Categories
Automobiles china Industrial Espionage International Trade and World Market Mergers, Acquisitions and Divestitures Solar Energy Uncategorized United States International Relations United States Politics and Government Wind Power

How China Obtains American Trade Secrets

BEIJING — The new trade deal between Washington and Beijing is intended in part to address one of the most acrimonious issues between them: China’s tactics in acquiring technology from companies based in the West.

It’s a thorny topic, and one that is unlikely to be fully solved with a trade pact.

The Trump administration blames China for stealing Western trade secrets, and it used those allegations as the legal basis for launching the trade war nearly two years ago. Trade talks between the two sides quickly became about broader issues, but the partial trade pact set to be signed on Wednesday includes pledges by China to stop some of the practices that Western businesses have long criticized. Depending on the details, that could make the deal more palatable for American businesses.

Underpinning these concerns is that China has repeatedly shown that it can acquire technology and, through heavy government subsidies, build competitive rivals to American companies. Businesses worry that it could do the same in other industries, like software and chips.

China has long denied that it forces foreign companies to give up technology. They do it willingly, Beijing asserts, to get access to China’s vast and growing market. Still, Chinese officials say they are taking steps to address the concerns.

The American authorities have long accused Chinese companies and individuals of hacking and other outright theft of American corporate secrets. And some in the Trump administration worry that Chinese companies are simply buying it through corporate deals.

American companies say Chinese companies also use more subtle tactics to get access to valuable technology.

Sometimes China requires foreign companies to form joint ventures with local firms in order to do business there, as in the case of the auto industry. It also sometimes requires that a certain percentage of a product’s value be manufactured locally, as it once did with wind turbines and solar panels.

The technology companies Apple and Amazon set up ventures with local partners to handle data in China to comply with internal security laws.

Companies are loath to accuse Chinese partners of theft for fear of getting punished. Business groups that represent them say Chinese companies use those corporate ties to pressure foreign partners into giving up secrets. They also say Chinese officials have pressured foreign companies to give them access to sensitive technology as part of a review process to make sure those products are safe for Chinese consumers.

Foreign business groups point to renewable energy as one area where China used some of these tactics to build homegrown industries.

Gamesa of Spain was the wind turbine market leader in China when Beijing mandated in 2005 that 70 percent of each wind turbine installed in China had to be manufactured inside the country. The company trained more than 500 suppliers in China to manufacture practically every part in its turbines. It set up a plant to assemble them in the city of Tianjin. Other multinational wind turbine manufacturers did the same.

The Obama administration questioned the policy as a violation of World Trade Organization rules and China withdrew it, but by then it was too late. Chinese state-controlled enterprises had begun to assemble turbines using the same suppliers. China is now the world’s biggest market for wind turbines, and they are mostly made by Chinese companies.

A somewhat similar industrial evolution occurred soon after in solar energy. China required that its first big municipal solar project only use solar panels that were at least 80 percent made in China. Companies rushed to produce in China and share technology.

The Chinese government also heavily subsidized the manufacture of solar panels, mostly for export. Chinese companies ended up producing most of the world’s solar panels.

Some in the Trump administration fear the same thing is happening in cars.

Shortly after opening China to foreign auto companies, Chinese officials held a competition among global automakers for who would be allowed to enter the market. The competition included a detailed review of each company’s offer to transfer technology to a joint venture to be formed with a Chinese state-owned partner.

General Motors beat out Ford Motor and Toyota by agreeing to build a state-of-the-art assembly plant in Shanghai with four dozen robots to make the latest Buicks. Executives at Volkswagen, the German automaker that had entered China even earlier, were furious, because competitive pressures forced them to upgrade their technology as well.

China is now the world’s largest car market. But except for a few luxury models, practically all of the cars sold in China are made there. Steep Chinese tariffs on imported cars and car parts have also played a role, as has the desire of foreign companies to avoid the costs and risks of transporting cars from distant production sites.

In the trade truce expected to be signed on Wednesday, Chinese officials have agreed not to force companies to transfer technology as a condition of doing business, and they undertook to punish firms that infringe on or steal trade secrets. China also agreed not to use Chinese companies to obtain sensitive technology through acquisitions.

Even before that, Chinese officials pledged to drop the joint venture requirement in areas like cars.

The question is whether China will stick to its pledges. Chinese officials have already issued rules echoing much of what they promised in Wednesday’s agreement. Foreign lawyers say the new rules have large loopholes. The rules give Chinese regulators broad discretion to act as they see fit in cases that involve “special circumstances,” “national state interests” and other fuzzy exceptions.

