- China does not treat institutional and informational warfare as optional or interesting adjuncts to traditional notions of warfare. In fact, the People’s Liberation Army (PLA) plays a central and even dominant role in leading influence and information doctrine and operations.
- These nonmaterial approaches are essential to the Chinese strategy and have real-world objectives and outcomes that are often similar or identical to those that could be achieved through (material) force.
- The US and allied Defense establishments are well positioned to work with the rest of government to play a similarly central role, not only in countering the Chinese use of political warfare but in leading national and allied efforts to responsibly and ethically deploy political warfare to achieve defense and national objectives and outcomes.
CHINA 2022
TENSIONS IN THE EAST CHINA SEA and TERRITORIAL DISPUTES IN THE SOUTH CHINA SEA / The Global Conflict Tracker identifies conflicts around the world, follows their evolution, and assesses their impact on U.S. national security. The newly redesigned and expertly researched tool from CFR’s Center for Preventive Action includes live data, background information, the latest developments, and critical resources to provide insight on the world’s strife.
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Taiwan shows a tango of engagement and deterrence against isolation and coercion Like his strategic partner Vladimir Putin in his horrific war in Ukraine, Xi Jinping’s violently aggressive actions in the past few days against Taiwan—and Japan—have revealed how he wants to act in the world. These acts are what diplomats and governments have called ‘disproportionate and destabilising’. Despite the strident efforts of China’s wolf-warrior diplomats, it’s plain hard for Beijing to portray itself as the victim here. Victims are usually not the ones launching ballistic missiles when others aren’t.
The military violence is far from a reasonable response to the visit to Taiwan of an 82-year-old American politician called Nancy Pelosi. China’s ambassador to Canberra, Xiao Qian, did his best to follow the instructions from Xi, repeating foreign ministry lines. ‘The actions taken by Chinese government to safeguard state sovereignty and territorial integrity and curb the separatist activities are legitimate and justified. Instead of expressing sympathy and support to the victim, the Australian side has condemned the victim along with the perpetrators.’ But in the real world, Chinese military aggression shows us that Beijing is intent on changing the peaceful status quo across the Taiwan Strait—something that is a flat contradiction to China’s stated policy of wanting peace.
Chinese military planes and ships closing large areas of the air and maritime space around Taiwan and the People’s Liberation Army firing ballistic missiles over the heads of 23 million Taiwanese people and into Japan’s exclusive economic zone are a physical demonstration of China’s intent. These actions make its words about peace and stability empty. It’s surprising that no one in Beijing or in the PLA higher command seemed to consider the effect on Japanese policy and public opinion that’s flowing from the disastrous decision to launch ballistic missiles into Japan’s EEZ. If China had wanted to really energise Tokyo’s efforts to strengthen Japan’s military power and to think through the close connection between Taiwan’s security and its own, these missile launches would have been the best way of achieving that.
Xi went beyond even the military violence, adding other overreactions like ending climate talks and military contact with the US, cancelling a meeting between the Chinese and Japanese foreign ministers and threatening the EU if members of the European parliament visit Taiwan. This lack of control from the Chinese also shows us something important about what happens next in nations’ relationships with Taiwan. More in The Strategist of August 9, 2022. The Strategist is the commentary and analysis site of the Australian Strategic Policy Institute, an independent, non-partisan think tank based in Canberra. ASPI is one of the most authoritative and widely quoted contributors to public discussion of strategic policy issues in Australia and a recognised and authoritative Australian voice in international discussion of strategic issues, especially in the Asia–Pacific. The Strategist aims to provide fresh ideas on Australia’s critical defence and strategic policy choices as well as encourage and facilitate discussion and debate among the strategy community and Australian public.
Tourists look on as a Chinese military helicopter flies past Pingtan Island, China, on August 4, 2022. Image: Hector Retamal/AFP/Getty Images
CNAS Responds: CHIPS and Science Act Signed Into Law Following the signing of the CHIPS and Science Act, experts from the Center for a New American Security analyze key provisions of the new law, and weigh in on the potential implications for U.S. industrial policy and strategic competition in the tech sector going forward.
Safeguarding Our Future bulletin – Protecting Government and Business Leaders at the U.S. State and Local Level from People’s Republic of China (PRC) Influence Operations In July 2022, the U.S. National Counterintelligence and Security Center (NCSC) warned American businesses and local and state governments about China’s efforts to use them to influence U.S. policy.
Birgit Korber / Getty Images
China Is the Wrong Industrial Policy Model for the United States – The first CSIS commentary of a three-part series on Chinese industrial policy The adoption of the CHIPS and Science Act is a watershed in U.S. economic policy. It is not because the United States has never practiced industrial policy before; in fact, the early development of semiconductors and the internet was due in large part to Defense Department support. And the U.S. federal and local governments have provided episodic aid for a variety of sectors and companies. It feels, though, as if a new era is beginning in which government support to strengthen the competitiveness of industries—for reasons of business, national security, public health, and the environment—will be seen as more necessary and normal than in the past. But as a new era dawns, it is important to get right both the goals and tools of industrial policy so that it is effective and consistent with international commitments. Otherwise, this change will leave the U.S. economy worse off than before.
The Right Goals The United States needs to remember that it has not fallen behind China. The best overall measure of technology prowess is the Global Innovation Index. Even though China has been steadily climbing the ranks, the United States, at third, is still substantially ahead of China, at twelfth. Moreover, China’s rise has in part been propelled by a huge jump in patent filings and cited scientific papers, many of which are of low quality. If one looks industry by industry, although the Chinese have made great strides in information and communications technologies, mass transit (such as high-speed rail), life sciences, and a few others, there is almost no sector where China is the dominant technology leader, unlike the United States. Moreover, if one were to consider this “race” in terms of coalitions of likeminded countries, the United States and its Western allies from Europe and Asia are cumulatively even further ahead.
More important, the decision of whether to utilize industrial policy should be driven primarily not by whether the gap between the United States and China is narrowing, but by whether greater government intervention can produce more positive results than a more relatively laissez-faire approach for the country’s current needs. The United States does not need to “catch up”—the typical justification for industrial policy—but rather needs to accelerate an economic transformation for itself and the globe in an era when transnational cooperation for research, production, and consumption is less assured because of both geostrategic tensions and rising energy and transportation costs.
The Wrong Means Equally important, although China’s recent progress is a motivating force for this shift, China’s state capitalist system is a bad model for the United States to draw on in determining how to proceed. In fact, it actually is often dysfunctional for China, too.
There are at least four Chinese practices that the United States should avoid:
First, as CSIS documented in a recent study, the Chinese government spends an enormous amount on industrial policy. By the study’s calculations, in 2019 China spent the equivalent of 1.73 percent of its gross domestic product (GDP) in fiscal outlays, tax breaks, below-market credit, and other kinds of subsidies. Far back in second place was South Korea, at 0.67 percent of GDP. The United States spent only 0.39 percent of GDP. The study’s original estimate for China was extremely conservative; had the team modified its assumptions and included more components, such as government procurement (which was originally left out because of difficulty obtaining the requisite data), the Chinese figure would be closer to 4.9 percent of GDP, over 12 times the U.S. figure. Moreover, China is relatively indiscriminate about how it spends. Although the Made in China 2025 plan, issued in 2015, highlighted 10 industries, in reality Chinese industrial policy lavishes billions on dozens of sectors, with the hope that something will pay off. The result is a financial system ladened with debt that is mortgaging the country’s future. The United States should not see this difference as a “gap” that needs to be closed. America needs to lead in industries, not industrial policy spending.
Second, spending in China is heavily affected by political loyalties, not rational economic analysis. As a result, a disproportionate amount of industrial policy spending goes to inefficient state-owned enterprises (SOEs) and cronies. It should surprise no one that China’s push into semiconductors has been slowed by cash going to unqualified companies that dumped money into real estate projects as well as massive corruption in the firm managing the national semiconductor fund.
Source: NikkeiAsia (China’s chipmaking industry has a long way to go before attaining 70% self-sufficiency by 2025) © Reuters
Third, China overemphasizes the development of shiny physical technologies that look good in photo ops. China’s achievements are displayed in tall skyscrapers, supercomputers, a space station, and new electric vehicles. But this preference for visible products has come at the expense of insufficient attention to the most important source of future economic growth—strengthening human capital. Millions of students in urban China graduate with degrees in science, technology, engineering, and math (STEM), but the educational system and overall political environment do not nurture creativity. For example, what lesson might China’s potential entrepreneurs take from the silencing of Alibaba founder Jack Ma? Equally important, even though absolute poverty has been reduced in rural China, educational attainment in the countryside, where over half of China’s youth live, is woefully inadequate. As a result, almost all of China’s recent economic growth has come from increased investment and essentially none has come from productivity gains, the source of true progress.
Fourth, China frames its industrial policy in highly nationalistic terms, a zero-sum contest pitting its own companies and economy against everyone else.This fear of external vulnerability has grown dramatically under Xi Jinping’s rule, as technological self-sufficiency, as opposed to raising China’s position in global value chains, has become China’s paramount industrial policy goal. The result is growing tensions with trading partners, particularly technology leaders, and slower growth due to pursuing strategies inconsistent with China’s comparative advantage.
The CHIPS and Science Act appears to avoid these four pitfalls. More in the August 9, 2022 Commentary, produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues.
Source: Nancy Pelosi/@Speaker Pelosi (Twitter)
Assessing the impact of CCP information operations related to Xinjiang This new policy brief from ASPI’s International Cyber Policy Centre explores the Chinese Communist Party’s use of technology, social media and disinformation operations to project its preferred Xinjiang narratives across the world.
The Chinese Communist Party (CCP) is using technology to enforce transnational digital repression and influence unwitting audiences beyond China’s territory. This includes using increasingly sophisticated online tactics to deny, distract from and deter revelations or claims of human rights abuses, including the arbitrary detention, mass sterilization and cultural degradation of minorities in Xinjiang. Instead of improving its treatment of Uyghurs and other Turkic minorities, the CCP is responding to critiques of its current actions against human rights by coordinating its state propaganda apparatus, security agencies and public relations industry to silence and shape Xinjiang narratives at home and abroad.Central to the CCP’s efforts is the exploitation of US‐based social media and content platforms.
CCP online public diplomacy is bolstered by covert and coercive campaigns that impose costs and seek to constrain international entities—be they states, corporations or individuals—from offering evidence‐based critiques of the party‐state’s record on human rights in Xinjiang and Hong Kong and other sensitive issues. This asymmetric access to US‐based social media platforms allows the CCP to continue testing online tactics, measuring responses and improving its influence and interference capabilities, in both overt and covert ways, across a spectrum of topics.The impact of these operations isn’t widely understood, and the international community has failed to adequately respond to the global challenges posed by the CCP’s rapidly evolving propaganda and disinformation operations. This report seeks to increase awareness about this problem based on publicly available information.
See also the July 7, 2021 article about Zhao Lijian in the New York Times Magazine: “The Man Behind China’s Aggressive New Voice: How one bureaucrat, armed with just a Twitter account, remade Beijing’s diplomacy for a nationalistic era”
Pelosi lands in Taiwan, ignoring China’s threats
Taiwan Foreign Minister Joseph Wu welcomes U.S. House of Representatives Speaker Nancy Pelosi at Taipei Songshan Airport in Taipei, Taiwan August 2, 2022. Taiwan Ministry of Foreign Affairs/Handout via REUTERS
Speaker Nancy Pelosi (D-Calif.) arrived in Taiwan on Tuesday, capping off days of speculation regarding whether the third-highest ranking official in the U.S. government would visit the self-governing island amid criticism from China. Pelosi’s arrival in Taipei was broadcast on major television networks. It is her latest stop on a days-long trip to Asia with a congressional delegation.
Senate Minority Leader Mitch McConnell (R-Ky.), along with 25 other Republican senators, released a joint statement praising her decision to visit to Taiwan minutes after she landed on the island: “We support Speaker of the House of Representatives Nancy Pelosi’s trip to Taiwan,” the statement reads. “For decades, members of the United States Congress, including previous Speakers of the House, have travelled to Taiwan,” it continues. “This travel is consistent with the United States’ One China policy to which we are committed. We are also committed now, more than ever, to all elements of the Taiwan Relations Act.”
During the historic trip to Taiwan, House Speaker Nancy Pelosi said her visit was intended to make it “unequivocally clear” that the U.S. would “not abandon” the democratically governed island. Pelosi left Taiwan the following day (August 3, 2022), en route to South Korea’s capital Seoul, after becoming the first sitting House Speaker in 25 years to visit the self-governing island. Pelosi’s praise of the island’s commitment to democracy was a significant show of support for Taipei, in the face of escalating threats from China.

The plane carrying U.S. House of Representatives Speaker Nancy Pelosi takes off from Taipei Songshan Airport in Taipei, Taiwan August 3, 2022. REUTERS/Ann Wang
The Transcript of Pelosi’s Opening Remarks at Bilateral Meeting with Vice President of the Legislative Yuan of Taiwan Tsai Chi-chang, can be downloaded here.
China’s response: The Chinese Ministry of Foreign Affairs released a statement condemning Pelosi’s trip to Taiwan, saying it “gravely undermines peace and stability across the Taiwan Strait, and sends a seriously wrong signal to the separatist forces for ‘Taiwan independence.’”. Shortly after Pelosi landed in Taipei, China announced that the People’s Liberation Army would hold live-fire drills — exercises using live ammunition — at several points around Taiwan. Taiwan’s defense ministry said China’s threat to hold live-fire exercise areas was aimed at threatening the country’s key ports and urban areas and unilaterally damaged regional peace and stability.
Russia’s response: Pelosi’s visit to Taiwan reflects Washington’s desire to prove its “impunity and display their lawlessness,” Russian Foreign Minister Sergey Lavrov has said. Lavrov also connected Pelosi’s visit with the U.S. response to Russia’s invasion of Ukraine, saying: “I cannot tell what was their [the Americans’] motivation but there are no doubts that it reflects the very same policy we are talking about with regards to the Ukrainian situation.”
Newspaper front pages on US House Speaker Nancy Pelosi’s visit to Taiwan on Aug. 2, 2022 / Photographer: Betty Hou/Bloomberg
How to Defeat China Economically? Don’t Follow Its Worst Practices Amid the challenges posed by Russia’s war against Ukraine and China’s increasing assertiveness in Asia, the G7 met in Europe. Most of the hard work was completed by staff before the political leaders gathered. Even so, some of the ideas advanced remained half‐baked at best, such as the Partnership for Global Infrastructure and Investment initiative, apparently a Biden administration brainchild. It is supposed to uplift developing countries, create jobs in industrialized nations, and provide a return on private investment. Next up: achieving global peace and making the lion and lamb lie down together! Driving the PGII is “the China threat.” The People’s Republic of China supposedly is about to take over the world with its Belt & Road Initiative. Poor nations will be impoverished through “debt‐trap” diplomacy, the PRC will control vital projects around the world, and facilities with military uses will be constructed covertly. Thus, the US and West must respond, tossing their people’s money at the same sort of overseas projects, saving the foolish and irresponsible locals from themselves and defeating the Chinese communists.
It is a dubious idea in the best of circumstances.
Beijing should not be underestimated, but it is not the 800‐pound gorilla often portrayed. Political interference in the economy is rife, government enterprises swallow vast resources, banks are saddled with heavy debt, a property bubble threatens, young people increasingly want to leave the PRC, draconian COVID restrictions undermine regime support, and the rapidly aging population poses potential demographic and economic disaster. Despite the expectation that Xi will win a third term as president, his political position could be simultaneously on the mountaintop and at the abyss, as dissatisfaction rises over endless COVID lockdowns. More in this July 5, 2022 Commentary (Cato Institute).
Economic Woes Worsen as Support for Xi Jinping’s Leadership Begins to Falter The relentless cascade of bad economic news in China has not only cast doubt on the governance ability of the Xi Jinping leadership, but has also called into question the long-term viability of the Chinese economic model, which stresses maintaining party-state control of the market and limiting international access to sensitive sectors such as finance. Given supreme leader Xi’s Maoist-style and statist approach to the economy as well as his insistence on a “zero-tolerance” pandemic policy, confidence in China’s future among its neighbors and trading partners is tipped to drop even further, especially if Xi realizes his long-held ambition and gains an unprecedented third or even fourth five-year term as “core of the Chinese Communist Party (CCP) leadership” at the upcoming 20th Party Congress. Xi has undoubtedly been forced to allow Premier Li Keqiang – a political foe and leader of the opposition Communist Youth League (CYL) faction – and technocrats in the central-government apparatus to assume day-to-day management of the economy. Due to his dented authority – and the threats to stability posed by the growing rebelliousness of China’s 400 million-strong middle class who have grown increasingly frustrated with Beijing’s problematic governance record since the early 2010s – the 69-year-old Xi may be forced to make pledges to adopt a more pro-market stance after the Party Congress. The supreme leader might also be obliged to appoint more members of the “anti-Xi faction” to the Central Committee and the all-powerful Politburo to be endorsed at the Party Congress this fall (China Brief, May 27). More in the July 18, 2022 article in Jamestown’s China Brief.
People protest in front of a branch of the People’s Bank of China in the central Chinese city of Zhengzhou on July 10, 2022. Anonymous Source/AFP
Decoupling in Strategic Technologies – From Satellites to Artificial Intelligence Geopolitical tensions between the United States and China have sparked an ongoing dialogue in Washington about the phenomenon of “decoupling,” the use of public policy tools to separate the multifaceted economic ties that connect the two powers. This process has already begun, with a range of steps taken in recent years on both sides of the Pacific to reshape the bilateral economic relationship. Decoupling encompasses a wide range of tactics and policy objectives. Some have advocated for decoupling as a means of protecting the economic health of certain U.S. industries. Others have argued for decoupling as a tool to reduce the dependence of the United States on China for strategically important products and supplies. Still others see decoupling as a means of limiting the channels through which China might compromise U.S. national security, as in the ongoing debates around 5G and network infrastructure.
This issue brief studies the efficacy of one specific aspect of this broader decoupling phenomenon. Specifically, it examines the use of export controls and related trade policies to prevent a rival from acquiring the equipment and know-how to catch up to the United States in cutting-edge, strategically important technologies. This objective has already motivated some of the most widely discussed events of the “decoupling era” in U.S.-China relations. The Committee on Foreign Investment in the United States, for example, has been active in blocking Chinese firms from accessing specific types of leading-edge semiconductor designs.
To study the efficacy of these tactics, this CSET issue brief examines past efforts by the United States to decouple supply chains in satellite technology. For decades, an array of export controls and other regulations have worked to prevent rivals from accessing key technologies for satellites designed and manufactured in the United States. The satellite domain affords the opportunity to examine the effectiveness of decoupling policies in the context of a suite of emerging technologies considered strategically important. These lessons have contemporary relevance as U.S. policymakers consider establishing similar regimes in the current generation of strategic emerging technologies like artificial intelligence (AI).
See also Carnegie’s April 25, 2022 report: U.S.-China Technological “Decoupling”. The Carnegie Endowment for International Peace (CEIP) is one of the most influential, nonpartisan international affairs think tanks in the world, headquartered in Washington D.C. with operations in Europe, South and East Asia, and the Middle East as well as the United States. Founded in 1910 by Andrew Carnegie, the organization describes itself as being dedicated to advancing cooperation between countries, reducing global conflict, and promoting active international engagement by the United States and countries around the world.
Image: James Ferguson (as published in the August 17, 2020 article in the Financial Times: “The decoupling of US and China has only just begun”
PRC in International Organizations A new publication from the U.S.-China Economic and Security Review Commission (USCC) identifies Chinese nationals serving in leadership positions in key international organizations. Top leadership positions are broadly defined as positions at the board of directors and senior management team level. The Commission’s work on this subject is informed by the enduring relevance to the Commission’s charter regarding the nature and implications of Chinese participation in international governmental organizations. The publication documents Chinese nationals serving in leadership roles in the following organizations:
- Chinese Heads of International Organizations
- UN Principal Organs
- UN Funds and Programs
- UN Specialized Agencies
- Other UN Entities and Bodies
- International Trade and Financial Institutions
- Other International Organizations
The data are current as of July 18, 2022, and will be updated on a semi-annual basis. USCC’s full document can be found here.
CSET Government Update: Cutting Off Chinese Chipmaking Supplies — U.S. Officials Lobby the Dutch U.S. officials have asked the Dutch government to restrict exports to China of an important type of semiconductor manufacturing equipment, Bloomberg reported last week. Netherlands-based ASML Holding is the world’s largest manufacturer of photolithographic machines, a critical tool in modern semiconductor manufacturing. A push by U.S. officials during the Trump administration helped convince Dutch authorities to block exports to China of ASML’s crown jewel: its extreme ultraviolet lithography machines. EUV machines — which only ASML can make — are used in manufacturing the current generations of cutting-edge chips, and without them, Chinese chipmakers have to rely on an older type of “deep ultraviolet” lithography machine. But those older DUV machines can still produce chips as advanced as the 7nm node — more than capable of running advanced AI applications. In its final report last year, the National Security Commission on Artificial Intelligence recommended export controls on both EUV and DUV machines, but that would require the Dutch and Japanese governments to get on board. Bloomberg noted that a similar lobbying effort is underway with Tokyo, as Japan’s Nikon is another vital supplier of DUV machines. But the push could face an uphill battle — in a recent interview, the Dutch prime minister pushed back on efforts to “close off” his country’s trade relationship with China. CSET, the Center for Security and Emerging Technology, is a policy research organization within Georgetown University’s Walsh School of Foreign Service. CSET produces data-driven research at the intersection of security and technology, providing nonpartisan analysis to the policy community. CSET is currently focusing on the effects of progress in artificial intelligence (AI), advanced computing and biotechnology. They seek to prepare a new generation of decision-makers to address the challenges and opportunities of emerging technologies.

ASML employees pose in front of the partially completed frame of the company’s newest product in Veldhoven, Netherlands, in January 2022, in this handout picture released by ASML. The “High NA EUV” tool, still under development, will cost around $400 million and will be used to help create the circuitry of a new generation of computer chips. ASML/Handout via REUTERS
Confronting Reality in Cyberspace: Foreign Policy for a Fragmented Internet The era of the global internet is over. The early advantages the United States and its allies held in cyberspace have largely disappeared as the internet has become increasingly fragmented, more dangerous, and less free. CFR’s new Independent Task Force Report offers a new foreign policy for cyberspace founded on three pillars: building a trusted internet coalition, balancing more targeted pressure on adversaries with pragmatic cyber norms, and getting the U.S. house in order.
Source: Shutterstock / motioncenter (via the Alliance for Securing Democracy (ASD), a nonpartisan initiative housed at the German Marshall Fund of the United States)
WeChat Is China’s Most Beloved (and Feared) Surveillance Tool According to the new book Influence Empire, and this July 12, 2022 article in Bloomberg, WeChat became so powerful that it could have posed a real threat to Beijing’s rule.
WeChat’s headquarters in Guangzhou. Photographer: Lulu Chen
Joint address by MI5 and FBI Heads In an unprecedented joint address, MI5 Director General Ken McCallum, and FBI Director Christopher A. Wray spoke to an audience of business and academic leaders at Thames House. Somewhat overshadowed by chaos in British politics, they warned of huge Chinese espionage efforts. China is “engaging in a coordinated campaign on a grand scale,” said MI5 Director-General Ken McCallum. Both agencies said they had massively stepped up investigations into Chinese activity in the last few years. FBI director Christopher Wray said China was the “biggest long-term threat to our economic and national security”, accusing Beijing’s Ministry of State Security of homing in on western companies it wanted to “ransack” to help obtain corporate secrets. MI5 head Ken McCallum said his service had seen a sevenfold increase in China-related investigations since 2018. McCallum added that China’s “scale of ambition is huge” and that Beijing was focused on “areas of core technology where it would otherwise be impossible for China to catch up with the west by 2050”.
MI5 Director General Ken McCallum, left, and FBI Director Christopher A. Wray attend a joint news conference at MI5 headquarters in central London on Wednesday, July the 6th, 2022. (Dominic Lipinski/PA/AP)
Biden must rally against a Russia-led UN ‘cybercrime treaty’ In the midst of Russian-led cyber attacks against Ukraine and attempts to probe critical United States infrastructure, the United Nations began negotiations to draft a new cybercrime treaty. Improbably, this global law enforcement initiative is championed by Moscow and supported by Beijing. Weird? A little, but a closer look reveals that the initiative has little to do with combating cybercrime. Russia and China seek to legitimize authoritarian internet control and undermine digital human rights. And the Biden administration needs to mobilize to arrest momentum toward a Sino-Russian cybersecurity coup at the U.N.
The U.N. General Assembly adopted a resolution last year on countering cybercrime globally. It plans to complete a draft treaty by 2023. The Kremlin’s cyber envoy celebrated the U.N. resolution as a “triumphant success of Russian diplomacy.” It’s easy to understand his excitement. While the Kremlin’s focus on U.N. cyber regulation may seem counterintuitive given Moscow’s blatant disregard for international law, Russian President Vladimir Putin is adept at manipulating international institutions. Instead of abandoning the U.N., which would disadvantage Russia, Putin wants to co-opt it to suit the Kremlin’s needs. Read the full story on The Hill. See also the Budapest Convention. The Convention on Cybercrime, also known as the Budapest Convention on Cybercrime or the Budapest Convention, is the first international treaty seeking to address Internet and computer crime (cybercrime) by harmonizing national laws, improving investigative techniques, and increasing cooperation among nations. It was drawn up by the Council of Europe in Strasbourg, France, with the active participation of the Council of Europe’s observer states Canada, Japan, Philippines, South Africa and the United States.
Targets of Interest: Russian Organizations Increasingly Under Attack By Chinese APTs On June 22nd 2022, CERT-UA publicly released Alert #4860, which contains a collection of documents built with the Royal Road malicious document builder, themed around Russian government interests. SentinelLabs has conducted further analysis of CERT-UA’s findings and has identified supplemental Chinese threat activity.
China’s recent intelligence objectives against Russia can be observed in multiple campaigns following the invasion of Ukraine, such as Scarab, Mustang Panda, ‘Space Pirates’, and now the findings here. SentinelLabs’ analysis indicates this is a separate Chinese campaign, but specific actor attribution is unclear at this time. While the overlap of publicly reported actor names inevitably muddies the picture, it remains clear that the Chinese intelligence apparatus is targeting a wide range of Russian-linked organizations. SentinelLabs’ findings currently offer only an incomplete picture of this threat cluster’s phishing activity, but they serve to provide perspective into an attacker’s ongoing operational objectives and a framework for our ongoing research.
Cultivating friendly forces: The Chinese Communist Party’s influence operations in the Xinjiang Diaspora This ASPI report (a part of a larger online project which can be found on the Xinjiang Data Project website explores community groups and individuals in the Xinjiang diaspora that are linked to the CCP’s united front system, as well as the methods and tactics used by that system to activate and guide them. The authors use open-source materials (chiefly Chinese-language media reports, government documents, and social media posts) to track groups and individuals who are promoting the party’s Xinjiang narrative and policies overseas, and place their activities within the wider context of the CCP’s overseas influence operations. ASPI’s findings demonstrate the following:
- the CCP is systematically collecting information on members of the Xinjiang diaspora and creating databases that could strengthen the party’s overseas surveillance and interference work.
- community organisations in the Chinese diaspora and their elites are frequently used as conduits for promoting the party’s Xinjiang narrative and policies and are actively cultivated, and at times captured, by united front officials.
- some senior members of these organisations also hold prominent positions in China-based united front organs, which enables them to more effectively coordinate activities and promote the party’s agenda.
- the influence of CCP-linked community groups extends well beyond the Xinjiang diaspora, and some groups have secured the open or tacit endorsement of local politicians while influencing local public opinion.
- united front agencies leverage cultural events, language learning, business opportunities and political honours to entice and unify overseas Chinese behind the CCP’s hegemonic abstractions of ‘China’ and ‘Chineseness’ while marginalising, silencing and delegitimising CCP critics, and identities and cultures not approved by the party.
The report begins with a brief overview of the united front system and its overseas influence operations targeting the Xinjiang diaspora. The authors then look at the specific tactics and mechanisms of influence adopted by united front operatives to seize control of the Xinjiang narrative and influence public opinion abroad, before they offer their conclusions and recommendations. Along the way, the authors provide four detailed case studies in order to pull back the veil on the activities of Xinjiang-linked community organizations and their ties to the united front system in Canada, Central Asia, Australia and Turkey. The full extent of their activities requires additional research and public transparency, and any policy responses will need to respond dynamically to the specifics of each situation. However, the starting point must be a more nuanced understanding of the CCP’s united front system. ASPI, the Australian Strategic Policy Institute, s an independent, non-partisan think tank that produces expert and timely advice for Australian and global leaders. ASPI generates new ideas for policy makers, allowing them to make better-informed decisions. ASPI is one of the most authoritative and widely quoted contributors to public discussion of strategic policy issues in the Indo-Pacific region and a recognised and authoritative Australian voice in international discussion on strategic, national security, cyber, technology and foreign interference issues.
A watchtower on a high-security facility near what is believed to be a so-called reeducation camp in China’s northwestern Xinjiang region on May 31, 2019. Greg Baker/AFP Via Getty Images
Rise of China-Russia axis could hobble global science Closer ties between Moscow and Beijing may force Western universities to cut their research ties with China, causing a “profound shock” to global research networks unless risks are managed, says former science minister Lord Johnson in a new report (“Stumbling Bear, Soaring Dragon: Russia, China and the geopolitics of global science”) for the Policy Institute at King’s College London and the Harvard Kennedy School.
Image: Newsweek
Chinese Political Warfare: The PLA’s Information and Influence Operations Material power is relatively easy to understand and quantify. Much less attention is given to nonmaterial power, which is admittedly more nebulous and difficult to assess. Even so, if power is broadly defined as the capacity to exercise or impose one’s will over another, then nonmaterial forms of power need to be taken seriously. This means understanding them, increasing one’s capacity to operationalize and exercise them, and institutionalizing their use to achieve national and security interests. The issue of nonmaterial power (especially information and influence operations, which will fall under the term political warfare) is arising because these forms of power have been taken for granted or have been largely ignored by the advanced democracies. Beijing is exploiting our complacency. There is already a rich and growing body of literature on the various information, influence, and institutional resources and activities of the Chinese Communist Party (CCP).
This new brief from the Hudson Institute does not seek to reproduce the excellent work already out there, instead, it will make the following point:
UK’s first Critical Minerals Intelligence Centre to help build a more resilient economy UK’s first Critical Minerals Intelligence Centre to help build a more resilient economy. Based in Nottingham, the Critical Minerals Intelligence Centre (CMIC) will improve the resilience of the UK’s critical mineral supply chain by providing policymakers with “criticality assessments”. A critical minerals strategy is expected soon. To stay up to date with the CMIC and for more information, please visit the official website. See also the IAE report (The Role of Critical Minerals in Clean Energy Transitions – revised in March 2022). The International Energy Agency (IEA) was created in 1974 to help co-ordinate a collective response to major disruptions in the supply of oil. While oil security this remains a key aspect of our work, the IEA has evolved and expanded significantly since its foundation. Taking an all-fuels, all-technology approach, the IEA recommends policies that enhance the reliability, affordability and sustainability of energy. It examines the full spectrum issues including renewables, oil, gas and coal supply and demand, energy efficiency, clean energy technologies, electricity systems and markets, access to energy, demand-side management, and much more. Since 2015, the IEA has opened its doors to major emerging countries to expand its global impact, and deepen cooperation in energy security, data and statistics, energy policy analysis, energy efficiency, and the growing use of clean energy technologies.
Source: IEA Image Copyright – ShutterStock
PRC State Media Attacks Jamestown Foundation’s Xinjiang Research The official People’s Republic of China (PRC) press agency Xinhua has released an English language video feature entitled: “Who fabricated lies about Xinjiang ‘forced labor’?” The video asserts that the bipartisan “Uyghur Forced Labor Prevention Act”, which was passed by Congress late last year and came into effect on June 21, is based on what it falsely claims is research manipulated by Adrian Zenz, one of the world’s leading scholars on PRC government policies in Xinjiang and Tibet. For example, Xinhua alleges that Zenz fabricated his original figure from 2018 that about one million Uyghurs were interned in camps; an estimate that the Asia Society’s ChinaFile called “quite credible.”
The image above is a screenshot of Xinhua’s June 21 “investigative report” on international research on Xinjiang (Source: Xinhua). Xinhua then blames the Jamestown Foundation, which through their flagship journal-China Brief, has published much of Zenz’s groundbreaking research, for fabricating “a web of lies” about Xinjiang. The piece neglects to mention that Zenz’s scholarship for the Jamestown Foundation has been widely cited as credible by leading international media outlets, including the New York Times, Bloomberg, Washington Post and BBC. Furthermore, both the U.S. Congress and State Department have also cited Zenz’s findings as accurate. In addition to numerous falsehoods about Zenz’s research, the Xinhua piece also repeats a number of baseless claims about our organization. It calls the Jamestown Foundation an “ultra-conservative think tank founded by a former CIA chief.” Neither assertion is accurate. The Jamestown Foundation is scrupulously non-partisan and publishes research “without political bias, filter or agenda” that is primarily based on “indigenous and primary sources.” Finally, the Xinhua piece implies that the Foundation is funded by the U.S. government, which is also untrue. The Jamestown Foundation is funded entirely through the generosity of private foundations and donors.
Silicon Twist – Managing the Chinese Military’s Access to AI Chips The Chinese military’s progress in artificial intelligence largely depends on continued access to high-end semiconductors. By analyzing thousands of purchasing records, this CSET policy brief offers a detailed look at how China’s military comes to access these devices. The authors find that most computer chips ordered by Chinese military units are designed by American companies, and outline steps that the U.S. government could take to curtail their access.
Lindy Cameron speech at Tel Aviv Cyber Week The CEO of the NCSC (United Kingdom) emphasizes the ties between academia, industry and government in countering cyber threats. “Good morning everyone. And it’s fantastic to be here again in Tel Aviv. Thank you so much for inviting me. And thanks to those of you who are joining us online – thanks for tuning in. It’s great to be back here for a 2nd year running despite the challenges of COVID. I would like to start by congratulating Gaby Portnoy on his appointment as Director General of the Israel National Cyber Directorate earlier this year. My own organisation – the UK’s National Cyber Security Centre – and the INCD share an awful lot in terms of mission and of outlook. Our collaborations over the years have really delivered and I look forward to expanding the partnership in the years ahead. Since I was here in Tel Aviv this time last year, the brutal Russian invasion of Ukraine has not only changed the geo-political landscape but transformed the context for our work on cyber security.
When the first Russian tank crossed into Ukrainian territory, the unthinkable suddenly became a terrifying reality. Millions of innocent people have had their lives, homes and families taken from them. And while Russia inflicted this physical oppression, they were also conducting a cyber campaign. This came as no surprise. Russia has consistently used cyber pressure to stress its rivals, distract them, and where possible disable them. But – just as they have done on the battlefield – Ukrainian cyber defenders have done an incredible job (emphasized by the NCSC) of repelling many of these attacks. They are real heroes. And I think resilience and preparation are at the heart of this success. I’ll come back to this point shortly.
But for all the pernicious activity that we have seen from Russia in the last few months in cyber space and beyond, we must not lose sight of the longer-term strategic challenges posed by the continued growth of China as a technological and economic power. Because in cyber security this challenge is particularly acute because of the globalized nature of digital technology. The Chinese government’s use of technology is about coercion and control. And the country’s technological and economic power mean they can export this vision very widely. Once the world relies on technology delivered with an authoritarian bias, it will constrain our choices. As allies…as equals…our more open systems can take time to reach agreement. And when we leave important choices unmade, we leave gaps in our defences which will be rapidly exploited.
So these challenges – from China, Russia and others – make it impossible for us to leave cyber security for another day. So now is the time to innovate, educate and empower our citizens. The democracies of the world have to challenge themselves to develop technologies and systems which allow us to avoid reliance on products not aligned with our values. And I hope that the ‘start-up nation’ of Israel can play an important role in this innovation over the years to come. But – even with a war raging in Ukraine – the biggest global cyber threat we still face is ransomware. That tells you something of the scale of the problem. Ransomware attacks strike hard and fast. They are evolving rapidly, they are all-pervasive, they’re increasingly offered by gangs as a service, lowering the bar for entry into cyber crime. And that’s what makes them such a threat – not just the nationally significant incidents that my team and I deal with in the NCSC, but also the hundreds of incidents we see that affect the UK more widely every year. These complex attacks have the potential to affect our societies and economies significantly, if it were not for the expertise of our incident management operators working in collaboration with their counterparts in industry and their international counterparts gathered here today. So, we worked hard over the last year, to really understand, with our law enforcement partners, the criminal system behind ransomware. We want to drive down profits and drive up the risk to the criminals. We continue to work on understanding the scale, nature and evolution of their techniques. We want to make ransomware an unprofitable and unattractive business.
