AI: Machine Detection of Missile/Nuclear Launches, no Google

Posted on June 5, 2018June 5, 2018 by Denise Simon

Primer: The U.S. holds an enviable lead in pushing artificial-intelligence technology out of labs and into real-world applications. Thank companies like Alphabet (GOOGL), Facebook (FB) and Apple (AAPL) for that.

But China’s government and technology elites aim to overtake the U.S. in AI by 2030 — or so they proclaimed in July at a Beijing political gathering.

Good luck with that.

Yes, China has many strengths as it sets out for worldwide dominance in AI technology. Its internet giants Baidu (BIDU), Alibaba Group Holdings (BABA) and Tencent Holdings (TCEHY) are also pouring money into AI research and hiring top scientists.

China’s huge population will generate massive raw data to train AI systems in how to make predictions. So there’s good reason to think China will make breakthroughs in developing computer algorithms — the software programs that aim to replicate the human ability to learn, reason and make decisions.

China also has a major weakness: a semiconductor industry that still lags the U.S. in making high-end electronic processors. Chinese companies buy AI chips mainly from Nvidia (NVDA), based in Santa Clara, Calif. Intel (INTC), the dominant supplier of brainy chips for personal computers, is pushing fast into AI. More here.

Google Employees Quit Over Controversial Pentagon Contract Some employees even quit.

Due to Google employees signing a petition for the Pentagon’s Project Maven, the AI project which is a drone contract. Project Maven is known as Algorithmic Warfare Cross-Functional Team. Google at the time of the contract beat out other bidders including Microsoft, Amazon and IBM. More here on Google.

Google will abandon Project Maven, your project of ... photo

WASHINGTON (Reuters) – The U.S. military is increasing spending on a secret research effort to use artificial intelligence to help anticipate the launch of a nuclear-capable missile, as well as track and target mobile launchers in North Korea and elsewhere.

The effort has gone largely unreported, and the few publicly available details about it are buried under a layer of near impenetrable jargon in the latest Pentagon budget. But U.S. officials familiar with the research told Reuters there are multiple classified programs now under way to explore how to develop AI-driven systems to better protect the United States against a potential nuclear missile strike.

If the research is successful, such computer systems would be able to think for themselves, scouring huge amounts of data, including satellite imagery, with a speed and accuracy beyond the capability of humans, to look for signs of preparations for a missile launch, according to more than half a dozen sources. The sources included U.S. officials, who spoke on condition of anonymity because the research is classified.

Forewarned, the U.S. government would be able to pursue diplomatic options or, in the case of an imminent attack, the military would have more time to try to destroy the missiles before they were launched, or try to intercept them.

“We should be doing everything in our power to find that missile before they launch it and make it increasingly harder to get it off (the ground),” one of the officials said.

The Trump administration has proposed more than tripling funding in next year’s budget to $83 million for just one of the AI-driven missile programs, according to several U.S. officials and budget documents. The boost in funding has not been previously reported.

While the amount is still relatively small, it is one indicator of the growing importance of the research on AI-powered anti-missile systems at a time when the United States faces a more militarily assertive Russia and a significant nuclear weapons threat from long-time foe North Korea.

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“What AI and machine learning allows you to do is find the needle in the haystack,” said Bob Work, a champion of AI technology who was deputy defense secretary until last July, without referring to any individual projects.

One person familiar with the programs said it includes a pilot project focused on North Korea. Washington is increasingly concerned about Pyongyang’s development of mobile missiles that can be hidden in tunnels, forests and caves. The existence of a North Korea-focused project has not been previously reported.

While that project has been kept secret, the military has been clear about its interest in AI. The Pentagon, for example, has disclosed it is using AI to identify objects from video gathered in its drone program, as part of a publicly touted effort launched last year called “Project Maven.”

Still, some U.S. officials say AI spending overall on military programs remains woefully inadequate.