The trade pact calls for consultations within 90 days if the United States thinks Beijing is not living up to its commitments, but it is unclear whether the Trump administration could then force compliance. More broadly, the pact does not address China’s subsidies for new industries, a key factor in what happened in sectors like solar panels. China has largely rebuffed calls to rein in subsidies for homegrown competitors in industries like semiconductors, commercial aircraft, electric cars and other technologies of tomorrow.

The Trump administration is counting on tariffs to counterbalance that. The partial trade pact will leave in place broad tariffs on many of those industries to prevent Chinese competitors from flooding the American market. Leaving broad tariffs in place also gives Western companies a strong financial incentive to reconsider supply chains that are heavily reliant on China.

Categories
Check Point china computer security Cyberattacks and Hackers Mobile Applications TikTok (ByteDance) Uncategorized Video Recordings, Downloads and Streaming

Major TikTok Security Flaws Found

TEL AVIV — TikTok, the smartphone app beloved by teenagers and used by hundreds of millions of people around the world, had serious vulnerabilities that would have allowed hackers to manipulate user data and reveal personal information, according to research published Wednesday by Check Point, a cybersecurity company in Israel.

The weaknesses would have allowed attackers to send TikTok users messages that carried malicious links. Once users clicked on the links, attackers would have been able to take control of their accounts, including uploading videos or gaining access to private videos. A separate flaw allowed Check Point researchers to retrieve personal information from TikTok user accounts through the company’s website.

“The vulnerabilities we found were all core to TikTok’s systems,” said Oded Vanunu, Check Point’s head of product vulnerability research.

TikTok learned about the conclusions of Check Point’s research on Nov. 20 and said it had fixed all of the vulnerabilities by Dec. 15.

The app, whose parent company is based in Beijing, has been called “the last sunny corner on the internet.” It allows users to post short, creative videos, which can easily be shared on various apps.

It has also become a target of lawmakers and regulators who are suspicious of Chinese technology. Several branches of the United States military have barred personnel from having the app on government-issued smartphones. The vulnerabilities discovered by Check Point are likely to compound those concerns.

TikTok has exploded in popularity over the past two years, becoming a rare Chinese internet success story in the West. It has been downloaded more than 1.5 billion times, according to the data firm Sensor Tower. Near the end of 2019, the research firm said TikTok appeared to be on its way to more downloads for the year than better-known apps from Facebook, Instagram, YouTube and Snap.

But new apps like TikTok offer opportunities for hackers looking to target services that haven’t been tested through years of security research and real-world attacks. And many of its users are young and perhaps not mindful of security updates.

“TikTok is committed to protecting user data,” said Luke Deshotels, the head of TikTok’s security team.

“Like many organizations, we encourage responsible security researchers to privately disclose zero day vulnerabilities to us,” he added. “Before public disclosure, Check Point agreed that all reported issues were patched in the latest version of our app. We hope that this successful resolution will encourage future collaboration with security researchers.”

Mr. Deshotels said there was no indication in customer records that a breach or an attack had occurred.

TikTok’s parent company, ByteDance, is one of the world’s most valuable tech start-ups. But TikTok’s popularity and its roots in China, where no large corporation can thrive outside the good graces of the government, have prompted intense scrutiny of the app’s content policies and data practices.

American lawmakers have expressed concern that TikTok censors material that the Chinese government does not like and allows Beijing to collect user data. TikTok has denied both accusations. The company also says that although ByteDance’s headquarters are in Beijing, regional managers for TikTok have significant autonomy over operations.

Check Point’s intelligence unit examined how easy it would be to hack into TikTok user accounts. It found that various functions of the app, including sending video files, had security issues.

“I would expect these types of vulnerabilities in a company like TikTok, which is probably more focused on tremendous growth, and on building new features for their users, rather than security,” said Christoph Hebeisen, the head of research at Lookout, another cybersecurity company.

One vulnerability allowed attackers to use a link in TikTok’s messaging system to send users messages that appeared to come from TikTok. The Check Point researchers tested the weakness by sending themselves links with malware that let them take control of accounts, uploading content, deleting videos and making private videos public.

The researchers also found that TikTok’s site was vulnerable to a type of attack that injects malicious code into trusted websites. Check Point researchers were able to retrieve users’ personal information, including names and birth dates.

Check Point sent a summary of its findings to the Department of Homeland Security in the United States.

