China Cracks Down On Tech - Its People Benefit

Back when Stephen S. Roach was Morgan Stanley's chief economist Moon of Alabama often quoted from his columns. Fifteen years ago Roach spoke out against globalization and emphasized the need of labor power. His takes stood in stark contrast to the conventional wisdom of that time. Roach retired from Morgan Stanley around 2011 and has since been a senior lecturer at the Yale School of Management.

While I had not read Roach for some time I today stumbled over a column of his which I find astonishingly wrong and badly argued.

Roach writes about China's recent clamp down on fin-tech, internet monopolies and private education companies:

China’s regulation of its spirited tech sector could be a tipping point for the economy

The subtitle is a good summary of the column:

There are legitimate reasons for China’s anti-tech campaign, but when the full force of regulation is used to strangle the business models and financing capacity of the economy’s most dynamic sector, it weakens confidence and the entrepreneurial spirit

China has recently cracked down and financial consumer services, hail services and private education companies. Alibaba's fintech spin off Ant was prohibited from going public. Didi, the Uber of China, went public in U.S. capital markets even though it been warned not to do so. Its apps were taken down and it will have to pay a severe fine. Other tech companies are also under pressure says Roach:

Moreover, there are signs of a clampdown on many other leading Chinese tech companies, including Tencent (internet conglomerate), Meituan (food delivery), Pinduoduo (e-commerce), Full Truck Alliance (truck-hailing apps Huochebang and Yunmanman), Kanzhun’s Boss Zhipin (recruitment), and online private tutoring companies like TAL Education Group and Gaotu Group. And all of this follows China’s high-profile crackdown on cryptocurrencies.

It is not as if there were a lack of reasons – in some cases, like cryptocurrencies, perfectly legitimate reasons – for China’s anti-tech campaign. Data security is the most oft-cited justification.

This is understandable in one sense, considering the high value the Chinese leadership places on its proprietary claims over big data, the high-octane fuel of its push into artificial intelligence. But it also smacks of hypocrisy in that much of the data has been gathered from the surreptitious gaze of the surveillance state.

The issue, however, is not justification. Actions can always be explained, or rationalised, after the fact. The point is that, for whatever reason, Chinese authorities are now using the full force of regulation to strangle the business models and financing capacity of the economy’s most dynamic sector.

Stephen Roach thinks, wrongly, that it is bad to restrict certain business models and financing through public offerings. But from China's point of view it makes perfect sense. Why should it care how much money foreign investors lose by that:

Cont. reading: China Cracks Down On Tech - Its People Benefit

Biden Is Not Ending The 'Forever Wars'. He Is Preparing The Path To New Ones.

Daniel Larison writes that Joe Biden's foreign policies are probably worse than Trump's:

Joe Biden’s foreign policy record as president in his first six months has been as bad as his non-interventionist and antiwar critics feared it would be. Biden has made one significant and correct decision that he appears to be following through on, and that is the withdrawal of the last remaining U.S. troops from Afghanistan, but even here there is reason to worry that US forces may be relocated to other nearby countries and the war against the Taliban will continue from afar. On almost every other front, Biden has not only failed to undo some of his predecessor’s worst and most destructive policies, but in many cases he has entrenched and reinforced them.

Biden has failed to stop the U.S./Saudi war on Yemen. He is keeping troops in Iraq and Syria. His retreat from Afghanistan turns out to be fake. He is sabotaging a return to the nuclear with Iran.

The U.S. has, in contradiction to its Doha agreement with the Taliban, restarted its bombing campaign against them and is likely to continue it for years to come:

The top American general overseeing operations in Afghanistan declined to say Sunday night whether U.S. airstrikes against the Taliban would end Aug. 31, the date previously given by officials as a cutoff for such attacks.

Gen. Kenneth F. McKenzie Jr., the head of United States Central Command, refused to commit to ending the United States last remaining military leverage over the Taliban: airstrikes.
...
The Taliban reacted furiously to the strikes, saying they were in breach of the 2020 agreement negotiated between the militant group and the United States.