Russia may dominate the headlines at the moment, but this threat of ransomware has not gone away – and nor have we stopped our relentless focus on it. But it’s not all doom and gloom. I’ve mentioned Ukraine, and closer to home, just look at the work undertaken by our hosts here in Israel – a shining example of what can be done when a nation takes cyber security seriously. The technology developed here is truly world class. The talent in the cyber security sector is second to none. And your defenses are some of the strongest in the world. But making the most of our digital future is too big an issue for any one nation to handle alone. Whether its drip feed irrigation or health and climate tech, Israel has always been proud to innovate for the benefit of people, well beyond your borders. So, I hope you will continue to produce cyber security solutions which are safe, strong and affordable for the whole world. Because an isolationist stance is just not going to work, long term. I think the war in Ukraine is a case in point there.” The full speech can be found here on the NCSC website.
Ms. Lindy Cameron
China-Europe Academic Engagement Tracker The Central European Institute of Asian Studies has launched an engagement tracker on June the 27th, 2022, to contribute to the emerging discussion about the sustainability and security risks of China-Europe academic cooperation. The Central European Institute of Asian Studies (CEIAS) is an independent think tank with branches in the cities of Bratislava (Slovakia), Olomouc (Czech Republic), and Vienna (Austria).
China’s Surveillance State Is Growing. These Documents Reveal How A New York Times analysis of over 100,000 government bidding documents found that China’s ambition to collect digital and biological data from its citizens is more expansive and invasive than previously known. Reporters spent over a year combing through the documents that reveal the country’s technological road map to ensure the longevity of its authoritarian rule.
Source: New York Times
Best and Bosom Friends: Why China-Russia Ties Will Deepen after Russia’s War on Ukraine Edited by Jude Blanchette of CSIS and Hal Brands of SAIS, the Marshall Papers is a series of essays that probes and challenges the assessments underpinning the U.S. approach to great power rivalry. Inspired by the work and legacy of Andrew Marshall, the founding director of the Office of Net Assessment, the Papers will be rigorous yet provocative, continually pushing the boundaries of intellectual and policy debates.
The partnership between China and Russia has become one of the most critical features of the contemporary strategic relationship. Russia’s war in Ukraine has created economic and diplomatic dilemmas for China, but it hasn’t altered the fundamental alignment of interests and autocratic values that drives that relationship. In this Marshall Paper, David Shullman and Andrea Kendall-Taylor explain why the Sino-Russian relationship will only get deeper as a result of the war—even as it reveals strains and divisions that the United States and its allies may, eventually, be able to exploit.
Photo: Peter Parks/AFP/Getty Images
Leaked Audio From 80 Internal TikTok Meetings Shows That US User Data Has Been Repeatedly Accessed From China For years, TikTok has responded to data privacy concerns by promising that information gathered about users in the United States is stored in the United States, rather than China, where ByteDance, the video platform’s parent company, is located. But according to leaked audio from more than 80 internal TikTok meetings, China-based employees of ByteDance have repeatedly accessed nonpublic data about US TikTok users — exactly the type of behavior that inspired former president Donald Trump to threaten to ban the app in the United States.The recordings, which were reviewed by BuzzFeed News (the 2021 Pulitzer Prize-Winner in International Reporting, and a four time Pulitzer Prize-finalist), contain 14 statements from nine different TikTok employees indicating that engineers in China had access to US data between September 2021 and January 2022, at the very least. Despite a TikTok executive’s sworn testimony in an October 2021 Senate hearing that a “world-renowned, US-based security team” decides who gets access to this data, nine statements by eight different employees describe situations where US employees had to turn to their colleagues in China to determine how US user data was flowing. US staff did not have permission or knowledge of how to access the data on their own, according to the tapes.
“Everything is seen in China,” said a member of TikTok’s Trust and Safety department in a September 2021 meeting. In another September meeting, a director referred to one Beijing-based engineer as a “Master Admin” who “has access to everything.” (While many employees introduced themselves by name and title in the recordings, BuzzFeed News is not naming anyone to protect their privacy.)
The recordings range from small-group meetings with company leaders and consultants to policy all-hands presentations and are corroborated by screenshots and other documents, providing a vast amount of evidence to corroborate prior reports of China-based employees accessing US user data. Their contents show that data was accessed far more frequently and recently than previously reported, painting a rich picture of the challenges the world’s most popular social media app has faced in attempting to disentangle its US operations from those of its parent company in Beijing. Ultimately, the tapes suggest that the company may have misled lawmakers, its users, and the public by downplaying that data stored in the US could still be accessed by employees in China.
In response to an exhaustive list of examples and questions about data access, TikTok spokesperson Maureen Shanahan responded with a short statement: “We know we’re among the most scrutinized platforms from a security standpoint, and we aim to remove any doubt about the security of US user data. That’s why we hire experts in their fields, continually work to validate our security standards, and bring in reputable, independent third parties to test our defenses.” ByteDance did not provide additional comment.
In 2019, the Committee on Foreign Investment in the United States began investigating the national security implications of TikTok’s collection of American data. And in 2020, then-president Donald Trump threatened to ban the app entirely over concerns that the Chinese government could use ByteDance to amass dossiers of personal information about US TikTok users. TikTok’s “data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information,” Trump wrote in his executive order. TikTok has said it has never shared user data with the Chinese government and would not do so if asked. More in this June 17, 2022 article in BuzzFeed News and in the article ” TikTok moves to ease fears amid report workers in China accessed US users’ data“, in The Guardian of June 17, 2022, and in this June 25, 2022 article, also in The Guardian.
SOPA Images/LightRocket via Getty
European universities under fire over work with Chinese military European universities and governments are toughening up their approach to collaboration with China in dual use technologies after it was revealed that thousands of papers have been co-authored over the last two decades with the Chinese military. Joint work on drones, AI, positioning systems and other potentially war-related research that is helping China create the world’s most technologically advanced military grew dramatically in volume up until 2019.
“Foreign interference often targets European universities and research organisations, whereby certain foreign state actors are operating contrary to the sovereignty of the EU, its values and interests,” said research commissioner Mariya Gabriel, responding to the findings. “This has been increasingly reported in the past few years.” But while some universities admit they have been “naïve” in dealing with China, others have defended the collaborations, saying they have been caught off guard by a dramatic shift in opinion against China, which made previously condoned projects now look suspect. Some say they will even continue to work with Chinese military universities, at least while a backlog of agreed projects clears.
Last month, a consortium of journalists in Germany, the Netherlands, Belgium, Spain, Italy, Switzerland and Denmark revealed that since 2000, nearly 3,000 studies have been co-authored between European researchers and Chinese academics at military-linked universities, chiefly China’s prestigious National University of Defense Technology (NUDT).
NDTU’s Motto: 厚德博学、强军兴国 (Excel in Virtue and Knowledge; Strengthen the Armed Forces and the Nation)
Joint papers grew from around less than 150 a year in 2011 to nearly 400 in 2019 before falling off, found the China Science Investigation, which was led by the Dutch investigative outlet Follow the Money. The collaborations covered applications with military uses, like underwater positioning systems, for example.
“In too many European countries there are too many cases of questionable collaborations, where European knowledge leaks away and ends up supporting the Chinese People’s Liberation Army,” said Jeroen Groenewegen-Lau, a science and technology expert at the Berlin-based Mercator Institute for China Studies. Although they argue the collaboration question is complex, European universities are beginning to make changes. Earlier this year, the Commission published a toolkit for universities on how to mitigate foreign influence in research and innovation. “Some universities are really tightening up their procedures in terms of foreign influence and foreign interference,” said Palmowski. But there could be other universities that need a “sense check” of whether they scrutinised their collaborations strictly enough, he said.
The University of Amsterdam, another Dutch institution named in the investigation, said this year it had appointed a “knowledge security portfolio holder” and that “collaborations and their [possible] consequences are being looked at more closely than ever”. Meanwhile at TU Delft, the university has built a tool where researchers can learn more about China’s strategy, said Peter Gill, the university’s senior policy adviser for China. The aim is that academics can be cannier when judging how a research collaboration fits into China’s broader agenda. The university now has 15 quick guides for researchers to help them judge whether joint projects are wise. These have now been shared with other universities across the Netherlands.
“I think the risk of risk management is that you say, well, let’s do it to zero, then we won’t have any risk,” said Gill, who spent his career in oil, gas, mining and offshore wind – including lengthy stints in China and Taiwan – before starting the new position at Delft in 2019. Reducing risk, and collaboration with it, to zero would not be in the interests of science, he said. TU Delft may still be working with Chinese military researchers, Gill acknowledges. “Since PhD research projects typically take about four to five years to complete we cannot rule out the involvement of TU Delft in projects that used to be less controversial a few years ago than they are presently,” he said.
If universities don’t react to worries about Chinese collaboration, Palmowski warns, governments will step in, using much more heavily handed regulation. “I think it’s really important that we have this internal discussion in the sector, because I don’t want the government to do it for us,” he said. More in this June 16, 2022 article in ScienceBusiness.
The University of Amsterdam, the Netherlands
U.S., EU Plan Joint Foreign Aid for Cybersecurity to Counter China According to a June 15, 2022 article in the Wall Street Journal, the U.S. and the European Union plan to introduce joint funding of secure digital infrastructure in developing countries, according to officials involved in the talks. The effort marks the first time the EU and U.S. will work together to fund and help protect other countries’ critical infrastructure against cyberattacks. By working together on cybersecurity, the EU and U.S. aim to help countries that otherwise might be eager to accept funding from China, an EU official said. Initial projects, likely in Africa or Latin America, could be under way by the end of the year, officials said. Russia’s invasion of Ukraine has underscored the importance of supporting telecommunications networks and other hardware in countries vulnerable to nation-state cyberattacks, they said. The EU official said that Chinese technology can come with data-security risks. Officials from EU countries and the U.S. have said that products from Huawei Technologies Co., for example, contain built-in flaws that can be used for government espionage. Huawei has said that it won’t share data with the Chinese government. Discussions about funding digital infrastructure in foreign countries started through the Trade and Technology Council, a U.S.-EU forum set up last year to resolve disputes between the two jurisdictions in several policy areas.
The council held its first meeting in September in Pittsburgh, and the war in Ukraine has accelerated the talks, as officials seek to counter the influence of Russia and other authoritarian regimes. The forum helped forge ties that proved critical when the two economies joined forces to impose sanctions on Russia after it invaded Ukraine, participants said. After a second meeting of the council in May, European Commission Executive Vice President Margrethe Vestager said that “Russia’s war of aggression against Ukraine has further underlined the key importance of our cooperation with the U.S. on economic and technology issues.” A model for the U.S.-EU cyber plans could be the partnership in 2020 to build the world’s longest undersea cable off the Pacific island of Palau, a U.S. State Department official said. The U.S., Australia and Japan helped fund different parts of the $30 million project, aimed at providing secure communications networks to Palau.

Koror, Palau’s commercial center.
Funding efforts are expected to reflect policies where American and EU views are aligned, officials said, such as efforts to avoid using technology providers that government cybersecurity experts have warned against, officials said. The U.S. has aggressively discouraged countries from using products from Huawei in their telecoms networks. The 27 EU countries in 2020 agreed to measures for assessing spying and cybersecurity threats posed by tech providers. The European Union doesn’t have the power to require its member countries to ban a technology provider, but several countries including Sweden excluded Huawei from their 5G networks.
Telecom executives, as well as officials in the U.S. and allied countries, have said Chinese gear is often cheaper than equivalent equipment made by Huawei rivals Ericsson AB and Nokia Corp.
Discussions about funding digital infrastructure in foreign countries started through the U.S.-EU Trade and Technology Council. U.S. Secretary of State Antony Blinken, center, and U.S. Secretary of Commerce Gina Raimondo speak with French Foreign Minister Jean-Yves Le Drian at a meeting of the council in France in mid-May. Photo: Kevin Lamarque/AP
CISA gives agencies tool to securely embrace 5G technologies The U.S. government’s cybersecurity agency issued a new five-step evaluation process Thursday to assist other agencies as they look to securely adopt 5G technologies. With the “5G Security Evaluation Process” the Cybersecurity and Infrastructure Security Agency wants to give federal agencies a blueprint on how to begin and navigate the risk management process as they authorize 5G systems.
CISA teamed up with the Department of Homeland Security’s Science and Technology Directorate and the Pentagon’s Office of the Undersecretary of Defense for Research and Engineering to conduct the study and issue the evaluation process.“The intent of this joint security evaluation process is to provide a uniform and flexible approach that federal agencies can use to evaluate, understand, and address security and resilience assessment gaps with their technology assessment standards and policies,” wrote Eric Goldstein, CISA’s executive assistant director for cybersecurity, in a blog post. “As the nation’s cyber defense agency, CISA views a repeatable process agencies can use during the RMF Prepare step as an essential tool for new federal 5G implementations. Such a process will provide assurance that the government enterprise system is protected and cybercriminals cannot gain backdoor entry into agency networks through 5G technology.” CISA requests that agencies review the process and provide feedback by June 27. More in this May 26, 2022 article in Fedscoop. See also 5G: A Guide to Secure Adoption By Business. This guide from Business Executives for National Security (BENS) assesses security challenges introduced by 5G technology and recommends methods for mitigating them in the private sector.
Source: Fedscoop (Getty Images)
Huawei, ZTE to be banned from Canada’s 5G/4G networks Canadian telecom providers will have to rip out any Huawei and ZTE equipment from their 4G and 5G networks without compensation, the federal government has announced. The long-expected announcement came from Public Safety Minister Marco Mendicino and Innovation Minister François-Philippe Champagne.
Ottawa has “serious concerns about suppliers such as Huawei and ZTE who could be compelled to comply with extrajudicial directions from foreign governments in ways that would conflict with Canadian laws or would be detrimental to Canadian interests,” the government said in a policy statement. “Canada’s closest allies share similar concerns about these two suppliers. Given the potential cascading economic and security impacts a telecommunications supply chain breach could cause, allies have taken actions to enable them to prohibit the deployment of Huawei and ZTE products and services in their 5G telecommunications networks.”
The official ban will be part of upcoming federal changes to the Telecommunications Act. Amendments will include mechanisms to prohibit the use of equipment and services from designated suppliers where necessary to protect Canada’s telecommunications system. Asked repeatedly by reporters why it took three years for the government to reach its decision, Champagne said this “has never been a race.”
Asked if there is evidence Huawei or ZTE equipment has been used here for data theft, Champagne didn’t answer directly. “This has been a process” to make the decision, he said, including consultations with Canada’s allies. He also cited findings from Public Safety Canada. More here.
The Administration’s Approach to the People’s Republic of China On May 26, 2022, America’s Secretary of State Antony Blinken delivered his long awaited speech at the George Washington University outlining the Biden Administration’s approach to the PRC. Summarising the strategy, he said it would be guided by three principles: “invest, align, compete.” Each includes key political and economic pledges, which in turn will have repercussions for British policymakers and business leaders.
Avalanche of hacked Xinjiang Police documents, images expose Chinese government abuse of Uyghurs A leaked cache of thousands of photos and official documents, titled “The Xinjiang Police Files,” reveal new information surrounding China’s detainment of its Uyghur population. An anonymous hacker allegedly downloaded and decrypted the secret files from a number of police computer servers in Xinjiang before handing them to Dr. Adrian Zenz, a U.S.-based scholar who has previously published research on Xinjiang.
The PLA’S evolving outlook on urban warfare: Learning, Training, and Implications for Taiwan The PLA’S evolving outlook on urban warfare: Learning, Training, and Implications for Taiwan[/vision_highlight] The People’s Liberation Army (PLA) has been increasing its study, training, and preparation for future urban warfare over the past decade. The PLA has limited experience with urban warfare and so often relies on observations of other militaries to inform its outlook. Among the drivers for this interest in urban warfare is that any Chinese campaign to force “(re)unification” with Taiwan could involve intense fighting in Taiwanese cities. The current edition of the Science of Military Strategy mentions an urban offensive (城市进攻) as a component of island operations (岛上作战) but does not elaborate on the conduct of such an offensive, likely because of the sensitivity of this scenario. This campaign could present a particular challenge, given that over 90 percent of Taiwan’s population lives in cities. Beyond the possibility of invading Taiwan, the Chinese Communist Party (CCP) is also concerned about terrorist threats, whether real and imagined, within China’s cities or against the security of Chinese citizens and businesses worldwide. Meanwhile, the conduct of urban counterterrorism has become the focus of several exercises and exchanges undertaken by the PLA and the People’s Armed Police (PAP).
This ISW (Institute for the Study of War) report explores the PLA’s history with urban warfare and considers several lessons from the PLA’s study of other militaries’ operations. ISW’s analysis examines the PLA’s outlook on new technologies and emerging capabilities for future urban warfare, discusses several relevant weapon systems and capabilities that the PLA is pursuing, and evaluates the training and recent exercises through which the PLA is seeking to improve its proficiency in urban warfare. This report concludes by raising questions for future research and includes several recommendations and considerations for US and Taiwanese policy responses. The US military can look to leverage lessons learned from its conflicts over the past twenty years and explore options to contribute to Taiwan’s capabilities for robust defense and resistance within its cities. The PLA’s progress in preparing for urban warfare will merit continued analytic attention; an improved understanding of these dynamics could inform US and Taiwanese initiatives to bolster deterrence.
Taipei, Taiwan
China’s Messaging on the Ukraine Conflict In the early days of Russia’s invasion of Ukraine, social media posts by Chinese diplomats on US platforms almost exclusively blamed the US, NATO and the West for the conflict. This new ASPI report (‘China’s messaging on the Ukraine conflict’) explores how social media is being used by Chinese diplomats to influence perceptions on the war between Russia and Ukraine. The report finds that China’s diplomatic messaging was distributed in multiple languages, with its framing tailored to different regions.
Chinese diplomats amplified Russian disinformation about US biological weapon labs in Ukraine, linking this narrative with conspiracy theories about the origins of Covid-19. Two examples taken from a publication in the China Daily of March 20, 2022:
“They blame China for leaking the novel coronavirus — but they have been doing the research on such viruses.”
“While running its bio labs worldwide, the US has also been fabricating lies in the global public opinion fields.”
Chinese state media mirrored these narratives, as well as replicating the Kremlin’s language describing the invasion as a ‘special military operation’. One example taken from state-owned China Global Television Network – CGTN on February 25, 2022:
Not surprisingly, Russia is the culprit in Western framing of the Ukraine crisis. Immediately after the Kremlin announced a “special military operation” in the Donbass region in eastern Ukraine, U.S. President Joe Biden forcefully condemned “Russia alone is responsible for the death and destruction this attack will bring” and “the world will hold Russia accountable.”
Without Washington’s relentless promotion of NATO’s expansion and fanatical instigation of Moscow-Kyiv tensions, a war would have never broken out in the region. The U.S. is instead the big boss behind endeavoring to manipulate Ukraine for American gains, and this eventually provoked Russia to strike back.
In the early stage of the conflict, tweets about Ukraine by Chinese diplomats performed better than unrelated content, particularly when the content attacked or blamed the West.
The report’s findings suggest that, in terms of its international facing propaganda, the Russia–Ukraine conflict initially offered the party-state’s international-facing propaganda system an opportunity to reassert enduring preoccupations that the Chinese Communist Party perceives as fundamental to its political security.
U.S. Citizen and Four Chinese Intelligence Officers Charged with Spying on Prominent Dissidents, Human Rights Leaders and Pro-Democracy Activists A U.S. citizen and four officials from China’s Ministry of State Security (MSS) were charged in an indictment, unsealed in federal court in Brooklyn yesterday, with conspiracy and other charges related to an espionage and transnational repression scheme. According to court documents, Wang Shujun, 73, of Queens, New York; Feng He, aka Boss He, of Guangdong; Jie Ji, of Qingdao; Ming Li, aka Elder Tang and Little Li, of Guangdong; and Keqing Lu aka Boss Lu, of Qingdao, allegedly participated in an espionage and transnational repression scheme in the United States and abroad. Wang was arrested on March 16, pursuant to a criminal complaint, and will be arraigned at a later date. He, Ji, Li and Lu remain at large.
“We will not tolerate efforts by the PRC or any authoritarian government to export repressive measures to our country,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “These charges demonstrate the Justice Department’s unwavering commitment to hold accountable all those who violate our laws in seeking to suppress dissenting voices within the United States and to prevent our residents from exercising their lawful rights.”
“As alleged, Wang acted as a covert intelligence asset in his own community, spying on and reporting sensitive information on prominent pro-democracy activists and organizations to his co-defendants, who are members of the Chinese government’s Ministry of State Security,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s indictment exposes and disrupts an operation by the PRC that threatens the safety and freedom of Chinese nationals residing in the United States on account of their pro-democracy beliefs and speech. Our office and our law enforcement partners will remain vigilant to thwart foreign espionage activities aimed at our citizens and residents.” “If anyone doubts how serious the Chinese government is about silencing its critics, this case should eliminate any uncertainty,” said Acting Executive Assistant Director Alan E. Kohler Jr. of the FBI’s National Security Branch. “The Chinese government’s aggressive tactics were once confined to its borders. Now, the PRC is targeting people in the United States and around the world. The FBI and its partners remain committed to combatting transnational repression.”
According to court documents, Wang is a well-known academic and author who helped start a pro-democracy organization in Queens that opposes the current communist regime in China. However, as alleged, since at least 2011, Wang has used his position and status within the Chinese diaspora and dissident communities to covertly collect information about prominent activists and human rights leaders on behalf of the MSS and PRC. As alleged in the indictment, He, Ji, Li and Lu acted as Wang’s handlers, directing Wang to target specific individuals and groups that the PRC considers subversive, such as Hong Kong pro-democracy activists, advocates for Taiwanese independence, and Uyghur and Tibetan activists, and obtain information on particular topics and matters of importance to the MSS. As alleged in the indictment, Wang communicated and provided information to the MSS, including to He, Ji, Li and Lu, by using encrypted messaging applications and emails, as well as during face-to-face meetings in the PRC. Wang would often memorialize the information he collected in email “diaries” to be accessed by the MSS. These “diaries” included details about Wang’s private conversations with prominent dissidents, as well as the activities of pro-democracy activists and human rights organizations. A search of Wang’s residence incident to his arrest revealed approximately 163 “diary” entries Wang wrote to He, Ji, Li and Lu and other MSS officials. Source: Department of Justice, May 18, 2022
The seal of the United States Department of Justice is seen on the building exterior of the United States Attorney’s Office of the Southern District of New York in Manhattan, New York City, U.S., August 17, 2020. REUTERS/Andrew Kelly/File Photo
Isolating Taiwan Beyond the Strait – Chinese pressure tactics in four democracies In its pursuit to isolate Taiwan, Beijing has adopted a variety of coercive actions such as disinformation, propaganda, and economic pressures. Additionally, the Chinese military presence surrounding the island is growing. Even so, China also seeks to isolate Taiwan in the international arena and within other third countries. As such, the conflict between China and Taiwan is becoming increasingly relevant beyond the Taiwan Strait, and affects societies and decision-makers inside other countries.
This report examines how China seeks to isolate Taiwan in four democratic countries: Japan, South Korea, Germany, and Sweden. It also analyses how these four countries have responded to Chinese efforts to isolate Taiwan, both at domestic and international levels. FOI, the Swedish Defence Research Agency, is one of Europe’s leading research institutes in defence and security. FOI is a government authority under the Ministry of Defence, and most of its activities are assignment-based.
CEIAS launches Center for CEE-Taiwan Relations The last couple of years brought a dynamic development of the relations between Taiwan and the countries of Central and Eastern Europe. Several countries in the region have emerged as European avant-garde in promoting deeper engagement with Taiwan. However, this newfound interest in engaging with Taiwan requires that mutual relations are underpinned by rigorous analysis and understanding of national and regional specifics. Lack of expertise could emerge as one of the key obstacles in the continued development of relations between Taiwan and EU member states, especially those located in the CEE.
Towards this end, CEIAS is launching the Center for CEE-Taiwan Relations, a new initiative and a specialized unit tasked with producing and disseminating expert knowledge necessary for ensuring sustainable development of relations between Taiwan and the EU, while having a special focus on the CEE countries. The Center’s activities will be dedicated to three key pillars – economy, political relations and security, and grassroots interactions – which we will investigate in collaboration with both European and Taiwanese partners.
One of the first activities under the Center for CEE-Taiwan Relations is the EU-Taiwan Tracker. The EU-Taiwan Tracker is a portal dedicated to providing comprehensive information about the development of relations between Taiwan and the 27 EU member states from January 2020 onwards. This tool is for anyone from the scholarly, policymaking, and journalistic community working on EU-Taiwan relations. Events are listed chronologically, with the latest news listed on the top. Events can be filtered by topic, country, or both. Each entry contains one or more links to English- and Chinese-language media sources. Data entries are updated on a weekly basis.
Orban’s Hungary: A Russia and China Proxy Weakening Europe On May 16th 2022, the European Values Centre for Security Policy published Orban’s Hungary: A Russia and China Proxy Weakening Europe. This report describes that today’s Hungary is adversarial to transatlantic interests and democratic values and purposefully undermines liberal democratic freedoms. Under Orban’s leadership, Hungary has embraced the efforts of authoritarian Russia and China to broaden and deepen their politico-economic influence throughout Central Europe. This way, Hungary has become the primary staging ground for Russian and Chinese intelligence and influence operations targeting countries in the wider region.
The One Belt One Road Initiative is fully in harmony with Hungarian interests, Prime Minister Viktor Orbán said on Thursday April 25, 2019, in Beijing, at talks with Chinese Prime Minister Li Keqiang / Photo: Balázs Szecsődi/PM’s Press Office
Because of its status as an ally of authoritarians and because of Orban’s revisionist agenda, Hungary is an active threat to the stability and safety of Central and Southern Europe. Despite a number of dangerous steps Orban has taken, almost no relevant political or state institution in Central Europe has openly stood up to his vision. In comparison to the earlier English version of this report, this new Czech version now also includes a chapter on current developments in Hungary in relation to the Russian aggression against Ukraine. Hungary and Russia allied against Ukraine as well. This alliance manifests among other things in these ways:
- Hungary announced it will not permit transport of weapons for Ukraine through its territory
- Viktor Orban vowed not to let Hungary engage in the war in Ukraine, he even based part of his political campaign on this promise
- In Hungary, media allied with Orban’s party Fidesz vehemently spread pro-Kremlin propagandist narratives targeted against the EU
- In his campaign, Viktor Orban actively promotes the Kremlin story about “something between Ukraine and Russia” that is not of European concern, he claims only he personally can guarantee “peace and stability” and that he will make sure Hungary does not become involved in a war that is not “ours”
- In his latest speech and in the announcement of victory in Hungarian parliamentary election, Viktor Orban called Volodymyr Zelenskyy an “adversary”
Moreover, efforts to map, uncover and face Orban’s authoritarian and antidemocratic agenda for Hungary and its region seem to have very little effect. Awareness of the situation is mainly raised by volunteers or minimally funded Hungarian democrats and their allies from both sides of the Atlantic. A key step for creating an efficient transatlantic liberal alliance against Orban and his party Fidesz would be to provide direct political, financial and technological support to democratic civil society in Hungary and its surroundings.
The involvement in the One Belt One Road initiative can bring benefits to both Russia and other countries, Chinese Foreign Minister Wang Yi said on Tuesday April 18, 2017, answering a question from a TASS correspondent. Source: The Russian news agency TASS (Информацио́нное аге́нтство Росси́и, abbreviated TASS or ТАСС), is a major Russian state-owned news agency founded in 1904. EPA/Wu Hong
Justice Department Sues to Compel a U.S. Businessperson to Register Under the Foreign Agents Registration Act Justice News – May 17, 2022: The Department of Justice today filed a civil enforcement action in the U.S. District Court for the District of Columbia, seeking to compel Stephen A. Wynn, a U.S. businessperson and hotelier who previously served as the CEO of Wynn Resorts, to register under the Foreign Agents Registration Act (FARA) as the agent of the People’s Republic of China (PRC) and a senior official of the PRC’s Ministry of Public Security (MPS). Wynn was advised to register as an agent by the department but declined to do so.
“The filing of this suit – the first affirmative civil lawsuit under FARA in more than three decades – demonstrates the department’s commitment to ensuring transparency in our democratic system,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Where a foreign government uses an American as its agent to influence policy decisions in the United States, FARA gives the American people a right to know.”
According to the complaint, from at least June 2017 through at least August 2017, Wynn contacted the then-President and members of his administration to convey the PRC’s request to cancel the visa or otherwise remove from the United States a Chinese businessperson who left China in 2014, was later charged with corruption by the PRC and sought political asylum in the United States. Wynn engaged in these efforts at the request of Sun Lijun, then-Vice Minister of the MPS. Wynn conveyed the request directly to the then-President over dinner and by phone, and he had multiple discussions with the then-President and senior officials at the White House and National Security Council about organizing a meeting with Sun and other PRC government officials.
During the time that he engaged in this conduct, Wynn’s company owned and operated casinos in Macau, a special administrative region in the PRC. The department alleges that Wynn acted at the request of the PRC out of a desire to protect his business interests in Macau.
This enforcement action is being handled by the Counterintelligence and Export Control Section of the National Security Division. Trial Attorney Nathan Swinton is litigating the case. Download USA v. Wynn Complaint
One of Wynn Resorts’ two Macau casinos: Wynn Palace / Source: South China Morning Post
China Pathfinder: Q1 2022 Update China’s leaders spent the first months of 2022 in damage-control mode, as a host of economic problems and new pandemic-related challenges piled up. With the entire city of Shanghai under a zero-COVID lockdown, the crackdown on technology firms ongoing, and the property sector deteriorating, good economic news was scarce. On the geopolitical front, Beijing’s ambiguous positioning on Russia’s invasion of Ukraine raised the prospect of secondary sanctions, amplifying the risk calculations for foreign businesses in China. Foreign capital, meanwhile, has been flowing out of China amid a mounting debate about whether the country is becoming “uninvestable.” Rhodium Group’s latest quarterly update with the Atlantic Council’s GeoEconomics Center indicates that China’s economic system has distinctly moved away from market economy norms this quarter.
Great Wall of Steel: China’s Global Campaign to Suppress the Uyghurs The Kissinger Institute is pleased to present Great Wall of Steel, China’s Global Campaign to Suppress the Uyghurs, the culmination of over two years’ work. Since 2018, global concern for Uyghurs has centered on internment camps where Beijing has forcibly “re-educated” between one and two million Turkic citizens of Xinjiang and, more recently, on the question of whether parolees from the camps are forced to work harvesting cotton and processing polysilicon. Global concern for the rights of Chinese Uyghurs has resulted in sanctions, a diplomatic boycott of the Beijing Olympics, and action against Chinese and foreign firms involved in forced labor supply chains.
To date, international censure of China has been based on how Uyghurs are treated within China itself. With Great Wall of Steel, the author proves that that focus, while intense, has been too narrow: China is pursuing, harassing, and detaining Chinese Uyghurs and Kazakhs around the world and returning them to China for punishment whenever possible. These refoulements are pervasive, tenacious, and often illegal. They reveal a Chinese diplomatic and policing capability that disregards sovereign borders and national and international laws in pursuit of security, as defined by Beijing.
Through his research, interviews, and travels in Russia, China, and Central Asia, the author has compiled the most thorough known database of worldwide Uyghur renditions. Sadly, we can be sure that his record is far from complete.
The author has gone where the evidence led him. He does not write for geopolitical reasons—he is not interested in blackening China’s eyes as part of the competition between China and the West. He has written this report only out of concern for the welfare of people targeted by China’s security ministries. The Mission of the Wilson Center’s Kissinger Institute is to ensure that informed engagement remains the cornerstone of U.S.-China Relations.
Source: NBC News
Warfare by another name In this firsthand look at Washington’s fight against Beijing’s global economic hybrid war a member of the Atlantic Council’s Gray Zone Task Force, housed in the Scowcroft Center’s ForwardDefense practice (and former chief of staff of the US Export-Import Bank) argues that the United States is struggling against its formidable adversary. But he offers a prescription for success, which includes streamlining an “uncoordinated bureaucracy in Washington” and adopting a “private-sector mindset” that would allow it to attract more business in countries that China is aggressively courting. Read more.
Export Control Regulations for Dual-Use Items (Draft for Feedback) The document, translated by the Center for Security and Emerging Technology (CSET) is China’s draft regulation on export controls on dual-use items. When finalized, it will replace existing, separate regulations governing export controls on missile-related dual-use items and on nuclear, biological, and chemical weapons-related dual-use items. The PRC Ministry of Commerce is soliciting public feedback on this draft regulation through May 22, 2022.
Strategic Competition in the Financial Gray Zone Over the past 10 years, the U.S. government has slowly reoriented its foreign and security policy from the fight against global terrorism toward strategic competition with Russia and China. This reorientation has been accompanied by a new examination of how strategic competition will impact the integrity and future stability of the U.S. economy and financial system. One of the most important elements of strategic competition is sub-threshold warfare (also called asymmetric, hybrid, or gray zone warfare), wherein strategic competitors seek to shape the geostrategic environment in their favor, from information operations to economic warfare—which includes such tools as illicit finance and strategic corruption. Strategic competitors present a clear economic and financial threat to the United States when they operate in the emerging financial gray zone, in which malign actors can take advantage of the U.S. financial system to further their aims and disarm the country internally. The U.S. government, along with its allies, has only begun to acknowledge the sweeping nature of the financial gray zone and to reposition itself to compete within it. Because adversaries exploit the seams between the internal and external policies and authorities, Washington must have greater insights into a complex operating system and better integrate data across the many relevant agencies—in a way, connecting the financial dots. As it develops this comprehensive picture, the U.S. government should develop stronger defensive and offensive policy tools to counter this emerging threat. You’ll find the new CSIS report here.
Source: CSIS
Declaration for the Future of the Internet On April 28, the United States and more than 60 global partners announced the “Declaration for the Future of the Internet” in response to the “trend of rising digital authoritarianism.” The declaration is a “political commitment among Declaration partners” to promote a more positive vision for the internet and technology. The declaration reaffirms the goal of having an open and free internet and outlines several principles that includes “commitments to: Protect human rights and fundamental freedoms of all people; Promote a global internet that advances the free flow of information; Advances inclusive and affordable connectivity…”. You can read the declaration here.
Chinese FDI in Europe: 2021 Update This report, from Rhodium Group and the Mercator Institute for China Studies (MERICS), summarizes China’s investment footprint in the EU-27 and the United Kingdom (UK) in 2021, analyzing the impact of the pandemic as well as policy developments in Europe and China. It finds that the nature of Chinese investment in Europe is changing. After years of being dominated by M&A, Chinese investment in Europe has become more focused on greenfield projects. In 2021, greenfield investment reached EUR 3.3 billion, the highest ever recorded value, making up almost a third of all Chinese FDI. In addition, it shows that Chinese venture capital (VC) investment is pouring into European tech start-ups. In 2021, Chinese VC investment in Europe more than doubled to the record level of EUR 1.2 billion. This investment was concentrated in the UK and Germany, and focused on a handful sectors including e-commerce, fintech, gaming, AI and robotics. Click here to read the full report.
Global Island: Sustaining Taiwan’s International Participation Amid Mounting Pressure from China China under Chinese Communist Party General Secretary Xi Jinping has ramped up political, economic, and military pressure on Taiwan. The roots of Beijing’s pressure campaign, including Xi’s personal interactions with Taiwan policy, go back decades. But recent events have deepened and intensified China’s efforts, which include seeking to block Taiwan from engaging the rest of the world as part of a comprehensive strategy to force Taipei to move toward unification with the mainland on Beijing’s terms. A new CNAS report explores trends related to Taiwan’s international participation and offers a framework for how Washington, Taipei, and interested allies and partners can respond to growing pressure from Beijing.
China will be deglobalisation’s biggest loser Russia’s unprovoked war against Ukraine has accelerated the division of the world into two blocs, one comprising the world’s democracies and the other its autocracies. This, in turn, has exposed the risks inherent in economic interdependence among countries with clashing ideologies and security interests. And although the coming deglobalisation process will leave everyone worse off, China stands to lose the most. Of course, China was headed towards at least a partial decoupling with the United States well before Russia invaded Ukraine. And it has been seeking to ensure that this process happens on its terms, by reducing its dependence on US markets and technology. To that end, in 2020 China unveiled its so-called dual-circulation strategy, which aims to foster domestic demand and technological self-sufficiency.
And yet, last year, China was still the world’s largest exporter, shipping US$3.3 trillion in goods to the rest of the world, with the US its leading export market. In fact, overall trade with the US grew by more than 20% in 2021, as total Chinese trade reached a new high. Trade with the European Union also grew, reaching US$828 billion, even as disagreements over human rights torpedoed a controversial EU–China investment agreement. That agreement had been born of the belief that Europe would maintain strategic neutrality in the Sino-American cold war, in order to reap the economic benefits of engagement with China. But if human-rights concerns were enough to convince the European Parliament not to ratify the deal, Russia’s war against Ukraine—which China has tacitly supported, and which has pushed the US and the EU closer together—seems likely to drive the EU towards a broader economic decoupling from China.
One cannot blame Western democracies or their autocratic adversaries for prioritising security over economic welfare. But they must brace for the economic consequences. And a middle-income autocracy like China will bear a far larger cost than rich democracies like the US and its European allies. More in this article in The Strategist.