The Committee on Foreign Investment in the United States, a panel that reviews investment deals on national security grounds, is also looking into ByteDance’s 2017 acquisition of Musical.ly, a lip-syncing app that the company later merged into TikTok. That deal set the stage for TikTok’s rapid rise in the United States and Europe.

There are also concerns about the company’s data privacy practices. In February, the Federal Trade Commission filed a complaint against TikTok, saying it illegally collected personal information from minors. The complaint claimed that Musical.ly had violated the Children’s Online Privacy Protection Act, which requires websites and online companies to direct children under 13 to get parental consent before the companies collect personal information.

TikTok agreed to pay $5.7 million to settle the complaint and said it would abide by COPPA. TikTok is still being investigated by the British Information Commissioner’s Office to determine if it violated European privacy laws that offer special protections to minors and their data.

Ronen Bergman reported from Tel Aviv, Sheera Frenkel from San Francisco, and Raymond Zhong from Hong Kong.

Categories
china Chinese Nationalist Party (Taiwan) Computers and the Internet Democratic Progressive Party (Taiwan) Elections Han Kuo-yu Politics and Government Propaganda Rumors and Misinformation Social Media Taiwan Tsai Ing-wen Uncategorized Voting and Voters

Awash in Disinformation Before Vote, Taiwan Points Finger at China

TAIPEI, Taiwan — At first glance, the bespectacled YouTuber railing against Taiwan’s president, Tsai Ing-wen, just seems like a concerned citizen making an appeal to his fellow Taiwanese.

He speaks Taiwanese-accented Mandarin, with the occasional phrase in Taiwanese dialect. His captions are written with the traditional Chinese characters used in Taiwan, not the simplified ones used in China. With outrage in his voice, he accuses Ms. Tsai of selling out “our beloved land of Taiwan” to Japan and the United States.

The man, Zhang Xida, does not say in his videos whom he works for. But other websites and videos make it clear: He is a host for China National Radio, the Beijing-run broadcaster.

As Taiwan gears up for a major election this week, officials and researchers worry that China is experimenting with social media manipulation to sway the vote. Doing so would be easy, they fear, in the island’s rowdy democracy, where the news cycle is fast and voters are already awash in false or highly partisan information.

China has been upfront about its dislike for President Tsai, who opposes closer ties with Beijing. The Communist Party claims Taiwan as part of China’s territory, and it has long deployed propaganda and intimidation to try to influence elections here.

Polls suggest, however, that Beijing’s heavy-handed ways might be backfiring and driving voters to embrace Ms. Tsai. Thousands of Taiwan citizens marched last month against “red media,” or local news organizations supposedly influenced by the Chinese government.

That is why Beijing may be turning to subtler, digital-age methods to inflame and divide.

Recently, there have been Facebook posts saying falsely that Joshua Wong, a Hong Kong democracy activist who has fans in Taiwan, had attacked an old man. There were posts about nonexistent protests outside Taiwan’s presidential house, and hoax messages warning that ballots for the opposition Kuomintang, or Chinese Nationalist Party, would be automatically invalidated.

So many rumors and falsehoods circulate on Taiwanese social media that it can be hard to tell whether they originate in Taiwan or in China, and whether they are the work of private provocateurs or of state agents.

Taiwan’s National Security Bureau in May issued a downbeat assessment of Chinese-backed disinformation on the island, urging a “‘whole of government’ and ‘whole of society’ response.”

“False information is the last step in an information war,” the bureau’s report said. “If you find false information, that means you have already been thoroughly infiltrated.”

Taiwanese society has woken up to the threat. The government has strengthened laws against spreading harmful rumors. Companies including Facebook, Google and the messaging service Line have agreed to police their platforms more stringently. Government departments and civil society groups now race to debunk hoaxes as quickly as they appear.

The election will put these efforts — and the resilience of Taiwan’s democracy — to the test.

“The ultimate goal, just like what Russia tried to do in the United States, is to crush people’s confidence in the democratic system,” said Tzeng Yi-suo of the Institute for National Defense and Security Research, a think tank funded by the government of Taiwan.

Fears of Chinese meddling became acute in recent months after a man named Wang Liqiang sought asylum in Australia claiming he had worked for Chinese intelligence to fund pro-Beijing candidates in Taiwan, buy off media groups and conduct social media attacks.

Mr. Wang’s account remains largely unverified. But there are other signs that Beijing is working to upgrade its techniques of information warfare.