AI ARMS RACE

The Pentagon is in a race against China and Russia to infuse more AI into its war machine, to create more sophisticated autonomous systems that are able to learn by themselves to carry out specific tasks. The Pentagon research on using AI to identify potential missile threats and track mobile launchers is in its infancy and is just one part of that overall effort.

There are scant details on the AI missile research, but one U.S. official told Reuters that an early prototype of a system to track mobile missile launchers was already being tested within the U.S. military.

This project involves military and private researchers in the Washington D.C. area. It is pivoting off technological advances developed by commercial firms financed by In-Q-Tel, the intelligence community’s venture capital fund, officials said.

In order to carry out the research, the project is tapping into the intelligence community’s commercial cloud service, searching for patterns and anomalies in data, including from sophisticated radar that can see through storms and penetrate foliage.

Budget documents reviewed by Reuters noted plans to expand the focus of the mobile missile launcher program to “the remainder of the (Pentagon) 4+1 problem sets.” The Pentagon typically uses the 4+1 terminology to refer to China, Russia, Iran, North Korea and terrorist groups.

TURNING TURTLES INTO RIFLES

Both supporters and critics of using AI to hunt missiles agree that it carries major risks. It could accelerate decision-making in a nuclear crisis. It could increase the chances of computer-generated errors. It might also provoke an AI arms race with Russia and China that could upset the global nuclear balance.

U.S. Air Force General John Hyten, the top commander of U.S. nuclear forces, said once AI-driven systems become fully operational, the Pentagon will need to think about creating safeguards to ensure humans – not machines – control the pace of nuclear decision-making, the “escalation ladder” in Pentagon speak.

“(Artificial intelligence) could force you onto that ladder if you don’t put the safeguards in,” Hyten, head of the U.S. Strategic Command, said in an interview. “Once you’re on it, then everything starts moving.”

Experts at the Rand Corporation, a public policy research body, and elsewhere say there is a high probability that countries like China and Russia could try to trick an AI missile-hunting system, learning to hide their missiles from identification.

There is some evidence to suggest they could be successful.

An experiment by M.I.T. students showed how easy it was to dupe an advanced Google image classifier, in which a computer identifies objects. In that case, students fooled the system into concluding a plastic turtle was actually a rifle. here

Dr. Steven Walker, director of the Defense Advanced Research Projects Agency (DARPA), a pioneer in AI that initially funded what became the Internet, said the Pentagon still needs humans to review AI systems’ conclusions.

“Because these systems can be fooled,” Walker said in an interview.

DARPA is working on a project to make AI-driven systems capable of better explaining themselves to human analysts, something the agency believes will be critical for high stakes national security programs.

‘WE CAN’T BE WRONG’

Among those working to improve the effectiveness of AI is William “Buzz” Roberts, director for automation, AI and augmentation at the National Geospatial Agency. Roberts works on the front lines of the U.S. government’s efforts to develop AI to help analyze satellite imagery, a crucial source of data for missile hunters.

Last year, NGA said it used AI to scan and analyze 12 million images. So far, Roberts said, NGA researchers have made progress in getting AI to help identify the presence or absence of a target of interest, although he declined to discuss individual programs.

In trying to assess potential national security threats, the NGA researchers work under a different kind of pressure from their counterparts in the private sector.

“We can’t be wrong … A lot of the commercial advancements in AI, machine learning, computer vision – If they’re half right, they’re good,” said Roberts.

Although some officials believe elements of the AI missile program could become viable in the early 2020s, others in the U.S. government and the U.S. Congress fear research efforts are too limited.

“The Russians and the Chinese are definitely pursuing these sorts of things,” Representative Mac Thornberry, the House Armed Services Committee’s chairman, told Reuters. “Probably with greater effort in some ways than we have.”

Yet Another American Caught Spying for China

Posted on June 4, 2018June 4, 2018 by Denise Simon

It is an epidemic, only no one will admit that. Mr. Hansen’s charges are found here.