The concentration of strikes against the Taliban reflected a new sense of urgency in Washington about the imperiled Afghan government.

“I’m just not going to be able to comment about the future of U.S. airstrikes after Aug. 31,” General McKenzie told reporters after meeting with Afghanistan’s president, Ashraf Ghani, and his aides earlier in the day.

The Taliban have recently done a lot of diplomacy with visits to Moscow, Beijing and Tehran. Together, with Pakistan, which continues to supply the Taliban with weapons and manpower, those countries are planing for a future where the Taliban will have total control of, or at least a significant role in. the Afghan government. They have promised to invest in a Taliban led Afghanistan.

But the U.S. will not allow a rebuilding of the silk road between China and Iran. It will not allow for safe 'Belt & Road' investments in Afghanistan. Instead of controlling Afghanistan for its own purpose, as it did with its occupation, the U.S. will, from now on, do its best to deny others to benefit from the country.

After first pressing the Afghan president to make room for an interim government, Biden is now again backing him. In a phone call last Friday Biden pledged full support for Ghani's continued hardline:

Cont. reading: Biden Is Not Ending The 'Forever Wars'. He Is Preparing The Path To New Ones.

U.S. - China Talks Point To A Longer Conflict

The U.S. wants to slice and dice its approach to China. It will use all means to take advantage of China where it can, while restricting China in those fields were it can no longer compete with it. The Chinese reject that approach. The U.S., they say, should not see China as an enemy. It should stop lecturing China, accept it as an equal and cooperate with it in all fields.

The U.S. is unwilling to do that. Its media-military-industrial complex is already primed for a cold war with China. Trillions of dollars are to be made from it. China on the other side is ready to play hardball if it must.

Today U.S. Deputy Secretary of State Wendy Sherman held talks with the Chinese Deputy Foreign Minister Xie Feng, She also meet with Foreign Minister Wang Yi. The later meeting, demanded to be the main event by the U.S., had already led to some squabble. Wang Yi is beyond Sherman's rank and her main discussion, the Chinese insisted, should be with a person on her own level:

The State Department emphasized Sherman will have “senior-level” communications but a statement from China’s Foreign Affairs Ministry emphasized that Sherman “will hold talks” with Xie and after that Foreign Minister Wang will “meet her.”

On Saturday two 'senior U.S. administration officials' gave a preview of the talks:

As Secretary Blinken has said, the U.S. relationship with China will be collaborative where it can be, competitive where it should be, and adversarial where it must be. And we expect all dimensions of the relationship will be on the table for discussion during Wendy’s meetings.
...
In Tianjin, [Sherman is] going to make clear while we welcome stiff and sustained competition with the PRC, everyone needs to play by the same rules and on the level – on a level playing field.

She’s going to underscore that we do not want that stiff and sustained competition to veer into conflict. This is why the U.S. wants to ensure that there are guard rails and parameters in place to responsibly manage the relationship.

The second official added:

Cont. reading: U.S. - China Talks Point To A Longer Conflict

The MoA Week In Review - OT 2021-057

Last week's posts at Moon of Alabama:

• July 19 - U.S. Takes Down Israeli Spy Software Company
  Related:
  - Meet Toka, the Most Dangerous Israeli Spyware Firm You’ve Never Heard Of - Mintpressnews
  - Pegasus is Just the Tip of the Israeli Cyber Spying Iceberg, with Whitney Webb - Mintpressnews
  - ‘Somebody Has to Do the Dirty Work’: NSO Founders Defend Pegasus Spyware - The Wire

• July 20 - China Has First World Problems
  Related:
  - Hong Kong's status as a financial center seems safe - Axios
  - Watching China: Anatomy of a Suicide - Fred Reed / UNZ
  - The United States Underestimates China’s Economic Challenge at Its Own Peril - Richard Wolff / ICH