Twitter, which is blocked in mainland China, recently took down a vast network of accounts that it described as Chinese state-backed trolls trying to discredit Hong Kong’s protesters.

A 2018 paper in a journal linked to the United Front Work Department, a Communist Party organ that organizes overseas political networking, argued that Beijing had failed to shape Taiwanese public discourse in favor of unification with China.

In November, the United Front Work Department held a conference in Beijing on internet influence activities, according to an official social media account. The department’s head, You Quan, said the United Front would help people such as social media influencers, live-streamers and professional e-sports players to “play an active role in guiding public opinion.”

“We understand that the people who are sowing discord are also building a community, that they are also learning from each other’s playbooks,” said Audrey Tang, Taiwan’s digital minister. “There are new innovations happening literally every day.”

In Taiwan, Chinese internet trolls were once easily spotted because they posted using the simplified Chinese characters found only on the mainland.

That happens less these days, though there are still linguistic slip-ups.

In one of the YouTube videos from Mr. Zhang, the China National Radio employee, a character in the description is incorrectly translated into traditional Chinese from simplified Chinese. Mr. Zhang did not respond to a message seeking comment.

Puma Shen, an assistant professor at National Taipei University who studies Chinese influence efforts, does not believe that disinformation from China is always guided by some central authority as it spreads around the internet.

“It’s not an order from Beijing,” Mr. Shen said. Much of the activity seems to be scattered groups of troublemakers, paid or not, who feed off one another’s trolling. “People are enthusiastic about doing this kind of stuff there in China,” he said.

In December, Taiwan’s justice ministry warned about a fake government notice saying Taiwan was deporting protesters who had fled Hong Kong. The hoax first appeared on the Chinese social platform Weibo, the ministry said, before spreading to a Chinese nationalist Facebook group.

Sometimes, Chinese trolls amplify rumors already floating around in Taiwan, Mr. Shen said. He is also on the lookout for Taiwanese social media accounts that may be bought or supported by Chinese operatives.

Ahead of midterm elections in 2018, his team had been monitoring several YouTube channels that discussed Taiwanese politics. The day after voting ended, the channels disappeared.

After Yu Hsin-Hsien was elected to the City Council that year in Taoyuan, a city near Taipei, mysterious strangers began inquiring about buying his Facebook page, which had around 280,000 followers. Mr. Yu, 30, immediately suspected China.

His suspicions grew after he demanded an extravagantly high price and the buyers accepted. Mr. Yu, who represents Ms. Tsai’s party, the Democratic Progressive Party, did not sell.

“Someone approaches a just-elected legislator and offers to buy his oldest weapon,” Mr. Yu said. “What’s his motive? To serve the public? It can’t be.”

Recently, internet users in Taiwan noticed a group of influencers, many of them pretty young women, posting messages on Facebook and Instagram with the hashtag #DeclareMyDeterminationToVote. The posts did not mention candidates or parties, but the people included selfies with a fist at their chest, a gesture often used by Han Kuo-yu, the Kuomintang’s presidential candidate.

Mr. Han’s campaign denied involvement. But some have speculated that China’s United Front might be responsible. The United Front Work Department did not respond to a fax requesting comment.

One line of attack against Ms. Tsai has added to the atmosphere of mistrust and high conspiracy ahead of this week’s vote.

Politicians and media outlets have questioned whether Ms. Tsai’s doctoral dissertation is authentic, even though her alma mater, the London School of Economics, has confirmed that it is.

Dennis Peng hosts a daily YouTube show dedicated to proving otherwise. His channel has 173,000 subscribers. Theories about Ms. Tsai’s dissertation have circulated in China, too, with the help of the Chinese news media.

Mr. Peng, a former television anchor, once supported Ms. Tsai. He was proud that Taiwan elected a female president. Now he says he is not being paid by anyone, including China, to crusade against her.

He is not worried about being smeared as fake news.

“Let news and fake news compete against each other,” Mr. Peng said. “I trust that most people aren’t so stupid. Everybody eventually figures it out.”

Steven Lee Myers contributed reporting. Wang Yiwei contributed research from Beijing.

