy on Americans.
In mid-April, the U.S. banned exports to ZTE as punishment for the Chinese company breaking the terms of a settlement to resolve its sanctions-busting sales to North Korea and Iran. 

The penalty, which the Commerce Department said Thursday it would now lift as part of a new deal, amounted to a death knell for ZTE.
Backers of the ZTE amendment introduced Thursday, led by Mr. Cotton along with Senate Minority Leader Chuck Schumer (D., N.Y.) and Sen. Chris Van Hollen (D., Md.), are hoping to attach it to the National Defense Authorization Act, which could get a vote as soon as next week. 

Senate Majority Leader Mitch McConnell (R., Ky.) hasn’t said whether he expects the amendment to go to a vote, or whether it could make it into the package by other means.
Sen. Lindsey Graham (R., S.C.), who urged his colleagues to back off their effort to void Trump’s aluminum and steel tariffs after meeting with the president this week, said he wasn’t yet comfortable with the ZTE deal.
“I don’t know,” Mr. Graham said. 

“I want to give the president as much latitude as we can to negotiate with China and get a good deal with North Korea. Our intelligence community is very concerned. I want to know from them: do these changes alleviate their concerns?” he said.
The Commerce Department agreement announced Thursday requires ZTE to pay a $1 billion fine and allow U.S. enforcement officers inside the Chinese company to monitor its actions. 

In exchange, it allows ZTE to resume buying components from U.S. suppliers that it needs to make smartphones and build telecoms networks.
“I’m not comfortable yet,” said Sen. Roy Blunt (R., Mo.), a member of the Senate Intelligence Committee who has declined to back an effort to subject Trump’s metals tariffs to congressional approval. 

“I want to know more about the U.S. presence inside the company and why we should believe that that creates a level of assurance that we need to have about their capacity to do things that we wouldn’t want to have them do.”
The amendment introduced by lawmakers on Thursday would also prohibit U.S. government agencies from purchasing or leasing telecom equipment or services from ZTE or Huawei, and ban the U.S. from subsidizing those firms with grants or loans.
A ZTE spokeswoman didn’t immediately respond to a request for comment.
The fight over ZTE between Trump administration officials and China hawks in Congress began last month. 

Just weeks after the Commerce Department had banned U.S. companies from selling to ZTE, Trump suggested he was considering reversing the penalty. 

He tweeted May 13 that he and Chinese dictator Xi Jinping were “working together to give massive Chinese phone company, ZTE, a way to get back into business, fast.” 

He added: “Too many jobs in China lost. Commerce Department has been instructed to get it done!”

The tweet incensed many members of Congress, as well as intelligence and military officials, who moved swiftly to denounce any prospect of a reprieve through a series of legislative actions and an aggressive publicity campaign.
The debate over ZTE in Congress likely will have ramifications for the fall elections, as well as for trade policy. 

Polling has suggested that voters remain wary of China, a fear that Trump is tapping with his get-tough rhetoric.
The Wall Street Journal/NBC poll in April found that most U.S. voters view China as an adversary rather than an ally. 

Fear of China is especially intense among Trump supporters. 

But it is also substantial among older voters, whites and Republicans in general.
In private meetings with GOP senators this week, Trump argued in favor of reaching a deal with ZTE, which his administration struck after the president personally negotiated with Xi. 

The White House has also argued that if ZTE goes out of business, it will simply be absorbed by Huawei, lawmakers said, leaving the U.S. without protections included in the deal, such as the installation of Chinese-speaking American enforcement officers inside the company to monitor its actions.
That carried little weight with Mr. Rubio, who co-sponsored Thursday’s amendment and who has been among the most vocal members of Congress on the issue. 

“If Huawei is an even bigger problem than ZTE, we shouldn’t be selling them semiconductors either,” he said.
Lawmakers said the administration’s handling of the ZTE issue was evidence of dysfunctional trade policies. 

In a speech on the Senate floor Thursday, Mr. Schumer said: “Trump has directed far too much of the administration’s energies on trade toward punishing our allies, like Canada and Europe, instead of focusing on the real menace, the No. 1 menace: China.” 

Mr. Schumer was referencing Trump’s decision last week to impose tariffs on America’s closest allies.
While the ZTE drama unfolded Thursday, lawmakers’ ramped-up scrutiny of Google’s deal with Huawei represented another front in the offensive against Chinese tech companies: data sharing. 

Trump administration officials and lawmakers had earlier largely limited their actions to trying to reduce ZTE’s and Huawei’s U.S. footprints. 

Now, members of Congress appear more willing to examine partnerships between U.S. firms and the two companies that have nothing to do with U.S. sales.
A representative for Huawei wasn’t immediately available to comment.
A Google spokesman said in a statement the company looks forward to answering lawmakers’ questions, adding: “We do not provide special access to Google user data as part of these agreements, and our agreements include privacy and security protections for user data.”
Derek Scissors, a China scholar at American Enterprise Institute, said the ZTE deal makes little sense if U.S. policy goals are to both keep Chinese firms out of the U.S. telecom network and keep them from getting access to Americans’ personal data.
“If we don’t trust Chinese telecommunications firms, why are we helping them become more capable?” he said.