• July 21 - Russia And Germany Win War Over Nord Stream 2
  Related:
  - Nord Stream 2 ‘Deal’ Is Not an American Concession, It’s Admission of Defeat - SCF
  - As US finally drops it's opposition to Nord Stream 2, it’s clear plans to block the pipeline were always about money, not security - RT
  - U.S. Will Regret This Shameful Appeasement of Russia - RealClearWorld

• July 22 - How Iran Successfully Trolled The U.S. With A 'Weapon Smuggling' Ship Parade
  Related:
  - Iranian frigate Sahand in the St. Petersburg Navy Day Parade (video) - RT
  - Bad News About Iran and Nuclear Deal - Naked Capitalism
  - U.S. Weighs New Sanctions on Iran’s Oil Sales to China if Nuclear Talks Fail- WSJ

• July 23 - Canada, Victims Of Communism, And Comparisons To A Holocaust
  Related:
  - Italy Releases Research Report on Xinjiang Issues: The U.S. Seeks Geopolitical Benefits in the Name of Human Rights - Newsdirectory3
  - Unlocked: Colonies, Borderlands, and Barriers: Hong Kong, Xinjiang, and the Future of the People’s Republic of China - Chinahand
  - Room for 10,000: Inside China's largest detention center - AP
    A pre-trial prison in Xinjiang. Actual number of inmates: ~2,000. Rikers Island in New York has ~10,000.

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Other issues:

Cont. reading: The MoA Week In Review - OT 2021-057

Canada, Victims Of Communism, And Comparisons To A Holocaust

Canada seems to have some rather ambiguous position towards fascists. While it compares China's handling of its Uyghur population to a holocaust it is itself favoring the perpetrators of the real Holocaust.

The Canadian Broadcast Corporation reports of donations from supporters of east-European nazis to a Canadian anti-communist organization:

A controversial monument being built in Ottawa to honour victims of communist regimes has received donations in honour of known fascists and Nazi collaborators, according to a list posted online by the organization spearheading the project.

The Memorial to the Victims of Communism is being financed partly through a "buy-a-brick" campaign called Pathways to Liberty, which is run by the registered charity Tribute to Liberty.

The campaign sells "virtual bricks" that appear on the organization's website and in their newsletter. The bricks are dedicated to alleged victims of communism and include biographical notes about the individuals being commemorated.
...
An organization calling itself the General Committee of United Croats of Canada purchased virtual bricks dedicated to Ante Pavelić, describing him only as a "doctor of laws."

Pavelić was the wartime leader of the Ustaša, the fascist organization that ran the Independent State of Croatia, a Nazi puppet regime. In this role, Pavelić was the chief perpetrator of the Holocaust in the Balkans. Approximately 32,000 Jews, 25,000 Roma and 330,000 Serbs were murdered by the regime.
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An organization calling itself the Knightly Order of Vitéz purchased five bricks. "Several members of the order actively participated in the persecution, despoliation and, in 1944, the deportation of the Hungarian Jews," said László Karsai, a professor of history at the University of Szeged.

Vitéz members included high-ranking members of the Nazi-puppet government established late in the war, which organized the deportation of some 437,000 Hungarian Jews. "It was the biggest, fastest deportation action of the Holocaust," said Karsai. "Several tens of thousands of Vitéz members got large lands (from) Jewish properties."

The League of Ukrainian Canadians' Edmonton Branch, meanwhile, purchased five virtual bricks in honour of Roman Shukhevych — who led the Ukrainian Insurgent Army (UPA) during the Second World War and was responsible for the deaths of tens of thousands of Belarusians, Jews, Poles and Ukrainians.