Categories
Bezos, Jeffrey P Blue Origin Boeing Company china Comets European Space Agency India International Space Station Israel Japan Mars (Planet) Mars 2020 (Mars Rover) Moon National Aeronautics and Space Administration OneWeb Inc Private Spaceflight Rocket Science and Propulsion russia Satellites Space and Astronomy Space Exploration Technologies Corp Starlink Sun Uncategorized United Arab Emirates Virgin Galactic

Rocket Launches, Trips to Mars and More 2020 Space and Astronomy Events

If you follow space news and astronomy, the past year offered no shortage of highlights. Astronomers provided humanity’s first glimpse of a black hole. China landed on the moon’s far side. And the 50th anniversary of the Apollo 11 moon landing inspired us to look ahead to our future in space.

The year to come will be no less eventful:

  • No fewer than four missions to Mars could leave Earth this summer.

  • NASA may finally launch astronauts into orbit aboard capsules built by SpaceX and Boeing.

  • We expect to learn more secrets about the interstellar comet Borisov.

  • And private companies are working to demonstrate new abilities in space.

However much you love space and astronomy, it can be challenging to keep up with the latest news in orbit and beyond. That’s why we’ve put dates for some of these events on The Times’s Astronomy and Space Calendar, which has been updated for 2020. Subscribe on your personal digital calendar to be automatically synced with our updates all year long. (We promise not to collect any personal information from your private calendar when you sign up.)

[Sync your calendar with the solar system.]

Below are some of the launches, space science and other events to look forward to.

Roughly every two years, the orbits of Earth and Mars come closer than usual. Space agencies on Earth often send missions to the red planet during that window, and in 2020 four such launches are scheduled.

Three of the missions will carry rovers. The United States is launching the soon-to-be-renamed Mars 2020 rover, which also carries a small helicopter. It will try to land in Jezero Crater, which once contained a lake and could preserve evidence of life, if life ever existed there.

Neither China, Europe nor Russia has deployed a rover on the Martian surface. But they will try, in a pair of missions. China’s mission, its first on its own to the red planet, includes an orbiter in addition to a rover. The European Space Agency and Russia cooperated to build Rosalind Franklin, a rover named for the English chemist whose work was essential to finding the structure of DNA.

The rovers could be joined on Mars by Hope, an orbiter commissioned by the United Arab Emirates. It is being built in Colorado, and is to be launched on a Japanese rocket. If it succeeds, it could represent a new model for space programs, in which small, wealthy countries pay for off-the-shelf spacecraft to get themselves into orbit and beyond.

Since the space shuttle’s last flight, in 2011, NASA has relied on Russia’s Soyuz spacecraft for trips to and from the International Space Station. In 2019, NASA hoped to begin flying astronauts aboard capsules built by two private companies, SpaceX and Boeing, but persistent delays knocked back the timeline another year.

NASA’s commercial crew program could finally achieve its goal in 2020. SpaceX’s Crew Dragon is scheduled to conduct an uncrewed test of its in-flight abort system on Jan. 11. If the test succeeds, the capsule could carry astronauts to the space station not long after.

Boeing’s Starliner experienced problems during its first uncrewed test flight in December and was unable to dock with the space station. An upcoming review of that test will determine whether Starliner might still be able to fly into orbit with astronauts in the first half of this year.

Virgin Galactic, the space-plane company run by Richard Branson, conducted two successful test flights with crew aboard in the past 13 months. In the year to come, the company could carry its first passengers to the edge of space. Blue Origin, the company founded by Jeff Bezos of Amazon, may follow suit; it has conducted 12 crewless tests of its capsule for short tourist jumps to suborbital space. For now, only the very wealthy will be able to afford such jaunts.

Other private companies are looking to Earth orbit for the future of internet service. SpaceX launched 120 Starlink satellites in 2019 and could launch many more in 2020. A competitor, OneWeb, could send more of its satellites to orbit in the coming year, too. These companies are blazing the trail for orbital internet — a business that Amazon and Apple are also pursuing — and upsetting astronomers, who fear that large constellations of internet satellites will imperil scientific study of the solar system and stars.

In September, a comet called Borisov 2I was spotted in our solar system, only the second ever confirmed interstellar object. Unlike Oumuamua, which was spotted in 2017 only as it was leaving the solar system, astronomers caught sight of Borisov and its 100,000-mile-long tail as it flew toward the sun, before it turned and began its exit.

In 2020, scientists will continue to point ground and orbiting telescopes at Borisov as it speeds back toward the stars beyond — unless, as some astronomers hope, it explodes into fragments after being heated by the sun. Whatever happens, other interstellar visitors are sure to follow, and professional sky gazers hope to find them with powerful new telescopes in the years ahead.