Driverless vehicles move shipping containers at a port in Qingdao in eastern China’s Shandong Province, Thursday, Jan. 6, 2022. China’s politically volatile global trade surplus surged to $676.4 billion in 2021, likely the highest ever recorded by any country, as exports jumped nearly 30% over a year earlier despite semiconductor shortages that disrupted manufacturing. (Chinatopix via AP / The Associated Press)
Mapping China’s Rise in the Western Balkans China’s emergence as a power in the Western Balkans over the last decade is among the most significant geopolitical developments in Europe. As an element of Beijing’s wide internationalisation efforts to expand its global footprint, the country has been working to improve its position in several key sectors, such as energy and infrastructure. Moreover, in the last few years we have witnessed both an expansion and a widening of activities that go beyond the economy and beyond interaction with state institutions. There is now greater Chinese engagement in culture, academia, education, media, and even with a range of political parties and local government. China is also developing a wider constituency of interested partners within the countries of the region, to enhance the influence it carries there. Moreover, the broader persistent geopolitical impasse in the Western Balkans – most significantly exemplified by the stalled EU accession process and the developmental gap with the rest of Europe – entails continued attempts by many external, non-Western actors to position and embed themselves in the region to pursue their long-term goals. These have included stronger positioning and influence by Beijing in key sectors, such as energy and infrastructure, as well as broader positioning in society and politics.
The overall development prospects of countries in the region continues to suffer due to geopolitical uncertainty, incomplete access to the European market, persistent emigration, insufficient investment, and bad governance. This status quo is generating opportunities for countries like China to enter critical sectors. Moreover, Beijing’s policy of lending money with few explicit conditions creates a ‘debt trap’. Montenegro currently finds itself in such a trap, with a debt-to-GDP ratio of almost 100% with over half owed to China. These risks are further exacerbated by corruption and autocratic and non-transparent governance. China engages with Western Balkan states on a bilateral basis, but also through the “16 plus 1” framework, which brings together countries from Central and Eastern Europe to collectively interact with Beijing. Diplomatically, China has preferred to interact at the elite, state institutional level, but it is increasingly focusing on non-state, local, and civil society structures in the various states of the region. Importantly, China’s rising presence in the region and increasing geopolitical competition has led the West to respond with growing support for EU and NATO expansion, infrastructure support, and efforts to deepen cooperation with Western Balkan states in areas such as critical infrastructure and security. China’s appearance on the regional map has caught many politicians by surprise, while others have preferred to dismiss the importance of the trend due to a scarcity of reliable and accessible data points and information. Meanwhile, a surge of interest in the matter from national and international official institutions, academia, research centres, and private companies, has illustrated the rising need for a more structured, systematic, and long-term effort to collect, collate, and analyse Beijing’s entrance and advancement into the region. This mapping project attempts to begin to provide such data and information.
The war in Ukraine has the potential to introduce new political dynamics to the region of the Western Balkans. Major EU states such as Germany are already calling for the accelerated integration of that part of Europe into the EU and NATO space and these political voices are likely to multiply in the coming weeks and months. There is a distinct possibility of greater coordination between Russia and China in the region, further raising the geopolitical stakes. Moreover, policies of neutrality such as that of Serbia may become untenable as the global system divides into two large political and economic blocs.
Wang Yang, chairman of the Chinese People’s Political Consultative Conference, meets with Ivan Brajovic, former president of the Parliament of Montenegro, in Beijing, May 2018 (Liu Weibing / Xinhua / picture alliance)
ECFR’s mapping project provides brief overviews of China’s relations with six countries in the Western Balkans: Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia. It offers a complementary mixture of quantitative and qualitative approaches. The collection and collation of data on China is a challenge for a variety of reasons, meaning some aspects of individual country relations with China still require further research. Later iterations of the project will add to and update the initial contents. ECFR is grateful for the support and contributions of the organizations and individual experts that have assisted in the creation of this mapping exercise of these countries’ interactions with China.
Challenging China’s Trade Practices The U.S. views of China’s nonmarket innovation practices are increasingly pessimistic, as these practices persist and the United States and allies and partners have yet to develop fully effective responses to ensure that our companies and workers can compete on a level playing field. Core Chinese practices, such as forced technology transfer, restrictive market access, and industrial subsidies, have been a concern for U.S. policymakers since before China’s accession to the World Trade Organization (WTO). Yet, twenty years on, China has intensified rather than modified these practices and has failed to live up to its WTO accession promise of moving towards a free market economy. It has expanded its nonmarket playbook to include cyber theft of intellectual property, talent acquisition, exploitation of the open U.S. academic environment, and economic coercion. At the same time, China’s homegrown technology development presents new challenges to U.S. innovation leadership, particularly in emerging technology areas where Chinese capabilities are not always dependent upon transfers of technology from the United States.
Against the backdrop of heightened geopolitical tensions between the United States and China, competition in the technology and innovation domains has direct implications for U.S. national security. The Interim National Security Strategy of the Biden Administration notes that China “is the only competitor potentially capable of combining its economic, diplomatic, military, and technological power to mount a sustained challenge to a stable and open international system.” It highlights the strategic competition with China, arguing that “economic security is national security” and implicitly bringing longstanding economic concerns with China, such as their nonmarket innovation policies, under the national security umbrella.
As the United States seeks an effective strategy to manage the economic and technological competition with China, it will lean heavily on national security-focused defensive tools, i.e., export controls, inbound investment screening, and potentially new authorities related to outbound investment controls. It is important to recognize the limitations of these tools to address China’s nonmarket innovation practices writ large. The U.S. toolkit of national security-focused defensive tools is designed to address specific risks arising from discrete commercial transactions. These tools set clear rules around the types of technology that may be transferred, either through an export or an investment transaction, but not the commercial terms on which the transfer occurs. In contrast, many of the U.S. concerns about China’s nonmarket innovation practices involve technology that may be legally transferred to China, but U.S. firms are pressured to do so on terms that provide an unfair advantage to their Chinese competitors. The use of an export or investment control may therefore not be wholly responsive to concerns around nonmarket innovation practices in all instances, though they can be an important part of a broader strategy. More in CNAS April 14, 2022 report.
Global Security Forum 2021 This report examines the state of U.S. domestic divides, discusses their influence on foreign policymaking, and explores several scenarios where the intersection of a foreign policy crisis and a skeptical public is put to the test. It shows that domestic divides extend beyond partisan politics and that U.S. citizens see foreign policy through lenses that differ greatly depending on socio-economic status, age, rural versus urban location, and race. It also shows that there is nonetheless plenty of common ground among Americans when it comes to foreign policy, especially when considering short-term responses to crises, and among foreign policy professionals from across the political spectrum.
Today, no single foreign policy issue unites or divides Americans as the 9/11 attacks or the Vietnam War once did. Instead, domestic divisions have created an opportunity for U.S. adversaries. China has used its own brand of “whataboutism” to claim its “democracy” is just as good as the U.S. version.
Russia has used the last three election cycles to attempt to deepen rifts within U.S. society. Both assess that a weakened, inwardly focused United States is less likely to engage on the world stage. After a half-century of U.S. leadership, both hope that inward bent could mean weakened alliances, a gutted rules-based international order, and an unwillingness to push back on Chinese economic dominance or Russian expansionism.
A dirge for U.S. leadership is likely premature, however, for Americans are united in at least one opinion: the United States should lead. A February 2021 Pew Research Center survey showed that 87 percent of Americans think it is important for the United States to be respected abroad.1 CSIS’s own public survey showed similarly strong bipartisan support for U.S. global engagement, including 56 percent of people identifying as “Extremely Liberal/Progressive” and 57 percent of those identifying as “Extremely Conservative.”
Digging deeper into these polls, Americans disagree on how to lead and the appropriate priorities of that leadership. For example, divides exist on whether a robust military advantage is a necessary component of leading; 68 percent of Republicans say yes, but only 30 percent of Democrats agree. Similarly, a large majority of Republicans but a minority of Democrats believe the United States should attempt to limit the power and influence of China, even though an overall bipartisan majority supports defending Taiwan against Chinese interference.2 Republican and Democratic respondents also disagree on which issues are the top priorities. The September 2020 Chicago Council survey demonstrated few areas of priority overlap: whereas Democrats consider Covid-19, climate change, and racial inequality to be top threats, Republicans prioritize China, terrorism, and immigration.
In addition to taking a hard look at divisions and unity on foreign policy, this report seeks to understand to what extent these divisions do and should affect foreign policy decisionmaking. The U.S. public has limited channels to exert day-to-day control over policy, yet today’s engaged citizen still has an unprecedented set of opportunities to express opinions. Social media gives any person a voice, and algorithms designed to grab attention highlight the most extreme versions of those opinions. Politicians, who always have an eye on the next election cycle, are keenly aware of their constituencies’ views.
The balance, then, for elected leaders is between faithfully executing on the solemn duty to represent the will of the people and making unpopular decisions that are nonetheless necessary for the safety of the nation. Once that difficult decision is made, they must also ask the American people for support, even sacrifice, to accomplish the requirement to provide for the common defense.
In order to explore how policymakers might go about both making that decision and asking the U.S. public for support, U.S. foreign policy professionals participated in hypothetical future scenarios about Taiwan, an immigration crisis on the southern border, and a blockade on a major shipping route near the Suez Canal. The discussions centered on two questions. First, could experts across the political spectrum agree on a recommended course of action during a foreign policy crisis? Second, how would those experts convey to the American public the necessity of the planned steps? These scenario exercises, along with historical research and expert discussions, answered the question about how domestic divides might constrain freedom of movement for policymakers in defining the U.S. role in the world.
Cyberspace Strategic Outlook 2030 Horizon Scanning and Analysis International stability has been challenged in recent days. Peace on the European continent has been fundamentally shattered. The Alliance’s foundational commitment to the principles of individual liberty, democracy, human rights, and the rule of law also fully applies in the realm of emerging technological challenges. These evolving threats include those within the cyber domain, which increasingly challenge the NATO Alliance as part of the growing strategic competition in international security. This volume of edited papers is intended to help inform decision-makers so they better understand the critical features of, and differences among, the various cyber threats we face. Threat actors are increasingly seeking to destabilize the Alliance through the cyber domain by employing malicious cyber activities and campaigns below the threshold of an armed attack. The report, published by CCDCOE (the NATO Cooperative Cyber Defence Centre of Excellence), is here.
A Competitive Era for China’s Universities This CSET brief illuminates the scale of Chinese government funding for higher education, science, and technology by exploring budget and expense reports for key government organizations and 34 of China’s most elite “Double First Class” universities. Chinese political leaders view elite universities as key components of the country’s military modernization, economic growth, and soft power; a situation that presents security risks for international partners.
Implications for Cybersecurity in Western-Chinese Technology Decoupling Admiral Dennis Blair and Arthur Coviello discuss the recent report from the Multilateral Cyber Action Committee (MCAC) that addresses the cybersecurity implications of a technology decoupling.
Investor Redemptions from China Funds Hit Pandemic High Global investors’ confidence in China is at the lowest since the start of 2021. The bearish mood can be clearly seen in the data about redemptions from Chinese stock and bond funds. In the third week of March, global investors pulled out more than $3 billion from Chinese equities, the highest since the first week of 2021, according to the latest report from Emerging Portfolio Fund Research, which is owned by Informa and tracks fund flows and allocations. China bond funds saw a weekly outflow of more than $1 billion for the first time, EPFR data showed. The sizable capital outflow is in sharp contrast to the bullish consensus assessment of Chinese securities not long ago. From September to the first week of March, over $50 billion was pumped into EPFR-tracked China equity funds and $11 billion into Greater China fund groups, the report said.
One of the most important factors driving investors out of the Chinese market is “China’s refusal to condemn Russia’s invasion of Ukraine,” according to EPFR. China is one of the few major economies that declined to take a clear stance against Russia, which makes it a target for sanctions from the West. If imposed, such sanctions could add to the suffering of Chinese companies listed in the U.S., which already face the risk of delisting after failing to meet audit requirements in early March. More in this March 28, 2022 article in Institutional Investor.
How The U.S. Is Losing The Lithium Industry To China Australia and South American countries currently possess the world’s largest stores of raw lithium. However, it is another country – China – that controls the processing supply chain of the “petroleum of the future.” In fact, in 2020 alone, China produced 15 times more lithium than the United States. If the U.S. is to adapt to the effects of climate change, the nation will require an increase in electric vehicles (EV), the expansion of charging infrastructure, and electrification of the production industry. All of that, however, requires increased importation of lithium from abroad, and risks a growing dependency on foreign powers. The scope of the problem is massive. “It is estimated that the U.S. alone will need 500,000 metric tons per year of unrefined lithium by 2034 just to power EVs. The U.S. produces just a fraction of that today. The current global production of lithium in 2020 was about 440,000 metric tons of lithium carbonate equivalent (LCE, contains about 18% of pure lithium), and not all of that is in pure enough form for batteries,” says Chris Doornbos, president and CEO of E3 Metals Corp, a lithium extraction firm. In response, the Department of Energy is recommending the subsidization and promotion of domestic production of lithium, and the creation of lithium supply chains as well as a lithium recycling industry to ensure imported lithium remains in the local supply chain. (Department of Energy, June 2021; Forbes, January 11, 2022; Forbes, January 20, 2022)
Batteries with anodes made of lithium metal have the potential to hold much more energy than their counterparts used in today’s lithium-ion batteries. (Photo by Bjoern Wylezich | Shutterstock.com)
Rare Earths, Scarce Metals, and the Struggle for Supply Chain Security Alerted to their vulnerability on rare earths (REEs) when China threatened to withhold supplies to Japan in September 2010, industrialized countries began to be concerned with developing alternate sources. For Japan in particular, REEs are indispensable to the production of the catalytic converters of the automobile industry that is a mainstay of the Japanese economy. They are also components of high technology devices that include permanent magnets, rechargeable batteries, smart phones, digital cameras, light emitting-diode lights, clean energy, and fighter planes. Although found in many places in the world outside of China—several African and Latin American countries, Canada, the western United States and Vietnam, among others—and not actually rare, the mining and refining processes of the seventeen entities that are classified as REEs had gradually been ceded to the People’s Republic of China (PRC). The process is highly labor intensive and generates significant pollution, especially since REEs are often found in conjunction with radioactive substances. China with its lower wages and more lax environmental laws proved an attractive alternative that companies there were eager to take advantage of.
In the United States, existing concerns were magnified by China’s increasingly aggressive military posture, the pandemic-induced economic downturn that revealed U.S. dependence on the PRC for even face masks and personal protective equipment, and a commitment to combat climate change by transitioning from fossil-fueled cars to electric vehicles (EVs). In the waning days of the Trump administration, Congress passed a pandemic aid spending package that included over $800 million to fund research on rare earths and strategic minerals that advocates hoped would counteract Chinese dominance over the sector. In addition to providing incentives for research and development on REEs and scarce metals, the law requires the U.S. Geological Survey to forecast metals demand much as the Energy Department forecasts oil demand. Leaving no doubt as to the aim of this enhanced interest, a clause in the bill requires an annual report from the Director of National Intelligence on China’s overseas mining investments. The bill was hailed for its potential to refresh investment in renewable energy after the pandemic downturn, and as a “bipartisan win and a watershed policy for a U.S. mine-to-magnet supply chain.” Funding does not always translate into results but, as evidenced by numerous reports in mining industry publications, the grants definitely incentivized research. Among other achievements, University of West Virginia scientists working under a National Energy Technology Laboratory grant announced a breakthrough on the partial recovery of REEs from Appalachian coal resources, and Wayne State University researchers unveiled a new process for extracting REEs from fly ash. Fears that the Biden administration, with its greater commitment to environmental protection, would be less concerned with critical mineral supplies proved largely unfounded.
In February 2021, Executive Order 14017 directed the secretaries of Commerce, Energy, and Defense to submit reports within 100 days identifying risks in the supply chain for critical minerals and other identified strategic materials including rare earth elements, as determined by the Secretary of Defense, and policy recommendations to address the risks. The weighty hundred day report, released in June, found inter alia that surging domestic production of REEs and critical metals had not kept pace with the rapid expansion of the Chinese economy, leading to an equally substantial increase in China’s net import reliance for strategic and critical materials. Increased demand for cobalt, copper, lithium, platinum group metals and REEs and other materials resulted in stepped up Chinese efforts to capture the entire value chain for such technologies as permanent magnets, batteries, and semiconductors. FPRI, March 30, 2022.
Want The US Win Against Russia And China? Fill The Top National Security Job You’ve Never Heard Of In response to Russia’s deadly invasion of Ukraine, the US and allies have applied “unprecedented” sanctions and export controls against Russia. Those include a ban on semiconductors developed with US technology and the addition of 51 Russian military end users to the Department of Commerce’s Bureau of Industry and Security (BIS) Entity List. “We are choking Russia’s access to technology that will sap its economic strength and weaken its military for years to come,” President Biden said during his State of the Union address. These trade restrictions are an important tool to degrade Russia’s cyber capabilities, just as they can be used to prevent other adversaries, namely China, from stealing and exploiting US tech. But can the US develop and apply these restrictions with the key post overseeing this bureau still sitting vacant? Probably not.
For an example of the latest national security fallout, consider a recent report from leading analysts for semiconductors, Credit Suisse, suggesting that Apple is considering chips from Chinese military fab YMTC for its iPhone 14. Given that Apple prides itself on security built into its silicon, it’s hard to imagine why the world’s most valuable company would risk compromising its value proposition—if only to put price pressure on other chip vendors like Samsung and Kioxia. Iain Morris at Light Reading reckons that the People’s Republic of China may be nudging Apple to use chips from its national champion. Given that Apple reported about $68 billion in sales from the PRC last year and 70% growth, it may be an offer that Apple can’t refuse. “YMTC’s presence in the best-selling smartphone would look about as welcome as a Gazprom pipeline through Germany does to opponents of Russia,” notes Morris. Any partnership with YMTC should have been off the table years ago. An effective BIS leader would have designated YMTC for the Military End User list, if not the Entity List, as dozens of national security experts, the White House, Congress and others have recommended. Not having a boss at the helm gives BIS cover not to make these critical decisions.
BIS is probably the most important agency Americans have never heard of. Responsible for developing and implementing export controls, the BIS is a frontline defense to prevent adversaries from acquiring sensitive technologies and weaponizing them against the United States. More than seven months ago, President Biden nominated Alan Estevez as Undersecretary for Industry and Security. But the post still remains vacant as Mr. Estevez awaits a confirmation vote in Congress. This delay comes on top of the already five years that have passed since there has been a confirmed BIS Under Secretary. The BIS has become more prominent amid the United States’ escalating competition with China, which seeks to dominate the global semiconductor industry. MIT’s Technology Review reported this month that China’s “decade-long quest to become a cyber superpower is paying off,” which is “driven right from the very top” of the Chinese Communist Party.
Similarly, a Pentagon supply chain security report released this month cautions: “The migration of semiconductor manufacturing to the Asia-Pacific region, and the subsequent decline in domestic manufacturing, represents a substantive security and economic threat for the United States and many allied nations.” The principal threat, specifically, is a Chinese conquest of Taiwan, responsible for an estimated 92% of the world’s most advanced semiconductor manufacturing. Stopping China’s ambitions to dominate the semiconductor market is also critical to diminishing Russia’s military strength. Russia purchases about 70 percent of its chips from China. With growing resolve, lawmakers from both sides of the aisle both acknowledge the need for competitive advantage over war-making adversaries like Russia and China. “If there’s any subject that unifies the most conservative Republican and the most liberal Democrat, it’s a deep skepticism of China and a motivation to ensure U.S. economic competitiveness,” CNBC reported last month.
Yet, despite this bipartisan consensus, Congress has yet to hold a vote to fill this post, undermining an effective export control regime. This delay begs the question: How can lawmakers stress the need to address Russia’s and China’s aggression on the one hand, and simultaneously hold up one of our nation’s key appointees on the other? By all accounts, Mr. Estevez is an ideal choice to head the BIS. More in this March 29, 2022 article in Forbes.
UK ministers quietly approve Chinese microchip factory takeover The U.K. government has quietly approved the controversial sale of a Welsh microchip factory to a Chinese-owned firm. Ministers have decided not to intervene in the takeover of Newport Wafer Fab, which makes semiconductors, following a review by the government’s national security adviser, Stephen Lovegrove. More than six months after he was asked to examine the sale, Lovegrove concluded there were not enough security concerns to block it, according to two government officials. The decision has already caused alarm among security experts and backlash from Tory MPs who believe the government is employing too narrow a definition of national security.
Tom Tugendhat, the chairman of the House of Commons foreign affairs committee, said: “It’s not clear why we haven’t used our new powers under the National Security and Investment Act to fully review the takeover of one of our leading compound semiconductor companies.” He added: “This is an area where China is sinking billions to compete. The government has no clear strategy to protect what’s left of our semiconductor industry.” Iain Duncan Smith, a former Conservative leader and a long-standing critic of the Chinese government, said the decision was “ridiculous.” “Kwasi Kwarteng needs to stand up for access to key technologies in the West which China is determined to get control over,” he said, referring to the the U.K.’s business secretary. Duncan Smith warned: “If the government goes down this road, it will become yet another step in the pathetic process of appeasing China who right now is supporting Russia and plans to pose a direct and deliberate threat to the West’s access to microchips and other key components for electronic equipment.”
No.10 Downing Street said it did not comment on national security assessments. An official at the Department for Business, Energy and Industrial Strategy said: “We reserve the right to intervene under National Security and Investment Act if there are national security concerns.”
The decision is likely to spark fresh concern over the role of Chinese-linked firms in crucial British industries. Newport Wafer Fab is the U.K.’s largest semiconductor plant. Semiconductors, also known as microchips or chips, are an essential component of electronic devices. Nexperia, a Dutch subsidiary of the Chinese technology company Wingtech, engineered a takeover of Newport Wafer Fab last spring despite calls for Kwarteng to intervene at the time. Politico, April 1, 2022
Nexperia’s HQ in Nijmegen, The Netherlands / Source: Novio Tech Campus
Ukraine intelligence accuses China of hacking days before invasion: report Ukrainian intelligence suggests that China executed a major cyberattack against Ukraine’s military and nuclear facilities just days before Russian forces invaded the country, according to The Times. According to Ukrainian intelligence reports, Chinese state-backed hackers attempted to infiltrate and hack over 600 websites belonging to the Ukrainian government and other key institutions, including Ukraine’s defense force, the national bank and the railway authority. Hackers reportedly intended to target and disable Ukrainian defense and critical infrastructure. See also The Hill.
China Research Group Briefing: Takeover of Newport Wafer Fab
Why does Newport Wafer Fab matter – to both the UK and China? Key points:
- Newport Wafer Fab is a silicon and compound semiconductor foundry in Wales which was bought in July 2021 by Chinese-owned firm Nexperia. On 1 April 2022, the Government said “no decisions” have been made on its national security review of the takeover.
- As well as being the UK’s largest semiconductor plant, Newport Wafer Fab was one of the anchor companies for the UK’s first compound semiconductor innovation cluster, CSConnected.
- As the chip foundry for CSConnected, NWF was a partner in at least 14 Innovate UK programmes to develop gallium nitride (GaN) and photonics devices, including a project to develop high-frequency GaN designs for 5G defence radar systems.
- China’s 14th Five Year Plan (2021-2025) specifically identifies compound semiconductors as an area where China could take the lead in a field where it isn’t as far behind as it is in conventional silicon-based chipmaking.
- Nexperia is owned by the Shanghai-based Wingtech. Almost 30% of Wingtech’s shares can be traced back to the Chinese government entities, investment screening specialists Datenna found.
- Shanghai’s 2021-2025 Science & Technology Plan focuses on building the silicon carbide and gallium nitride compound semiconductor industry, with ambitions for a “silicon carbide valley”.
- March 2021: Chinese-owned firm Nexperia installed two of its directors on the board of Newport Wafer Fab following a “contract dispute”.
- May – June 2021: The Foreign Affairs Committee wrote to BEIS twice expressing concern over the deal. The Secretary of State for BEIS, Rt Hon Kwasi Kwarteng MP, declined to intervene and stated that it is for the Welsh Government to decide on matters of economic development.
- July 2021: 100% of shares of Newport Wafer Fab were acquired by Nexperia for £63m. Nexperia is 100% owned by Chinese firm Wingtech. 30% of Wingtech’s shares can be traced back to Chinese government entities. Given semiconductors have been designated as a strategic industry in China, the industry is subject to a high level of state influence.
- July 2021: The Prime Minister agreed to a review led by his national security adviser, Sir Stephen Lovegrove.
- August 2021: A British consortium of nine companies claimed they were willing to step in with up to £300m of investment if the deal was blocked.
- January 2022: The National Security and Investment Act comes into force, giving the government powers to scrutinise and intervene in business transactions, such as takeovers, to protect national security. Semiconductors fall under ‘Advanced Materials’ – one of the 17 security-critical sectors.
- April 2022: Politico reports that the NSA has concluded that there were not enough security concerns to block it. The Government responds that it is still “considering the case and no decisions have been made”. It is not clear if the deal has been officially “called in” under the National Security and Investment Act.
More in CRG’s Briefing.
Former GE Power Engineer Convicted of Conspiracy to Commit Economic Espionage On March 31, 2022, a federal jury convicted a New York man of conspiracy to commit economic espionage following a four-week jury trial. According to court documents and evidence presented at trial, Xiaoqing Zheng, 59, of Niskayuna, was employed at GE Power & Water in Schenectady, New York, as an engineer specializing in sealing technology. He worked at GE from 2008 until the summer of 2018. The trial evidence demonstrated that Zheng and others in China conspired to steal GE’s trade secrets surrounding GE’s steam and gas turbine technologies, knowing or intending to benefit the People’s Republic of China and one or more foreign instrumentalities, including China-based companies that research, develop, and manufacture parts for turbines.
“Zheng conspired to steal trade secrets from his employer, GE, and transfer this information to his business partner in China, so they could enrich both themselves and companies receiving support from the PRC government,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This is the kind of exploitation of our economy and open society that the Department will continue to counter relentlessly.” “Today’s verdict holds Xiaoqing Zheng accountable for betraying his employer and trying to help China cheat in the global marketplace,” said U.S. Attorney Carla B. Freedman for the Northern District of New York. “With our law enforcement partners, we will continue to investigate and prosecute individuals who connive to steal trade secrets and valuable technology from the innovative companies doing cutting-edge work in our district.” “Those who conspire to steal technology from a U.S. business and transfer it to China can cause tremendous damage,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “Good-paying jobs could be lost, and communities can suffer. These actions help China become more of a threat to our national security. This is why the FBI puts so much effort into investigating cases of economic espionage.” “Dr. Zheng used his status as a trusted engineer with GE to conspire to commit economic espionage on behalf of the People’s Republic of China,” said Special Agent in Charge Janeen DiGuiseppi of the FBI’s Albany Field Office. “This conviction should send a strong message that the FBI will continue to vigorously investigate economic espionage cases and pursue prosecution in partnership with the United States Attorney’s Office to ensure the protection of American technology and American jobs.”
Sentencing is scheduled for Aug. 2 in Albany before U.S. District Judge Mae A. D’Agostino. Zheng faces up to 15 years in prison, a fine of up to $5 million, and a term of supervised release of up to three years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. The jury acquitted Zheng of two counts of economic espionage and two counts of trade secret theft. The jury could not reach a verdict on one count of conspiracy to commit trade secret theft, two counts of economic espionage, three counts of trade secret theft, and one count of making a false statement to the FBI. This case was investigated by the FBI, with assistance from the Homeland Security Investigations (HSI) Buffalo Field Office. The case was prosecuted by Assistant U.S. Attorneys Rick Belliss and Emily C. Powers for the Northern District of New York, and Trial Attorney Matthew Chang of the National Security Division’s Counterintelligence and Export Controls Section.
Exporting Censorship: The Chinese Communist Party Tries to Control Global Speech about China The National Security Institute at George Mason University’s Scalia Law School is excited to publish, “Exporting Censorship: The Chinese Communist Party Tries to Control Global Speech about China”. This NSI Law and Policy Paper is the latest in a series of papers and programs designed to provide educational resources and realistic solutions to China’s increased global power.
This Law and Policy Paper:
- Summarizes the Chinese Communist Party’s effort to export its system of censorship to control how the rest of the world speaks and thinks about China;
- Details how China has been using economic pressures and extraterritorial laws to suppress and punish unfavorable narratives about China around the world;
- Identifies key elements of the Chinese Communist Party’s campaign to subvert free speech abroad and censor narratives inconsistent with its ambition to build a new global order with China at the center; and
- Proposes actionable steps to raise awareness of and to counter the Chinese Communist Party’s campaign to censor narratives that do not support China’s geopolitical ambition.
The Supply Chain Crisis Is About to Get a Lot Worse THE SUPPLY CHAIN is in chaos—and it’s getting worse. Air freight warehouses at Shanghai Pudong Airport are log-jammed as a result of strict Covid testing protocols imposed on China’s biggest city following a local outbreak. At the city’s port, Shanghai-Ningbo, more than 120 container vessels are stuck on hold. In Shenzhen, a major manufacturing hub in the country’s south, trucking costs have shot up 300 percent due to a backlog of orders and a shortage of drivers following the introduction of similar Covid restrictions. Major ports the world over, which used to operate like clockwork, are now beset by delays, with container ships queuing for days in some of the worst congestion ever recorded. The list goes on.
More than a million containers due to travel to Europe from China by train—on a route that goes through Russia—must now make their journey by sea as sanctions bite. Russia’s invasion of Ukraine has also severed key supply lines for nickel, aluminum, wheat, and sunflower oil, causing commodity prices to skyrocket. Countries in the Middle East and Africa that rely on produce from Ukraine are likely to experience serious food shortages in the coming weeks and months. Some European automotive production lines have cut their output due to a shortage of wiring normally sourced from factories in Ukraine. If the pandemic, which triggered a surge in purchasing of goods, caused the global supply chain to buckle, Russia’s invasion of Ukraine and China’s continuing zero-Covid policy risk breaking it completely.
The supply chain is too complex, interconnected, and fragile to be made completely immune to shocks, especially ones as seismic as a global pandemic or a major war. But a new reality is forcing companies to adopt new strategies to keep goods moving. In this reality, backlogs and breakdowns are the new normal, which makes getting ahead of disruptions as early as possible more important than ever.
“We used to occasionally have black swan events,” says Richard Wilding, professor of supply chain strategy at Cranfield University in the UK, referring to rare and hard-to-predict occurrences that have major impacts. “The problem at the moment is we have a whole flock of black swans coming at us.” Wilding says managing a supply chain used to involve 80 percent dealing with predictability and 20 percent coping with surprises, numbers that have now flipped. And he says a growing number of companies are now using tools that provide greater visibility into the flow of goods, and which can sometimes predict potential choke points. “You effectively need to have continual monitoring,” he says. In an age when everything is connected, the global supply chain—a mess of transportation routes connecting commodities to manufacturers to buyers—has until recently remained alarmingly analog. That was manageable in the before-times, but the age of constant supply chain disruption is sending companies scrambling for more data.
The war in Ukraine, meanwhile, is already delaying or cutting off supplies of materials and products needed by companies that make cables, seat covers, and other automotive parts in nearby countries, including Moldova and Belarus. A November 2021 study published by the consulting firm McKinsey found that 93 percent of companies surveyed have plans to make their supply of materials and products more resilient and agile, with many looking to diversify by “on-shoring” or “multi-shoring” production. In simple terms, this means using several supplies distributed geographically and across the supply chain to spread the risk of disruption. But the same report found that just 2 percent of these firms were aware of the risks faced by companies further up the supply chain. An automaker, for example, might understand the risks facing the companies that supply it with components, but be unaware of the challenges facing the companies that manufacture the electronic chips used in those products. That’s a problem when new issues are likely to pop up in the weeks and months ahead, as more contagious strains of Covid test China’s zero-tolerance policy and the crisis in Ukraine continues.
Willy Shih, a professor at Harvard Business School, who researches manufacturing and supply chains, expects China to be hit by further shutdowns and restrictions that strain production and shipping lines as new outbreaks flare up across the country. “I think it’s just the tip of the iceberg,” Shih says in reference to the recent lockdown of Shenzhen. “It’s going to depend on where new infections pop up, but it’s clear that it is in a lot of places now. And they do not have an exit strategy.”
In a notable shift, Chinese president Xi Jinping told a meeting of the Politburo last week that China must “minimize the impact of the epidemic on economic and social development,” according to an official transcript. This is already translating into a less all-or-nothing approach to containing the virus, with Shanghai, for example, so far avoiding a full lockdown in favor of localized restrictions. Shih says the key challenge in trying to manage supply chain risk by mining data is that there are inevitable blindspots. “There are so many different players in the chain,” he says. This complexity, he adds, makes it hard to gather and synthesize all the data needed to build a complete picture.
Many of the global economic ripple effects of Russia’s invasion of Ukraine won’t be felt for weeks or even months. Russia is, for instance, one of the world’s largest exporters of fertilizer, accounting for about 14 percent of the global supply. Fertilizer prices, which were already trending upward, are now 40 percent higher than they were prior to the Ukraine invasion, and will likely rise further as the global supply chain struggles to adjust to yet more disruption—which in turn will place further pressure on food production across the world.
And some of those knock-on effects may seem far removed from their cause. Wilding at Cranfield University says the price of tomatoes may spike in the coming weeks because some agricultural producers have switched to producing grain, which requires less fertilizer. “This interconnectivity and these parallel interactions will start going across the network,” he says.
Companies may try to make their supply lines more resilient, but according to William Reinsch, an expert on foreign trade at the Center for Strategic and International Studies, a think tank in Washington, DC, ideas about disentangling supply chains entirely, by moving US manufacturing out of China, for instance, are fanciful. “The connections are too deep and too great. They aren’t going to vanish entirely,” he says. Part of the problem is that the supply chain was already being stretched by trade and geopolitical tensions. “It’s the perfect storm, between Covid, the war, trade turmoil, and the growing antagonism between the US and China on economic issues,” says Reinsch. More in this March 28, 2022 article in Wired.
Russia’s War on Ukraine and China’s ‘(Un)Friendly Neutrality’ Commenting on Beijing’s official stance on Russia’s war on Ukraine, Li Keqiang, the premier of the State Council of the People’s Republic of China, stated on March 11 that “China has always conducted an independent and peace-loving foreign policy developing its bilateral relations [with Russia and Ukraine] without hurting anyone’s interests.” He went on to say that “China will always develop relationships with other partners based on mutual respect, mutual profit, and mutually beneficial results” (RIA Novosti, March 11).
Earlier, Wang Wenbin, an official representative of China’s ministry of foreign affairs, said that “China and Russia will continue normal trade cooperation, which complies with the spirit of mutual respect, equality and mutual benefit” (1prime.ru, February 28). A very similar sentiment came from the head of the China Banking and Insurance Regulatory Commission (CBIRC), Guo Shuqing, who affirmed that China is not planning to join any anti-Russian sanctions and aims to “maintain normal financial cooperation with all parties” (RIA Novosti, March 2).
Despite this friendly rhetoric, however, China’s stance might not be as “friendly neutral” on Russia’s actions as it may seem. China’s actions present a very different picture, visible in four main ways.
First, Beijing’s changing rhetoric. Instead of sticking with the “special military operation” term used by Moscow—the denial or questioning of which is now penalized by law in Russia—Chinese leader Xi Jinping for the first time openly called Russian actions “a war” (Nikkei, March 9). Even though small, this episode is highly indicative, potentially signifying a shift in China’s official position.
Second, China’s unfriendly measures in the financial and economic domain. In early March, the China-led Asian Infrastructure Investment Bank (AIIB), frequently viewed as an institution rivaling the World Bank, took a decisive step: having referred to the events in Ukraine as the “war in Ukraine” (AIIB Statement, March 3), the AIIB subsequently suspended all transactions and financial operations related to Russia and Belarus. In its statement, AIIB also announced it was putting all financial functions related to Russia and Belarus under review—no further explanation was provided (Rosbalt, March 4).
Third, China’s unfriendly measures in the realm of technological restrictions. The Chinese government has refused to provide Russia’s airlines with essential spare parts and components indispensable for its operations. This information was officially confirmed by Valery Kudinov, one of the representatives of the Federal Air Transport Agency (Rosaviatsiya). In his official statement, Kudinov expressed deep concern and disgruntlement with the situation, stating that Russia will try to approach other countries, such as India and Turkey (Rosbalt, March 10). Notably, about 80 percent of the currently operated Russian planes are of foreign origin (BBC—Russian service, February 26). Since the EU and the US have banned providing spare parts, components and aviation software to Russia, much of the Russian commercial aviation will soon be exhausted and flying in Russia will become dangerous (Svoboda.org, March 7).