WASHINGTON (Reuters) – A former officer with the U.S. Defense Intelligence Agency was arrested over the weekend for allegedly trying to spy on the United States for China, the Justice Department said on Monday.

The Federal Bureau of Investigation took Ron Rockwell Hansen, 58, into custody on Saturday while he was on his way to the Seattle-Tacoma International Airport to get a connecting flight to China.

The department said he has been accused of trying to transmit national defense information to China and with receiving “hundreds of thousands of dollars” while acting illegally as an agent for the Chinese government.

Reuters could not immediately learn who may be representing Hansen in the case.

Hansen is the latest person in a string of former U.S. intelligence officers to be swept up in criminal probes related to spying for the Chinese.

Earlier this year, former CIA case officer Jerry Chun Shing Lee was indicted for conspiring to gather or deliver national defense information to China.

Another former U.S. intelligence employee named Kevin Mallory is on trial in Virginia, also in connection with selling secrets to China.

In the new case announced Monday, prosecutors said that Hansen speaks fluent Mandarin-Chinese and Russian.

He served as a case officer for the Defense Intelligence Agency while on active military duty from 2000-2006, and later continued that line of work as a civilian employee and a contractor.

He also held a top secret clearance for years.

The government said that between 2013 and 2017, he traveled between the two countries attending conferences and provided the information he learned to China’s intelligence service.

He was paid via wire transfers, cash and credit cards. He also allegedly improperly sold export-controlled technology.

“His alleged actions are a betrayal of our nation’s security and the American people and are an affront to his former intelligence community colleagues,” said John Demers, the head of the Justice Department’s National Security Division.

According to court records, the FBI started investigating his activities in 2014. He was unaware of the probe, and participated in nine voluntary meetings with federal agents in Salt Lake City. Utah.

Prosecutors say that during his meetings, he told the FBI that Chinese intelligence had tried to recruit him, offered to cooperate as a source and even provided thumb drives to the FBI that contained classified materials he was not authorized to have.

Hansen appeared before a magistrate judge in Seattle on Monday, and is charged in a 15-count complaint.

Mr Hansen, who lives in Syracuse, Utah, was charged with attempting to gather or deliver national defense information to aid a foreign government.

Other charges – there are 15 in total – include acting as an unregistered foreign agent for China, bulk cash smuggling, structuring monetary transactions and smuggling goods from the US.

photo, Mallory

*** Now about those phones and Kevin Mallory:

The phone the Chinese intelligence operatives gave Kevin Mallory was a specialized spy gadget. If it had worked like it was supposed to, he might be a free man today.

The former CIA officer, on trial in Alexandria federal court on espionage charges, freely told his old colleagues that he had been approached by those spies on social media in February of 2017. He said he had been invited on two trips to China and given a Samsung Galaxy phone with special encryption capabilities.

What he didn’t tell his U.S. intelligence contacts, and, according to prosecutors, what he thought they would never learn, was that he also traded classified documents to the Chinese agents in exchange for $25,000.

Mallory, a 61-year-old from Leesburg, Va., who also served in the Defense Intelligence Agency, State Department and U.S. Army, was arrested last spring. While prosecutors say he was selling secrets, he contends he was trying to expose the Chinese spies. Whatever jurors decide, the veteran intelligence operative’s trial is offering a glimpse into some of the inner workings of both Chinese espionage and American attempts to counter it.

It’s “very rare” for a foreign intelligence service’s device “to be revealed like that,” FBI agent Paul Lee testified on Thursday. The phone would have cost the Chinese government a lot of money to develop, he had told Mallory last year.

Mallory explained in meetings with the CIA and FBI, which were recorded and played for the jury, that the phone contained an app designed to facilitate steganography, or the hiding of information inside of an image. Documents were merged into a file that appeared as an image — in this case, the Chinese chose horses grazing in front of a mountain range.