Before the end of 2020, the moon could see one more visitor from Earth. Chang’e-5, a robotic probe built by China, aims to collect moon rock and soil samples and send them back to Earth. The last set of lunar samples was gathered in 1976 by a Soviet spacecraft.

The year to come may also bring greater clarity about American designs for returning to the moon. NASA is aiming to put the first woman and the next man on the moon by 2024, with a program called Artemis. A wide range of political, budgetary and technological hurdles stand in the way of meeting that ambitious timeline.

Categories
china Huawei Technologies Co Ltd International Trade and World Market Politics and Government Smartphones Uncategorized United States Politics and Government

Huawei Posts Solid Growth but Warns of Difficulties Ahead

HONG KONG — For Huawei, it has been a year of lawsuits, blacklists, diplomatic fights, spying accusations and, most recently, viral anger from the Chinese internet.

Through it all, the company posted solid growth, its deputy chairman Eric Xu said on Tuesday. In a year-end note, Mr. Xu said the company’s sales in 2019 increased an estimated 18 percent from a year earlier to $121.8 billion, just below the company’s initial target for revenue.

The results hinted at a slowdown in the final quarter of the year, and Mr. Xu’s note was rich in metaphors describing the difficult days ahead. Alternately likening the company to plums bitten by winter’s frost, a bamboo stalk battered by wind and an embattled aircraft, the executive said that in 2020, the company would not grow as rapidly as it did in the first half of 2019.

“It’s going to be a difficult year for us,” wrote Mr. Xu, adding that “the external environment is becoming more complicated than ever, and downward pressure on the global economy has intensified.”

Huawei is the world’s leading maker of equipment that powers cellphone networks and a champion of Beijing’s ambitions to build new, cutting-edge technology companies. Officials in the United States have long been worried that China’s government could use Huawei’s products to gather intelligence, an accusation the company has repeatedly denied.

Huawei’s year went from bad to worse when the United States added the company to an export blacklist in May. The move effectively restricted its ability to purchase American products crucial to its smartphones and telecom gear, weighing on revenue growth.

The blocks, though, have proven somewhat porous. The Trump administration has permitted sales to Huawei that are used to maintain existing mobile networks. Some of its American suppliers determined they could lawfully continue selling nonsensitive products to the company. In October, the Trump administration said it would issue export licenses to certain United States companies selling to Huawei, further easing pressures on its supply chain.

Even so, Mr. Xu indicated that the confrontation with the United States would continue to dampen growth and said he expected Huawei to remain on the blacklist in 2020.

“Difficulty is the prelude to greater success, and adversity the whetstone of an iron-willed team. The U.S. government’s campaign against Huawei is strategic and long-term,” he wrote.

Huawei, he said, will “need to go all out” to develop software and services that work with its smartphones. Analysts have worried about whether the company’s smartphones would remain competitive since it was blocked from working with Google. Huawei had to release its latest flagship smartphone, the Mate 30 series, without regular access to Google’s apps.

Mr. Xu said the company shipped a total of 240 million smartphones in 2019, an increase of almost 17 percent over the 206 million units it sold in 2018.

The company’s shares are not publicly traded and it has no obligation to announce its results. In a nod to transparency, Huawei has long announced financials, and this year it began reporting unaudited results quarterly. The numbers for 2019 are not audited, and the company will likely provide further details for its performance in the first months of 2020.

With Huawei’s business under pressure, Mr. Xu also warned of tough times for employees, even as he thanked them. Huawei unexpectedly became the center of online anger in China this month after an employee said he had been jailed for 251 days after demanding severance pay from the company. The experience struck a chord for many Chinese white-collar tech employees, who are now facing sagging returns for long hours at the office.

Despite the renewed focus on Huawei’s famous hard-charging corporate spirit, Mr. Xu did not mince his metaphors in describing the company’s outlook on its employees.

“Managers at all levels need to put company interests above personal gain and go where they are needed most, including hardship regions,” he wrote, calling those willing to put up with such difficulties “tree growers.”

He said the company would remove managers who were performing in the bottom 10 percent as part of a plan to better prune talent.

“We will remove mediocre managers more quickly — people who have lost their enterprising spirit, who have built their position on personal connections or empty and unactionable reporting, and those who prioritize short-term gains and pass problems on to their successors,” he wrote, calling such people “the pit-diggers among us.”