The Victims of Communism memorial project in Canada is a copy of a similar project in Washington DC. It has high level support:

In 2013, the Harper government pledged $1.5 million to the project, a figure that increased to $3 million by 2014. By the end of 2014, the project's budget had ballooned to $5.5 million, with a taxpayer contribution of $4.3 million.
...
A NCC spokesperson said the estimated total cost of the monument is now $7.5 million, with $6 million coming from the federal government after Finance Minister Chrystia Freeland included an additional $4 million in this spring's budget to complete the monument.
...
The monument has received letters of support from Prime Minister Justin Trudeau, former Green party leader Elizabeth May, former NDP leader Tom Mulcair and former federal justice minister Irwin Cotler.

The generous with tax dollars Chrystia Freeland is known for her support of fascists in the Ukraine. It relates to her family's history:

Cont. reading: Canada, Victims Of Communism, And Comparisons To A Holocaust

How Iran Successfully Trolled The U.S. With A 'Weapon Smuggling' Ship Parade

Remember these June headlines?

• Iran sends ships to Atlantic Ocean rumored to go to Venezuela - NY Post, June 10 2021
• Are Iranian warships smuggling weapons to Venezuela? - gCaptain / Bloomberg, June 12 2021
• U.S. warns Venezuela, Cuba to turn away Iranian ships believed to be carrying arms - Politico, June 9 2012

> The Biden administration is urging Venezuela and Cuba to turn away two Iranian warships believed to be carrying arms intended for transfer to Caracas, while vowing that the U.S. will take “appropriate measures” to deter what it sees as a “threat” to America’s partners in the Western Hemisphere.

The warnings — some public and some private, according to three people briefed on the situation — come as the vessels have traveled a significant distance across the Atlantic Ocean. A senior Biden administration official said the ships are thought to be carrying weapons to fulfill a deal that Iran and Venezuela made a year ago, noting that it was during the administration of former President Donald Trump. <

A few days later the news had changed a bit.

• US officials: Iranian ships changing course away from Venezuela - The Hill June, 18 2021
• CHICKENED OUT Iranian warships ‘taking weapons to Venezuela’ DIVERT to Africa after US vowed to take ‘appropriate action’ - The Sun, June 18 2021
• Iranian ships once believed to be headed toward Venezuela change course, U.S. officials say - Politico,  June 17 2021

> U.S. officials believe the course change indicates that a diplomatic campaign to urge governments in the Western Hemisphere to turn away the ships was successful, the official said. The Iranian frigate Sahand and afloat staging base Makran charted a new course after Biden administration officials publicly and privately urged the governments of Venezuela, Cuba and other countries in the region not to allow them to dock, POLITICO reported. <

After the U.S. was blustering that it had won that 'diplomatic campaign' the news was silent about the Iranian ships.

A few days ago the ships were back in the news but only on specialized sites:

Cont. reading: How Iran Successfully Trolled The U.S. With A 'Weapon Smuggling' Ship Parade

Open Thread 2021-056

News & views ...

Russia And Germany Win War Over Nord Stream 2

The sanctions war the U.S. waged against Germany and Russia over the Nord Stream 2 pipeline has ended with a total U.S. defeat.

bigger

The U.S. attempts to block the pipeline were part of the massive anti-Russia campaign waged over the last five years. But it was always based on a misunderstanding. The pipeline is not to Russia's advantage but important for Germany. As I described Nord Stream 2 in a previous piece:

It is not Russia which needs the pipeline. It can sell its gas to China for just as much as it makes by selling gas to Europe.
...
It is Germany, the EU's economic powerhouse, that needs the pipeline and the gas flowing through it. Thanks to Chancellor Merkel's misguided energy policy - she put an end to nuclear power in German after a tsunami in Japan destroyed three badly placed reactors - Germany urgently needs the gas to keep its already high electricity prices from rising further.

That the new pipeline will bypass old ones which run through the Ukraine is likewise to the benefit of Germany, not Russia. The pipeline infrastructure in the Ukraine is old and near to disrepair. The Ukraine has no money to renew it. Politically it is under U.S. influence. It could use its control over the energy flow to the EU for blackmail. (It already tried once.) The new pipeline, laid at the bottom of the Baltic sea, requires no payment for crossing Ukrainian land and is safe from potential malign influence.