To send the files through the secure version of the app, which was a customized version of the Chinese messaging service WeChat, both parties had to be online and type in a password. (The one built into the application, Mallory told the officials, was the word “password,” in English.)

Mallory told the FBI that the Chinese spies told him they had found a “special way” to make the app safer.

But their system was flawed. James Hamrock, an engineer who analyzed the phone for the FBI, said he believes the encrypted application crashed at one point, creating an unintentional log of Mallory’s communications with one of the Chinese spies.

If the app had not crashed, Hamrock testified, he likely would not have been able to see Mallory’s communications. Instead, as Mallory and FBI agents met in a hotel room in Ashburn, Va., last May to look at the phone, they saw conversations in which Mallory had discussed delivering “more documents,” including something related to a foreign intelligence service. (The name of that service was redacted from exhibits shown in court).

“I’m — I’m surprised it kept this much,” Mallory told the agents as they examined the phone.

But defense attorneys stressed that U.S. law enforcement would never have known about the phone — let alone have been able to examine it — had Mallory not brought it to them.

Mallory maintains that as soon as he realized the Chinese recruiters who had approached him on LinkedIn were spies, he decided to deliver them to American hands.

“Kevin Mallory has worn a white hat throughout his career, and he did not take it off for a relatively small amount of money,” public defender Geremy Kamens said in his opening statement. “If he was motivated by money, he would have kept his mouth shut.”

Instead, Mallory caught the attention of authorities because he repeatedly contacted a CIA employee from his church and a CIA contractor he worked with from 2010 to 2012 to say he believed he was in touch with Chinese intelligence.

In a text to the contractor, a covert operative who testified from behind a screen under the pseudonym John Doe, Mallory said the operatives “asked me a few questions that could have only come from our side of the house.”

Doe testified that he took that to mean that the Chinese had penetrated the CIA.

Doe said Mallory’s request to be put in touch with someone in the agency’s East Asia Division “seemed odd.”

Ralph Stevenson, a CIA resources officer, agreed. When Mallory contacted him in a similar manner, Stevenson said, he deleted the texts and responded with a terse email.

At the Montgomery Chinese Branch of the Mormon Church that weekend, Stevenson upbraided Mallory. Read more here.

*** One last item:

China’s influence in New Zealand is so extensive that it threatens the traditionally close intelligence contacts between New Zealand and its Western allies, according to a report written by the Canadian spy agency.

The report, entitled China and the Age of Strategic Rivalry, was authored by experts at the Canadian Security Intelligence Service (CSIS). It contains a summary of views expressed by participants at an academic outreach workshop that was organized in Canada by the CSIS. In a section focusing on Chinese “interference in democratic systems”, the report suggests that, despite its small size, New Zealand is “valuable to China […] as a soft underbelly through which to access Five Eyes intelligence”. In recent years, claims the report, Beijing has adopted “an aggressive strategy” that has sought to co-opt political and economic elites in New Zealand as a means of influencing political decision making in the country. As part of that process, China seeks to gain advantages in trade and business negotiations, suppress negative views of China, facilitate espionage and control the views of the Chinese expatriate community in New Zealand, according to the report. Ultimately, Beijing seeks to “extricate New Zealand from […] its traditional [military and intelligence] partners]” as a means of asserting its regional and —eventually— global influence, the report concludes.

In a separate but connected development, it emerged this week that China expert Peter Mattis told an American Congressional committee last month that New Zealand’s position in the Five Eyes alliance was tenuous due to China’s influence. Mattis, a former China analyst for the United States Central Intelligence Agency, was speaking before the US-China Economic and Security Review Commission, a group of experts that advise the US Congress. He told the Commission that the influence of the Chinese Communist Party in New Zealand is so deep that it raises questions about whether the Pacific Ocean country can continue to share intelligence with the other members of the Five Eyes alliance.