Categories
5G (Wireless Communications) china Computers and the Internet Faroe Islands Huawei Technologies Co Ltd International Trade and World Market Politics and Government Salmon Sands, Carla (1960- ) Telephones and Telecommunications Uncategorized United States International Relations Wireless Communications

At the Edge of the World, a New Battleground for the U.S. and China

TORSHAVN, Faroe Islands — The mere existence of the Faroe Islands is a wonder. Tall peaks of snow-patched volcanic rock jut out from the North Atlantic Ocean. Steep cliffs plunge into the deep waters of narrow fjords.

The remote collection of 18 small islands, which sit between Iceland and Norway, is known for a robust puffin population and periodic whale hunts. The semiautonomous Danish territory also has a thriving salmon industry.

Technology is not a common conversation topic among its 50,000 residents. Yet in recent weeks, the Faroe Islands have turned into a new and unlikely battleground in the technological Cold War between the United States and China.

The dispute started because of a contract. The Faroe Islands wanted to build a new ultrafast wireless network with fifth-generation technology, known as 5G. To create that new network, the territory planned to award the job to a technology supplier.

That was when the United States began urging the archipelago nation not to give the contract to a particular company: the Chinese telecommunications giant Huawei. American officials have long said Huawei is beholden to Beijing and poses national security concerns.

Then Chinese officials got involved. A senior Faroe Islands government official was recently caught on tape saying that the Chinese had offered to boost trade between the territory and China — as long as Huawei got the 5G network assignment.

“Commercially, the Faroe Islands cannot be very important to Huawei or anybody else,” Sjurdur Skaale, who represents the territory in the Danish parliament, said over breakfast in the capital of Torshavn this week. “The fact that the Chinese and American embassies are fighting over this as hard they are, there is something else on the table. It is about something else than purely business.”

Image
Credit…Ben Quinton for The New York Times

No location is now too small for the United States and China to focus on as they tussle over the future of technology. The Faroe Islands, whose proximity to the arctic gives it added military importance, joins countries across Europe caught in the middle of the two superpowers over Huawei, the crown jewel of the Chinese tech sector.

For more than a year, American officials have applied pressure on Britain, Germany, Poland and others to follow its lead in banning Huawei from new 5G networks. They argue the company can be used by China’s Communist Party to spy or sabotage critical networks. Huawei has denied that it helps Beijing.

But if the European nations side with Washington, they risk harming their economic ties to China, which has a growing appetite for German cars, French airplanes and British pharmaceuticals.

In the Faroe Islands, Bardur Nielsen, the prime minister, has tried defusing the conflict. In a statement, he said his government “has not been pressured or threatened by foreign authorities in relation to the development of a 5G network in the Faroe Islands.”

Any decision about awarding a contract to Huawei, he said, would be made by the local telecommunications company, Foroya Tele.

Foroya Tele said in a statement that it is testing different technologies. The choice of a 5G network provider, it said, “requires significant considerations given the scale and importance of the investment for the Faroe Islands.”

For the people of the Faroe Islands, the debate over Huawei and 5G is rooted in salmon more than in download speeds.

Salmon is central to the territory’s economy. More than 90 percent of the Faroe Islands’ exports are fish, including salmon, mackerel, herring and cod. In the surrounding waters, thousands of salmon can be seen splashing inside large netted rings, where they are bred for meals in Paris, Moscow, New York — and, increasingly, Beijing.

After 2010, the islands’ salmon exports to China picked up. At the time, the Chinese government had slowed the purchase of the fish from Norway in response to the awarding of the Nobel Peace Prize to Chinese human rights activist Liu Xiaobo in Oslo.

China now makes up about 7 percent of the Faroe Islands’ salmon sales. The Faroese government this year opened an office in Beijing to further expand trade.

In 2014, the islands’ salmon sales to Russia exploded after the European Union limited what fish other countries could export there. Those rules do not apply to the Faroe Islands because it is not a part of the European bloc.

In all, salmon exports from the Faroe Islands are expected to top $550 million this year, up from roughly $190 million a decade ago.

“This is the home place of Atlantic salmon,” Runi Dam, a consultant for local fishing companies, said while standing over giant pens filled with about 15,000 salmon each. “We have the perfect environment.”

Now the salmon business has become entangled in the fight over the 5G wireless network.

Credit…Ben Quinton for The New York Times
Credit…Ben Quinton for The New York Times

Last month, America’s ambassador to Denmark, Carla Sands, went public with warnings against Huawei. In an opinion piece in the local Faroe Islands newspaper, Ms. Sands said there could be “dangerous consequences” if the company was allowed to build the 5G network. When countries let Huawei in, she said, “they agree to work under Chinese communist rules.”