Another notable blow came from the Chinese producers of advanced electronics. Specifically, Huawei and Xiaomi announced their decision to reduce supplies of smartphones to the Russian market, based on “related risks and uncertainties”—the announcement was made after Apple and Samsung banned sales of their products to Russia. According to a former top official of Xiaomi, China’s decision to take this step is likely to be motivated by fear that the Russian market will lose attractiveness as a result of US sanctions (due to decreasing purchasing power among Russian consumers), with consequences becoming “much more grave than in the case of Iran” (Kommersant, March 10). Despite Kremlin’s propaganda and import substitution rhetoric, the Russian market is heavily dominated by Chinese smartphone-producing brands, which hold a 60 percent share (Epravda.com.ua, March 9).
Fourth, China’s evasiveness about imports of Russian natural resources. Russia, which has been increasingly tuning its foreign economic policy in line with its “Pivot to Asia” strategy, is confident that whatever happens, the export of natural resources will remain a bridge between China and Russia. Indeed, some Chinese moves corroborate this hope. Namely, on February 25, the Chinese media announced that Heilongjiang and Guangdong provinces are strengthening ties with regions in Russia’s Far East in lumber and timber production (News.cn, February 27). Moreover, according to Russian sources, large Chinese companies, including, among others, Aluminum Corp. of China, China Petrochemical Corp., China National Petroleum Corp. and China Minmetals Corp., are now conducting talks with large Russian businesses and natural monopolies (such as Rusal and Gazprom) with regards to acquiring shares (Gazeta.ru, March 8). More in Jamestown’s Eurasia Daily Monitor of March 21, 2022.
Understanding Global Disinformation and Information Operations The Australian Strategic Policy Institute’s International Cyber Policy Centre (ICPC) released their ‘Understanding Global Disinformation and Information Operations’ website and companion paper. This project, led by ASPI ICPC’s Information Operations and Disinformation team, provides a visual breakdown of publicly-available data from state-linked information operations on social media. Data sets from Twitter’s Information Operations Archive were analyzed to see how each state’s willingness, capability and intent has evolved over time. By making these complex data sets available in an accessible form, the project is helping to broaden meaningful engagement on the challenge of state actor information operations and disinformation campaigns for policymakers, civil society and the international research community. Policymakers and researchers can now consistently compare the activity, techniques and narratives across each operation, and compare what states do differently from each other and how their activities change over time.
The Distortion of UN Resolution 2758 and Limits on Taiwan’s Access to the United Nations The German Marshall Fund released a new report on a massive pressure campaign by China to coerce international organizations and even U.S.-based think tanks into altering their language and references to Taiwan in conferences and studies. (China claims Taiwan, an independently governed democracy, as its own territory.) The authors list examples, including an instance when the Nuclear Threat Initiative and the Stimson Center “bowed to [Chinese] pressure” on how they reference Taiwan on their websites “to avoid being barred from participation in U.N. conferences and losing access to the U.N. and its affiliated agencies, which are essential to their work.” Read the full report here.
Source: Nations Online Project
The China Factor in Tech Export Controls Against Russia Technology export controls have taken a prominent place in the response of the United States and its allies to Russia’s invasion of Ukraine. By applying the so-called Foreign Direct Product Rule (FDPR) to Russia, the U.S. cuts off Russian customers not only from U.S. technology but also from foreign-produced items that contain or were developed with controlled U.S.-origin technology or software. The Biden administration imposed one FDPR on Russian military end users and one Russia-wide FDPR (the latter excludes some low-technology consumer goods). U.S. allies and partners that are also major tech producers, including the EU, Japan, South Korea, and Taiwan, have backed the United States’ measures and supplemented them with their own restrictions. In addition, by pulling out of the Russian market, powerful tech firms like Apple contribute to Russia’s increasing technological isolation.
The sweeping tech controls will likely impose severe costs on the Russian military and economy. For some time, Russia has intensified its efforts to develop a domestic high-tech industry. With this push, the government aimed to diversify the Russian economy away from natural resources, while also making the country technologically more self-sufficient. But Russia’s tech economy bid has produced mixed results. Russian companies have successfully developed some homegrown solutions, including messenger services, social networks, and search engines. Russia has also made some progress in developing its own mobile operating systems and cloud services. However, in other areas, like semiconductors and telecommunications equipment, the country remains highly dependent on imports. The United States and its allies now target these dependencies.
While the breadth and reach of the U.S. technology controls against Russia are unprecedented, their design was visibly inspired by previous measures imposed on China’s tech giant Huawei. The telecom equipment manufacturer has come into the U.S. government’s crosshairs due to security concerns regarding its 5G technology, the evasion of sanctions against Iran, and allegations of intellectual property theft. In 2020, the Trump administration used the FDPR to cut Huawei off from semiconductors, after the company had successfully circumvented some less restrictive measures. Reportedly, the FDPR significantly curtailed Huawei’s business operations and profits. More in the March 8, 2022 issue of The Diplomat.
China’s Plan for Digital Dominance Digital transformation is all the craze in China. Even the venerable Kweichow Moutai distillery now talks of the new digital processes necessary to brew a smarter liquor. But all of this only reflects the popularization of a long-running Communist Party initiative of far greater strategic significance. Over the past two decades, General Secretary Xi Jinping has been at the center of party efforts to create a comprehensive digital strategy of immense proportions, known as Building Digital China (建设数字中国), or more often simply Digital China. While sounding much like an industrial strategy, Digital China is never described as such internally. In broadest terms, it is a major strategic decision made by Xi Jinping in the aftermath of the 18th Party Congress in 2012 to digitally transform the nation. For the more technically minded, it is the overall strategy for national informatized development in the new era. Although mostly unknown in the West, Digital China has enormous implications for China’s developmental path, great-power competition, and the norms that will undergird the international system for decades to come.
As a concept personally tied to Xi, one might argue that not only has he made Digital China a key to national success, but that Digital China has also contributed to his individual success, as the concept has tracked his rise for more than two decades. Xi first adopted the precursor concept of Digital Fujian from a local academic while serving as deputy party secretary and governor of that province in 2000. It was originally conceived as a simple effort to use new and emerging digital technologies to improve local governance and improve economic efficiency — in essence, China’s first experiments in e-government. Xi Jinping’s Digital Fujian would evolve and expand over the next 20 years before finally reemerging as the party’s vision for a fully informatized Digital China: a sharp weapon that empowers the nation (improved national competitiveness) and a spring rain that benefits the people (improved operating efficiency of society).
Surprisingly, a strategic initiative of this size and scope has progressed mostly unnoticed in the West. Perhaps more surprising, even the most concrete elements of the strategy remain obscure outside China. At the onset of the pandemic, Xi Jinping directed the Communist Party to accelerate an infrastructure campaign of epic proportions in support of Building Digital China. This campaign, known in China as New Type Infrastructure (新型基础设施), is to receive an estimated 17.5 trillion yuan (nearly $2.7 trillion) over five years exclusively for the purpose of digitally transforming traditional infrastructure and building new digital infrastructure. As outlined in April 2020 by the National Development and Reform Commission, the state’s top macroeconomic planning authority, New Type Infrastructure falls into multiple levels and categories including the construction of an industrial internet, the building of a national dual gigabit network (integrated 5G mobile and fixed gigabit optical), the building of a satellite internet network, as well as the recent official launch of nationally integrated system of big-data centers. More broadly, Beijing describes the campaign as becoming the key support and important material guarantee for a new revolution in science and technology and a new round of industrial transformation. Simply stated, this plan is a pivotal part of China’s effort to dominate the Fourth Industrial Revolution. More in this March 28, 2022 article in War on the Rocks.
SEC Proposes Rules on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure by Public Companies The Securities and Exchange Commission proposed amendments to its rules to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting by public companies.
“Over the years, our disclosure regime has evolved to reflect evolving risks and investor needs,” said SEC Chair Gary Gensler. “Today, cybersecurity is an emerging risk with which public issuers increasingly must contend. Investors want to know more about how issuers are managing those growing risks. A lot of issuers already provide cybersecurity disclosure to investors. I think companies and investors alike would benefit if this information were required in a consistent, comparable, and decision-useful manner. I am pleased to support this proposal because, if adopted, it would strengthen investors’ ability to evaluate public companies’ cybersecurity practices and incident reporting.”
The proposed amendments would require, among other things, current reporting about material cybersecurity incidents and periodic reporting to provide updates about previously reported cybersecurity incidents. The proposal also would require periodic reporting about a registrant’s policies and procedures to identify and manage cybersecurity risks; the registrant’s board of directors’ oversight of cybersecurity risk; and management’s role and expertise in assessing and managing cybersecurity risk and implementing cybersecurity policies and procedures. The proposal further would require annual reporting or certain proxy disclosure about the board of directors’ cybersecurity expertise, if any.
The proposed amendments are intended to better inform investors about a registrant’s risk management, strategy, and governance and to provide timely notification to investors of material cybersecurity incidents.
The proposing release will be published on SEC.gov and in the Federal Register. The comment period will remain open for 60 days following publication of the proposing release on the SEC’s website or 30 days following publication of the proposing release in the Federal Register, whichever period is longer. See also SEC’s Fact Sheet.
Chinese Tech Companies Deepen Roots in Russia in Spite of U.S. Sanctions Many Chinese technology companies have decided to stay put in Russia, despite a growing exodus of Western firms and an ongoing meltdown in China’s tech stock market. On March 15, the Hang Seng Tech Index—one of the leading indicators for technology stocks in Asia—dropped 12 percent amid fears that Chinese firms would be shut out from Western markets for remaining in Russia. Despite financial pressure from U.S. sanctions and Russia’s relatively minor market value for Chinese firms, Chinese netizens have vociferously called on firms to stay in solidarity with Russia, putting firms in a tough dilemma.
In a joint statement on Feb. 4, Chinese President Xi Jinping and Russian President Vladimir Putin announced that the Russia-China partnership had “no limits.” Chinese netizens have seemingly taken that to heart, voicing their support for Russia’s war on platforms such as Tencent, Sina Weibo and Douyin, where public sentiment is largely pro-Russia, pro-war and pro-Putin. Netizens, deeming him “Putin the Great,” have also turned out in support of Russian businesses by buying out Russian-made goods on Russian e-commerce stores.
In the face of wide public support for Russia’s war, Chinese tech firms have faced intense domestic backlash for attempting to join Western companies in pulling out of Russia. In late February, three days prior to Russia’s invasion of Ukraine, ride-hailing giant Didi Chuxing announced that it would close down its 1.5-year-old service in Russia. In response to the announcement, nationalist influencers mobilized against DiDi, accusing it of colluding with Western sanctions. Shortly after, Didi reversed course, publishing a statement on Weibo promising that it would continue serving Russian consumers. While evidently a product of the fierce public reaction, Didi’s quick about-face may have been motivated in part by a desire to appease regulators conducting an ongoing cybersecurity probe into the company. More in this article in Lawfare.
Intel Announces Initial Investment of Over €33 Billion for R&D and Manufacturing in EU According to the company’s recent announcement, Intel plans to invest as much as 80 billion euros in the European Union over the next decade along the entire semiconductor value chain – from research and development (R&D) to manufacturing to state-of-the art packaging technologies. Their announcement includes plans to invest an initial 17 billion euros into a leading-edge semiconductor fab mega-site in Germany, to create a new R&D and design hub in France, and to invest in R&D, manufacturing and foundry services in Ireland, Italy, Poland and Spain. With this landmark investment, Intel plans to bring its most advanced technology to Europe, creating a next-generation European chip ecosystem and addressing the need for a more balanced and resilient supply chain.
The 2022 AI Index Report The AI Index is an independent initiative at the Stanford Institute for Human-Centered Artificial Intelligence (HAI), led by the AI Index Steering Committee, an interdisciplinary group of experts from across academia and industry. The annual report tracks, collates, distills, and visualizesdata relating to artificial intelligence, enabling decision-makers to take meaningful action to advance AI responsibly and ethically with humans in mind. The latest edition includes data from a broad set of academic, private, and nonprofit organizations as well as more self-collected data and original analysis than any previous editions, including an expanded technical performance chapter, a new survey of robotics researchers around the world, data on global AI legislation records in 25 countries, and a new chapter with an in-depth analysis of technical AI ethics metrics.
China Won’t Let Putin Lose His Ugly Ukraine War Who needs enemies when you have friends like Vladimir Putin? This is what Xi Jinping must be thinking just six weeks after the two announced a “no limits” friendship to make the world safe for autocracies by taking on America and the other democracies, weakening Washington’s alliances in Europe and Asia and overturning the primacy of liberal democratic norms in place since the end of the Cold War in the early 1990s. In recent days, the Russian president requested military assistance from his Chinese counterpart to fight a war when much of the world is uniting against him. The cascading sanctions could soon begin to affect Chinese companies doing business with Russian entities. If Xi makes good on his earlier promises to support Putin, China will find itself joining the club of pariah nations that includes Russia, North Korea, Syria and Iran. If Xi turns his back on Putin in this time of need, his word can no longer be believed while his country will not regain the trust of the West. In short, Xi has seriously miscalculated.
Where does China go from here? Read in New York Post.
Australian Government commits $240 million to critical minerals projects in mission to end Australia’s reliance on China The Australian outback has become the stage for a renewed push to safeguard the future of western industries and break a near complete reliance on critical minerals from China. China produces and supplies almost all the minerals used in the production of renewable energy products, mobile phones, electric vehicles and even the batteries used in the US joint-strike fighter. The federal government announced $240 million to develop a rare earth minerals industry in Australia with senior ministers openly listing China as one reason to do so. “China currently dominates around 70 to 80 per cent of global critical minerals production and continues to consolidate its hold over these supply chains,” Energy and Industry Minister Angus Taylor said in a statement. “This initiative is designed to address that dominance.” Australia has enormous volumes of rare earth minerals but until now no domestic production capacity has been built, partly because China has refined the minerals cheaply, despite environmental criticisms. Key points: 1) The federal government says Australia needs to break away from China’s domination of the industry, 2) Australia has enormous volumes of rare earth minerals, and 3) The war in Ukraine has exposed the pitfalls of reliance on foreign powers.
More in this March 15, 2022 article in ABC News.
What China stands to gain—and lose—by wading into the Ukraine war How far will these autocrats take their “no limits” friendship? As Russian President Vladimir Putin’s war in Ukraine grinds on, the Kremlin has reportedly reached out to Beijing for some extra military muscle. Meanwhile, there’s chatter among foreign-policy thinkers in both China and the West that President Xi Jinping could play a uniquely useful role in mediating the conflict. So today The Atlantic Counciol is taking a different approach to our Fast Thinking alerts. Call it Fast Forward: Insight from their top Sinologists about China’s potential options for dealing with its combustible next-door neighbor. Fast Thinking.
Sullivan addresses Russia concerns U.S. and Chinese officials met for seven hours in Rome on Monday for a discussion that addressed in part Russia’s invasion of Ukraine, a senior Biden administration official said.
National security adviser Jake Sullivan warned China’s top diplomat, Yang Jiechi, that China could face consequences for supporting Russia, the official said.
The meeting, described by Biden administration officials as intense and candid, followed reports that Russia has sought military and economic support from China amid the Ukraine invasion. The senior administration official declined to directly address those reports. “We do have deep concerns about China’s alignment with Russia at this time, and the national security adviser was direct about those concerns and the potential implications and consequences of certain actions,” the Biden administration official told reporters during a briefing following the meeting.
White House press secretary Jen Psaki said Sullivan communicated that China would face “significant consequences” if the country provides Russia with military or other support that “violates sanctions or supports the war effort.” But she declined to offer specific information about those consequences, saying they would be coordinated with U.S. allies.
The senior administration official said Monday that the date for the meeting between Sullivan and Yang had been planned before Russia invaded Ukraine almost three weeks ago. It nevertheless came at a timely and pressing moment, with the U.S. trying to keep international pressure on Russia for attacking Ukraine.
A White House readout of the call said that the engagement touched on a “range of issues” and that there was “substantial discussion” about the Russian military invasion of Ukraine. The readout said Sullivan and Yang “underscored the importance of maintaining open lines of communication between the United States and China.”
Biden administration officials said they would be watching China’s actions closely as they pertain to Russia and its invasion of Ukraine. Read the full story in The Hill here.
The Tangled Web We Wove: Rebalancing America’s Supply Chains The pendulum of globalization has swung too far. What the fallout of the ongoing pandemic makes clear is that decades of offshoring and cost-cutting in the pursuit of efficiency and a better bottom line have left the supply chains of the United States and its allies and partners unacceptably brittle. Restoring balance to the system—with greater resilience through reducing dependence on potential adversaries, greater geographic diversity, and a pragmatic approach to building a mix of domestic capabilities and sourcing from reliable partners—will be a complex, expensive, and far-reaching undertaking.Today the Center for a New American Security (CNAS) released a new report, offering actionable recommendations for policymakers to develop a comprehensive, proactive, and achievable U.S. supply chain strategy. Key recommendations include:
- Crafting a supply chain strategy. The United Stated needs a blueprint for how to think about, and prioritize, the security and resilience of its critical supply chains.
- Promote efforts to improve software supply chain security. Existing governmental efforts to strengthen the resilience of supply chains should acknowledge and address software supply chain security.
- Establish a network of like-minded countries to collaborate on technology policy. The United States should create a multilateral technology alliance with a core group of like-minded countries to collaborate on supply chain diversification.
The breadth of the supply chain challenge is vast, and it will get only more complicated as time goes on. The United States must do what it can now, in conjunction with collaborative efforts with its allies and partners, to ensure its supply chains are resilient enough to withstand upheaval, geopolitical conflict, and natural disaster.
National Security Agency’s Cybersecurity Technical Report (March 2022) The National Security Agency (NSA) has released a new report that gives all organizations the most current advice on how to protect their IT network infrastructures from cyberattacks. NSA’s report ‘Cybersecurity Technical Report (CTR): Network Infrastructure Security Guidance‘ is available freely for all network admins and CIOs to bolster their networks from state-sponsored and criminal cyberattacks.
The Media Environment and Domestic Public Opinion in China Toward Russia’s War On Ukraine China’s position on Russia’s war on Ukraine is complex, confused, and contradictory, attempting to balance friendship with Russia, opposition to the United States, aversion to the instability caused by the war, and protection of China’s international image as a respectable power that advocates sovereignty for all countries. Ultimately, China’s position is more supportive of Russia than not. The result is that official public messaging domestically has downplayed Russia’s war on Ukraine, limited coverage of anti-war protests overseas, and suppressed dissenting sentiment within China. Pro-Russian, anti-Ukraine, anti-European Union, and anti-US voices and narratives are proliferating under this approach while expressions of support for Ukraine and anti-war sentiments are censored. It is not possible to make a conclusive statement on what the majority of Chinese people believe with regard to the war, but based on the Insikt Group’s preliminary research it is likely that many genuinely support Russia, in part due to Russian narratives and propaganda, while many genuinely disapprove of the war. The latter group is likely a largely silent or silenced group. Suppression of anti-Russia and pro-Ukrainian opinions may not be limited to China’s citizenry alone, as unverified sources suggest that police forces in China are also contacting outspoken Ukrainians in China. Additionally, faced with negative domestic and international reactions to some online content, government authorities are blaming separatist forces in Taiwan and Xinjiang.
This report defines public opinion as opinions outside of government sources, meaning any public expression toward the situation in Ukraine that does not come from policymakers or government spokespersons. The Insikt Group’s definition also excludes expressions by organizations demonstrably or almost certainly led by the Chinese Communist Party (CCP). However, assessing genuine public opinion in China is difficult for several reasons. First, the significant levels of censorship in China, especially online, mean that the most visible and discoverable expressions of public opinion generally fall within acceptable bounds established by the authorities. Several instances of anti-war expression have already been censored, making it more likely that pro-Russian narratives become mainstream. Second, because the CCP places significant emphasis on “guiding” public opinion through overt and covert means, online content and comments are not necessarily reflective of what an ordinary citizen believes. Even without demonstrable proof of a connection to the CCP, it is possible that any particular expression is not organic but is made with an objective in mind that may not conform to the true feelings of the one who expressed it. However, it is also inaccurate to discount all public opinion toward Ukraine that is in line with China’s official position as propaganda. Third, whether social media activity is reflective of broader views toward an issue in any country is debatable; the medium is driven by emotion and the loudest voices are not necessarily representative of general society. All that can be said conclusively as of this writing is that there is a diverse range of opinions in China toward Russia’s war on Ukraine.
Editor’s Note: The research presented was conducted during the week of February 28, with collection and conclusions finalized on March 3. While relevant information regarding China’s official position and media environment towards the conflict in Ukraine continues to come to light, the Insikt Group believes their findings are an accurate representation of the situation at the time this report was written and likely continue to be accurate as of the publication date.
FACT SHEET: Securing a Made in America Supply Chain for Critical Minerals Critical minerals provide the building blocks for many modern technologies and are essential to our national security and economic prosperity. These minerals—such as rare earth elements, lithium, and cobalt—can be found in products from computers to household appliances. They are also key inputs in clean energy technologies like batteries, electric vehicles, wind turbines, and solar panels. As the world transitions to a clean energy economy, global demand for these critical minerals is set to skyrocket by 400-600 percent over the next several decades, and, for minerals such as lithium and graphite used in electric vehicle (EV) batteries, demand will increase by even more—as much as 4,000 percent. The U.S. is increasingly dependent on foreign sources for many of the processed versions of these minerals. Globally, China controls most of the market for processing and refining for cobalt, lithium, rare earths and other critical minerals. The February 22, 2022 FACT SHEET is here.
Source: Visual Capitalist, March 1, 2022
China’s Dominance in Clean Energy Metals
Renewable sources of energy are expected to replace fossil fuels over the coming decades, and this large-scale transition will have a downstream effect on the demand of raw materials. More green energy means more wind turbines, solar panels, and batteries needed, and more clean energy metals necessary to build these technologies.
This visualization, based on data from the International Energy Agency (IEA), illustrates where the extraction and processing of key metals for the green revolution take place. It shows that despite being the world’s biggest carbon polluter, China is also the largest producer of most of the world’s critical minerals for the green revolution. Source: Visual Capitalist, January 23, 2022
Forced Labor Linked to Amazon Suppliers, Report Says Multiple Amazon suppliers have ties to forced labor in China, the Tech Transparency Project said in a March 7, 2022 report. “Three Amazon suppliers are reported to have used forced labor directly: Luxshare Precision Industry, AcBel Polytech, and Lens Technology,” the group said. “Another two, GoerTek and He-fei BOE Optoelectronics, are themselves supplied by factories that have been implicated in forced labor. Amazon also continues to sell third-party products that advertise the use of Xinjiang cotton despite a ban on such goods, it said. “Amazon complies with the laws and regulations in all jurisdictions in which it operates, and ex- pects suppliers to adhere to our Supply Chain Standards,” a company spokesperson said. “We take allega- tions of human rights abuses seriously, including those related to the use or export of forced labor. Whenev- er we find or receive proof of forced labor, we take action.”
ODNI Releases Threat Assessment for 2022 On Feb. 7, the Office of the Director of National Intelligence (ODNI) released the intelligence community’s annual threat assessment. The report is intended to present the most direct and serious threats to the United States during 2022 and is divided into 8 categories: China, Russia, Iran, North Korea, Health Security, Climate Change and Environmental Degradation, Additional Transnational Issues, and Conflicts and Instability. While not an exhaustive list, the report details worldwide threats such as Russia’s military capabilities, China’s demonstrated capability and intent to advance its interests at the expense of the U.S. and its allies, and the potential for humanitarian and economic crises, political unrest and geopolitical competition caused by the lingering effects of the coronavirus, among many others. In reference to the threats outlined in the report, the foreword of the assessment reads, “These challenges will intersect and interact in unpredictable ways, leading to mutually reinforcing effects that could challenge our ability to respond, but also introducing new opportunities to forge collective action with allies and partners against both the renewed threat of nation-state aggression and emerging threats to human security.”You can read the assessment here. Information available as of 21 January was used in the preparation of this assessment.
Digital Currencies: The US, China, And The World At A Crossroads Central bank digital currencies have taken flight globally, and China is boldly leading the way. How will China’s digital currency, the e-CNY, serve the political and economic agenda of China’s authoritarian government? What are its implications for the world economy, international security, and the leading role of the United States in global payments and finance? How might the e-CNY and its underlying and related technologies be adopted by other countries? How do we weigh the potential gains in efficiency against the risks to privacy and security? How should the United States respond? To answer these questions, the Hoover Institution brought together distinguished experts in national security, finance, economics, central banking, technology policy, and computer science. This volume presents their findings and proposes a pathway toward revitalizing US financial leadership on the international stage in the digital age. The United States must respond to a spectrum of key policy concerns raised by the e-CNY and improve incentives for innovation and competition in its own payment systems. It should expedite development of technology and standards for a possible digital dollar. And it should advocate for democratic norms of privacy, accountability, transparency, and security in shaping the global rules surrounding central bank digital currencies.
EU Sanctions Whistleblower Tool The European Commission has launched an EU Sanctions Whistleblower Tool to facilitate the anonymous reporting of past, ongoing or planned sanctions violations, or attempted violations. It committed to the establishment of such a platform in its January 2021 Communication on “The European economic and financial system: fostering openness, strength and resilience”
CHINA’S STRATEGIC ASSESSMENT OF RUSSIA: MORE COMPLICATED THAN YOU THINK Western observers of international affairs sounded the alarm after a seemingly enthusiastic joint statement by President Vladimir Putin and General Secretary Xi Jinping. Released during the Russian president’s visit to China — the first time Xi has met with a foreign head of state since before the pandemic — the statement seemed to signal increasing alignment between two powers against the United States and its allies. Based on the document, one could assume China would be supportive of Russia’s assault on Ukraine. The truth, however, is quite different, both on this particular issue (in which China was played by Russia) and in China’s general assessment of Russia, its largest neighbor.
The nature of the Sino-Russian relationship has been difficult to define and there is much disagreement over its characteristics. Is it as sturdy as an alliance? Or as flimsy as a marriage of convenience? The truth is the relationship is neither and both. This paradox is the result of both an alignment and misalignment in different areas of their national interests. While certain factors innate to the Sino-Russian relationship drive them apart, the two are currently glued together by their shared view that the United States poses a threat to their core interests. An accurate assessment of the depth, strengths, and weaknesses of Sino-Russian relations is thus key to mapping out where the two countries do and do not collude in international affairs, especially in Europe and Asia. This includes an understanding of how China views its past, present, and future relationship with Russia.
How can we understand China’s evaluation of Russia’s comprehensive power, and consequently, the alignment of China and Russia’s political, strategic, and economic visions? I find that a close alignment to counter the United States between Beijing and Moscow is primarily driven by their perceived “hostility by the U.S.” Meanwhile, leadership preferences — especially Xi’s personal affinity toward Russia and Putin — also play a key role in driving alignment with Russia, arguably beyond China’s national interests. However, these factors do not negate the fact that China and Russia differ fundamentally in their visions and approaches to the international system. Their alignment is based solely on their shared anti-U.S. agenda and leadership preferences. As such, the Chinese assessment of the long-term prospects of Sino-Russian relations is not as glorified as it seems.
For Xi, the attempt to balance a commitment to Russia with China’s larger bid for global credibility is becoming more difficult by the hour. Photograph by Evgenia Novozhenina / Reuters
Given current travel restrictions and general censorship in China, my analysis relies on more than a dozen private roundtables in the past 12 months (including four in the past month), conversations with Chinese strategists and experts, and desktop research of Chinese academic papers, commentary, and reports. I also lean on the works of long-time Russia experts, such as Feng Yujun and Ji Zhiye, the former vice president and former president of China Institutes of Contemporary International Relations (CICIR), respectively. CICIR is the most authoritative international relations think tank in China and plays an unrivaled role in the Chinese security apparatus. As such, their views carry significant weight.
There are also voices in China that sing high praise for the Sino-Russia relation and its value. These voices cater to Xi’s preferences and are politically expedient, but they obstruct a clear reading of Chinese assessments and intentions. Still, I find that both “bear-huggers” and “bear-critics” share the same basic assessment: that Russia is a destructive power, and that there is a fundamental difference in Russian and Chinese goals and approaches to the international system. In China, what separates supporters and critics of a strong Sino-Russian relationship is whether one believes that the opportunities and benefits of partnering with Russia outweighs the risks and costs, and for how long.
China and Russia are pushed together by two factors. The first is the shared threat the United States poses. The second is a leader-level nostalgia for the Sino-Soviet partnership. The most salient characteristic of the Sino-Russian alignment today is their shared threat perception of the United States. This does not mean that China and Russia would not have any relationship absent this shared perspective — they always have and always will. But it does mean that the shape and health of their relationship would be completely different if the shared threat perception of the United States was not present.
Prior to the 2014 crisis over Ukraine, China and Russia had a lukewarm relationship. However, the crisis created a watershed event that led Chinese government experts to designate 2014 as “a year of abnormal acceleration of Sino-Russia relations,” although, this acceleration needs to be qualified since China has not yet recognized Russia’s annexation of Crimea. Still, around that time, China’s strategic anxiety over the U.S. strategy of “rebalancing to Asia” coincided with Russia’s fear over NATO’s potential expansion. As such, China made a determination that “China and Russia face the same international pressure from the U.S. bully on a wide range of issues from global governance to their neighborhood and to their domestic affairs.” For Beijing, China and Russia are both identified as revisionist powers in the international order (although the common title disguises critical distinctions of their desired goals). Furthermore, the United States constitutes the most important threat to both countries in their primary theaters — China in the West Pacific and Russia in Eastern Europe. Alignment and cooperation is thus sought, almost instinctively, to mitigate Chinese and Russian isolation by the West, to divide American attention and resources, and to complicate U.S. military planning in both theaters.
Such an alignment is significant for alleviating strategic pressure on China, at least psychologically. At a minimum, it provides a reassurance that China is not countering U.S. hegemony alone. As long as the United States pursues “dual containment” of both China and Russia, the alignment will have motivation and justification. Given the overarching theme in the Chinese national security strategy that defines the United States as China’s primary threat, any disagreements with Russia are seen as secondary and Russian diplomatic and military capabilities will be seen as a valuable asset.
Yet Russia’s fondness for strategic maneuver, such as the utilization of hybrid warfare, also constitutes a major risk for China. Four hundred years of Sino-Russian relations has taught the Chinese that during China’s conflicts with others, the Russian modus operandi is to maximize its own benefits in the name of mediation and assistance for China. For example, Russia carved out one million square kilometers of Chinese territory through its mediation of the Second Opium War. Therefore, the assessment by China’s Russia hands is that Moscow not only sees the “new Cold War” between Washington and Beijing as beneficial for Russia, but that Russia is also responsible for “exploiting and deepening the suspicion, hostility and fear” between Washington and Beijing through diplomatic maneuvers and manipulations. Yet, these experts also vigorously warn about Russian acts of “balancing and coalescing” with both America and China.
So long as the United States remains the biggest threat to China and Russia, the latter will manage their differences to serve the more important goal of countering U.S. pressure. However, while such alignment is strong in terms of words and postures, it is weak on actions. As attested by the joint statement by China and Russia during Putin’s most recent visit of Beijing, the two countries are adept at verbally expressing their shared positions and mutual support, but they are short on concrete policies to be adopted. For example, as China tries to gauge Russia’s substantive support in the South China Sea and on Taiwan, nothing but tepid statements have emerged, along with one joint military exercise in the South China Sea in 2016. While support in this limited domain does not do justice to China and Russia’s coordination on the global scale, the authenticity of the Sino-Russian friendship is tested by how Russia will act toward China’s most important security concerns, such as Taiwan and the South China Sea.
Sino-Russian alignment is also vulnerable to shifts in the balance of relations between the United States, China, and Russia. This is the core weakness of a relationship driven by external factors, in the eyes of Chinese analysts. As put by Ji Zhiye, former president of CICIR, , the Sino-Russian relationship is “temporary, uncertain, vulnerable and could be severely weakened by even slight changes in the external factor (the U.S. policy toward both).” Improvement of relations with the United States, by either China or Russia, will undermine the confidence by the other party. Furthermore, overwhelming Russian dependence on China from sweeping Western sanctions will sow the seeds of Russian discontent against China and result in efforts to distance and counterbalance. More in this War on the Rocks article.
China business could become a problem for German companies A recent report from the Kiel Institute for the World Economy highlighted the risks of these ever-growing ties. “German companies, especially in the automotive industry, have made profits in China for many years, and now their dependence on the Chinese market may become a problem,” Rolf Langhammer, the author of the report, wrote. “They have provided Chinese companies with the necessary know-how to be replaced by them in the future, thus helping China to gain a more powerful negotiating position in the geopolitical competition.” In formulating its China strategy, I am told, Germany’s government could look for ways to address these risks through a combination of carrots and sticks: targeted government incentives for companies to invest in other markets and tighter restrictions on technology transfers, including through export controls and heightened scrutiny of research and development collaboration. There does not seem to be much appetite in Europe for an outbound investment-screening mechanism, like the one currently being debated in the US Congress. But this debate, too, may make its way across the Atlantic. More in this GMF article and in this IFW article.
Putin’s Aggression Against Ukraine Deals a Blow to China’s Hopes for Taiwan On June 25, 1950, with Joseph Stalin’s backing, North Korean leader Kim Il-Sung sent troops across the thirty-eighth parallel, hoping to unify the Korean Peninsula by force. China’s leader, Mao Zedong, lent his support to the effort, but soon found that doing so put Taiwan out of his reach. While the United States had essentially washed its hands of the nationalists one year prior, President Truman declared that “in these circumstances the occupation of Formosa by Communist forces would be a direct threat to the security of the Pacific area.” To prevent an attack on Formosa (Taiwan), President Truman ordered the Seventh Fleet to patrol the Taiwan Strait. The Soviet Union’s decision to encourage North Korean aggression ended up costing China the chance to bring Taiwan under its control. Nearly three-quarters of a century later, China’s support of Russian aggression against Ukraine will similarly undermine its interests in the Taiwan Strait.
Counterintuitively, the months leading up to Putin’s attack on Ukraine have increased the focus on Taiwan, with analysts weighing whether Russian aggression against Ukraine would invite a similar Chinese attack on Taiwan. Many who are advocating the United States do less to counteract Russian aggression against Ukraine are doing so by arguing that it is a distraction from the graver danger: a Chinese invasion of Taiwan. The upshot is that the current crisis in Europe has sharpened a debate about where the United States should deploy its finite resources, with a growing chorus advocating that the United States should direct its energy toward preparing to defend Taiwan. A heightened U.S. focus on Taiwan and a consensus that it needs to prepare for a conflict in the Taiwan Strait would not be welcomed in Beijing. More in CFR’s AsiaUnbound of February 23, 2022.
Why did a Peking University paper on China’s tech deficiencies get deleted? How far advanced is Chinese tech? Not very much, according to a recent researched study on the impact of U.S.-China decoupling. Authored by the U.S. hand Wáng Jīsī 王缉思 and his team at Peking University’s Institute of International and Strategic Studies, the paper was taken off the web after less than a day. While a full evaluation of the study’s findings remains difficult without access to the longer version, an eight-page summary remains available.
The report was, presumably, deemed too negative by the powers that be. The authors painted a picture of China as vulnerable and dependent on Western technology in key sectors such as semiconductors, AI, and aerospace. Over the past three years, sensitivities around decoupling have gone through the roof as the U.S. cut off select Chinese firms from access to U.S. technologies such as the leading foundry Taiwan Semiconductor Manufacturing Corporation (TSMC). Despite Beijing’s aversion to public displays of weakness, the Peking University paper paints a very accurate picture of China’s vulnerabilities in the technology space. It also offers actionable items to avoid the worst downsides of decoupling.
Whereas the Peking University study may overstate China’s weaknesses, it is a breath of fresh air compared to many U.S. commentators — from current and former U.S. government officials to U.S. think tanks like the Harvard’s Belfer Center — who have chronically overstated the strength of Chinese tech. The reality lands somewhere in the middle. The future development of key technology sectors in China and the U.S. depends on a host of factors: they include whether the U.S. and its allies continue to ratchet up technology and financial controls, whether Chinese STEM students and researchers abandon pursuing advanced degrees and job opportunities in the U.S., and on the overall state of U.S.-China relations in the coming three to five years.
The paper is evenhanded in its diagnosis. On the one hand, China has made great strides, for example, in publishing peer-reviewed scientific papers, as well as developing an efficient funding pipeline for innovative companies. On the other hand, China lags significantly behind in overall metrics of innovation, things like research citations, the quality and depth of patents, contributions to standards development, and the quality of STEM researchers that graduate each year. These findings are largely consistent with Western observers. Because the U.S. continues to be attractive for STEM students, researchers, and professionals, the Peking University paper concludes that China has a long way to go in its journey from a “large technology power” (科技大国) to a “strong technology power” (科技强国).
The authors claim that “national innovation is a dynamic and systematic project,” one that involves a constellation of participant from governments to industry to academia. But they leave out the role of global supply chains in the innovation process. In the document available, too little emphasis is placed on the role of markets, well-developed legal systems and IP protection, and trust in driving highly competitive industries such as semiconductors. In a similar vein, Western studies of China’s technology sector tend to overlook these same factors, attributing an outsized role instead to government policies and state subsidies.
More in the February 25, 2022 article in SupChina.