On Wednesday, New Zealand’s Prime Minister Jacinda Ardern emphatically dismissed questions about her country’s role in the Five Eyes alliance. She told reporters in Wellington that the issue of New Zealand’s Five Eyes membership had “never been raised” with her “or anyone else” by Five Eyes partners. Ardern added that her government received its information “from official channels, not opinions expressed at a workshop”.

Chinese Spy Networks in Britain and United States

Posted on May 29, 2018May 29, 2018 by Denise Simon

The agents are thought to have handed over secrets while still in service for France’s external DGSE intelligence agency, similar to Britain’s MI6 and America’s CIA, Ms Parly told CNews television. The third person – believed to be the wife – has been indicted for “concealment of treasonable crimes” and placed under “judicial control”, meaning judges keep close tabs on her pending trial. More here.

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France has confirmed the arrest of two French intelligence officers who are accused of spying for the Chinese government. It appears that the two officers were captured and charged in December. However, their arrests were not publicized at the time, because French counterintelligence officials wanted to avoid alerting more members of a possible spy ring, which some say may include up to five French citizens. It was only last Friday, a day after French media published leaked reports of the arrests, that the French government spoke publicly about the case.

France’s Minister of the Armed Forces, Florence Parly, told France’s CNews television on Friday that two French intelligence officers were “accused of extremely serious acts of treason” against the French state. The two officers had been charged with delivering classified information to a foreign power”, she said. Parly added that the spouse of one of the officers was also being investigated for participating in acts of espionage on behalf of a foreign country. When asked to identify the country that the two officers are accused of spying for, the minister refused to respond. But the Agence France Presse news agency cited an anonymous “security source”, who said that the two intelligence officers were being suspected of spying for China and that they had been captured following a sting operation by French counterintelligence officers.

French television station TFI1 said on Friday that both spy suspects are officers in the General Directorate of External Security (DGSE), France’s primary external intelligence agency. The station added that at least one of the two suspects was stationed at the embassy of France in Beijing when French counterintelligence became aware of the alleged espionage. According to some reports, the two suspects had retired from the DGSE by the time they were arrested, but committed their alleged espionage while still in the service of the spy agency. French government officials have refused to provide information about the length of the alleged espionage or the nature of the classified information believed to have been compromised. Additionally, no information is available about whether the two alleged spies were working in cooperation with each other. The BBC asked China last week about the arrests in France, but the Chinese Ministry of Foreign Affairs said it was not aware of the incident.

*** As a reminder, the United States has it’s own Chinese spy network. Jerry Chun Shing Lee was charged with aiding China dismantle a U.S. informant network in China in exchange for money. He has plead not guilty.

a man smiling for the camera © Provided by South China Morning Post Publishers Limited

It was this past February that FBI Director Chris Wray provided testimony to the Senate Intelligence Committee that Chinese spies have fully infiltrated U.S. universities. Additionally, China continues to gain access and in many cases successfully, of U.S. technologies and intellectual properties through telecommunications companies, academia and most especially with joint business adventures.

China has launched an ‘all society’ approach to gain access to intellectual property and some universities are pushing back on the warnings put forth by Director Wray as there are an estimated 400,000 Chinese students studying in the United States, many attending cash strapped colleges.

US Warships Challenge Chinese Islands: FONOP

Posted on May 29, 2018May 29, 2018 by Denise Simon

USS Higgins

The US Navy sent two warships to a disputed archipelago in the South China Sea on May 28 in its latest symbolic protest against China’s claims there.

Reuters first reported that the USS Higgins and the USS Antietam ventured within 12 miles of the Paracel Islands in a demonstration the Pentagon calls a “freedom of navigation operation” or FONOP. The move signals US rejection of China’s claims of political control in the South China Sea.

