Category Archives: China

Worried About Big Brother?

Oh, yes, we should be really, really worried!
WSJ 11/5/2018
By Andy Kessler

Hardly a week goes by that I don’t run into people who, when I ask how they are doing, tell me they’re worried about authoritarianism. Living in California, my impulse is to ask if they’re worried about the state’s one-party rule. But before I can get that out, the complaints begin: Trump, Facebook, Google, police state. Uh boy. Pot-dispensary paranoia?

This fascist-behind-every-tree thinking isn’t helped by the tech industry. Apple CEO Tim Cook told privacy commissioners in Brussels last month that personal information “is being weaponized against us with military efficiency. Today, that trade has exploded into a data-industrial complex.” Mr. Cook was poking at Facebook and Google and calling for more regulation.

In high Silicon Valley style, former Facebook security executive Alex Stamos took to Twitter to criticize Mr. Cook’s hypocrisy: “Apple uses hardware- rooted [digital rights management] to deny Chinese users the ability to install” virtual private networks. That means iPhone users in China can’t avoid their government’s censorship and surveillance. Fear mongers in the U.S. worry about authoritarianism, but in China it’s real. Anyone caught resisting there gets a mark on his not-so-proverbial permanent record.

In 2014 China began rolling out a Social Credit System, aiming for nationwide implementation by 2020. Like the FICO financial-credit system in the U.S., scores come from hundreds of data sources, but in this case those sources include more than 200 million cameras that monitor citizens’ behavior. Debtors end up on blacklists, unable to take trains or stay in luxury hotels. Some who have refused to join the military have been locked out of universities.

There are also “red lists” of good citizens, who are entitled to perks like skipping lines at ferries and not paying a deposit to rent bikes. Every man, woman and child must adapt to the government’s social pressure—or else. As the Dead Kennedys sang in 1979: “It’s the Suede-Denim secret police / They have come for your uncool niece.”

Is authoritarianism a rational fear in the U.S.? We have all the piece parts. FICO tracks financial credit, though not very well. Loyalty systems from airlines to supermarkets track purchases. Environmentalists often deploy social persuasion, from the LEED energy- efficiency standards to the virtue signaling that surrounds hybrid cars and overpriced organic food.

But these are all private actors. The government has no-fly blacklists and TSA Pre-Check as a travel red list. But as far as anyone can prove, that data is siloed. The Internal Revenue Service isn’t supposed to share data with Immigration and Customs Enforcement. And your phone records? To catch the recent pipe-bomber, the FBI identified his fingerprints but had to get a subpoena before it could triangulate his location from phone records.

Our checks have balances. Facebook, Google and Apple have fixed procedures for handling government data requests. Under the 1986 Stored Communications Act, gaining access to data usually requires a subpoena, court order or search warrant; less than 10% of requests qualify as emergencies under the companies’ criteria. Investigators similarly need subpoenas to access footage from city traffic cameras.

California passed a privacy bill in June patterned on Europe’s General Data Protection Regulation. The cost of compliance will benefit the biggest tech companies by squeezing out competitors, while the new privacy rules will do little to prevent data breaches. Instead, the law will bring government and technology platforms even closer.

How to prevent a social-credit system from coming to the U.S.? First, keep regulators out of the business of setting privacy rules, as they will be tempted to offer rewards to incumbents in exchange for backdoors to users’ information. Second, stop data from mingling among different government agencies.

Finally, in the digital age, data privacy should be understood as a property right. The concept of property rights formed the basis for the runaway success of American capitalism. You, not the state, own your land and your ideas. Congress should pass a law deeming individuals full owners of their digital information, though they would still be free to sell it in slices to Facebook or United Airlines or Safeway.

By contrast, China’s political system—a mongrel of autocratic capitalism and democratic socialism—is not compatible with progress and growth in the long run. Given the choice, ever fewer Chinese entrepreneurs will opt to realize their dreams at home. China’s authoritarian disregard for property rights and privacy is a fuse already lit. Ideas, like capital, flow to where they’re treated well.


Google: No to USA; Yes to China.

A wonderful (?) example of politically correct non-think.  [And when only the money matters.]