U.S., European Tech Competition With China in Africa Challenging China’s dominance in Africa’s tech sector was one of the key takeaways from this month’s Europe-Africa summit and a key component of the EU’s Global Gateway infrastructure agenda. But it’s not going to be easy given the enormous breadth of Chinese technology engagement in Africa that goes back decades. Western governments are going to find it even more difficult to compete in this market given the rapid expansion of Chinese corporate activity in Africa’s digital sector. University of Tampere researcher Motolani Agbebi mapped out the scope of that challenge in a new paper published in February on the CFR website that details Africa’s role in China’s Digital Silk Road agenda. Podcast.
City of Vice: Macau, Gambling, and Organized Crime in China In November 2021 and January 2022, the Macau Special Administrative Region (SAR) Judiciary Police arrested 13 individuals involved in operating two separate casino VIP customer “junkets” for engaging in illegal gambling activities, running a criminal syndicate, and money laundering (Macau Judiciary Police, November 29, 2021; January 31). The criminal groups used their VIP junket business in Macau casinos to recruit mainland Chinese residents to engage in illegal online gambling on overseas platforms, and illicit side-betting. The proceeds of the syndicate were then laundered and transferred through the junket accounts of the casinos using underground banks. These developments underscore how gambling in Macau has grown from small beginnings, as tolerant Portuguese administrators did not want to unduly antagonize local Chinese, to a multi-billion dollar business that has been infiltrated by organized crime groups for much of its modern history.
During Portuguese rule (1557–1999) Macau was described as the “city of the name God,” hosting the religious orders of St. Augustine, St. Dominic, and St. Francis, as well as convents and Catholic churches. In the 20th century, Macau became a city of vice as casino gambling emerged as the dominant business, supported by related prostitution, money lending, and money laundering from mainland China. After the return of sovereignty and administration from Portugal to China in 1999, Macau has had extraordinary economic success and relative political stability compared to the neighboring Hong Kong SAR. Macau’s gross domestic product (GDP) rose from $6.458 billion in 1999 to $45,103 billion in 2016 at average annual growth rate of 12 percent. This economic growth, however, has been increasingly dominated by the gambling sector, which in 2013 accounted for over 60 percent of GDP. Casino “gross gambling revenue” in Macau has surpassed Las Vegas and the city is effectively the world’s largest gambling center. However, as the gambling sector has grown, so has the organized crime long associated with that business that has become a domestic problem for China and has impacted other countries in Asia. A particular concern for Beijing is the Macau gambling industry’s role in facilitating capital flight.
Macau / Image: Time Out
Organized Crime in Macau
The violent conflict between triad societies (organized crime groups based in southeastern China) in 1997 illustrated how extensive they had become in the casino gambling industry and how powerless both the Portuguese authorities as well as the monopoly gambling operator were to control them. The triad conflict only ended when a key protagonist, Wan Kuok Kui (also known as “broken tooth”) was arrested, convicted, and imprisoned. However, the real driver of the cessation of triad violence was the imminent resumption of sovereignty by the PRC and the fear among triad groups that Beijing would put an end to their gambling-related businesses.
In 1997, the Macau 14K and the Wo On Lok triad societies were in open violent conflict, leading in the first five months of the year to over a dozen murders, following 21 murders in 1996. Wan Kuok Kui destabilized the balance of power in the Macau underworld and caused the conflict by trying to capture market share from rival triad factions. The violent conflict only ended when the Portuguese led Macau Judiciary Police arrested Wan Kuok Kui in May 1998, leading to his conviction on charges of criminal association, loan sharking, and illegal gambling, which resulted in a 15-year prison sentence.
The triad conflict stemmed from competition for control of the lucrative casino VIP rooms and vice (prostitution was often included in VIP packages provided to wealthy gamblers). VIP Rooms were introduced by STDM and Stanley Ho to bring high rollers into Macau’s casinos. The VIP Rooms were leased to “junket” groups that were responsible for bringing customers from the PRC to Macau to gamble, as well as managing the illegal aspects of this business such as giving credit and recovering debts. The need for credit came from the PRC’s law preventing anyone from taking more than around 20,000 renminbi (around $3,000) out of the country. Debt collection was complex as gambling debts are not legally enforceable in mainland China, where almost all gambling has remained illegal. “Junket” operators solved these problems for Stanley Ho and STDM, but as they were all involved with or operated by triad societies, these arrangements facilitated organized crime groups’ access to the casino business.
The end of the casino monopoly in Macau in 2002, when the government granted three operating concessions and later increased to six, led many observers to predict that triad and organized crime involvement in Macau casinos would end. In reality, the growth of casino revenue in Macau fueled huge income for the triad society factions that dominated the major junkets.
Since the 2018 crackdown by the Chinese authorities against illegal gambling, it was clear that Macau, the junkets, and the triad leaders involved in the largest operators were deeply involved in cross-border organized crime. In July 2019, a state-owned news agency report denounced Suncity, the biggest Macau junket operator, for facilitating online gambling; Suncity denied the accusation. The report said that the practice had caused “great harm to China’s social-economic order,” and that the annual amount wagered by Suncity mainland clients in the online casinos it operates from Southeast Asia was over trillion yuan, equivalent to a staggering $150 billion.
The PRC government has struggled with periodic capital outflows during the peak years of economic growth, which can weaken the Yuan currency. A key channel for capital outflows from China has been Macau casinos, facilitated by junkets arranging credit in the Mainland, providing underground banking facilities and assisting in the laundering of the proceeds of crime from the PRC. This problem illustrates the continued existence of organized crime groups in China, as well as their success in diversifying their business outside of the country and across Asia. It remains to be seen whether the crackdown by the Chinese authorities on cross border illegal gambling, related underground banking, and money laundering will succeed. More in Jamestown’s China Brief Volume: 22 Issue: 4, February 25, 2022.
Following the Crypto: Using Blockchain Analysis to Assess the Strengths and Vulnerabilities of North Korean Hackers Since 2014, the Pyongyang-led cybercrime organization known as the Lazarus Group has transformed from a rogue team of hackers to a masterful army of cybercriminals and foreign affiliates that can compromise major national financial networks and steal hundreds of millions of dollars’ worth of virtual assets. Through analyzing three case studies of major North Korean hacks, a new CNAS report outlines key strengths and vulnerabilities in the Lazarus Group’s campaigns to infiltrate cryptocurrency exchanges and steal, launder, and liquidate funds. The study also offers a prospective look into the future of North Korea–led crypto hacks and provides a series of policy recommendations to strengthen cyber resilience against these efforts.
Source: AMBCRYPTO
FBI director says the threat from China is ‘more brazen’ than ever before China’s threat has “reached a new level – more brazen, more damaging, than ever before, and it’s vital, vital, that all of us focus on that threat together,” according to FBI Director Christopher Wray, who has accused China of stealing U.S. innovations and launching massive hacking operations. “When we tally up what we see in our investigations, over 2000 of which are focused on the Chinese government trying to steal our information or technology, there’s just no country that presents a broader threat to our ideas, innovation, and economic security than China,” Wray said. The bureau is opening new cases to counter China’s intelligence operations every 12 hours or so, with its hackers pilfering more personal and corporate data than all other countries combined, Wray said. National Public Radio, January 31, 2022
Chinese President Xi Jinping proposes a toast during the welcome banquet for leaders attending the Belt and Road Forum at the Great Hall of the People, in Beijing, on April 26, 2019. The gathering reportedly included more than 150 nations and international organizations, though the U.S. was among those notably absent. Nicolas Asfouri/Pool/Getty Images
The EU’s Global Gateway: Building connectivity as a policy In December 2021, the European Union introduced the Global Gateway, a new development and funding scheme aimed at building sustainable, high-standard and secure digital, energy and transport infrastructure across the globe. With both global tensions and international interest in connectivity increasing, the Global Gateway is not only a European countermove to China’s Belt and Road Initiative but also an addition to the EU’s attempt to strengthen its strategic autonomy.
In the latest FIIA Working Paper, the author analyses the Global Gateway in the framework of the EU’s external relations and international competition. The author addresses the EU’s normative agenda embedded in the policy program and estimates what challenges the implementation of the strategy is expected to face. The author notes that despite the Global Gateway being a viable attempt by the EU to bring scattered European funding and development projects under a marketable brand and a strategic vision, several questions remain open. According to the author, a key question is, whether the EU’s value-based approach, namely the Gateway’s commitment to democratic values and good governance among others, can compete with China’s non-regulated approach overseas. This FIIA Working Paper is part of the institute’s research project ‘Superregionalism and Contentious Connectivity in Asia’ examining connectivity as a key area of global power competition. The project explores linkages with security, economy and (sustainable) development, and compares connectivity strategies of key actors, such as China, Russia, Japan, the US, and the EU. The publication is also part of the FIIA Geoeconomics series.
Can a Tiger Change its Stripes? China is Joining the Hague System, but Many Quirks Remain China will join The Hague International Design System this spring, but some of China’s unique legal procedures could impede global harmonization, and the development has the potential to unleash an application tsunami on worldwide patent offices, says this attorney.
China’s long arm: How Uyghurs are being silenced in Europe Index on Censorship, a nonprofit that defends people’s freedom to express themselves without fear of harm or persecution, published “China’s long arm: How Uyghurs are being silenced in Europe.“
A Beijing think tank offered a frank review of China’s technological weaknesses. Then the report disappeared The Peking University (PKU) Institute of International and Strategic Studies posted – then a week later removed – an 8-page abridged version of an interim report titled China-US Strategic Competition in Technology: Analysis and Prospects. The bold appraisal of both countries’ technological prowess was led by the renowned PKU Professor Wang Jisi. After assessing both country’s strength in three areas – artificial intelligence (AI), information technologies, and aerospace – researchers found that China lagged behind the U.S. in three key technologies: high-end semiconductors, operating systems and software, and aerospace. The PKU team found that “China still has a long way to go from being a quantitatively strong country in science and technology to being a qualitatively strong country in science and technology;” and that it “still lags far behind the U.S. in terms of the number of highly cited papers and in paper originality.” “Both China and the U.S. face losses from decoupling, both at the technical and industrial levels, but China’s losses may be greater at present,” it concludes. (Science, February 8, 2022)
A Long March 3B carrier rocket carrying an experimental satellite shortly before its launch on 30 December 2021. Although China is advancing, the United States is still “absolutely leading” in aerospace technology, a Peking University report said. Liu Guoxing/VCG via Getty Images.
The United Front in Britain: Tactics that go unnoticed The Security Service’s (MI5) Alert on Christine Lee, reportedly a Chinese Communist Party (CCP) spy, operating in the Houses of Parliament should have sent shockwaves across the country, resulting in more media attention about her various connections and networks. It has been pointed out that Lee’s activities are aimed at the cultivation of relations with influential figures, reportedly undertaken in coordination with the CCP’s United Front Work Department (UFWD), with funding provided by foreign nationals located in the People’s Republic of China (PRC) and Hong Kong. However, apart from such blatant elite capture in direct cooperation with the UFWD, a more subtle, wider influence is being exerted in the form of the CCP’s United Front strategy. The operation of the United Front strategy does not need to directly involve the United Front Work Department, and once its narrative tools are formulated, they are frequently propagated by people unaware of the existence of either the UFWD or the strategy. In essence, the United Front strategy enables the CCP to mobilize all resources to discursively isolate and destroy its enemies, through swaying the opinion of a ‘wavering middle’ that does not yet hold strong favorable or adverse views of the PRC. Those who speak out against the CCP, accurately and on relevant topics, in a manner that may have bearing on its survival, are seen as enemies. As such, many voices that superficially may even appear to be criticizing the PRC can in fact be vital assets.
Such ‘critics’ are often merely pushing sophisticated distractions. Directing attention to minor or irrelevant problems that are shared by most societies is one tactic. Pushing false analogies in order to create comparisons between the PRC’s more serious problems and the free world is another common tactic. Examples include presenting narratives whereby the ‘People’s Republic’ appears much like any other country, dealing with a plethora of minor challenges. Such challenges could include animal welfare issues, domestic violence, growing divorce rates, and an ageing population. In reality, however, the PRC is governed by an openly hostile regime engaged in ethnic cleansing, slave labour, commercial organ harvesting and mass surveillance – in short, it is a ‘systemic competitor‘ . Should anybody have the backbone to bring up ethnic cleansing in PRC occupied regions, one can be confident that a well-prepared range of false analogies such as Black Lives Matter, American internment camps for Japanese civilians during the Second World War, and so on, will immediately surface.
Among other common tactics are relentless gaslighting and guilt-tripping through sometimes centuries-old pseudo-historical fake grievances, as well as more contemporary victim and oppression narratives. These are often carefully curated depending on the political leanings of the targeted demographic. It is almost inconceivable that any Chinese citizen would be genuinely upset by the First Opium War in the year 2022, much as a Cornish person would not fret over the Barbary slave trade.
Many tactics within the United Front strategy operate on the level of culture, and individual and interpersonal psychology. United Front narratives target opinion-formers, such as British politicians, academics and academic administrators, journalists, and key players in the business and commercial sectors. Influence may begin taking shape from an early stage in their career; having the ‘correct narratives’ at times even helps people get where they are. Over time, these narratives penetrate British society at all levels and spread in every direction – bottom-up and top-down – for example, by people who resent their position in society and are too ignorant to grasp the true implications behind soundbites like the ‘China model’ and the ‘China Dream’. At the same time, CCP narratives are often articulated by people with personal financial or professional interests related to the PRC. In between both ends of the spectrum lies a territory of careless, complacent ‘virtue-signalling’, viewing ‘all cultures as equal’, and all disparity as signs of oppression. Therefore, not all those engaged in spreading United Front narratives need to be supporters of the CCP, nor are they always aware of the implications of their words. Through correct social positioning, it is possible to be amoral or even dislike the CCP, and yet aid it in its objectives. The Council on Geostrategy article “The United Front in Britain: Tactics that go unnoticed”, is here. The Council on Geostrategy is an independent non-profit organization situated in the heart of Westminster (London). They focus on an international environment increasingly defined by geopolitical competition and the environmental crisis. Founded in 2021, they aim to promote a strong Britain, working closely with allies and partners, to uphold an open international order – for a more secure and prosperous future.
Source: FPRI’s February 6, 2018 article “A weapon without war: China’s United front Strategy
Technology’s Role in Driving U.S. Competitiveness: ITI’s Action Plan for 2022 The Information Technology Industry Council (ITI) promotes public policies and industry standards that advance competition and innovation worldwide.) puts forward several policy priorities where the United States can make significant progress in 2022 for the benefit of businesses, workers, and consumers across virtually every sector of the U.S. economy. Accomplishing these objectives will ensure that the United States remains a global leader in innovation and technology. It will also ensure that technology continues to play a critical role in achieving the policy agenda of the Biden-Harris Administration and the 117th Congress. Included as part of Technology’s Role in Driving U.S. Competitiveness: ITI’s Action Plan for 2022, ITI highlights five actions that the Administration and U.S. Congress, with the support of the tech industry, should take as soon as possible to promote U.S. competitiveness and benefit the U.S. economy now and in the future:
- Enable the free flow of data between the U.S. and EU: We encourage the Administration to quickly reach an agreement with the European Commission that preserves the flow of data between the United States and Europe.
- Invest in domestic technology research and development and manufacturing: Semiconductors power much of today’s digital economy and are a critical component in making the goods and delivering the services Americans rely on daily. U.S. Congress should fully fund the CHIPS For America Act and enact the United States Innovation and Competition Act/America COMPETES Act of 2022 to incentivize research and development and manufacturing of semiconductors and other advanced technology in the United States.
- Implement digital trade agreements that ensure American companies can operate freely in markets outside the U.S.: The Administration should negotiate, and U.S. Congress should support, enforceable digital trade rules with countries in the Indo-Pacific region to drive inclusive growth and innovation, to protect a free and open internet, and enable market opportunities for U.S. businesses around the globe.
- Solidify U.S. leadership in technical standards development: Existing export control rules have caused U.S. companies to cede ground, influence, and leadership to foreign competitors in international technology standards development. The U.S. Department of Commerce should publish a pending export control rule to enable companies to participate fully in this routine activity.
- Leverage technology in infrastructure rollout: Essential information and communications equipment will be necessary for the U.S. economy and the American people to realize the full benefits of the recently passed Infrastructure Investment and Jobs Act. The Administration should remove burdens that will prohibit U.S. companies from acquiring necessary commercial technologies from the global market in a timely and cost-effective manner.
USTR Releases Annual Report on China’s WTO Compliance The Office of the United States Trade Representative released its annual “2021 Report to Congress on China’s WTO Compliance,” laying out the Biden Administration’s assessment of China’s membership in the World Trade Organization.
“China has not moved to embrace the market-oriented principles on which the WTO and its rules are based, despite the representations that it made when it joined 20 years ago,” said Ambassador Katherine Tai. “China has instead retained and expanded its state-led, non-market approach to the economy and trade. It is clear that in pursuing that approach, China’s policies and practices challenge the premise of the WTO’s rules and cause serious harm to workers and businesses around the world, particularly in industries targeted by China’s industrial plans.”
The Biden Administration is pursuing a multi-faceted approach to address the harm caused by China’s trade and economic policies through both bilateral engagement with China and the use of trade tools to protect American workers and businesses. The Administration’s strategy also includes enhanced engagement with allies and partners in order to build broad support for solutions to the many unique problems posed by China and defending our shared interests.
This report was prepared pursuant to section 421 of the U.S.-China Relations Act of 2000 (P.L. 106-286), 22 U.S.C. § 6951 (the Act), which requires the United States Trade Representative (USTR) to report annually to Congress on compliance by the People’s Republic of China (China) with commitments made in connection with its accession to the World Trade Organization (WTO), including both multilateral commitments and any bilateral commitments made to the United States. The report covers calendar year 2021. It also incorporates the findings of the Overseas Compliance Program, as required by section 413(b)(2) of the Act, 22 U.S.C. § 6943(b)(2).
OFAC Issues Chinese Military-Industrial Complex Sanctions Regulations On February 16, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued “abbreviated” regulations to implement President Biden’s 2021 Executive Order (EO) barring certain investments in Chinese Military Industrial-Complex Companies (CMICs). OFAC announced that it intends to “supplement” these regulations at a later time to include interpretative guidance and definitions, general licenses, and other regulatory provisions. The narrow regulations, 31 C.F.R. part 586, went into effect on February 16, 2022.
The US government is ending the China Initiative The US Justice Department has announced it is ending its controversial China Initiative. Assistant Attorney General Matthew Olsen said that after a review of the program, he has concluded that the China Initiative is “not the right approach” to countering national security threats. The program began under the Trump administration as an effort to root out economic espionage, but drew criticism for falling short of that stated goal while increasingly focusing on academics and researchers of Chinese descent. A recent investigation by MIT Technology Review found just how far the China initiative had strayed from its original mission, recasting all Chinese academics and students in American universities as potential spies, and focusing on research integrity issues rather than national security concerns.
The DOJ is going to shift to a new strategy focused broadly on threats from hostile countries, rather than China alone. Read the full story.
Podcast: Demystifying censorship in China China has one of the world’s most restrictive media environments, relying on censorship to control information in the news, online, and on social media. But how does internet censorship in China actually function and who does it affect? Political scientist Molly Roberts explains the Chinese Communist Party’s censorship apparatus. You can listen on Spotify here.
Financing & genocide: Development finance and the crisis in the Uyghur Region A joint investigation by the Helena Kennedy Centre for International Justice at Sheffield Hallam University and NomoGaia, published in coordination with the Atlantic Council’s DFRLab, reveals how the World Bank’s private lending arm, the International Finance Corporation (IFC), has several significant investments in China’s Xinjiang Uyghur Autonomous Region, where indigenous peoples have been subjected to what international legislators, legal scholars, and advocates have determined to be a genocide. Significant evidence suggests that several of IFC’s clients are active participants in the implementation of China’s campaign of repression against the Uyghurs, including through forced labor, forced displacement, cultural erasure, and environmental destruction. IFC’s failure to adequately safeguard communities and the environment affected by its financing in the Uyghur Region makes the institution complicit in the repression of Uyghur, Kazakh, and other minoritized citizens. Using Chinese state media and propaganda, satellite imagery of IFC’s client operations, IFC project documentation, public reports, and corporate disclosures, this report presents credible evidence that IFC financing is contributing to companies committing gross human rights abuses against Uyghur peoples in the region and makes evidence-based recommendations to IFC and other parties.
An emerging “all-lose” scenario – China, the Western Balkans and the EU Western Balkans (WB) is a relatively recent concept which defines not just the geographical but also political status of Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Kosovo and Serbia. Contrary to the other states in the Balkans which have already joined the European Union (EU), WB’s accession is effectively at a standstill with no finish line in sight. However, the EU still considers WB its “backyard” which will eventually accede to the European Union. This is reflected in an EU-centric engagement framework meant to expedite reform and development in WB that will ensure compliance and synchronisation with the EU’s normative, regulative and policy frameworks.
As China’s ties with WB have been rapidly developing under the Belt and Road Initiative (BRI) and China-CEE Cooperation Framework (16/17+1) from the early 2010s onwards, how they fit in such a context has come under growing scrutiny.
LSE’s brief analysis offered here outlines the substantially different understandings of China-WB relations by all three main stakeholders in the relationship – China, WB and the EU – and of the goals and role they seek and play in the relationship. Such a perception gap makes the engagement strategies and goals they individually pursue within the relationship incompatible. The result is that China-WB relations are an irritant for all three, with potentially long-term adverse impact not only on China-WB relations but on all three relationships within the triangle as well as the regional politics.
What the Defense Department’s 2021 China Military Power Report Tells Us About Defense Innovation The Chinese Communist Party (CCP) is increasingly public about its national efforts—and its timelines—to achieve a “great rejuvenation” of China through technology leadership. The CCP hopes by 2049 to accomplish its centenary goal of maturing into “a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious”; by 2035 to complete its “China Standards” push to standardize and create interoperability in emerging technologies; by 2030 to become the world leader in artificial intelligence (AI); by 2027 to reach its recently announced aim to completely modernize the People’s Liberation Army (PLA) into a force capable of “intelligentized” warfare; and by 2025 to fulfill its “Made in China” objectives of growing the amount of high-tech goods manufactured in China from agricultural technologies to maritime and aerospace engineering. These wide-ranging goals are contingent, if not focused explicitly, on China strengthening its command of emerging technologies, as the U.S. Department of Defense’s 2021 annual China Military Power Report to Congress makes clear.

Chinese soldiers march in formation passed Tiananmen Square and the Forbidden City during a military parade on September 3, 2015 in Beijing, China. China is marking the 70th anniversary of the end of World War II and its role in defeating Japan with a new national holiday and a military parade in Beijing. (Photo by Kevin Frayer/Getty Images)
These emerging technologies include AI and advanced robotics, semiconductors and advanced computing, quantum, biotechnology, hypersonic and directed energy weapons, and advanced materials and alternative energy.
The Defense Department report elaborates on earlier sentiments expressed by the Biden administration’s Interim National Security Strategic Guidance that China is the only competitor to the United States “capable of combining its economic, diplomatic, military, and technological power to mount a sustained challenge to a stable and open international system.” According to the China Military Power Report, which covers the CCP’s military and security developments in 2020, China is transitioning to a new stage in its national strategy—as evidenced by the CCP’s announcement of new priorities and shortening of its timelines over the past year—one in which emerging technologies and defense innovation are playing a central role in more recent iterations of the CCP’s strategic objectives.
The PRC has undoubtedly demonstrated its commitment to achieving its vision. It has increased its annual military budget by 6.8 percent in 2021 and is investing enormous resources into the research and development of emerging technologies that it believes will convert into military capabilities over the next decade. However, defense innovation at the scale and pace of China’s vision raises challenges. Organizational transformation is hard, especially when it involves substantial changes to force structure and operational plans. China’s vision of simultaneously using cyber, AI, electronic warfare and other capabilities in military contingencies also requires an incredibly high level of operational sophistication. Whether the CCP’s execution of its plans can match the ambition remains to be seen. More in the February 15, 2022 article in Lawfare.
Chinese Communist Party Organizational Chart (2022)
Source: Cheng Li, Brookings Institution
Involuntary Returns – report exposes long-arm policing overseas Just around Christmas last year, China’s global hunt for “fugitives” hit a new milestone. Since its launch in 2014 as part of Xi Jinping’s anti-corruption campaign, 10,000 are claimed to have been successfully returned from over 120 countries around the globe under Sky Net (and junior partner Fox Hunt) operations. This new report by Safeguard Defenders goes beyond the few individual cases reported on occasionally in the past, delving deep into their foreign operations and blowing the lid on the use of so-called “voluntary” returns… by any means necessary. “Any means” is to be taken literally. Legally sanctioned methods under the PRC’s National Supervision Law range from detaining family members back in China, to sending police overseas on secret missions to intimidate targets into returning, to outright kidnappings abroad. As the research shows, formal legal procedures such as extraditions play an almost non-existent role in the claimed success rate of the Sky Net campaign. Instead, these involuntary returns (IR) account for the vast majority of Sky Net’s track record: in 2018, IR stood for some 64% of the claimed successful returns, while extradition – the appropriate judicial channel for such returns – represented but 1%. The rapidly expanding global practice poses a severe threat to national sovereignty and individual rights everywhere. National awareness and investigations, as well as targeted actions to counter these operations and protect those most at risk are key to upholding the international rules-based order.
China legalizes use of kidnapping abroad Safeguard Defenders’ latest report exposes an existing legal interpretation from the party-twin to the body in command of Sky Net: China’s new feared super-ministry, the National Supervision Commission (NSC). On the basis of article 52 of the National Supervision Law (2018), it provides the practical terms for how the NSC and Police shall achieve the return of claimed fugitives. This legal interpretation serves as a guide on the numerous categories of methods that can be employed. In its fifth and final category, it states outright: “[For the fifth category] There are two common ways: (1) kidnapping, which means using the methods of kidnapping to arrest fugitives back to the country; (2) trapping and capturing, which means luring criminal suspects to the territories of the destination country, the high seas, international airspace, or a third country which has an extradition treaty with the destination country, and then to arrest or extradite them.“
The three types of involuntary returns (IR) The research behind the report includes a deep dive into 62 cases of both failed and successful attempts at these “voluntary” returns. Based on these, Safeguard Defenders mapped three types of IR (involuntary returns) methods employed. Broadly speaking, they are:
IR Type 1: Threats to family in China
After moving to Canada Xie Weidong, a former judge on China’s Supreme Court, publicly criticised the PRC’s criminal justice system. Chinese authorities accused him of corruption and then attempted to get him to return “voluntarily”. When he refused, police detained first his sister and then his son back in China. Police also reached out to his ex-wife, a former long-time business partner and others, such as the lawyer who was representing his sister: all with the aim of persuading him to return. Having been a judge, Xie knew all too well what was in store for him should he return and continued to refuse despite the retaliation against his family members and others. The PRC even sent a lawyer to Canada to persuade him in person… in vain.
IR Type 2: Targeting victims in foreign country
The first known case of Chinese agents operating undercover in Australia to forcibly return someone is that of Dong Feng in late 2014, just months after Xi launched the international arm of his anti-corruption campaign (Fox Hunt). Dong, who had obtained Australian citizenship was a tour group operator and bus driver. He was also a Falun Gong practitioner. Undercover Chinese police officers approached Dong in Melbourne to persuade him to return and face “justice”. He initially agreed to communicate with them because of threats to his family back in China, but in the end he refused to return and stayed in Australia. However, the news that Chinese police were working undercover in Australia leaked, causing a diplomatic spat between Canberra and Beijing.
IR Type 3: Kidnappings abroad
Chinese human rights defender Dong Guangping had already served three years in prison in China on charges of inciting subversion of state power in the early 2000s and had been disappeared for another eight months in incommunicado detention in 2014. To escape further persecution, he managed to make it to Thailand in 2015, where he was granted official refugee status by the UNHCR. As he awaited resettlement to Canada in a Bangkok immigration detention centre, Chinese police walked in, handcuffed him in front of Thai officers and led him out. Dong later resurfaced in detention in China (there is no official record of his having left Thailand) where he was sentenced to three years in prison. He was freed in 2019 after serving his sentence. Individuals are not necessarily targeted through one method only. Cases have been recorded were, if one method fails, another is employed. Sky Net is set up to ensure their return at any cost, by any means necessary.
The scope and scale of Sky Net: The 10,000+ successful returns may represent but part of an iceberg as this number is based on the limited data touted by the CCP which include only successful returns in their publications. As Safeguard Defender’s deep dive into 62 individual cases shows, only half of them were successful. Moreover, whereas Sky Net officially claims to be targeting only economic criminals and Party- and State functionaries accused of bribery, corruption or abuse of power, many of the cases identified by Safeguard Defenders are of a very different kind. They clearly include actions against dissidents or human rights defenders: whether it is Chinese journalist Li Xin kidnapped in Thailand, activist Tang Zhishun kidnapped in Burma, or as in the cases of British Lee Bo or Swede Gui Minhai, targeted in Hong Kong and Thailand respectively.
In addition, the Uyghur Human Rights Project also mapped hundreds of cases of Uyghurs being targeted in a similar manner, although their data likely scratches only the surface.
It is therefore most likely that the official data excludes such instances, leaving us in the dark on just how common such targets are or how many of Sky Net’s operations end in failure and are therefore not registered in the data. Caveats aside, with 10,000+ admitted successful returns from over 120 countries even within its very narrow category of reported targets, it is a massive and worldwide operation.
China Pathfinder: Q4 2021 Update In the fourth quarter of 2021, China moved farther from market economy norms. The real estate sector continued to dominate the headlines as Evergrande, the country’s largest property developer, finally defaulted, along with peers Kaisa, Sinic Holdings, Fantasia, and Modern Land. Meanwhile, the government’s regulatory crackdown intensified, culminating in ride-hailing giant Didi’s forced delisting from the New York Stock Exchange. The move may herald a broader unwinding of foreign listings, particularly for data-heavy Chinese companies. While VC flows to China’s tech startups showed recovery from a low in 2020, the main targets for this investment were hardware technology sectors favored by Beijing. With expectations for a slowdown in 2022 mounting, China’s leaders dropped their fiscal restraint and promised new stimulus at their year-end Central Economic Work Conference (CEWC).
An aerial view of Beijing’s city network / Wenjie Dong/Getty Images
China Pathfinder is a multiyear initiative from the Atlantic Council’s GeoEconomics Center and Rhodium Group to measure China’s system relative to advanced market economies in six areas: financial system development, market competition, modern innovation system, trade openness, direct investment openness, and portfolio investment openness. To explore their inaugural data visualization and read their 2021 annual report, please visit chinapathfinder.org.
Caged tiger—the looming threats to China’s economic growth AS CHINA celebrates the lunar new year and the winter Olympics open in Beijing, host Mike Bird and Simon Cox, The Economist’s China economics editor, size up the looming threats to economic growth. Against the mounting costs of a zero-tolerance approach to the pandemic and a sharp slowdown in the property sector, can Xi Jinping deliver on his promise of “common prosperity” for all? A podcast with Don Weinland, The Economist’s China business and finance editor; Angela Zhang, director of the Centre for Chinese Law at Hong Kong University and author of “Chinese Antitrust Exceptionalism”; and Zhu Ning, a professor at the Shanghai Advanced Institute of Finance and author of “China’s Guaranteed Bubble”.
The day I was tapped up by Chinese Intelligence Nigel Inkster, a former director of MI6, has described China as an ‘intelligence state’. This was true even before the Chinese Communist party (CCP) passed laws that all individuals and organisations must help the security forces when asked. Chinese officials, party members and citizens have long been active across a broad front in advancing the interests of the CCP, seeking out political, military, scientific, technological and commercial information. Britain has to be wary of more than just the Ministry of State Security (MSS) — China’s secret police agency — or the military intelligence department. The revelation last month that the Labour MP and former shadow minister Barry Gardiner had accepted £420,000 from Christine Lee, a CCP ‘agent of influence’, was not an isolated occurrence.
We should not make the mistake, as one newspaper did last month, of thinking that ‘China today is not really interested in old-fashioned spying’. Its intelligence services are highly active and use many different methods for recruitment. China often engages in what I call ‘iceberg operations’: there is enough in the open to provide deniability, but what’s visible is only a fraction of the bigger picture. I know because I’ve been the target of such an operation. In 2018, when I was adviser to the Commons Foreign Affairs Committee, a British professor suggested that my experience in EU/China relations might earn me some good money giving lectures. Would I like to be introduced to his friends at a Chinese university? The professor himself lectures at a party school where CCP officials are trained. I exchanged emails with the Shanghai International Studies University, which passed me on to an affiliated thinktank, the Shanghai Institute for European Studies (SIES). I soon received an all-expenses-paid offer to fly to the city. Since I was already due to speak in Shenzhen at a conference, we agreed to meet there to talk more about the offer. As the email said, by ‘lucky coincidence’ two of its people were in nearby Guangzhou for business the week after.
It was not hard to spot that this was an intelligence approach. The article in The Spectator is here.
Chinese surveillance equipment in Kosovo Cameras, digital recorders, and other equipment from Zhejiang Dahua Technologies, a Chinese company blacklisted in the US, have been purchased by a Serb-majority interim authority in the Kosovar municipality of Gjilan. These are to be installed in local schools.

The purchase worth tens of thousands of euros has, according to publicly available documents, been backed by a Serbian government office that steers relations with Kosovo. The central Kosovar authorities noted they had no information about the plans, indicating the limits of Pristina’s authority over Serb-dominated areas on its territory. Moreover, this has prompted discussions about the possibility of China gaining ground in the future development of digital infrastructure in the region and concerns over the related security challenges.
China has put efforts into promoting its “smart cities” project abroad, focusing on providing integrated biometric, sensory and analytical technologies to assist foreign governments with monitoring and governing urban centers. Whereas Kosovo has largely rejected its involvement in such projects and pledged to support the US’s “Clean Network” initiative, Serbia, on the other hand, has increasingly supported further cooperation with Beijing in the high-tech sector and has been using Chinese surveillance technology in Belgrade as part of a “safe city” initiative since 2019. This means the purchase of the Dahua equipment does not necessarily signal a significant inroad of Chinese technology into Kosovo or a change in the latter’s strategy of aligning itself with the “Clean Network” initiative, especially given the circumstances under which the deal was made. Nevertheless, it represents a case that shows other possibilities of installing surveillance tools in municipalities that are partly outside Pristina’s control and once again brings attention to the complex relations between Kosovo and Serbia as well as the Sino-Serbian ties.
Further reading: the 25th issue of the #CEEasia Briefing, RFE/RL: “Serbia’s Back-Door Bid To Embed Chinese Snooping Tools In Kosovo”, Wired: “Serbia’s smart city has become a political flashpoint”. This video covers the quiet introduction since 2019 of Chinese surveillance technology in Belgrade as part of a “safe city” initiative, along with facial-recognition and other advanced technologies to track the public. The plan envisaged more than 1,000 surveillance cameras with facial-recognition technology at 800 locations in the Serbian capital. The scheme fueled a citizens’ group called Thousands Of Cameras (Hiljade Kamera) to protest the assumption “that we are all potential criminals” and the lack of consultation with the public, in addition to street art and other efforts at resistance.
So far, Belgrade has faced little public resistance over its financing of a plan to implement similar Chinese snooping tools in Kosovo. Neither Kosovo’s government, its national police, nor its customs authority has publicly responded to the Dahua deal.
Cars drive past a Huawei logo on a building in central Belgrade, Serbia/ Marko Djurica (Reuters)
President Vladimir V. Putin of Russia met Xi Jinping, China’s leader, in Beijing on Friday February 4, 2022, in a highly choreographed display of unity as Mr. Putin confronts the United States and NATO over Ukraine. “We are working together to bring to life true multilateralism,” Mr. Xi told Mr. Putin, according to the Kremlin translation of their remarks. “Defending the real spirit of democracy serves as a reliable foundation for uniting the world in overcoming crises and defending equality.” The meeting — the first that Mr. Xi has held in person with a foreign counterpart in nearly two years — highlighted the deepening ties between two authoritarian leaders even as President Biden struggles to contain diplomatic crises with both.
Mr. Putin will also attend the opening ceremony of the Winter Olympics, as the most prominent of nearly two dozen world leaders whose attendance has blunted the impact of a “diplomatic boycott” by President Biden and other leaders of democratic nations.
Credit Alexei Druzhinin
FCCC Media Freedoms Report 2021: ‘Locked Down or Kicked Out’ The Foreign Correspondents’ Club of China’s (FCCC) latest working conditions report finds the foreign press corps is facing unprecedented hurdles covering China as a result of the government’s efforts to block and discredit independent reporting. As the number of journalists forced out by the Chinese state grows, covering China is increasingly becoming an exercise in remote reporting. With China pulling out all the stops for the Olympic Games, the FCCC is troubled by the breakneck speed by which media freedom is declining in China. Ninety-nine percent of foreign journalists responding to an annual survey conducted by the FCCC said that reporting conditions did not meet what they considered to be international standards. While China’s strict pandemic measures have allowed authorities to curb the number of infections, Covid-19 has been used frequently by authorities seeking to delay approvals for new journalist visas, shut down reporting trips, and decline interview requests.