In another interview with Danish Broadcasting this week, Ms. Sands accused a Huawei executive responsible for the Nordic region of “working for the Chinese communists,” who are “exporting their spying, their corruption and bribery around the world.”

Ms. Sands declined to be interviewed.

At the same time, China’s ambassador to Denmark visited the Faroe Islands at least twice in the past two months.

This month, the Danish national newspaper, Berlingske, published the transcript of an audio recording in which a senior Faroe Islands official is summarizing one of the meetings. Herálvur Joensen, a senior aide in the Faroese government, was caught on tape saying China’s ambassador had threatened to block a trade deal — and more fish sales — if Huawei was not used for the 5G network.

“If Foroya Tele signed agreement with Huawei, then all doors would be open for a free-trade agreement with China,” he said in the recording. “If this doesn’t happen, then there won’t be a trade agreement.”

A spokesman for the prime minister said Mr. Joensen had not attended the meeting with the Chinese ambassador and was not available for an interview.

Credit…Ben Quinton for The New York Times
Credit…Ben Quinton for The New York Times

Huawei’s critics jumped on the revelations, saying the leaked recording showed the close links between Huawei and the Chinese government.

China’s ambassador, Feng Tie, wrote in Berlingske that the country did not pressure the Faroe Islands. “It’s my duty to secure that Huawei is treated fair and without discrimination in Denmark,” he said. “It’s not at all in Chinese culture to promote threats. Promoting threats is more known from the U.S.”

Huawei said in a statement it was not involved in any talks between the two governments.

In villages and harbors around the islands, people said they were bewildered about being thrust into a battle between China and the United States.

“It is a lice between two nails,” said Rógvi Olavson, who lives in Torshavn and is a lecturer at the local university. “You’re squeezed by the U.S. on the one hand and China on the other.”

While many residents said the Faroe Islands prefer the United States over China, several expressed anger at American officials for demanding that Huawei be banned. They said the company helped build the existing 4G network, which they use to make phone calls or share photos from some of the more far-flung areas of the islands.

Sissal Kristiansen, who designs sweaters and other clothing from Faroese wool, said she had listened to a recent interview with Ms. Sands.

“It awoke this, ‘Oh bugger off’ feeling in me,” she said. “We make our own decisions.”

Others are wary about harming economic ties with China, which they fear will retaliate if Huawei is not selected for the 5G network. Many locals remember an economic crisis in the 1990s, when about 10 percent of Faroese residents ended up moving abroad.

Today, unemployment on the islands is almost nonexistent — just 183 people were out of work as of Friday, according to government statistics. Like other Nordic countries, health care, education and other social services are free. There is virtually no crime.

“China is not just a nice customer, it is a necessity,” said Martin Breum, an arctic expert who has written about the Faroe Islands. The Faroese, he added, “have nothing else to sell to the rest of the world. They live off their fish.”

Martin Selsoe Sorensen contributed reporting from Copenhagen.

Categories
5G backdoors Biz & IT china cyberwar Huawei Security Tech vulnerabilities

Bloomberg alleges Huawei routers and network gear are backdoored

5G Logo in the shape of a butterfly.

Enlarge / PORTUGAL – 2019/03/04: 5G logo is seen on an android mobile phone with Huawei logo on the background. (credit: Omar Marques/SOPA Images/LightRocket via Getty Images)

Vodafone, the largest mobile network operator in Europe, found backdoors in Huawei equipment between 2009 and 2011, reports Bloomberg. With these backdoors, Huawei could have gained unauthorized access to Vodafone’s “fixed-line network in Italy.” But Vodafone disagrees, saying that while it did discover some security vulnerabilities in Huawei equipment, these were fixed by Huawei and in any case were not remotely accessible, and hence they could not be used by Huawei.

Bloomberg’s claims are based on Vodafone’s internal security documentation and “people involved in the situation.” Several different “backdoors” are described: unsecured telnet access to home routers, along with “backdoors” in optical service nodes (which connect last-mile distribution networks to optical backbone networks) and “broadband network gateways” (BNG) (which sit between broadband users and the backbone network, providing access control, authentication, and similar services).

In response to Bloomberg, Vodafone said that the router vulnerabilities were found and fixed in 2011 and the BNG flaws were found and fixed in 2012. While it has documentation about some optical service node vulnerabilities, Vodafone continued, it has no information about when they were fixed. Further, the network operator said that it has no evidence of issues outside Italy.

Read 9 remaining paragraphs | Comments