WSJ – 8/4/2018

Intent on abiding by its founding motto, “Don’t Be Evil,” Google announced in June that it would not participate in a U.S. military program seeking to apply artificial intelligence to drone technology. This week it has been reported that Google is attempting to reintroduce its flagship search engine into China, albeit with censoring and surveillance filters demanded by the Chinese government. This does not compute.

Eight years ago, Google co-founder Sergey Brin pulled the company out of China, telling The Wall Street Journal that “in some aspects of their policy, particularly with respect to censorship, with respect to surveillance of dissidents, I see some earmarks of totalitarianism.” That was true then and is more so now. China is famously using advanced technology to erect an Orwellian surveillance state.

But like other companies, Google has concluded it cannot sacrifice access to China’s market, which is now dominated by the Chinese search-engine company Baidu. That means conforming itself to China’s rules on social control of the internet. Google hasn’t decided whether to proceed with this search-engine initiative, but clearly no license will be granted unless the company agrees to give Chinese censors access to the site’s vast internal information.

That Google would seek re-entry to a country whose efforts at totalitarian control are increasing while the company ostentatiously separates itself from a U.S. defense program is more than a contradiction. It is naive. What kind of world does Google think we live in?

The June decision to withdraw from the Pentagon’s AI program was accompanied by an 8,000-word statement

of Google’s ethical principles on the use of artificial intelligence. Well, yes, the intersection between AI and human autonomy is complicated. But no one paying attention to China’s ambitions doubts that it is developing artificial intelligence for domestic political control and sophisticated military applications. Its Communist Party leaders are doing so to gain a decisive advantage over China’s military competitors, primarily the United States and its citizens.

A recent Journal article detailing China’s high-tech military programs quoted former People’s Liberation Army Maj. Gen. Xu Guangyu: “China will not ignore or let slip by any dual-use technology, or any technology at all, that might improve the ability of our military to fight, our awareness, or our ability to attack.” In other words, the U.S. finds itself in an intense military competition with China. If American tech companies deny their own country access to advanced knowledge, the U.S. will fall behind.

The good news is that most U.S. technology companies, including in Silicon Valley, understand these realities and are contributing to the U.S. effort to defend itself. Google and its hyper-political employees stand out for seeming to spend a remarkable amount of time navel-gazing and composing codes of conduct.

Sergey Brin had it right in 2010: China’s success at lifting its people out of poverty is remarkable. Its determination to deploy American knowledge to control the Chinese people remains abhorrent. 


Cost of Doing Business in China

When will US companies begin standing for something more than their bottom line?

Mercedes-Benz, the luxury unit of Daimler AG, recently learned the price of crossing Beijing. Earlier this month the German car maker was attacked by state media after posting an anodyne Dalai Lama quote on Instagram. The company quickly and abjectly apologized to the Chinese government. It then went further, promising “no support, assistance, aid or help to anyone who intentionally subverts or attempts to subvert China’s sovereignty and territorial integrity.”

This public humiliation has prompted many companies to ask: How much is it worth to stay in China’s markets?

Gone are the days when China bided its time, as counseled by Deng Xiaoping. In exchange for continued access to Chinese markets, Beijing increasingly expects Western companies to engage in selfcensorship, accept government control over information, and even punish their own workers for offending China.

Few companies have been willing to stand up for themselves when singled out. In January the American hotel giant Marriott caved in to pressure and temporarily shut down its websites in China. Its offense? An online questionnaire listed Tibet, Taiwan, Macau and Hong Kong as independent countries. After changing the website, the company’s CEO publicly stated that Marriott “respects and supports Chinese sovereignty and its territorial integrity.” Delta Air Lines, Qantas, Zara and Audi are also fellow travelers in China’s geopolitical strategy.

Perhaps most concerning, China has taken a particular interest in changing the fundamental way Western technology companies function. Facebook, banned in China since 2009, has worked on a “targeted censorship” tool during its bid to re-enter the country. Apple agreed to a partnership with a Chinese internet service company, effectively sharing user data with the government. There is no way either company would accept such demands from the U.S. government.

Some Western corporate leaders argue that running away from China makes no sense. “We believe in engaging with governments even when we disagree,” Apple CEO Tim Cook said last year. But engagement is a two-way street, and Beijing has shown no willingness to accommodate. Instead it has become more intrusive.