- 46% of respondents said their bureaus were understaffed because they had not been able to bring in the required number of journalists
- 52% of respondents said they were told to leave a place or denied access for health and safety reasons when they presented no risk, according to China’s own regulations
As a result, coverage of China is suffering. Nothing replaces on-the-ground reporting, free of state obstruction and surveillance.
- 62% of respondents said they were obstructed at least once by police or other officials
- 88% of the journalists who traveled to Xinjiang in 2021 said that they were visibly followed
- More than a quarter of respondents said their sources were harassed, detained, or called in for questioning by police more than once
Chinese authorities also appear to be encouraging a spate of lawsuits or the threat of legal action against foreign journalists, typically filed by sources long after they have explicitly agreed to be interviewed. Meanwhile, state-backed attacks against foreign journalists, particularly trolling campaigns online, have made it increasingly hard for journalists remaining in China to operate. Such campaigns have fostered a growing feeling among the Chinese public that foreign media are the enemy and directly encourage offline violence and harassment of journalists in the field.
Foreign journalists and their families are being harassed so severely by the state that a handful of correspondents, demoralized and under attack, have simply left mainland China. China’s approach to foreign journalists is in direct contrast to its own stated policies for foreign media and the Olympic spirit of excellence, friendship, and respect. The FCCC strongly believes that an independent media presence in China will bolster the country’s standing globally. China can boost confidence in its story not by flooding the world with highly orchestrated state propaganda, but by also letting others tell that story.
US Publishes Country Reports on Terrorism The Department of State has issued the 2020 Country Reports on Terrorism (CRT), which provides a detailed look at the counterterrorism environment last year, fulfilling an important Congressional mandate. Each year, the CRT provides insight on important issues in the fight against terrorism and helps the United States make informed decisions about policies, programs, and resource allocations as we seek to build counterterrorism capacity and resilience around the globe. Amid a constantly changing threat landscape, the CRT provides an overview of how we are marshalling international efforts to counter terrorism. Among the many accomplishments highlighted in the 2020 report are our efforts to expand the focus of the Global Coalition to Defeat ISIS to address new regions of concern, the first terrorist designation of a Racially or Ethnically Motivated Violent Extremist (REMVE) group, and the growing number of countries that have recognized the whole of Hizballah as a terrorist organization. The CRT also offers a frank assessment of the challenges we face. The report’s Annex of Statistical Information shows that both the number of terrorist attacks and the overall number of fatalities resulting from those attacks increased by more than 10 percent in 2020 compared with 2019. These figures reflect, in part, the spread of ISIS branches and networks and al-Qa’ida affiliates, particularly in Africa. The rising threat from REMVE groups, including those promoting the superiority of the white race, is addressed in a new section of the report for the first time. As the United States adapts its counterterrorism approach to keep pace with evolving threats, the CRT continues to serve as a valuable resource in assessing the global terrorism landscape. The 2020 Country Reports on Terrorism are available here.
Uyghurs and other ethnic minorities have faced extreme oppression at the hands of China’s authoritarian government, which has used counterterrorism as a pretext to commit genocide and crimes against humanity in Xinjiang. (Source: The Department of State Country Reports on Terrorism 2020)
USCC 2021 Annual Report to Congress Topics this year include the CCP’s ambitions and challenges at its centennial, China’s influence in Latin America and the Caribbean, the CCP’s economic and technological ambitions, the Chinese government’s evolving control of the corporate sector, U.S.-China financial connectivity and risks to U.S. national security, China’nuclear forces, Chinese military capabilities and decision-making for a war over Taiwan, Hong Kong’s government embracing authoritarianism, and a review of economics, trade, security, political, and foreign affairs developments in 2021. The U.S.-China Economic and Security Review Commission (USCC) was created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.
Annual Report to Congress
Executive Summary
Recommendations to Congress
How China views the Ukraine crisis Beijing may be 6,500 kilometers from Kyiv, but the geopolitical stakes for China in the escalating crisis over Ukraine’s fate couldn’t be higher. If Russia invades Ukraine and precipitates a drawn-out conflict with the United States and its Western allies (though a direct military confrontation is unlikely), China obviously stands to benefit. America will need to divert strategic resources to confront Russia, and its European allies will be even more reluctant to heed US entreaties to join its anti-China coalition.
But if US President Joe Biden defuses the crisis by acceding to some of Russian President Vladimir Putin’s demands, China will likely end up worse off strategically. While Putin will reap the benefits of his coercive diplomacy, and Biden will avoid a potential quagmire in Eastern Europe, China will find itself the sole focus of America’s national security strategy. Worse still, after Putin has skilfully exploited the US obsession with China to re-establish Russia’s sphere of influence, the strategic value of his China card may depreciate significantly. For Putin, capitalising on Biden’s fear of being dragged into a conflict with a secondary adversary (Russia) in order to extract critical security concessions is a risky but smart move. But ordering an invasion of Ukraine—and thus effectively volunteering to be America’s primary geopolitical adversary, at least in the short to medium term—is hardly in the Kremlin’s interest. Crippling Western sanctions and the high costs of fighting an insurgency in Ukraine would almost certainly weaken Russia significantly and make Putin himself both domestically unpopular and more dependent on Chinese President Xi Jinping.
Intriguingly, despite the high stakes for China in the Ukraine crisis, the Chinese government has been extremely careful about showing its hand. While the heightened tensions dominate Western media headlines, Ukraine receives scant coverage in the official Chinese press. Between 15 December (when Putin and Xi held a virtual summit) and 24 January this year, the People’s Daily, the official mouthpiece of the Chinese Communist Party, carried only one article about the crisis—on the inconclusive talks in mid-January between Russia and the US and its NATO allies. Editorials or commentaries voicing Chinese support for Russia also are notable by their absence.
Even more intriguingly, the summary of the Putin–Xi summit released by the Kremlin claimed that Xi supported Putin’s demand for Western security guarantees precluding NATO’s further eastward expansion, but the Chinese version, published by the official Xinhua news agency, contained no such reference. Instead of explicitly endorsing Putin’s position, Xi’s statement was vague and general pabulum about ‘providing firm mutual support on issues involving each other’s core interests’.
The pattern continued when Chinese Foreign Minister Wang Yi spoke to US Secretary of State Antony Blinken on 27 January. Western media characterised Wang’s statement on Ukraine as an expression of support for Putin. In fact, Wang planted China’s diplomatic stake squarely on the sidelines, saying only that ‘Russia’s reasonable security concerns should be stressed and resolved.’ Chinese reticence on Ukraine suggests that Xi is carefully hedging his bets. To be sure, Putin’s aggressive diplomacy is serving Chinese interests, at least for now. Should he decide to invade Ukraine and divert US strategic focus away from China, so much the better. But, assuming that Xi doesn’t know the Kremlin’s real intentions vis-à-vis Ukraine (it’s doubtful that Putin has shared them with his Chinese counterpart), he is prudent not to show his own cards either. Any expression of unequivocal Chinese support for Putin’s demands could leave China with little wiggle room. At worst, goading Putin down the path of war could be construed in some circles in Moscow as a diabolical Chinese plot to use Russia as a strategic pawn in the Sino-American cold war. Alternatively, should Putin choose to pocket face-saving gains in order to avoid a potential disaster, China would look foolish for having backed the Kremlin’s unattainable demands. Strategic uncertainty aside, China’s rulers know that explicitly supporting Putin will almost certainly antagonise the European Union, which is now China’s second-largest trading partner. More in January 31, 2022 issue of The Strategist.
The EU Special Committee on Foreign Interference On the 25th of January, 2022, MEPs finalized 18 months of inquiry by Special Committee on Foreign Interference (INGE), and adopted its final recommendations. The committee adopted the report with 25 votes, eight against and one abstention. The European public and government officials are “overwhelmingly” unaware of the severity of the threat posed by foreign autocratic regimes, in particular Russia and China, MEPs say in the text. Insufficient defence made it easier for malicious actors to take over critical infrastructure, carry out cyber-attacks, recruit former senior politicians and propagate polarisation in the public debate. This is exacerbated by loopholes in legislation and not enough coordination between EU countries.
Counteraction / To counter the threats, INGE members urge the EU to raise public awareness through training for people in sensitive functions and general information campaigns. In addition, the EU should beef up its capabilities and build a sanctions regime against disinformation. Rules on social media platforms, which serve as vehicles for foreign interference, have to be tightened, too.
In addition, the committee recommended the following:
- support broadly distributed, pluralistic media and fact-checkers;
- make online platforms invest in language skills to be able to act on illegal and harmful content in all EU languages;
- treat digital election infrastructure as critical;
- provide financing alternatives to Chinese foreign direct investment used as geopolitical tool;
- clarify “highly inappropriate” relations between certain European political parties and Russia;
- ban foreign funding of European political parties;
- urgently improve cybersecurity, classify and register surveillance software such as Pegasus as illegal and ban their use; and
- make it harder for foreign actors to recruit former top politicians too soon after they have left their job.
The introduction of the Sanctions Targeting Aggressors of Neighboring Democracies (STAND) with Taiwan Act of 2022 U.S. Senator Dan Sullivan (R-Alaska), a member of the Senate Armed Services Committee (SASC), introduced the Sanctions Targeting Aggressors of Neighboring Democracies (STAND) with Taiwan Act of 2022, which would impose crippling, comprehensive economic and financial sanctions on China in the event that the People’s Liberation Army (PLA) or its proxies initiate a military invasion of the island democracy of Taiwan. The suite of sanctions includes the targeting of Chinese Communist Party (CCP) members and Chinese financial institutions and industrial sectors, as well as prohibiting U.S. financial institutions—including investment companies, private equity firms, venture capital firms, or hedge funds—from making any investments in a Chinese entity that benefits or is affiliated with the CCP. The bill would also prohibit the importation of certain goods mined, produced, or manufactured wholly, or in part, in the People’s Republic of China. Congressman Mike Gallagher (R-Wisc.) will be introducing companion legislation in the House of Representatives.
Sen. Sullivan spoke about the STAND with Taiwan Act in a speech on the Senate floor on January 20, 2022.
China hires western TikTokers to polish its image during 2022 Winter Olympics An army of western social media influencers, each with hundreds of thousands of followers on TikTok, Instagram or Twitch, is set to spread positive stories about China throughout next month’s Winter Olympics. Concerned about the international backlash against the Beijing Games amid a wave of diplomatic boycotts, the government has hired western PR professionals to spread an alternative narrative through social media. In November, as Joe Biden contemplated a diplomatic boycott, Vipinder Jaswal, a US-based Newsweek contributor and former Fox News and HSBC executive, signed a $300,000 contract with China’s consulate general in New York to “strategize and execute” an influencer campaign promoting the Beijing Winter Olympics and Paralympics in the US.
The contract, which has been registered with the US Department of Justice, lays out a detailed public relations strategy. According to the agreement, between 22 November and 13 March, when the Winter Paralympics end, each influencer will be asked to produce three to five “deliverables”, meaning content that is crafted to fit the targeted audience. Jaswal claims his company has received up to 50 pitches from influencers ranging from former Olympians to entrepreneurs.
The contract states that 70% of the content will be culture-related, including Beijing’s history, cultural relics, modem life of people and new trends. Another 20% will highlight “cooperation and any good things in China-US relations”, including high-level bilateral changes and positive outcomes. Jaswal, who was born in the UK, received $210,000 shortly after the contract was sealed with Chinese diplomats, he told the Observer. He promised Beijing that his influencers would bring an estimated 3 million impressions on social media platforms frequently used by young Americans. He said he was well aware of the controversies that surround China’s policies in Xinjiang and Hong Kong, but “what we are trying to do is to simply highlight the integrity and dignity of the Olympics”, he said. “Boycotts don’t help mutual understanding … I don’t support boycotts. They are ineffective, irrelevant and inconsequential.” More in The Guardian of January 22, 2022, and The Business Insider of January 23, 2022.
What Role Should Criminal Justice Play in Foreign Relations? What is the function of criminal justice in foreign relations? Consider the federal criminal case against Venezuelan President Nicolás Maduro. In March 2020, the U.S. Department of Justice publicly unveiled federal international drug trafficking charges against Maduro, just a month after President Trump had met with Juan Guaidó, the head of the Venezuelan National Assembly. The case played an ambiguous role in broader U.S.-Venezuela foreign policy. Some commentators believed that indictments were an integral part of the Trump administration’s “maximum pressure” campaign to cabin Maduro, a campaign that included sanctions and political recognition of Guaidó as Venezuelan president. At the same time, the criminal investigation clearly began during the Obama administration and thus potentially represented the natural culmination of years of prosecutorial efforts. How much control did the White House have over the case? How much should it have had? And how normatively desirable in U.S. foreign relations are such foreign affairs prosecutions — cross-border criminal cases that involve extraterritorial statutory authority, institutional capacity and multilateral cooperation — compared to, say, diplomacy or sanctions against the Venezuelan regime?
In a new article, “The Criminalization of Foreign Relations,” the author takes up such questions, arguing that the United States best harnesses extraterritorial law enforcement policy when engaging criminal justice’s distinctiveness and expressivism. Regarding distinctiveness, compare criminal prosecutions against the six other major six foreign policy modalities: diplomacy, bilateral and multilateral agreements, trade, economic sanctions, military force, and the use of foreign aid. More in the article “What Role Should Criminal Justice Play in Foreign Relations?“, published in Lawfare.
Specters of Fear and Executive Power A “specter,” according to Merriam-Webster, is “a visible disembodied spirit, a ghost; something that haunts or perturbs the mind, a phantasm.” David Driesen’s “The Specter of Dictatorship” is a book about fear in politics. Driesen offers three main arguments about the relationship between fear of dictatorship and the separation of powers. First, the Founders’ fear of tyranny was a foundational purpose for the Constitution and that the Supreme Court has misunderstood this original meaning as it has expanded presidential power and embraced the unitary executive theory. Second, he focuses on modern experiences with European tyranny (from the Nazis to the rise of 21st century European authoritarianism) to highlight the dangers of powerful chief executives and their ability to exploit public fear to concentrate power. Finally, drawing on this history he offers a series of important doctrinal recommendations to restore checks and balances. A full review of The Specter of Dictatorship: Judicial Enabling of Presidential Power” (Stanford University Press, 2021) is here.
‘Web3’ is on the way. Authoritarians should be worried The Internet once held great promise as a means of empowering individuals, but it has become yet another path of control for bad actors. Today, authoritarian governments and companies around the world track and surveil individuals; data is not private and is sold for profit; some states algorithmically “score” their citizens; and propaganda and disinformation are rampant. Thankfully, we are on the cusp of “Web3,” a next-generation Internet that could shift the balance back toward individuals. If the United States embraces Web3, it could also offer a pivotal advantage in its ongoing competition with authoritarian states, especially China.
What is Web3? To understand, it helps to go back to the beginning. Think of Web1 as the original one-way Web pages of the 1990s — static sites coupled with the dawn of widespread email. Web2 came to life as the Internet became interactive, allowing users to log in and create their own content. At the same time, Google, Facebook and other massive tech platforms hosted “free” services in exchange for our data. Over subsequent decades, of course, the Internet has continued to advance and grow more sophisticated, but we mostly still operate in a Web2 world.
Now, we are closing in on a new version of the Internet — Web3 — built on the blockchain, a technology that makes it possible to transact data securely, and smart contracts, which allow users to make agreements without relying on intermediaries — it’s what permits you to pay a vendor directly using cryptocurrency, no bank required. Web3 is still being developed and defined, but it’s clear that, fundamentally, it will offer a more decentralized version of the Internet.
Web3 is in its heady early days. New companies are forming daily to remove central platforms and bring decentralized, more secure services to users globally. Some focus on video-sharing services with no central repository — in contrast with YouTube or TikTok. Others are creating decentralized shared-storage options, unlike centralized cloud services. These new services address many of the biggest problems of today’s Internet. Security is improved because there is no central database to hack. Privacy is protected because users directly control their data. Resiliency is built into Web3 through decentralization. And this decentralization makes control by authoritarian governments much more difficult. More in The Washington Post. See also this WEF publication (“Web3: The hype and how it can transform the internet”). The author is Engagement Lead at the World Economic Forum.
When the Chips are Down: Gaming the Global Semiconductor Competition Essential to the day-to-day functioning of modern society, semiconductors are increasingly at the center of a high-stakes competition between the U.S. and China. Taiwan—already a flashpoint in this competition—accounts for 92 percent of the world’s most advanced chip manufacturing capacity. Control over Taiwanese semiconductor facilities and human capital would give China roughly half of global chip fabrication capacity and almost all state-of-the-art manufacturing capacity.
TSMC, short for Taiwan Semiconductor Manufacturing Company, is by far the world’s largest chip manufacturer. It’s also the sixth most valuable company in the world with a market cap of over $600 billion, and supplies chips to the likes of Apple, Intel, and Nvidia. Market share Taiwan = 63% (54 % TSMC, 7 % UMC, 1 % PSMC, and 1 % VIS) Source: visualcapitalist.com of December 14, 2021.
A virtual strategy game conducted by the Center for a New American Security, and detailed in a newly published report, has produced critical insights into the nature of U.S.-China strategic competition and global competition for semiconductors. Designed and conducted by the CNAS Gaming Lab, the exercise examined how China could influence Taiwan’s semiconductor industry and policy options that the United States and Taiwan could take to counter China’s predatory actions. The game featured three teams—the United States, China, and Taiwan—and envisioned a scenario in which a disruption created a global shortage in leading-edge chips. The report’s key findings include:
- Taiwan seeks to remain the dominant global semiconductor manufacturer to maintain its “Silicon Shield,” which links Taiwan’s national survival and security to its technological preeminence in microelectronics.
- China is likely to use multifaceted gray zone tactics involving economic, political, informational, and military coercion to gain control over Taiwan’s semiconductor industry and complicate U.S., Taiwan, and multilateral responses.
- A misalignment of interests between the United States and Taiwan on how to secure semiconductor supply chains hinders policy coordination and creates opportunities ripe for exploitation by China.
- Unilateral actions by Taiwan or the United States are insufficient to stop China’s coercion of Taiwan, which will have significant impact on global semiconductor supply chains.
President Joe Biden, Australian Prime Minister Scott Morrison, and British Prime Minister Boris Johnson announcing the AUKUS security initiative, at the White House, September 15, 2021. Andrew Harnik/AP
The report also recommends five actions the White House and Congress should take to protect critical semiconductor supply chains and better position the United States to counter Chinese coercive measures, including strengthening interagency planning to address China’s gray zone tactics, focusing on areas of shared cooperation with Taiwan, and bolstering bilateral and multilateral dialogues with stakeholders in the semiconductor industry.
Conclusion: China will not wait for the United States to get its innovation and supply chain resilience house in order, nor is Beijing likely to come knocking on Washington’s front door. Gray zone tactics, or coercive actions marked by strategic ambiguity, render China a complex competitor. Strategic competition with Beijing requires enhanced cross-industry, bilateral, and multilateral dialogue and cooperation between the world’s leading techno-democ- racies. Greater prioritization of intellectual property, talent cultivation and retention, and adequately funded R&D is needed to maintain a competitive edge and counter Chinese coercion, especially with regards to the global semiconductor industry. Modern life depends on supply chain resilience and access to chips at every level, from transportation to digital communications to life-sustaining medical equipment and beyond. Failure to stabilize and protect supply chains and chip access related to Taiwan will have devastating impacts on everyday life in the United States and abroad, far beyond the inconvenience of holiday shipping delays. Trillions of dollars in economic activity hang in the balance. The key insights drawn from The Chips Are Down game further illuminate the gravity of the U.S.-China competition and global competition for semiconductors, clarifying the web of elements and distinctions that are vital to safeguarding semiconductor supply chains, minimizing associated risks, and assuming a proactive posture in the fight for technology leadership.
UK Intelligence Agency Targets China’s United Front The intelligence services of the British government harnessed the power of the media to try to protect the state from Chinese interference. In an almost unprecedented move, MI5 – the agency focused on counterintelligence within the U.K. – chose to call out an alleged Chinese spy, whom it said has been making payments to politicians. The warning about Christine Ching Kui Lee, a solicitor who runs a law firm in London, was accompanied by her photograph, which ensured that her face appeared prominently across websites and social media, even though she was not arrested nor charged with any crime. Excited journalists jumped in to add new twists to the story. The next day the papers were filled with a great deal of comment and analysis – alongside plenty of hearsay and speculation. A key allegation is that Lee donated 420,000 British pounds ($572,000) to a senior Labor member of parliament, Barry Gardiner, who employed her son, Daniel Wilkes, as a member of his parliamentary staff.
MI5 warned that anyone contacted by Lee “should be mindful of her affiliation with the Chinese state and remit to advance the CCP’s agenda in UK politics.”
In this October 16, 2015 file photo, China flags are fixed on poles beside Union flags along The Mall towards Buckingham Palace in London in preparation for a state visit by President Xi Jinping. Credit: AP Photo/Frank Augstein
The warning was issued in the form of an alert which was sent by MI5 to the speaker of the House of Commons, Lindsay Hoyle, who chose to forward it to all MPs – ensuring immediate press attention. In his memo, Hoyle said: “I am writing now to draw your attention to the attached Interference Alert issued by the Security Service, MI5, about the activities of an individual, Christine Lee, who has been engaged in political inference activity on behalf of the Chinese Communist Party, engaging with members of parliament and associated political entities, including the former APPG (All Party Parliament Group) Chinese In Britain.” Hoyle said Lee’s donations were made in a covert way in order to mask the origins of the payments. “This is clearly unacceptable behaviour and steps are being taken to ensure it ceases,” he added. The Chinese embassy in London said in a statement that China did not interfere in the internal affairs of other countries. In Beijing, foreign ministry spokesmanWang Wenbin saidChina has “no need” to engage in “so-called interference activities.” “Perhaps, some people, after seeing too many James Bond movies, are imagining links where there is none. It is deeply irresponsible to make unfounded sensational remarks based on subjective conjecture,” Wang said. Gardiner – the MP at the center of the scandal – said he was “angry and distressed” that he was targeted and insisted the donations were used to fund research and did not benefit him personally.
However, some journalists uncovered examples of Gardiner’s pro-Chinese position on sensitive issues, including his support for Chinese investment in Britain’s nuclear power industry. The Times newspaper also revealed that Christine Lee spoke up publicly in favor of the Chinese Communist Party’s clampdown on the pro-democracy demonstrations in Hong Kong. The newspaper added that she was involved in a fundraising event for the British Conservative Party, which is led by beleaguered Prime Minister Boris Johnson. “This case underlines the fact that China poses a serious and insidious threat to our democracy and we must ask our politicians, academics and journalists to be vigilant of CCP effort to buy influence and other forms of infiltration,” Steve Tsang, the director of the SOAS China Institute at the University of London, told The Diplomat. Tsang added, “China’s efforts to influence Western democracies have focused on cultivating members of parliament, especially where a new arrival or a leading figure in an opposition party looks as though may be on track to become a minister of state at a later stage.” Similar efforts by the Chinese government to gain influence have been uncovered in Australia. “While all the facts are still out, this case has echoes of similar episodes in Australia: donations to political parties and politicians from Chinese citizens and CCP-associated Australian citizens with the intention of generating pro-China statements and policy positions,” noted Dr. Bates Gill, professor of security studies at Macquarie University in Sydney.
“However, Australia and the UK are not alone in this. The United Front Work Department is actively cultivating politicians and opinion-shapers around the world,” said Gill, who is also a senior associate fellow with the Royal United Services Institute in London. In the United States, intelligence agencies have been taking an increasingly high-profile position on China. In 2018, the U.S. Justice Department unveiled its”China Initiative“, meant to counter thefts of trade secrets and other forms of economic espionage conducted by – or for the benefit of – the Chinese government. FBI Director Christopher Wray saidthat the bureau was opening a new China-related counterintelligence case about every 10 hours. More in this article in The Diplomat of January 22, 2022.
CRG researcher Chris Cash sat down with Martin Thorley, an expert on Chinese party-state activity in the UK, to discuss the work of the United Front and the Christine Lee case, protecting East Asian diaspora communities, and the UK and China’s ‘phoney peace’. You can listen here on Spotify.
Higher Education’s Confucius Institute Hangover The conviction of acclaimed Harvard scientist Charles Lieber on charges stemming from his improper relationship with the Chinese government has sent shockwaves throughout U.S. higher education. Lieber’s case laid bare China’s efforts to blur the traditional boundaries between academia, defense research, and the private sector to advance its military and technological modernization. These under-the-radar tactics make illicit knowledge and technology transfer very difficult to detect.
Unfortunately, they are just the tip of the iceberg.

A new report (“The Middle Kingdom Meets Higher Education: How U.S. Universities Support China’s Military-Industrial Complex”) by the Foundation for Defense of Democracies (FDD) reveals that dozens of America’s top research universities have quietly entered into academic and research partnerships with the same Chinese schools working to give the People’s Liberation Army (PLA) a technological advantage over the U.S. military. U.S. law does not require U.S. universities to disclose the details of such partnerships, even though Beijing has made clear that it intends to harvest cutting-edge American innovation to underwrite its military modernization and nuclear weapons program.
What all of the report’s problematic partnerships share in common is that they can be traced back to decisions by these U.S. and Chinese universities to jointly operate Confucius Institutes (CIs), which are Chinese government-sponsored organizations that offer Chinese language and cultural programming worldwide. CIs have come under fire for promoting the CCP’s preferred political narratives and encouraging the harassment of those on campus who criticize the regime. This latest research reveals that they also advance facets of China’s military-civil fusion, a national strategy aimed at acquiring the world’s cutting-edge technologies to achieve Chinese military dominance.
U.S. universities have long championed academic and research partnerships with Chinese universities as a win-win. By attracting top Chinese talent, U.S. universities dramatically exceeded enrollment and revenue targets. Formalizing such partnerships, which outline everything from exchange programs to joint research initiatives, is also standard operating procedure when a U.S. university establishes a CI program. In those instances, U.S. universities enter into contractual relationships with the Chinese Communist Party (CCP) to manage their CI operations, as well as a separate contract with a CCP-selected civilian university to support the CI’s programming. Troublingly, these separate contracts, many of which promote joint research collaboration in new and emerging fields, often remain active for years after a CI closure.
Beijing established CIs mainly at America’s top research universities, often referred to as ‘R1’ and ‘R2’ research centers. Before the recent wave of CI closures that began in 2018, more than 70 percent of all CIs were located at one of these U.S. research hubs. These same universities are often affiliated with the National Industrial Security Program (NISP), a Defense Department-led initiative that vets contractors and universities that receive millions of tax-payer dollars to perform classified work. Less surprising is that many of the Chinese sister universities chosen to support these CI programs have also been tapped by the CCP to spearhead defense innovation in fields ranging from nuclear weapons design and submarine development to cyber-espionage and materials science.
Chinese leader Xi Jinping has made clear his intention to harness the power of academia and civilian research to achieve Chinese military superiority. In a recent speech, Xi stated the CCP would “exhaust all means” to lure tech talent to China. Central to Xi’s strategy are government programs that sponsor Chinese students and researchers specializing in more than 200 academic ‘disciplines with national defense characteristics’ (or 国防特色学科) to study at America’s elite research colleges, after which they are expected to return to China and support its defense build-up. This initiative and others like it, including China’s Thousand Talents and Double First-Class University Plan (世界一流大学和一 流学科建设), are unapologetically aimed at supporting China’s military-civil fusion.
Confucius Institute on the Troy University campus in 2018. (Kreeder13/CC BY-SA 4.0/via Wikimedia)
Despite the national security implications of partnering with China, U.S. universities alone decide whether to enter into foreign academic and research relationships. There is no requirement that they coordinate with federal or local authorities, nor are universities required to conduct any formal due diligence on their foreign partners. Neither are U.S. universities required by law to publicly disclose copies of their CI contracts or information about their foreign partnerships. Shockingly, U.S. universities do not even have a legal or regulatory obligation to sever ties with Chinese universities supporting China’s defense industry. For instance, schools can legally maintain partnerships with Chinese universities formally identified as threats to U.S. national security, including those placed on the Commerce Department’s Entity List. More in this article in RealClearDefense, by a senior China fellow at the Foundation for the Defense of Democracies, a non-partisan think tank focused on national security and foreign policy. The author recently published a research monograph entitled, “The Middle Kingdom Meets Higher Education – How U.S. Universities Support China’s Military-Industrial Complex.”
UK Parliament / House of Commons: The Uyghur Tribunal TheUyghur Tribunalis an unofficial body that examined claims of human rights abuses and crimes against humanity reportedly committed against the Uyghur people by China in its Xinjiang province. The Tribunal has no legal powers. Its hearings were held at Church House in London. The Tribunal was chaired by Sir Geoffrey Nice QC, a barrister who has served as a part-time judge and worked at the International Criminal Tribunal for the Former Yugoslavia between 1998 and 2006 and led the prosecution of Slobodan Milošević, former President of Serbia. Members of what the Tribunal styled as a jury, included several academics specializing in fields like medicine, law and anthropology, and board members of charitable organizations. The Tribunal started its work in September 2020, and published a judgment in December 2021. The Tribunals judgment found evidence that China had detained “hundreds of thousands of Uyghurs – with some estimates well in excess of a million […] without any, or any remotely sufficient, reason and subjected [them] to acts of unconscionable cruelty, depravity and inhumanity”. The judgment stated that torture of Uyghurs “attributable to the PRC [Peoples’ Republic of China] is established beyond reasonable doubt”. It also said that crimes against humanity attributable to the PRC “is established beyond reasonable doubt” by acts of: “deportation or forcible transfer; imprisonment or other severe deprivation of physical liberty; torture; rape and other sexual violence; enforced sterilisation; persecution; enforced disappearance; and other inhumane acts”. On the subject of genocide, the Tribunal’s judgment emphasised the difficulty of assessing what legal standards should apply, and how such standards interact with public understanding of the phrase. However, they conclude that: “On the basis of evidence heard in public, the Tribunal is satisfied beyond reasonable doubt that the PRC, by the imposition of measures to prevent births intended to destroy a significant part of the Uyghurs in Xinjiang as such, has committed genocide”. The evidence the Tribunal reported of birth-prevention measures included enforced abortions, the removal of wombs against women’s will, the killing of babies immediately after birth and mass enforced sterilisation through the insertion of IUD devices that were only removable by surgical means.
The judgment reported evidence of reduced birth-rates particularly in indigenous Uyghur counties: “Across the 29 counties with indigenous-majority populations for which we have 2019 or 2020 data, the birth-rate has fallen by 58.5% from the 2011-15 baseline average […] In those counties that are over 90% indigenous, the birth-rate fell at an even greater rate, showing a 66.3% decrease in 2019-20”. The Tribunal found however, that “there is no evidence of organized mass killings”.
Lily Vetch / Uyghur Tribunal
Chinese Government response:In March 2021, the Chinese state imposed sanctions on nine UK citizens, including five MPs and Sir Geoffrey Nice, and several UK-based organisations, including the Uyghur Tribunal. In September 2021, in a press conference the Chinese Ambassador to the UK, Zheng Zeguang, described the Tribunal as “nothing but a farce carried out by a small number anti-China elements”. Mr Zheng further dismissed the evidence presented to the Tribunal and the witnesses, saying: “Its so-called “evidence” is nothing but sheer lies and disinformation. Its so-called “experts” are rumour mongers who have long engaged in slandering China. And the so-called “witnesses” the organizers have put together are merely actors who have been making up the so-called “persecution” that never happened at all.” The Ambassador dismissed claims of genocide as “absurd”, stating that in “the past 40 years, the population of Uygurs in Xinjiang has increased from 5.55 million to 11.6 million”. He said that “Xinjiang-related issues have nothing to do with human rights, ethnic groups or religions, but everything to do with fighting terrorism, separatism and extremism”, that the “Vocational Education and Training Centres in Xinjiang are absolutely not “concentration camps”, but preventative and de-radicalisation measures”. Adding that “in nature, they are no different from the Desistance and Disengagement Programme (DDP) of the UK or the de-radicalisation centres in France”. On 10 December, the day the Tribunal published its findings, a spokesperson for China’s UK Embassy said the Tribunalwas “nothing but a political tool used by a few anti-China and separatist elements to deceive and mislead the public”, describing it conclusions as “mere clumsy shows staged by anti-China elements for their self-entertainment”; adding “anyone with conscience and reason will not be deceived or fooled”.
The Research Briefing, published on the 18th of January, 2022, is here.
The threat from foreign state intelligence activities targeting Denmark In its role as national intelligence and security authority, the Danish Security and Intelligence Service (“Politiets Efterretningstjeneste”, or PET) is responsible for identifying, preventing, investigating and countering threats to freedom, democracy and security in Danish society. This applies to threats in Denmark as well as threats directed at Danish nationals and Danish interests abroad. Their Assessment of the Espionage Threat to Denmark can be found here.
Slovenia considers closer ties with Taiwan Slovenia and Taiwan are working on “exchanging representatives,” Prime Minister Janez Janša has announced, criticising China’s response to Taiwan’s decision to open a diplomatic representative office in Vilnius. The comments come as the EU is still struggling to find a unified message on China’s coercive trade measures against Lithuania, which faces mounting direct and indirect pressure in terms of trade. The exchange of representatives would not occur at the level of embassies but “at the same level that many EU countries already have,” Janša told Indian broadcaster Doordarshan in a recent interview. Janša said Slovenia would support any sovereign decision of the Taiwanese people: “If they want to join China … without any pressure, military intervention, blackmailing or strategic cheating as it is happening in Hong Kong currently, we will support it.” “But if the Taiwanese people want to live independently, we also have to support this position,” he added. Slovenia’s prime minister also criticised China for its response on the Taiwanese representative office matter.
Ljubljana, Slovenia
China: An Economic And Political Outlook For 2022 In recent years, Xi Jinping has taken China to the “left” politically and economically, but to the “right” with his deeply nationalist narratives at home and a more assertive foreign and security policy abroad. More recently, this has contributed to a slowdown in the Chinese economy and an increase in the level of political and policy reaction against Xi’s anti-market measures. Now, with last month’s Central Economic Work Conference, the Communist Party appears to have acknowledged a number of Xi’s measures have indeed gone too far, especially as Xi himself seeks to maximize economic stability ahead of his bid for another term in office at the 20th Party Congress this November. But whether these corrective measures will be enough to restore economic growth in the short term given the Chinese private sector is now “once bitten, twice shy” is another question altogether.
In the Policy Paper “China: An Economic and Political Outlook for 2022”, the Asia Society and Asia Society Policy Institute tackle these questions and provide an analysis of how China’s economic challenges are likely to shape its politics and policies in the year ahead.
Biden Signs Memo on Cybersecurity President Biden signed a national security memorandum on Jan. 19 to bolster the cybersecurity of the National Security, Department of Defense and Intelligence Community systems. The memo directs national security agencies to adopt the same cybersecurity standards that earlier executive order 14028 imposed upon certain federal civilian agencies. The memo further authorizes the National Security Agency to issue binding operational directives requiring agencies to both identify their national security systems and take action to protect or mitigate against cyber threats targeting those systems. And the memo also requires agencies to “secure cross domain solutions–tools that transfer data between classified and unclassified systems.” You can read the memo here.
U.S. Drops Case Against MIT Professor Accused of Hiding China Ties Gang Chen was one of around two dozen academics charged since 2019 with allegedly lying about their affiliations. January 20, 2022 statement from U.S. Attorney Rachael S. Rollins on the dismissal of the Gang Chen case:
“Today’s dismissal of the criminal charges against Gang Chen is a result of our continued investigation into this matter. Through that effort, we recently obtained additional information pertaining to the materiality of Professor Chen’s alleged omissions in the context of the grant review process at issue in this case. After a careful assessment of this new information in the context of all the evidence, our office has concluded that we can no longer meet our burden of proof at trial. As prosecutors, we have an obligation in every matter we pursue to continually examine the facts while being open to receiving and uncovering new information. We understand that our charging decisions deeply impact people’s lives. As United States Attorney, I will always encourage the prosecutors in our office to engage in this type of rigorous and continued review at every stage of a proceeding. Today’s dismissal is a result of that process and is in the interests of justice.” The professor and researcher at Massachusetts Institute of Technology (MIT) was indicted on January 19, 2021 by a federal grand jury in connection with failing to disclose contracts, appointments and awards from various entities in the People’s Republic of China (PRC) to the U.S. Department of Energy. Gang Chen, 56, was indicted on two counts of wire fraud, one count of failing to file a foreign bank account report (FBAR) and one count of making a false statement in a tax return. Chen was charged by criminal complaint and arrested on Jan. 14, 2021. According to charging documents, Chen is a naturalized U.S. citizen who was born in China. He is a professor and researcher at MIT where he serves as Director of the MIT Pappalardo Micro/Nano Engineering Laboratory and Director of the Solid-State Solar Thermal Energy Conversion Center (S3TEC). Since approximately 2013, Chen’s research at MIT has been funded by nearly $19 million in grants awarded by various U.S. federal agencies.