Maybe Chancellor Merkel on her recent visit to Washington DC finally managed to explain that to the Biden administration. More likely though she simply told the U.S. to f*** off. Whatever - the result is in. As the Wall Street Journal reports today:

Cont. reading: Russia And Germany Win War Over Nord Stream 2

China Has First World Problems

People in China have first world problems:

Peter Jolicoeur 周力克 @pajolicoe - 5:35 PM · Jul 20, 2021

My subway trip from home to Hongqiao rail station tomorrow (28 km) will take longer at 70 minutes than my high speed rail trip from Shanghai Hongqiao to Nanjing South Station at 59 minutes (295 km, averaging 300 km/h).

Who does not such hate long train rides? Well, that first world problem might be solved pretty soon:

World's first 600 km/h high-speed maglev train rolls off assembly line

China's new high-speed maglev train rolled off the production line on Tuesday. It has a designed top speed of 600 km per hour -- currently the fastest ground vehicle available globally.

The new maglev transportation system made its public debut in the coastal city of Qingdao, east China's Shandong Province.

But Peter is going to Nanjing which recently had a first world problem with Covid-19. One traveler had brought it in. Ten close contacts were identified and 140 possible contacts beyond them. All were notified, isolated and tested and Nanjing is again free of Covid. Meanwhile over 90% of all adults in Beijing have been vaccinated.

What amazes me is that some in the U.S. still think they can compete with and beat such an efficient system.

U.S. Takes Down Israeli Spy Software Company

A number of international papers report today on the Israeli hacking company NSO which sells snooping software to various regimes. The software is then used to hijack the phones of regime enemies, political competition or obnoxious journalists. All of that was already well known but the story has new legs as several hundreds of people who were spied on can now be named.

How that came to pass is of interest:

The phones appeared on a list of more than 50,000 numbers that are concentrated in countries known to engage in surveillance of their citizens and also known to have been clients of the Israeli firm, NSO Group, a worldwide leader in the growing and largely unregulated private spyware industry, the investigation found.

The list does not identify who put the numbers on it, or why, and it is unknown how many of the phones were targeted or surveilled. But forensic analysis of the 37 smartphones shows that many display a tight correlation between time stamps associated with a number on the list and the initiation of surveillance, in some cases as brief as a few seconds.

Forbidden Stories, a Paris-based journalism nonprofit, and Amnesty International, a human rights group, had access to the list and shared it with the news organizations, which did further research and analysis. Amnesty’s Security Lab did the forensic analyses on the smartphones.

The numbers on the list are unattributed, but reporters were able to identify more than 1,000 people spanning more than 50 countries through research and interviews on four continents.

Who might have made such a list and who would give it to Amnesty and Forbidden Stories?

NSO is one of the Israeli companies that is used to monetize the work of the Israel's military intelligence unit 8200. 'Former' members of 8200 move to NSO to produce spy tools which are then sold to foreign governments. The license price is $7 to 8 million per 50 phones to be snooped at. It is a shady but lucrative business for the company and for the state of Israel.

NSO denies the allegations that its software is used for harmful proposes with a lot of bullshittery:

The report by Forbidden Stories is full of wrong assumptions and uncorroborated theories that raise serious doubts about the reliability and interests of the sources. It seems like the “unidentified sources” have supplied information that has no factual basis and are far from reality.

After checking their claims, we firmly deny the false allegations made in their report. Their sources have supplied them with information which has no factual basis, as evident by the lack of supporting documentation for many of their claims. In fact, these allegations are so outrageous and far from reality, that NSO is considering a defamation lawsuit.

The reports make, for example, the claim that the Indian government under Prime Minister Narendra Modi has used the NSO software to spy on the leader of the opposition party Rahul Gandhi.

How could NSO deny that allegation? It can't.

Further down in the NSO's statement the company contradicts itself on the issues:

Cont. reading: U.S. Takes Down Israeli Spy Software Company