China’s behavior makes it necessary for Western companies to ask whether the cost of doing business can be too high. Does the profit motive override any responsibility to defend the values of the societies from which they emerged? If only to draw the line against further demands, companies should be reflexively opposed to Beijing’s overreach. Otherwise they should expect the cost of doing business in China to continue to rise.


Chinese Propaganda Protected?

We need an administration willing to take a much tougher approach to China.

WSJ – 11/9/2015
Some Ameri can radio listeners might have been surp rised last year to hear a news account explaining how pro-democracy protests in Hong Kong “failed without the support of the people of Hong Kong.” In fact, a large percentage of local residents joined the demonstrations until they were forcibly suppressed under orders from Beijing.

Listeners would have been less surprised if the stations had disclosed that the communist government in Beijing controls their content. More than a dozen stations across the U.S. are among a total of 33 globally that operate covertly, with Beijing hiding behind front men.

Last week it came to light that Beijing’s state-run China Radio International secretly owns 60% of a U.S. company, G& E Studio, which leases stations and airtime in Washington, Philadelphia, Boston and San Francisco, among other cities. Beijing uses similar subterfuges in Europe and Australia.

China went to great lengths to hide its role. Reuters broke the story after deploying 39 reporters to investigate in 26 countries, including the review of “scores of regulatory, zoning, property, tax, immigration and corporate records, including radio station purchase contracts and lease agreements.”

Beijing’s involvement was discovered via a footnote in a Federal Communications Commission filing on behalf of a separate company also affiliated with James Su, a Shanghai- born naturalized U.S. citizen, whom Reuters exposed as Beijing’s minority partner in its American radio operations.

The U.S. government apparently didn’t suspect a thing, but the FCC and Justice Department have both now opened investigations. Federal law bars foreign governments from holding radio licenses or owning stations and requires agents for foreign countries to disclose their roles.

These stations routinely air pro-Beijing propaganda. A report on Beijing-controlled WCRW in Washington last month on the cyber hack of the personnel records of more than 20 million federal employees failed to mention that U.S. officials blame Beijing. Another report, on talks between U.S. and Chinese naval officers about artificial islands Beijing built in the South China Sea to narrow international sea lanes, blamed “the tension the U.S. created this week.”

Beijing’s ability to operate secretly in the highly regulated broadcasting industry may be surprising, but its officials are open about their ambition to spread propaganda. President Xi Jinping last year urged: “We should increase China’s soft power, give a good Chinese narrative and better communicate China’s message to the world.” The head of China Radio International boasts of a “borrowed boat” strategy of using existing media outlets in foreign countries to spread Beijing’s party line.

Laws prohibiting foreign control apply only to traditional broadcasting. Foreignowned cable and satellite channels—China’s CCTV, Russia’s RT and Qatar’s Al Jazeera—are perfectly legal. The U.S. should mandate transparency by requiring these channels to make announcements every 15 minutes disclosing, “This programming is controlled by the government of China/Russia/ Qatar.”

Americans would at least be on notice that they’re getting foreign propaganda billed as news.


In other China-related news, the chief executive of the .xyz domain wants to “clarify” the company’s policy relating to Web addresses that Beijing can ban from the global Internet, discussed in last week’s column. Daniel Negari says the .xyz application to the Internet Corporation for Assigned Names and Numbers was unclear.

He acknowledges that if a resident of China registers a .xyz address that Beijing demands be suspended—such as if it includes a banned word such as “freedom,” “democracy” or any reference to Tiananmen Square—then the address would indeed be banned globally. But he says this is simply compliance with China’s “applicable law.” He draws an analogy to complying with the an FBI order seizing a website convicted of piracy of intellectual property. Mr. Negari assured in a Web post that his company “will not censor your domains”—a quibble, since China will be censoring.

But Mr. Negari says if a Web address registered outside China uses a word banned by Beijing, the site won’t be blocked. That’s good news, though it seems to violate the Icann policy that addresses be treated the same globally.

However Icann interprets the .xyz application, Congress should ask the U.S. Commerce Department to explain why it would allow Icann—which it oversees for now via a contract intended to protect the open Internet—to become the global enforcer of the Chinese regime’s censorship against Chinese citizens.

China’s plan to censor Web addresses highlights the folly of the Obama administration’s plan to end U.S. protection for the Internet. This would make it easier for authoritarian regimes to censor websites around the world, no longer just in their own countries.