Cross-country Exposure: Analysis of the MY2022 Olympics app The 2022 Winter Olympic Games in Beijing have generated significant controversy. As early as February 2021, over 180 human rights groups had called for governments to boycott the Olympics, arguing that holding the Games in Beijing will legitimize a regime currently engaging in genocide against Uyghur people in China. Some governments including Canada, the United Kingdom, and the United States have pledged to diplomatically boycott the Games, meaning that these countries will allow athletes to compete at the Games but will not send government delegates to attend the event.
The International Olympic Committee (IOC), the organization responsible for organizing the Games, has been criticized for failing to uphold human rights. In December 2021, the United States House of Representatives voted unanimously to condemn the IOC and stated that the IOC had violated their own human rights commitments by cooperating with the Chinese government. Following professional tennis player Peng Shuai’s 2021 sexual assault accusation against Chinese Communist Party leader Zhang Gaoli and her subsequent disappearance, Human Rights Watch stated that “the IOC has vaulted itself from silence about Beijing’s abysmal human rights record to active collaboration with Chinese authorities in undermining freedom of speech and disregarding alleged sexual assault.” According to IOC documents, Zhang Gaoli headed the steering committeee charged with securing and organizing the 2022 Games.
Internet platforms operating in China are legally required to control content communicated over their platforms or face penalties. Vague definitions of prohibited content are often called “pocket crimes” referring to authorities being able to deem any action as an offense. Such crimes are utilized by the Chinese government to restrict political and religious expression over the Internet. Chat and other real-time communications platforms operating in China typically perform automated censorship using a blocklist of keywords whose presence in a message will trigger its censorship. Previous work has found little consistency in what content different Chinese Internet platforms censor. However, Internet platforms are known to receive censorship directives from various government offices or officials.
MY2022’s splash screen and basic UI
In this Citizen Lab report the authors analyze MY2022 (冬奥通), an app required to be installed by all attendees to the 2022 Olympic Games, including audience members, members of the press, and competing athletes. The app is multi-purpose, implementing a wide range of functionality including real-time chat, voice audio chat, file transfers, as well as news and weather updates about the Olympic Games. The app can also be used to submit required health customs information for those visiting China from abroad, which includes submitting passport details, demographic information, as well as travel and medical histories. The Citizen Lab is an interdisciplinary laboratory based at the Munk School of Global Affairs & Public Policy, University of Toronto, focusing on research, development, and high-level strategic policy and legal engagement at the intersection of information and communication technologies, human rights, and global security.
Key Findings
- MY2022, an app mandated for use by all attendees of the 2022 Olympic Games in Beijing, has a simple but devastating flaw where encryption protecting users’ voice audio and file transfers can be trivially sidestepped. Health customs forms which transmit passport details, demographic information, and medical and travel history are also vulnerable. Server responses can also be spoofed, allowing an attacker to display fake instructions to users.
- MY2022 is fairly straightforward about the types of data it collects from users in its public-facing documents. However, as the app collects a range of highly sensitive medical information, it is unclear with whom or which organization(s) it shares this information.
- MY2022 includes features that allow users to report “politically sensitive” content. The app also includes a censorship keyword list, which, while presently inactive, targets a variety of political topics including domestic issues such as Xinjiang and Tibet as well as references to Chinese government agencies.
- While the vendor did not respond to our security disclosure, we find that the app’s security deficits may not only violate Google’s Unwanted Software Policy and Apple’s App Store guidelines but also China’s own laws and national standards pertaining to privacy protection, providing potential avenues for future redress.
US delays intelligence center targeting foreign influence As Russia was working to subvert U.S. elections and sow discord among Americans, Congress directed the creation of an intelligence center, the Foreign Malign Influence Center, to lead efforts to stop interference by foreign adversaries. But two years later, that center still is not close to opening, according to this article in AP News. Experts and intelligence officials broadly agree the proposed Foreign Malign Influence Center is a good idea. The U.S. has lacked a cohesive strategy to fight influence operations, they say, with not enough coordination among national security agencies. Adversaries that tried to interfere in the last two presidential elections continue to bombard Americans with disinformation and conspiracy theories at a time of peril for democracy in the U.S. and around the world. But the intelligence community and Congress remain divided over the center’s mission, budget and size, according to current and former officials. While separate efforts to counter interference continue, a person identified this year as a potential director has since been assigned elsewhere and the center likely will not open anytime soon.
The term “foreign malign influence” means any hostile effort undertaken by, at the direction of, or on behalf of or with the substantial support of, the government of a covered foreign country with the objective of influencing, through overt or covert means— (A) the political, military, economic, or other policies or activities of the United States Government or State or local governments, including any election within the United States; or (B) the public opinion within the United States.
The term “covered foreign country” means the following: (A) The Russian Federation. (B) The Islamic Republic of Iran. (C) The Democratic People’s Republic of Korea. (D) The People’s Republic of China. (E) Any other foreign country that the Director of the Center determines appropriate for purposes of this section.
MI5 warns MPs and peers of ‘Chinese agent’ trying to influence parliamentarians on behalf of Beijing An interference alert from the security service informed the House of Commons speaker that lawyer Christine Ching Kui Lee (Christine Lee runs a law firm -Christine Lee & Co-, with offices in London and Birmingham), “established links” for the Chinese Communist Party with current and aspiring MPs.
MI5 said that activity “had been undertaken in covert coordination with the United Front Work Department [a department of the CCP geared towards coopting politicians and public groups to support and promote the Chinese Communist Party’s foreign policy goals], with funding provided by foreign nationals located in China and Hong Kong”. BBC (January 14, 2022) The Guardian (January 13, 2022).
China Research Group Chair Tom Tugendhat in The Times (subscription needed): “The ability to access parliament, to attend functions and to pick up gossip is worth something to the Ministry of State Security that oversees foreign activity for Beijing…. we must do what we can to protect ourselves from outside influence.”
University of Exeter Postdoctoral Research Fellow Martin Thorley unpacks Lee’s links to the Chinese party-state and her involvement in British politics in this Twitter thread: “1/20 The news about “Chinese agent” Christine Lee broke today. I’ve been following her case for some time & in fact she featured in my PhD thesis on UK-China hidden relations. She’s appeared in stories by @thetimes & @GuidoFawkes before. Yet there’s still a lot more to this case.“
Lee’s involved in British politics has been on the security services’ radar for some time. The fact that Lee had made headway in infiltrating the office of a British elected representative shows that new laws to counter state threats, soon to arrive in Parliament, are long overdue. Security minister Darren Hinds’ assurances of a review to examine the ties Lee forged with establishment may shed more light on the ways in which hostile countries are trying to interfere with British politics and wider society. This very public warning from MI5 also demonstrates a willingness on the part of security services to publicly address concerns about CCP malign activity on British shores. It’s important that we are able to have an honest, open debate about the nature of the Beijing regime in order to counter actions that harm our interests.
China uses “United Front” work to co-opt and neutralize sources of potential opposition to the policies and authority of its ruling Chinese Communist Party (CCP). The CCP’s United Front Work Department (UFWD)—the agency responsible for coordinating these kinds of influence operations—mostly focuses on the management of potential opposition groups inside China, but it also has an important foreign influence mission. To carry out its influence activities abroad, the UFWD directs “overseas Chinese work,” which seeks to co-opt ethnic Chinese individuals and communities living outside China, while a number of other key affiliated organizations guided by China’s broader United Front strategy conduct influence operations targeting foreign actors and states. Some of these entities have clear connections to the CCP’s United Front strategy, while others’ linkage is less explicit. Today, United Front-related organizations are playing an increasingly important role in China’s broader foreign policy under Chinese President and General Secretary of the CCP Xi Jinping. It is precisely the nature of United Front work to seek influence through connections that are difficult to publicly prove and to gain influence that is interwoven with sensitive issues such as ethnic, political, and national identity, making those who seek to identify the negative effects of such influence vulnerable to accusations of prejudice. Because of the complexities of this issue, it is crucial for the U.S. government to better understand Beijing’s United Front strategy, its goals, and the actors responsible for achieving them if it is to formulate an effective and comprehensive response. See also this USCC report. The U.S.-China Economic and Security Review Commission was created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.
Former head of MI5: ministers failed to act on warnings before Commons spy alert over Christine Lee. Lord Evans of Weardale, now chairman of the committee on standards in public life, said more had to be done to identify the “true source” of donations and called for tighter rules on the flow of money via lobbying groups or shell companies, according to The Sunday Times of January 16, 2022.
See also “China Dialogues” as well as this article (“Christine Lee and Foreign Interference: what the UK can learn from Taiwan”) from a MPhil/PhD student at LSE’s Department of International Relations and a researcher at LSE IDEAS. Her research at the London School of Economics and Political Science focuses on China’s foreign policy and strategy toward Taiwan, cross-Strait relations, as well as Taiwan in digital IR.
Taiwan Requires Immediate Unprecedented Cyber Action The prospect of a Chinese invasion of Taiwan echoes some of the most disastrous 20th century instances of great power expansion—reminiscent, perhaps, of Nazi Germany’s Anschluss or even its subsequent invasion of Poland. Given that the latter ignited World War II, America’s strategic community has been rightly fixated on the vast military and political contingencies of a Chinese invasion that would remake Asia. But Taiwan is not just the geopolitical fulcrum of the Indo-Pacific; it is also the nexus of a rapidly evolving Sino-American technological competition. And if 20th century great power competition is any guide, tech races are just as important to long-term competition as territorial military contests. The U.S. needs to act now to secure the technological dimensions of a looming Taiwan crisis, or risk losing far more than the island.
In the domain of Sino-American tech rivalry, Taiwan is unique in two aspects: First, the Taiwan Semiconductor Manufacturing Corporation (TSMC) remains the world’s tightest bottleneck in the global high-tech ecosystem, with exclusive capabilities to construct the most valuable, sophisticated computer chips in existence. Second, military conflagration in Taiwan would represent a hitherto-unknown level of cyber-intensive military conflict, the seeds of which likely have already been planted. Both of these realities demand unprecedented cooperation between the United States and Taiwan—cooperation that requires significant trust and openness in Taipei and significant counter-espionage and national security assistance from Washington. It’s hard to overstate the importance of TSMC’s microscopic transistors: The company’s chips are the foundation of enormous sectors of national economic growth for both the U.S. and China. They are also the backbone of the massively consequential tech race between the two countries in security-essential sectors like artificial intelligence, quantum computing and advanced military capabilities.
Luisa Jung for The Washington Post
TSMC is estimated to have cornered as much as 90 percent market share of the world’s most advanced processors, and controls a majority of the global market for made-to-order chips. To stretch the historical analogy, it is as though a coterie of the world’s most accomplished nuclear physicists lived in a country that the Nazis aimed to annex in the 1930s, or like a collection of world-leading rocket scientists were on the verge of being absorbed into the Soviet bloc at the height of the Cold War.
A worker enters a “clean room” at chipmaker TSMC’s headquarters in Hsinchu, Taiwan, on Sept. 10 / Billy H.C. Kwok for TIME
It’s no coincidence that the world’s most precious technological capabilities are nestled in the world’s hottest geopolitical fault line. Taiwan’s government has long cultivated a “silicon shield” over the island in hopes that unique dominance in a crucial—but delicate—industry would deter China from rash actions against the island. In terms of imports, China spends more on semiconductors than on anything else—including oil — and in 2020, China’s semiconductor trade deficit stood at a whopping $233 billion. By intertwining Beijing’s long-term economic and strategic interests with Taiwanese semiconductors, the thought went, the PRC would be unlikely to invade the island because it would invite devastating supply-chain disruptions.
But that calculus may be changing. Stricter export controls on American-designed chips have stymied China’s access to advanced semiconductors from TSMC and elsewhere. The U.S. sanctions that cut off vital TSMC chips to Huawei, crippling many of the company’s prospects, seem ominous to many Chinese strategists. If Beijing’s decision-makers come to believe that something like Huawei’s fate awaits the PRC more broadly, Taiwan’s “silicon shield” will crack: Beijing would have nothing to lose, technologically speaking, from an invasion. If China could seize and leverage the personnel and facilities of TSMC effectively—or at least ensure they don’t continue accelerating U.S. technologies—it could have everything to gain.
Chinese efforts aside from an invasion have failed. Despite President Xi Jinping’s forceful statements on the immense value of semiconductor technologies for China’s security, little progress has been made in the mainland. China has already tried to recruit TSMC leaders to its own chip industry with limited success. Chinese hackers have been waging a chronic war on the company and have already stolen disturbingly large troves of information. But despite these efforts and the vast sums of money that China and other governments around the world are pouring into semiconductor alternatives, TSMC’s dominance in many of the most complex and competitive chip production techniques seems to only be growing growing. If China cannot buy, poach or steal TSMC’s talent, its next best option may be to conquer it—which is convenient enough, for a dictator who seems determined to reunify Taiwan with the PRC.
Ultra-sophisticated chips are a prerequisite for vast sectors of economic growth and are the key to a massively consequential tech race between the U.S. and China.
Image credit: TSMC
Given those factors, the U.S. cannot afford to gamble on the fate of the world’s most advanced chipmakers. In light of the shifting incentives of Beijing, any American contingency plan for a Chinese invasion that does not coordinate with Taipei now on quickly securing the TSMC “brain trust” and their families in the event of a crisis is woefully incomplete. In the event of a successful Chinese invasion, and with proper planning, TSMC engineers and scientists have the potential to fulfill a similar role to that of the German Jewish refugees who were so central to the success of the Manhattan Project in the 1940s—if the U.S. can ensure their safety. On the other hand, their loss could set back global technological development by years, or supercharge China’s edge in advanced technologies.
Relatedly, U.S. counter-espionage efforts also need to focus on protecting the full design and production chain of advanced semiconductors around the world. Attempts to try to diversify TSMC’s geographic presence with new fabrication facilities (or “fabs”) in Arizona, Japan and possibly Germany are not without risks. Nor are the efforts to expand the capacity of alternative companies to compete with Taiwan’s dominance in the sector. Diversified expertise will ultimately mean more targets for one of the PRC’s most urgent intelligence objectives. Protecting such vital intellectual property will require similar procedures and approaches to those used in the construction of America’s most sensitive sites—like military bases, intelligence agency facilities and nuclear weapons depots. Outfitting new fabs with such precautions will be costly, but not nearly as costly as a major breach of techniques, designs or data to the PRC. The article written for Lawfare by a senior fellow at the American Enterprise Institute and a research associate at the American Enterprise Institute, is here.
Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Sojitz (Hong Kong) Limited The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement on January 11, 2022, with Sojitz (Hong Kong) Limited (“Sojitz HK”), a Hong Kong, China-based company that engages in offshore trading and cross-border trade financing. Sojitz HK agreed to remit $5,228,298 to settle its potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). The apparent violations occurred when Sojitz HK made U.S. dollar payments through U.S. financial institutions for Iranian-origin high density polyethylene resin (HDPE) from its bank in Hong Kong to the HDPE supplier’s banks in Thailand. In doing so, Sojitz HK caused the U.S. financial institutions that processed the funds to engage in and facilitate prohibited financial transactions related to goods of Iranian origin. The settlement amount reflects OFAC’s determination that Sojitz HK’s apparent violations were non-egregious and voluntarily self-disclosed, and accounts for Sojitz HK’s remedial response and cooperation with OFAC. For more information, please visit this web notice.
Sanctions by the Numbers: 2021 Year in Review The first year of President Joe Biden’s administration witnessed major developments in U.S. sanctions strategy, including a general review of all sanctions programs under the auspices of the U.S. Department of the Treasury. Most notably, the Treasury has revised and expanded its sanctioning authorities to align with the broader foreign policy objectives of the Biden administration and to respond to global developments. This CNAS edition of Sanctions by the Numbers provides a snapshot of overall sanctioning trends, an overview of the most heavily used country-specific and thematic sanctions programs, and the global distribution of sanctions designations during the first year of the Biden administration.
China-related Sanctions (Excerpt)
In addition to the 70 designations pursuant to the country-specific sanctions program on China (CMIC), the Treasury imposed 30 designations on China-related targets under various other sanctions programs. To address continued human right abuses in Xinjiang against the Muslim Uyghurs, the Treasury—along with Canada, the EU, and UK—sanctioned two Chinese government officials, Wang Junzheng and Chen Mingguo, pursuant to human rights–related authorities. OFAC also imposed seven Hong Kong–related designations pursuant to Executive Order 13936, which addresses the oppressive actions of the Chinese government and Hong Kong authorities against democratic protests linked to Beijing’s Hong Kong National Security Law. The remaining sanctions on China and Hong Kong–related targets are pursuant to GLOMAG, SDGT, ISFR, DPRK3, and ILLICIT-DRUGS-EO for providing designated terrorist groups, such as the IRGC-QF and Hezbollah, with financial assistance and money laundering services.
Semiconductor manufacturing: What China really wants This summer, Her Majesty’s (HM) Government launched a national security review of the People’s Republic of China’s (PRC) purchase of the Newport Wafer Fab (NWF), a semiconductor factory in South Wales. A final decision on the acquisition by state-backed electronics company Wingtech through its Dutch subsidiary Nexperia is expected in January 2022. At almost the same time as HM Government announced that Sir Stephen Lovegrove, the National Security Adviser, would review the purchase, a report rom the White House called the circuits that firms like NWF manufacture the ‘DNA’ of the high-tech economy, which underpin ‘state-of-the-art military systems’. Gina Raimondo, President Biden’s Commerce Secretary, has asked allies to help slow the PRC’s innovation rate in the sector.Chinese strategy is quite simple: rapidly increasing its control of semiconductor supply chains. This has deep national security implications. Yet, claims that democratic countries’ positions in the industry have been ‘stolen’ by East Asian competitors are often based on a misunderstanding of a vast sector that includes many different activities. The industry is extremely complex, but firms broadly fit into particular niches: first, the big intellectual property-holders are the design firms; next, foundries (or ‘fabs’) produce integrated circuits (ICs), usually manufacturing for the design firms; packaging and assembly companies generally package these circuits in simpler cases, as components for products like smartphones. Separately, manufacturing-equipment companies make the kit that all these firms use for manufacture and design. The trend is strongly towards specialisation, with a few integrated device manufacturers (IDMs) like Intel and Samsung that design, make and package. But the biggest value-add is in the design firms: packaging trails a distant third.
So where is the PRC? This is surprisingly straightforward. Design is now dominated by one German and three American firms; Taiwan dominates fabs, followed by South Korea (Taiwan Semiconductor Manufacturing Company (TSMC) is now well ahead of any competitor technologically, and with Samsung has 81% of the world market, hence the claims that East Asia has devoured the semiconductor industry); and the bulk of manufacturing equipment comes from the United States (US), the Netherlands, and Japan. The PRC’s position in all these fields is negligible. The ‘assembly, testing, and packaging’ segment is Taiwanese-dominated, but now also features some major Chinese Players such as Tianshui Huatian, JCET Group, and Tongfu Microelectronics. This sector, less capital- and skill-intensive than the others, was the first to become dominated by East Asian firms. The PRC now hopes that the sector will provide a foot in the door. Yet, the American market share of around 50% of the industry as a whole is ten times the PRC’s. The PRC has almost nothing in the highly profitable fab-less design field and lacks Taiwan’s ability to make leading-edge 3-nanometre (nm) chips. 92% of manufacturing capacity for 10nm or under is Taiwanese. So what’s the problem? This is the beginning of the first, two-part article based on a recent report on this area (‘The acquisition of Newport Wafer Fab by China’s Wingtech‘), written by the Director, Defence and Security for Democracy, at Civitas. In February 2021 he published this report (‘Inadvertently Arming China? The Chinese military complex and its potential exploitation of scientific research at UK universities’).
Revealed: Huawei’s Oxbridge Millions British universities have received twice as much funding from Huawei as previous estimates suggest, according to new figures obtained byThe Spectator. Freedom of Information requests sent by Steerpike show that a further £28.7 million has been received from the Chinese tech giant by nine leading UK universities, on top of the sums identified in a landmark report by the China Research Group in June 2021. By far the biggest recipient of donations and research grants is Cambridge University which has taken £25.7 million from Huawei alone since 2016. Huawei has been banned from participating in Britain’s 5G network from 2027 amid security concerns. Last year MPs on the Commons Defence Select Committee claimed in a report that Huawei is ‘strongly linked to the Chinese state and the Chinese Communist Party despite its statements to the contrary’, citing its ownership model and the subsidies it has received. The Chinese telecoms giant has repeatedly denied that it is controlled or linked to the Chinese regime.
Cambridge’s links to the company have come under increasing scrutiny in the past two years. In February 2020, constituent college Jesus published a report about telecommunications reforms which praised Huawei and carried a foreword from Stephen Toope, university Vice-Chancellor. Five months later the Timesreported that the company paid £150,000 for the report alongside £200,000 for its Dialogue Centre from a branch of the Chinese State Council.
Professor Peter Nolan, 71, director of the China Centre and a fellow at Jesus, meets with Chairman Xiao Yaqingm, head of Beijing’s State-owned Assets Supervision and Administration Commission, in Beijing in September 2018 / Source: Daily Mail
In September 2021 Huawei was accused of ‘infiltrating’ a separate University of Cambridge research centre after most of its academics were found to have ties to it. Now Mr S has discovered that Cambridge has taken 31 research grants over the past five years, worth a total of £18.3 million or an average of £592,000 each. The largest sum was £2.9 million in February 2018; some £5.7 million has been granted since February last year. Cambridge also took £7.4 million in donations from Huawei over three different financial years since 2016. While the university refused to release annual figures, it disclosed that donations totalled between £50,000 to £99,000 in 2016/17, £5.5 million to £9.9 million in 2018/19 and £1 million to £4.9 million in 2020/21. The overall total of £25.7 million accepted by Cambridge is all the more notable in light of Oxford’s 2018 announcement that the university would no longer accept funding from Huawei. A similar Freedom of Information request by Steerpike found that Oxford received between £500,000 to £2.49 million in philanthropic support and grants from Huawei since 2016; exact figures were not provided by the university. Separately, the same request revealed that between £2 million to £4 million was also separately received by Oxford in donations from the China Scholarship Council, an arm of the Chinese Ministry of Education.
In June, a report by the China Research Group of hawkish Tory MPs found that twenty leading UK universities have collectively accepted more than £40 million in funding from Huawei and state-owned Chinese companies in recent years. On top of at least £26.2 million identified by Mr S gifted by Huawei to Oxford and Cambridge in donations and grants, a further £2.5 million has been given to seven other leading universities across the country from the same company since 2016. Among those include the Royal College of Art which received £104,000 from Huawei in April 2017 and Queen Mary University London which has received £825,000 since October 2018 for its electronic engineering and computer science school from four branches of the Huawei empire: Huawei Device, Huawei Technologies and both its Irish and Swedish offshoots. More in this article.
China’s Digital Currency and Authoritarianism China is the first major economy to develop and implement a central bank digital currency (CBDC). Its CBDC has many names: Digital Currency/Electronic Payment (DCEP), the digital yuan or renminbi, and electronic Chinese yuan (eCNY). A new video explainer from CNAS explores how Beijing’s CBDC efforts will have critical ramifications for the Chinese Communist Party’s digital authoritarianism. As China is in a national blitz to digitize its entire economy, it is strengthening its hand for domestic social control while also influencing financial technology innovation in the global financial system.
To find out more about the ground truths of China’s CBDC, you can read the January 2021 CNAS report(“China’s Digital Currency: Adding Financial Data to Digital Authoritarianism”).
CSET at Three When CSET was officially founded in January 2019, they were a small team with a handful of ambitious goals: 1) to use evidence-driven analysis to answer pivotal questions about emerging technologies and their security implications, 2) to produce relevant and timely work that influences policy outcomes, and 3) to prepare the members of their team for policymaking careers of their own. They’ve come a long way since then. Their research has made its way to the White House, the Pentagon, multiple congressional offices and committees, and many other policymaking bodies. They’ve expanded to a full-time staff of more than 50 people and seen many CSET alumni move into important policy positions at all levels of government. To mark their third birthday, this January 2022 progress reportprovides a detailed overview of CSET’s major accomplishments — their research, their impact, and their distinguished alumni — and highlights the areas where CSET researchers are conducting groundbreaking, data-driven analysis. On page 21 you’ll find that a CSET Research Analyst spoke with The Washington Post last December about U.S. investments in Chinese companies with military ties, based on the report “Harnessed Lightning” that he wrote with a CSET Senior Software Engineer and a CSET Translation Manager. “It’s clear there are large gaps in the U.S. export control system that allow the Chinese military to access equipment, information and capital originating in the United States,” the Research Analyst said. “But plugging these gaps is easier said than done.”
Potato Chips, Computer Chips: Yes, There Is a Difference With the rise of China, the United States needs more than a competitiveness strategy; it needs a policy specifically tailored to boost production and innovation capacity in strategically important industries—especially technologically sophisticated ones with dual-use capabilities. The founder and president of the Information Technology and Innovation Foundation (ITIF), and author of the report, writes that some industries, such as semiconductor microprocessors (computer chips) can experience very rapid growth and reductions in cost, spark the development of related industries, and increase the productivity of other sectors of the economy. In essence, spillover effects from computer chips make potato chip manufacturers more efficient. ITIF, founded in 2006, is an independent, nonprofit, nonpartisan research think tank.
Key Takeaways:
- In a fiercely competitive global economy, it is no longer assured that the United States will have needed domestic production and innovation capabilities, nor will it necessarily be able to securely buy them at will from other nations.
- U.S. economic and national security now depend on bolstering capacity in strategically important industries and technologies. A generic competitiveness policy will not suffice.
- Policymakers cannot ensure the “right boats” are lifted without a strategic-industry policy that identifies key industries and technologies, continually monitors U.S. and foreign capabilities, and implements policies to bolster targeted sectors.
- Strategic-industry policy should not entail favoring U.S. firms over allied nations’ firms that produce or do research in America. Nor does it mean picking industries in which the U.S. lacks capabilities or picking specific firms as “winners.”
- It does entail identifying industries in which the U.S. must have adequate capabilities to be secure. It means analyzing the strengths and weaknesses of each industry and implementing the correct policy interventions to spur competitive advantage.
- It is time to end the stale argument about free markets versus industrial policy. We need both: market-based policy for most of the economy, and strategic industrial policy for select sectors.
Former U.S. Navy Sailor Sentenced to 2.5 Years for Selling Export-Controlled Military Equipment to China According to a DOJ News Release Summary, published on December 21, 2021, Ye Sang “Ivy” Wang, a former U.S. Navy sailor who was a Logistics Specialist First Class assigned to the Naval Special Warfare Command, was sentenced to 30 months in custody and ordered to pay a $20,000 fine for conspiring with her husband and co-defendant, Shaohua “Eric” Wang, to illegally export sensitive military equipment to China for profit.
Naval Special Warfare Group 1 Training Detachment Building at Naval Amphibious Base Coronado. John Gastaldo/U-T San Diego/Zuma Press
Eric Wang pleaded guilty on September 26, 2019, admitting that he illegally sold export-controlled U.S. military equipment to China through his on-line business and that he enlisted his wife to use her Navy position to purchase the equipment for resale. Eric Wang also admitted that he maintained a warehouse in China to house the military equipment, travelled back and forth frequently, and had connections to buyers in China. On February 3, 2020, U.S. District Court Judge Cynthia Bashant sentenced Eric Wang to 46 months for his role in this scheme. According to Ivy Wang’s plea agreement and the government’s sentencing memorandum, she purchased military equipment for Naval Special Warfare units as part of her duties as a logistics specialist from 2015 to 2019. In March 2018, she used her military email and mailing address to order a device for identifying United States military personnel in the field. This item was subject to U.S. Department of Commerce export controls, and not advertised for sale to civilians. She was deployed in Iraq at the time the device arrived on base in San Diego. She advised her command that the package containing this device was something she had obtained for her husband for a camping trip. In reality, she bought the device on behalf of her husband for him to resell it to China for profit.
Months later, in October 2018, upon returning from deployment to Iraq, Ivy Wang told the interviewing agents that she knew her husband was shipping military equipment to China illegally. Despite being interviewed by law enforcement agents, Ivy Wang took the device from her Navy command, brought it home and gave it to her husband. The device had been secretly disabled by law enforcement. Upon receipt, Eric Wang messaged a customer that he was in receipt of the item, but advised he could not ship the item to China, because “they are still investigating me… My friend is a SEAL who also got involved. They are investigating him as well.” Ivy Wang told NCIS and HSI agents during her October 2018 interview that her husband sent her an Excel spreadsheet of military equipment items for her to purchase and that she knew those items were going to buyers in China. Eric Wang told her that he could not buy export-controlled military equipment using his personal email address, so he asked her to do it for him, using her position in the U.S. Navy and her military email address. She grew so annoyed at his repeated requests that, after purchasing equipment for him through March 2018, she gave him her password to her military email address and told him to buy the export-controlled military equipment posing as her after she deployed. “This defendant used her position of trust to put the Navy and the nation at risk, and the sentence imposed today holds her accountable for her actions,” said Acting U.S. Attorney Randy Grossman, who praised the prosecution team, NCIS, HSI and Department of Commerce for their excellent work on this case. “Ms. Wang betrayed her oath to the U.S. Navy and ultimately threatened the operational readiness and safety of our nation’s military by attempting to acquire and illegally export sensitive military equipment to China,” said Special Agent in Charge Joshua Flowers of the NCIS Southwest Field Office. “NCIS and our partners remain committed to protecting our nation’s critical technologies and infrastructure.” “This individual abused her position of trust to obtain military-grade equipment, which foreign adversaries could have used against American service members and allies,” said Chad Plantz, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) San Diego. “Fortunately, HSI and our partners were able to prevent this equipment from falling into the wrong hands, but this case serves as a stark reminder of why it’s important for organizations – particularly those involved in national defense – to educate their workforces on how to properly identify and report insider threats.” More details are here.
Xi’s Way Or The Highway: How and Why China Brings Global Businesses To Heel The sight of one of the most powerful and influential men in global finance issuing a groveling apology to the Chinese Communist Party (CCP) must surely rank as one of the most excruciating acts of the year. In November, Jamie Dimon, the Chief Executive Officer of JP Morgan, one of the largest investment banks in the world, humorously remarked that JP Morgan is likely to outlive the CCP. This off the cuff comment provoked fury from Beijing, pressuring Dimon to retract his statement. This particular incident reflects a much wider and sometimes sinister pattern of questionable business practices in China. China’s ruler, Xi Jingping, has made no secret of his plans to take China into the geopolitical stratosphere. Schemes such as the Belt and Road Initiative, a global infrastructure investment scheme into which China has poured $200 billion, are part of China’s effort to develop its economic hegemony. Central to this vision is Xi’s core economic ideal: ‘socialism with Chinese characteristics’. This deceivingly vague message has had significant implications for how China behaves as a player in the global economy. The phrase has been used by the CCP since China emerged from the period of extreme turbulence and isolation under Chairman Mao. However, under Xi, it has come to represent a distinct brand of political-economic ideology. At its core, the ideology stresses that although private enterprise has a key place within China’s economy, essentially no one is above the rule of the CCP, meaning total compliance with their authority is essential for permission to participate in commercial activity. It is within this context that Dimon’s rapid apology should be seen. Compliance with the CCP’s authority does not just mean abiding by the rules. Compliance in this case means not doing anything that undermines the legitimacy of the CCP and its decisions. Dimon’s retraction is only the latest in a series of efforts by the CCP to browbeat global businesses operating in China into conformity. The most striking example of this relates to the supply of cotton from the Xinjiang region in China to many of the world’s premier retailers such as Nike and H&M.
Many fashion retailers use vast quantities of cotton produced from Xinjiang to make its products. However, this region has recently become the focus of intense international scrutiny. Home to the ethnic Uighur Muslim minority, the region which produces 80% of China’s raw cotton has witnessed some of the most terrifying state-sponsored repression of the century. The Muslim minority have been subjected to appalling measures such as mass sterilisations and- crucially for businesses- forced labour in the cotton fields. Many fashion retailers, including Nike and H&M, are members of the international non-profit Better Cotton Initiative (BCI), which seeks to promote sustainable and ethical supply chains in the industry. The BCI has been vocal in drawing attention to Xinjiang and retailers have subsequently raised question marks about their supply. In spite of their good intentions, these protests are hastily silenced by the CCP, which has equated such remarks with attacks on China itself. It is therefore hardly surprising that a consumer boycott was rapidly organised across Chinese social media platforms, against retailers like H&M. This neatly sums up the risks that global businesses face in operating in China. The political conditions on the ground in China make it impossible for companies to continue to operate in the same style as they do in the West. Many firms’ dependence on Chinese exports and the spending power of Chinese consumers means that to operate in China profitably, principle must be put aside. The first article in a new series dedicated to business in China, published in Nouse (University of York) is here. Founded in 1964, Nouse is the oldest society on campus.
China’s Tech Crackdown: A Year-in-Review Over the past year, Beijing clipped the wings of its once high-flying technology giants in a dramatic clash between public and private power. Casualties included some of China’s top tech companies, including internet conglomerates Tencent and Alibaba, food delivery app Meituan, ride-hailing app DiDi, as well as companies in online gaming, private tutoring and cryptocurrency. Despite the chilling effects on innovation and economic growth, regulators appear poised to continue enforcement actions in 2022, furthering Xi Jinping’s bid for “common prosperity.” Prior to this year, China’s anti-monopoly and technology regulators were regarded as relatively toothless in reining in China’s powerful tech titans. The shifting fortunes of Jack Ma, Alibaba’s rags-to-riches founder, demonstrates how much of that narrative has changed. In 2015, Ma pressured a regulator to publicly recant a critical report against Alibaba. In late 2020, after Ma spoke out in a conference against China’s state-owned banks, regulators hauled Ma in for questioning, halted the initial public offering of Alibaba subsidiary Ant Group and left his public reputation in tatters.

Jack Ma, billionaire founder of Alibaba Group, arrives at the “Tech for Good” Summit in Paris, France May 15, 2019. REUTERS/Charles Platiau/File Photo
Bringing Ma to heel turned out to be the opening salvo in a year marked by high-profile actions against major tech companies. In the antitrust arena, the newly empowered State Administration for Market Regulation (SAMR) took aggressive steps to rein in anticompetitive behavior, levying a record $2.8 billion fine on Alibaba and a $530 million fine on Meituan. China also made major legislative and administrative moves, proposing amendments to the Antitrust Law to increase penalties for antitrust violations, and launching a new anti-monopoly bureau under SAMR to enforce it. Regulators also took major actions in the data privacy space. In the past year, the National People’s Congress passed the Data Security Law and the Personal Information Protection Law, regarded as China’s version of the EU’s General Data Protection Regulation. The Cyberspace Administration of China (CAC) cracked down on data privacy violations, disrupting Didi’s planned initial public offering (IPO) in New York for failing to comply with a cybersecurity review for sensitive data. Commentators have both praised China’s push for privacy and noted its inherent contradictions. The Financial Times called China a “surprise leader in Asia on data privacy rules.” Others have pointed out that while these laws shield Chinese citizens from domestic commercial and foreign government surveillance, it does little regarding domestic government surveillance. As Kendra Schaefer of Trivium China noted: “We often think about the PIPL in terms of its applications to Alibaba or Tencent but we forget that China’s state agencies are the country’s largest data processors.” Commentators have attributed various ideological and political motivations to the regulatory spree. Many of these crackdowns fall under the umbrella of “common prosperity,” Xi’s push to close the wealth gap in part by encouraging high-income individuals and businesses to “give back more to society.” Some point to the political calendar: With the 20th Party Congress scheduled for autumn 2022, these moves may be part of Xi’s efforts to consolidate his power ahead of his anticipated re-election.
Still others point to the regulatory competition angle. CAC’s enforcement actions against Didi could be explained not as a coordinated campaign from central authorities, but rather disjoint actions from independent regulatory agencies competing for primacy. As Kaiser Kuo described it: “Hey, we can’t let those guys at [the National Radio and Television Administration] get all the glory. We [Ministry of Culture] guys have to do something too, right?”
The crackdown has come with a significant economic burden, one that Xi seems willing to bear despite a lagging economy. China’s economy has slowed to lows not seen since the 1990s. The Economist estimates that the crackdown wiped more than $1 trillion off the collective market capitalization of China’s largest internet groups. China’s video-game license freeze alone has led to over 14,000 gaming-related firms shutting down. Xi may find these losses bearable because the economic burden is borne primarily by the consumer technology sector rather than what he views as strategically critical sectors, like semiconductors and aeronautics. Companies in the “hard tech” sectors like Huawei and Semiconductor Manufacturing International Corporation have largely escaped regulatory scrutiny. As Jude Blanchette of the Center for Strategic and International Studies puts it, ”Xi doesn’t care whether people can have their meals delivered 14% faster or if it is 7% easier to hail a car.” For all these reasons, regulators are likely to continue pursuing enforcement actions against Chinese technology companies into the foreseeable future. In August 2021, China’s State Council and Communist Party Central Committee passed a five-year plan promising to tackle monopolies, review regulations related to the digital economy and address “foreign-related rule of law.” The plan, in addition to statements from the SAMR’s agency head promising strengthened antitrust enforcement in 2022, points to another difficult year for China’s tech giants. The arcticle was published in Lawfare on January 7, 2022.
GFWatch: A Longitudinal Measurement Platform Built to Monitor China’s DNS Censorship at Scale China’s sophisticated filtering system, known as the Great Firewall (GFW), is the region’s biggest impediment to the freedom of information. The GFW is built by the Chinese government and is continuously developed to serve their political interests. This report introduces the design of GFWatch, a large-scale longitudinal measurement platform that informs the public about how GFW censorship changes over time and its negative impact on the free flow of information. GFWatch is a measurement platform capable of testing hundreds of millions of domains daily, enabling the continuous monitoring of the Great Firewallʼs DNS filtering behavior. The newly censored domains discovered by GFWatch provide a useful insight into Chinaʼs information control policies. This project is a result of an academic collaboration between researchers from Stony Brook University, University of Massachusetts – Amherst, University of California – Berkeley, and the Citizen Lab at the University of Toronto.
Key findings:
- We developed GFWatch, a large-scale, longitudinal measurement platform capable of testing hundreds of millions of domains daily, enabling continuous monitoring of the GFW’s DNS filtering behavior.
- From April to December 2020, GFWatch tested a total of 534M distinct domains (averaging 411M domains per day) and detected more than 300K censored domains. To the best of our knowledge, this is the largest number of domains tested and censored domains discovered in existing literature.
- We designed a probing method to reverse-engineer the actual blocklist used by the GFW’s DNS filter and identified 41K domains that appear to be overblocked despite matching regular expressions used by the GFW.
- Through our measurements, we discovered more than 3.6K unique forged IPv4 and IPv6 addresses. All IPv6 addresses are bogus and belong to the same subnet of the predefined Teredo prefix, 2001::/32, whereas the vast majority of IPv4 addresses belong to U.S. companies, including Facebook, Dropbox, and Twitter.
- Using data from GFWatch, we also assessed the impact of GFW’s DNS censorship on the global DNS system. We found 77K censored domains whose forged DNS resource records have polluted many popular public DNS resolvers, including Google, Cloudflare, and OpenDNS.
- Finally, we propose strategies to detect poisoned responses that can sanitize polluted DNS records from the cache of public DNS resolvers, and assist in the development of circumvention tools to bypass the GFW’s DNS censorship.
- For data exploration, we built an interactive dashboard that can be used to search for censored domains and fake IP addresses injected by the GFW that GFWatch has discovered.
Chinese National Pleads Guilty to Economic Espionage Conspiracy Xiang Haitao, 44, a Chinese national formerly residing in Chesterfield, Missouri, pleaded guilty today to conspiracy to commit economic espionage. According to court documents, Xiang conspired to steal a trade secret from Monsanto, an international company based in St. Louis, for the purpose of benefitting a foreign government, namely the People’s Republic of China. “Despite Xiang’s agreements to protect Monsanto’s intellectual property and repeated training on his obligations to do so, Xiang has now admitted that he stole a trade secret from Monsanto, transferred it to a memory card and attempted to take it to the People’s Republic of China for the benefit of Chinese government,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “With his guilty plea, Xiang is now being held accountable for this unlawful conduct.” “Mr. Xiang used his insider status at a major international company to steal valuable trade secrets for use in his native China,” said U.S. Attorney Sayler Fleming for the Eastern District of Missouri. “We cannot allow U.S. citizens or foreign nationals to hand sensitive business information over to competitors in other countries, and we will continue our vigorous criminal enforcement of economic espionage and trade secret laws. These crimes present a danger to the U.S. economy and jeopardize our nation’s leadership in innovation and our national security.” Justice News (DOJ) Press Release Number: 22-14 of January 6, 2022.
Lithuania Is the ‘Canary’ of World Order Lithuania, a Baltic state of 2.8 million with an outsize role in promoting human rights and democracy, is in the crosshairs of Russia and China. Neither Russian President Vladimir Putin nor Chinese leader Xi Jinping has been shy about going after Lithuania. But their recent moves have broader significance, namely testing American and European commitments to allies.
Mr. Putin is raising the temperature on Lithuania by absorbing neighboring Belarus into his security sphere and militarizing Kaliningrad, Russia’s territorial exclave on the Baltic Sea. Mr. Xi is waging a campaign of political and economic retaliation. The integration of the Baltic states into the North Atlantic Treaty Organization and the European Union in 2004 was a crowning achievement of post-Cold War politics. Lithuania helped lead Europe’s response to the depredations of the dictatorial regime of Alexander Lukashenko in Belarus by sheltering opposition leaders and staking out hawkish positions. This is the latest way in which Vilnius has irritated Mr. Putin, who would like to reclaim Russia’s near abroad as a sphere of influence. In Mr. Putin’s fanciful telling, Lithuania is a major source of Russia’s historical insecurity. That places it high on the list of neighboring states he would like to control. Lithuania drew China’s fury this year for its decision to leave the 17+1 format—the Beijing-designed framework for dealing with Europe—and by allowing the government of Taiwan to open an office for its representation in Vilnius. Beijing declared an import ban on products with goods made in Lithuania—a move damaging to European companies with factories or supply-chain sources in Lithuania. Continental, a Germany-based automotive supplier, is the latest multinational under Chinese pressure to close operations in Lithuania. Read the full article, written by two Hudson Senior Fellows in the Wall Street Journal (subscription needed).
Key Takeaways:
Lithuania’s Importance to NATO Lithuania, a Baltic state of 2.8 million with an outsize role in promoting human rights and democracy, is in the crosshairs of Russia and China. Neither Putin nor Xi have been shy about going after Lithuania. But their recent moves have broader significance, namely testing American and European commitments to allies. Mr. Putin is raising the temperature on Lithuania by absorbing neighboring Belarus into his security sphere and militarizing Kaliningrad, Russia’s territorial exclave on the Baltic Sea. Mr. Xi is waging a campaign of political and economic retaliation.
China’s Economic Pressure Campaign Against Lithuania Lithuania drew China’s fury this year for its decision to leave the 17+1 format—the Beijing-designed framework for dealing with Europe—and by allowing the government of Taiwan to open an office for its representation in Vilnius. Beijing declared an import ban on products with goods made in Lithuania—a move damaging to European companies with factories or supply-chain sources in Lithuania.
Lithuania Needs US Support Against Gray-Zone Aggression If Xi and Putin successfully detach Vilnius from NATO and the EU, there would be immediate ramifications in Asia, where China wants to push the U.S. out and establish regional hegemony. Most military strategists identify Taiwan as China’s best first target for confrontation—and thus the essential test of U.S. resolve. But an indirect opening move in the “gray zone” of conflict aimed at Lithuania might have advantages. If the U.S. and Europe fail to back Lithuania fully, America’s allies and partners in Asia will doubt U.S. commitment. Rather than working closely with Washington, they might become more friendly with China.
Lithuania
Significant Cyber Incidents (CSIS) Below is a summary of incidents from the Center for Strategic and International Studies over the last year. For the full list, click here.
December 2021. 1) Hackers targeted multiple Southeast Asian governments over the past 9 months using custom malware linked to Chinese state-sponsored groups. Many of the nations targeted are currently engaged in disputes with China over territorial claims in the South China Sea. A Bloomberg investigation publicly linked an intrusion into Australia’s telecommunications systems in 2012 to malicious code embedded in a software update from Huawei. 2) Cybersecurity firms found government-linked hackers from China, Iran, and North Korea attempting to use the Log4j vulnerability to gain access to computer networks. Following the announcement of Log4j, researchers already found over 600,000 attempts to exploit the vulnerability.
November 2021. 1) Chinese officials claim a foreign intelligence agency hacked into several airlines in China and stole passenger information. The officials stated the hacks are connected due to the use of a custom trojan in all the attacks. 2) After CISA publicly shared details on a vulnerability, Chinese hackers targeted nine companies and 370 servers between September and October using the same vulnerability.
October 2021. A Chinese-linked hacking group gained access to calling records and text messages from telecommunication carriers across the globe, according to a report from CrowdStrike. The report outlines the group began its cyberattacks in 2016 and infiltrated at least 13 telecommunications networks.
September 2021. 1) Chinese state-linked hackers targeted Afghan telecom provider Roshan and stole gigabytes of data from their corporate mail server over the past year. 2) The Lithuanian Defense Ministry found hidden features in popular 5G smartphone models manufactured in China, according to its state-run cybersecurity body. The module embedded in the phones detects and censors 449 keywords or groups of keywords that are counter to the message of the Chinese government. 3) The Norwegian Government stated a series of cyberattacks against private and state IT infrastructure came from bad actors sponsored by and operating from China. Their investigation of the hacks claims the actors attempted to capture classified information relating to Norway’s national defense and security intelligence.
August 2021. 1) Hacks initially attributed to Iran in 2019 and 2020 were found to be conducted by Chinese operatives. The cyberattack broke into computers across Israel’s government and tech companies. 2) Various Chinese cyber-espionage groups are responsible for the hacks of at least five major Southeast Asian telecommunication providers beginning in 2017. The attacks were carried out by three different hacking groups and are seemingly unlinked despite all groups having a connection to Chinese espionage efforts.
July 2021. 1) A widespread APT operation was discovered against users in Southeast Asia, believed to be spearheaded by Chinese entities. Researchers found a total of 100 victims in Myanmar and 1,400 in the Philippines, including many government entities. 2) The United States, the European Union, NATO and other world powers released joint statements condemning the Chinese government for a series of malicious cyber activities. They attributed responsibility to China for the Microsoft Exchange hack from early 2021 and the compromise of more than 100,000 servers worldwide. 3) The FBI and the U.S. Cybersecurity and Infrastructure Security Agency (CISA) released a statement exposing a spearfishing campaign by Chinese state-sponsored hackers between 2011 and 2013. The campaign targeted oil and natural gas pipeline companies in the United States. 4) Norway attributed a March 2021 cyberattack on parliament’s e-mail system to China.
June 2021. 1) A Chinese-speaking hacking group spearheaded an ongoing espionage effort against the Afghan government through phishing emails. Hackers posed as the Office of the President of Afghanistan and targeted the Afghan National Security Council. 2) Chinese actors targeted organizations, including Verizon and the Metropolitan Water District of Southern California using a platform used by numerous government agencies and companies for secure remote access to their networks. 3) Hackers linked to Russia’s Foreign Intelligence Service installed malicious software on a Microsoft system that allowed hackers to gain access to accounts and contact information. The majority of the customers targeted were U.S. based, working for IT companies or the government.
May 2021. A Chinese hacking group compromised a Russian defense contractor involved in designing nuclear submarines for the Russian navy.
April 2021. 1) Hackers linked to the Chinese military conducted an espionage campaign targeting military and government organizations in Southeast Asia beginning in 2019. 2) Two state-backed hacking groups—one of which works on behalf of the Chinese government—exploited vulnerabilities in a VPN service to target organizations across the U.S. and Europe with a particular focus on U.S. defense contractors. 3) New York City’s Metropolitan Transportation Authority (MTA) was hacked by Chinese-backed actors but were unable to gain access to user data or information systems. 4) Chinese hackers launched a months-long cyber espionage campaign during the second half of 2020 targeting government agencies in Vietnam with the intent of gathering political intelligence.
March 2021. 1) A group of Chinese hackers used Facebook to send malicious links to Uyghur activists, journalists, and dissidents located abroad. 2) The Indian Computer Emergency Response Team found evidence of Chinese hackers conducting a cyber espionage campaign against the Indian transportation sector. 3) Chinese government hackers targeted Microsoft’s enterprise email software to steal data from over 30,000 organizations around the world, including government agencies, legislative bodies, law firms, defense contractors, infectious disease researchers, and policy think tanks. 4) Suspected Chinese hackers targeted electricity grid operators in India in an apparent attempt to lay the groundwork for possible future attacks.
February 2021. Hackers associated with the Chinese military conducted a surveillance campaign against Tibetans both in China and abroad.
January 2021. Hackers linked to the Chinese government were responsible for ransomware attacks against five major gaming and gambling countries, demanding over $100 million in ransom.
A ‘Bright’ Path Forward or a Grim Dead End? The Political Impact of the Belt and Road Initiative in Kazakhstan This FPRI report assesses the political impact of the Belt and Road Initiative (BRI) in Kazakhstan. Specifically, it examines whether and how the People’s Republic of China can pursue a strategy of economic statecraft to further its foreign policy and political interests in Kazakhstan. Despite Kazakhstan’s importance for the success of the BRI’s overland trade corridors, the report argues that important financial, foreign policy, and political constraints limit Beijing’s potential to influence Nur-Sultan. Beijing’s concerns over upsetting its relationship with the Russian Federation and the fact that the value of bilateral trade, investment, and Kazakhstani indebtedness to China have decreased in recent years suggest that Beijing is less willing to, capable of, or interested in using the BRI to influence Kazakhstan.
Kazakhstan and China
The perceived closeness in this bilateral relationship has less to do with the influence of the BRI and more to do with the alignment of both countries’ geopolitical interests before the initiative’s creation. The report does not suggest that Chinese influence has decreased, but rather shows how Kazakhstan has been able to maintain a degree of political autonomy. Nur-Sultan has played a proactive role in forming its relationship with Beijing through its pursuit of former President Nursultan Nazarbayev’s “multi-vector” foreign policy strategy. In diversifying Kazakhstan’s diplomatic, economic, and political ties with Russia, China, the European Union, and the United States, Nur-Sultan has been able to avoid complete dependence on one country. Furthermore, Kazakhstan has been able to shape the size and scope of Chinese economic activity by guiding the initiative’s investments and projects to further the government’s domestic development agenda, Nurly Zhol (translated as “Bright Path”). However, issues related to corruption and deepening ties between Chinese and Kazakhstani elites through the BRI have likely strengthened Kazakhstan’s authoritarian political structure. FPRI, the Foreign Policy Research Institute, is dedicated to producing the highest quality scholarship and nonpartisan policy analysis focused on crucial foreign policy and national security challenges facing the United States.
Kazakh President Kassym-Zhomart Tokayev and China’s President Xi Jinping sign documents in the Great Hall of the People in Beijing, China, September 11, 2019. EAP-EFE/ Andrea Verdelli
Kazakhstan’s Systems Malfunctions It may be a cliché, but Kazakhstan’s ongoing dramatic crisis recalls one of Lenin’s most famous quotes, “There are decades where nothing happens; and there are weeks where decades happen.” Kazakhstan has for many years seen neither political change nor steady economic growth, with a regime dominated by kleptocratic elite far more interested in investing in Western luxury property than reshaping the nation from which the wealth to fund the purchases was looted. Almost out of the blue, however, Kazakhstan is facing a whole series of unprecedented crises that have exploded over the last several days: extraordinary demonstrations that have turned violent, defections from the police, a potential power struggle between its two presidents, a reported exodus of business elites, and Russian intervention.
Protests began after the New Year in the resource-rich western part of the country. This part of Kazakhstan has a history of otherwise rare dissent due to underinvestment comparative to the wealth that the region generates and a lack of effective representation in national politics. The protests were sparked by liquefied petroleum gas (LPG) fuel price liberalization, which saw drivers’ costs double at the start of the year. The unrest quickly spread to major cities, including the commercial capital of Almaty. On January 5, President Kassym-Jomart Tokayev announced new caps on fuel prices, appealed for calm, and ordered a reshuffle of the government and the powerful security services. Nevertheless, the situation escalated with protesters raiding Almaty Airport, city hall, and presidential residence.
Smoke rises from the city hall building during a protest in Almaty, Kazakhstan, Jan. 5, 2022. AP Photo
Other cities saw dramatic protests as well—in nearby Taldykorgan, a statue of long-time strongman Nursultan Nazarbayev, the country’s true powerbroker, was pulled down. Symbolically, his likeness was revealed to be hollow. An eerie digital silence cast a pall of deep concern for many subsequent hours, with local voices largely silenced to foreign observers. The government—only recently touting itself as the center of a new financial hub and luring bitcoin miners with cheap energy—shut down the internet entirely. The blackout means death tolls and estimates of destruction are all still speculative, even as the government has announced the death of at least a dozen police officers and the jailing of hundreds.
By January 6, revolutionary change was afoot. Videos shared on social media evidenced widespread looting and blatant disregard for Tokayev’s curfew surfaced, even apolitical instiutions such as Almaty’s airport were targeted. Even more shocking was that Tokayev invited forces from the Russian-led Collective Security Treaty Organization (CSTO)—who have already responded, with reports of Russian troops already in Almaty. The quick action of the CSTO in Kazakhstan is in stark contrast to the bloc’s non-response to Armenia’s pleas for protection from Azerbaijan in the 2020 Nagorno-Karabakh conflict. As Bruce Pannier has detailed for RFE/RL, the CSTO has, in fact, refused all other previous calls for intervention in other post-Soviet conflicts but rapidly agreed to do so in Kazakhstan, despite the fact no foreign power is involved in the demonstrations. Conspiracies already abound.
Tokayev also unexpectedly said that he removed Nazarbayev—to whom he owed his presidential promotion—from his role as head of the security council. The handover had been running smoothly, with Nazarbayev granting the chairmanship of their Nur Otan party to his favored mandarin last month. After all, changing the drapes of the presidential palace by installing Tokayev had done nothing to shift the balance of power away from Nazarbayev’s clique in business and the security forces. Nazarbayev also formally retained the title of “Elbasy,” often translated as “Leader of the Nation.” Amid all this, Nazarbayev has not been heard from publicly, a shocking silence for the former Communist Party boss-turned-nationalist-turned-kleptocrat whose cunning and chameleon politics meant that he has had a role in regional and international politics from the late Soviet era to the present. Nazarbayev had famous tête-à-têtes with Mikhail Gorbachev, Barack Obama, and Xi Jinping. These ranged from discussing attempts to preserve the Soviet Union to launching the Belt and Road Initiative, in which Kazakhstan plays a key overland route. It has been a leading destination for Chinese investment under the program, which symbolically Xi first announced in the China Daily to the world in the Kazakh capital in 2013.
President Xi Jinping gives a speech at Nazarbayev University in Astana, Kazakhstan in 2013. CCTV (China Central Television)
The blood spilt on January 5 has already sparked some invocations of Almaty’s December 1986 Jeltoqsan massacre, the bloody suppression of Kazakh demonstrators that some have argued was the first paroxysm of centrifugal sentiment that would ultimately tear the Soviet superpower apart. Tokayev does not have his own powerbase if he indeed is seeking to use the event to finally replace Nazarbayev in more than name. It also appears that the protesters would unlikely accept a figure so associated with the previous regime—although there is more uncertainty than clarity. Nazarbayev had in my travels to the country always struck me as genuinely popular, even fairly recently, though the 2019 Potemkin transition, combined with Tokayev’s ignominious-if-expected inaugural act of renaming of Astana as Nursultan grated across wide swathes of society. While Kazakhstan’s future remains unclear, it is important to already consider what further fallout these events and the resulting uncertainty may bring for policymakers and businesses near and far.
The crisis in Kazakhstan risks upsetting the balance of power in Eurasia. Major instability even in the short term would be perceived by the Kremlin as a threat to its own position, already deeply disturbed by the sight of street protests resulting in some political change. A more democratic government emerging would pose a challenge not only to Moscow but also to Central Asia’s other strongmen, while a more Moscow-friendly regime emerging from the chaos could choke off the potential for further expansion of Chinese influence. The full FPRI article, written by a Central Asia Fellow in the Eurasia Program at the Foreign Policy Research Institute, is here. See also “An Inside Look At China And Kazakhstan’s ‘Absurd’ Cross-Border Free Trade Zone“, a July 26, 2016 article published in Forbes.
The hacker-for-hire industry is now too big to fail The spotlight is on the “hackers for hire” industry as never before, after a series of public scandals engulfed the billion-dollar Israeli company NSO Group, which sells hacking tools to governments. Last month, Facebook reported that seven hacker-for-hire firms from around the world had targeted around 50,000 people on the company’s platforms. The fact the investigation didn’t even mention NSO Group shows how vast the industry and its targeting are. While NSO Group’s future is uncertain, governments are more likely than ever to buy cyber capabilities from the industry it helped define. Business is booming for “hackers for hire” firms. In the last decade, the industry has grown from a novelty into a key instrument of power for nations around the world. While the industry’s earliest customers were a small set of countries eager to project power around the world through the internet, the situation is far more complex today. Billions of dollars are at play, but there’s very little transparency and even less accountability. The result is a growing crowd of countries willing to spend large sums to develop sophisticated hacking operations. Read the full story, written cybersecurity senior editor for MIT Technology Review, here
Taiwan to Set Up $200 Million Fund to Invest in Lithuania Amid Dispute With China Taiwan said it would create a $200 million fund to invest in Lithuanian industries and boost bilateral trade as it tries to fend off diplomatic pressure on the Baltic state from China. The Lithuanian government, meanwhile, ordered the state-owned railway company not to sign a contract with a China-owned Spanish bridge builder, citing “national security interests,” the prime minister’s spokesperson told the Baltic News Service.
Vilnius, Lithuania
Lithuania is under pressure from China, which claims democratically ruled Taiwan as its own territory, to reverse a decision last year to allow the island to open a de facto embassy in Vilnius under its own name. Taiwanese representations in other countries, except the unrecognized Somaliland, are named after Taiwan’s capital, Taipei. China has recalled its ambassador to Lithuania and downgraded diplomatic ties and is pressuring companies like German car parts giant Continental to stop using Lithuanian-made components. It has also blocked Lithuanian cargos from entering China. U.S. Secretary of State Antony Blinken referred to China’s pressure on Vilnius in a joint news conference with German Foreign Minister Annalena Baerbock after a meeting in Washington and vowed to work with Berlin and others against such “intimidation.” Blinken said Germany and the United States agree on the importance of trans-Atlantic coordination on China “because it poses a significant challenge to our shared values, to the laws, rules and agreements that foster stability, prosperity and freedom worldwide.” “We have immediate concern about the government of China’s attempts to bully Lithuania … China is pushing European and American companies to stop building products with components made in Lithuania, or risk losing access to the Chinese market, all because Lithuania chose to expand their cooperation with Taiwan.”
Lithuania’s export-based economy is home to hundreds of companies that make products such as furniture, lasers, food and clothing for multinationals that sell to China. More in this article in Voice of America (VOA). Voice of America (VOA) is the largest U.S. international broadcaster, providing news and information in more than 40 languages to an estimated weekly audience of more than 311 million people. Since its creation in 1942, Voice of America has been committed to providing comprehensive coverage of the news and telling audiences the truth. Through World War II, the Cold War, the fight against global terrorism, and the struggle for freedom around the globe today, VOA exemplifies the principles of a free press. VOA is part of the U.S. Agency for Global Media (USAGM), the government agency that oversees all non-military, U.S. international broadcasting, and the MBFC rates Voice of America Least Biased based on balanced story selection and minimal use of loaded words. They also rate them High for factual reporting due to proper sourcing and a clean fact check record.
The Top 10 Global Risks of 2022 According to this article in Time, a domestic focus for both the U.S. and Chinese governments lowers the odds of a big international conflict in 2022, but it leaves less potential leadership and coordination to respond to emerging crises. That’s bad news in a year that will be dominated by the COVID-19 pandemic, climate change, and a number of regional geopolitical crises.
1. No zero COVID
2. Technopolar world (The world’s biggest tech firms decide much of what we see and hear. They determine our economic opportunities and shape our opinions on important subjects. E.U., U.S., and Chinese policymakers will all tighten tech regulation this year, but they won’t limit their ability to invest in the digital sphere where they, not governments, remain the primary architects, actors, and enforcers. Tech giants can’t yet (and don’t want to) effectively govern the digital space or the tools they’re creating. Disinformation will further undermine public faith in democracy, particularly in the U.S. As tech firms and governments fail to agree on how to protect data privacy, cyber-security, and the safe and ethical use of artificial intelligence, U.S.-China (and, to a lesser degree, U.S.-Europe) tensions on these issues will grow.)
3. U.S. midterms
4. China at home (An increasingly burdensome “zero-COVID policy” (see Risk #1) and President Xi Jinping’s reform plans will unsettle markets and companies in 2022. Xi’s vision of technological self-sufficiency, economic security, and social harmony—to make China strong—will collide with intensifying pushback from the West, an exhausted growth model, an overleveraged and unbalanced economy, and a rapidly aging population—and at a time when COVID-19 variants continue to circulate.)
5. Russia
6. Iran
7. Two steps greener, one step back
8. Empty lands
9. Corporates losing the culture wars
10. Turkey
Trends in AI Research for the Visual Surveillance of Populations Since 2014, computer vision models have dramatically improved their performance on benchmarks for image classification, image generation, facial recognition, and other tasks. As these examples show, computer vision researchers aim to solve a wide variety of problems. Yet previous bibliometric studies have examined international output of computer vision research as a whole, without distinguishing among these many research tasks. In principle, analyses of academic research can inform us about the global growth of research and the interests and incentives of each nation’s researchers. But only a small segment of computer vision research may relate to any particular area of interest. In this CSET brief, we focus on “visual surveillance research,” the development of algorithms such as facial recognition that could be used to surveil individuals or groups. These algorithms are often applied for benign, commercial uses, such as tagging individuals in social media photos. But progress in computer vision could also empower some governments to use surveillance technology for repressive purposes.
Using a dataset of English-language papers published between 2015 and 2019, CSET applied natural language processing methods to identify the computer vision papers in this corpus and the research tasks they described. CSET found:
- Papers relevant to visual surveillance accounted for less than 10 percent of all computer vision research
- Researchers with Chinese institutional affiliations were responsible for more than one third of publications in both computer vision and visual surveillance research
- China produces a disproportionate share of research on three “emerging” surveillance tasks—those where worldwide publication counts grew at over 30 percent annually
These conclusions derive from English-language research publications only. Further work could extend our task-extraction methodology to non-English publications, which would improve our estimates of international research output and would likely increase non-Anglophone countries’ estimated share of global surveillance research. Future projects could also augment our bibliometric approach by including more direct indicators of nations’ capabilities and interests in deploying surveillance technology, such as patent data, private research and development, camera deployment, and relevant government policies. CSET, the Center for Security and Emerging Technology, is a policy research organization within Georgetown University’s Walsh School of Foreign Service. CSET produces data-driven research at the intersection of security and technology, providing nonpartisan analysis to the policy community. CSET is currently focusing on the effects of progress in artificial intelligence (AI), advanced computing and biotechnology.
Concerns about China’s human rights record loom over the Winter Olympics in Beijing With just one month before the start of the Winter Olympics in Beijing, concerns about China’s human rights record loom over the Games. Activists and leaders have raised questions about China’s suppression of civil liberties in Xinjiang, Hong Kong and Tibet, but the International Olympic Committee has remained tight-lipped. Instead, the I.O.C. has consistently deflected calls to exert more pressure on China — a lucrative market and an important partner for the Olympics. For months, rights activists have asked the Olympic committee to make sure that Beijing 2022 merchandise had not been made under duress by Uyghurs in Xinjiang. So far, the I.O.C. has been reluctant to do so, according to correspondence reviewed by The Times between the I.O.C. and an anti-forced-labor coalition.
In years past, the I.O.C. had been willing to prod Russia about unpaid wages and Japanese officials about conditions for construction workers. The committee defended its approach in China.
The IOC’s Principles are here, and the IOC statement on the December 6, 2021 announcement by the US government is here.
Germany and China It has been interesting to watch the defenders of close relations between Germany and China mobilize over the past months to try to head off a more critical approach from the new government in Berlin. It started with a handful of discreet post-election meetings between Angela Merkel and senior European decision-makers, including her successor Olaf Scholz, in which the outgoing chancellor conveyed her concerns about a tougher line. It continued in late November with a below-the-radar visit from a group of Chinese officials with deep ties to Germany. Led by former ambassador Shi Mingde, they spent over a week in Berlin, Munich, and Stuttgart meeting with Germany’s political and corporate elite—including people close to Scholz. Their message: let’s work together to ensure that the special relationship between Berlin and Beijing does not go off the rails.
Volkswagen’s CEO Herbert Diess took to LinkedIn shortly before Christmas to warn that any push by Germany or Europe to decouple from China (a push that, by the way, does not exist) would be “very damaging.” “We need more cooperation and presence in China, not less!”, and “China is and will be the technology driver”, he wrote.
Siemens CEO Roland Busch added his voice last week, telling the Süddeutsche Zeitung that China deserved respect and that banning the import of products from the Xinjiang region would endanger Germany’s green transition. (“Siemens-Chef Roland Busch erklärt warum eine Konfrontation mit China für ihn der falsche Weg ist”.)
FT montage / AP / Bloomberg
What to make of all this? First, it is clear that new Foreign Minister Annalena Baerbock, who has promised a tougher approach to China, has unsettled a lot of important people. Although she has been measured in her statements since assuming her new post—making clear, for instance, that Germany cannot decouple from China—she has become the target of a campaign that is portraying her approach as naïve and dangerous. Baerbock has allies in Berlin and other capitals, most notably in Washington, but she will need to keep her nerve in the face of resistance from powerful interests in German industry and politics. Her ministry will be taking the lead in writing the new China strategy that was promised in the government’s coalition treaty. If this process forces a real debate between the different China camps in Berlin, then it will be constructive. Second, one month into the new government, one has to ask whether Scholz may himself be a member of the aforementioned resistance. No one who watched his political rise in recent years expected him to shake up German policy toward China once he landed in the Chancellery. As finance minister under Merkel and as the lead candidate for the Social Democrats (SPD) in the elections, he stood out mainly for his refusal to take clear positions on the big geopolitical questions involving Beijing. Scholz came into office promising continuity in foreign policy—a Merkel approach with SPD characteristics. Still, the signals he has sent on China in his first weeks running Germany’s new coalition government have been surprisingly soft in tone and content. In a very short time, Scholz has managed to undercut the main messages on China policy that were set out in its governing blueprint.
As EU officials in Brussels try to make sense of the conflicting signals being sent by the new government in Berlin, they are preparing to re-engage with Beijing themselves. An EU-China summit that had been tentatively scheduled to take place on January 14 has now been pushed back until late March, a Senior Visiting Fellow, Asia Program at the German Marshall Fund of the United States, was told. The Chinese side requested the delay in order to prepare a summit with “real deliverables,” according to one EU official. But if there is one clear message as 2022 begins, it is that China would prefer to sidestep Brussels and focus its diplomatic energy on the more malleable EU member states. One sign of this: Beijing’s ambassador to the EU, Zhang Ming, left his post last month and a replacement has still not been named. Why engage with EU officials who have become ever more strident in their criticism of China’s behavior when capitals like Berlin and Paris are striking more dulcet tones? Only the member states can put an end to this damaging dynamic but it is unclear whether they want to.
In Washington, officials are watching on nervously. The same Senior Visiting Fellow, Asia Program at the German Marshall Fund of the United States was told that senior members of the National Security Council had recently conveyed the message to German officials that they would see a return of bare-knuckles US unilateralism if they did not send clear signals about their readiness to work with Washington on China by the US midterm elections in November. Scholz has said all the right things about the transatlantic relationship since becoming chancellor, highlighting the importance of German-US ties in his first speech to the Bundestag and in his new year’s address. But expressing in his first call with Xi his desire to deepen the “bilateral partnership” and economic relationship with China sent a different message. As a German diplomat told me, “Scholz does not want to align with Washington on China. He is going to try to wiggle his way through, kick the can, and plead for time.” Sounds familiar? “Watching China in Europe” is a monthly update from GMF Asia Program. The German Marshall Fund of the United States (GMF) is a non-partisan policy organization committed to the idea that the United States and Europe are stronger together. GMF works on issues critical to transatlantic interests in the 21st century, including the future of democracy, security and geopolitics, alliances and the rise of China, and technology and innovation.
The Reichstag is a historic building in Berlin in which houses the Bundestag, the lower house of Germany’s parliament.
‘All-out assault’ on Hong Kong’s press continues ahead of Beijing Olympics As China prepares to host the 2022 Winter Olympics in Beijing, Chinese authorities continue to imprison journalists without consequence and crack down on the independent press in Hong Kong. Last month, Hong Kong authorities filed new charges against media entrepreneur and CPJ 2021 Gwen Ifill Press Freedom Awardee Jimmy Lai, along with six former staff at Lai’s media company Next Digital and his newspaper, Apple Daily. The following day, police raided the nonprofit newsroom Stand News and arrested six people affiliated with the outlet on suspicion of sedition, leading the site to announce that it would cease operations immediately.
Learn more from the Committee to Protect Journalists about some of the journalists under threat in China and Hong Kong in this month’s One Free Press list.
The Creepy TikTok Algorithm Does Know You TikTok, known in China as Douyin (抖音 / Dǒuyīn), is a video-focused social networking service owned by Chinese company ByteDance.
The uncanny, addictive AI has turned math into a mystical force—and flattened humanity into a series of codes. It’s a truth universally acknowledged that “the algorithm” knows you better than you know yourself. A computer can supposedly predict whether you’ll quit your job or break up with your partner. With 1,000 words of your writing, it can determine your age within four years. And no algorithm seems closer to omniscience than TikTok’s, which is reportedly helping users discover their sexuality and unpack their childhood trauma. Whereas Facebook asks you to set up a profile, and hand over a treasure trove of personal information in the process, TikTok simply notices—or seems to. The results can feel magical, writes Jess Joho in Mashable, as if TikTok is “reading your soul like some sort of divine digital oracle, prying open layers of your being never before known to your own conscious mind.”
As ever, there’s a dark side. Most users will be sucked into WitchTok and gardening how-to’s, but others will end up in an infinite scroll about ADHD, Tourette’s syndrome, or autism (#mentalhealth, for example, has garnered almost 21 billion views—a fraction of #dance, which has 341 billion views, but nonetheless a significant showing). This information can be extremely liberating, especially for conditions usually shrouded in stigma. But some are concerned about the deference given to the platform’s pseudo-psychiatric content. “Once [the algorithm] puts you on a side, it keeps you there,” says psychology professor Inna Kanevsky, better known on TikTok as the debunking @dr_inna, “and it starts seeming like you’re diagnosed.” That’s a potentially life-altering takeaway proffered up by a for-profit algorithm and content creators of varying reliability. The Wired article “The Creepy TikTok Algorithm Doesn’t Know You” is here.
Dangerous Liaisons At least three areas of Israeli-Chinese cooperation concern Washington. First, China and Israel have developed strong ties in the military sector; nowadays Israel is one of the world’s main suppliers to the People’s Liberation Army. This relationship reflects China’s sense of Israel’s long-term advanced military capabilities, developed through repeated clashes with the Arab world since 1948. Because of Chinese technological improvements, there is a double track to this cooperation. Israel does not just export arms to China but has agreed to buy military drones manufactured by China’s DJI Technology, which is known in the United States for its domestic-use drones but was blacklisted by Trump on account of internal security concerns. Second, Israel and China have pursued mutual interests in technological fields like artificial intelligence, communications networks, and software. Chinese companies that operate in these security-sensitive fields are eager to benefit from transfers of know-how by Israel, the “start-up nation.” The increasing Chinese investment in Israeli high-tech companies has so alarmed Washington that in late 2020, U.S. Assistant Secretary of State for Near East Affairs David Schenker publicly declared that this type of technology transfer could threaten both America’s and Israel’s internal security. Third, Israel has allowed China to build and run a new terminal in the port of Haifa, thus strengthening Beijing’s influence in the Mediterranean and increasing concerns about China’s Belt and Road initiative.
The new port in Haifa, constructed by Shanghai International Port Group. (via Twitter)
Beijing’s interest in a partnership with Israel appears to be based on not only economic factors in a narrow sense but a wider penetration strategy in areas of the world that, until a few decades ago, were under almost exclusive American influence. All these concerns, though, should be considered in light of larger trends that have emerged in Asia and the Middle East. President Biden, in his first months in office, followed the Obama policy of gradual withdrawal from the Middle East-Near Asia region while deploying more resources to counter China in the Pacific. China, for its part, reacted with an increasing presence in the Middle East. Beijing has strengthened not only its Israel ties but its political and economic relationships with Saudi Arabia, Iran, and Egypt. This geopolitical “chess match” has affected the area’s precarious equilibrium; every move in one direction can generate a dangerous opposing consequence. Israel is now in the uncomfortable position of being closely monitored by both the United States and China. For example, American officials have strongly recommended that Israeli’s national security advisor, Eyal Hulata, establish a new committee to evaluate foreign investments, replacing the Finance Ministry’s existing committee, whose jurisdiction does not include some areas targeted by Chinese interests. Subsequently, the Israeli government has been deciding on the winner of the billion-dollar procurement contract for building the green and purple lines of the Tel Aviv Light Rail. Many Chinese companies that are already blacklisted for their alleged ties with China’s Ministry of Defense have been part of the groups competing for the contract. Israel is in a dangerous situation. Formally excluding China from the competition could severely undermine Israeli-Chinese ties, while dealing with China could strain the new relationship between President Biden and Prime Minister Naftali Bennett. American Purpose, January 14, 2022.
The U.S.-China Economic and Security Review Commission The U.S.-China Economic and Security Review Commission (USCC) was created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.
USCC’s most recent Trade Bulletin: January 2022