The objective of their sail-by was a speck of land called “Woody Island,” where China has developed airstrips and port facilities in recent years as part of a broader strategy of establishing bases in these islands to demonstrate and exercise its political claims. This spring, China landed strategic bombers capable of carrying nuclear weapons on the island, a symbolic display of its deterrent power, and satellite imagery showed the arrival of surface-to-air missiles this month.

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The Vietnamese government protested China’s move as a violation of its sovereign claim to the islands—exactly the language used by China to protest US actions today after sending its own warships to warn away the Americans.

** See more here.

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The island is one of many that lay behind the “nine dash line,” a diplomatic term of art for China’s political vision for the South China Sea, which is at the center of a web of claims by nearby nations:

In March, the US sent a destroyer on a FONOP to the Spratly Islands. In response, China increased its naval activity there, including a parade of warships that was also captured by Planet satellites. Tensions in the South China Sea have been simmering for years, but are now complicated by China’s role in North Korean nuclear talks and growing trade disputes with the Trump administration.

*** Meanwhile in April of 2018:

Surveillance photos suggest it has already broken its promise to not land military aircraft on its artificial islands. And there are claims the facilities have begun jamming US forces.

Philippines news service The Inquirer has obtained an aerial surveillance photo taken back in January which appears to show two Chinese Xian Y-7 twin engine aircraft on the recently constructed artificial island of Mischief Reef — also known as Panganiban Reef.

These are military combat transport aircraft, built to rapidly deploy special forces troops and munitions to a battlefield.

The news comes amid reports that electronic warfare equipment recently installed on the islands were last week directed at disrupting the passage of the United States Navy’s aircraft carrier, the USS Roosevelt.

FAIT ACCOMPLI?

Mischief Reef is within the internationally recognised 370km exclusive economic zone (EEZ) that applies to the Philippines. It is one of seven artificial islands arbitrarily constructed within the disputed Spratly Islands cluster. Three of these have large, 3km long military-grade runways.

China refuses to accept the UN economic zone standard, established after World War II to reduce international tensions, as well as an adverse ruling in 2016 by an international court of arbitration on the matter.

Instead, it insists it holds sovereign territorial rights over the whole 3.5 million-square-kilometre South China Sea, right up to 20km of the coasts of bordering nations including Taiwan, Vietnam, Borneo and Malaysia.

“If they could land transports now, in the future they might want to land more provocative and destabilising types of assets such as fighter jets and bombers,” research fellow Collin Koh at Singapore’s Rajaratnam School of International Studies’ Maritime Security Program, told The Inquirer.

ELECTRONIC MISCHIEF

The Wall Street Journal reports US intelligence officers have identified radar and communications jamming equipment being installed on Beijing’s artificial South China Sea island fortresses.

Such electronic warfare devices are designed to block an opponent’s radar from ‘seeing’ what is going on, and prevent ships and aircraft from communicating with each other and the outside world.

Now, a US Navy pilot appears to have confirmed that these facilities are active.

Serving aboard the USS Roosevelt aircraft carrier which passed through the South China Sea to visit the Philippines last week, he implied the immense warship and its aircraft had been targeted by these disruptive devices.

“The mere fact that some of your equipment is not working is already an indication that someone is trying to jam you.” the pilot told the Philippines’ GMA News Online.

“And so we have an answer to that,” the naval officer cryptically told the journalist invited aboard for a tour of the ship.

DELVE DEEPER: How does China’s military compare with the US?

The USS Roosevelt had passed through the disputed waterway at the same time as a major Chinese naval parade was being staged on behalf of its new President-for-life, Xi Jinping.

The pilot reportedly flew one of the US Navy’s EA-18G Growler aircraft — a modified Super Hornet intended to provide electronic warfare support for accompanying ships and aircraft.

“This is not something that the US will look kindly on or think they can overlook.” military analyst Omar Lamrani at geopolitical think-tank Stratfor told Business Insider .

Lamrani said that even though electronic jamming was nothing like shooting a weapon, such activity was provocative and “could lead to an escalatory pattern that could be negative for both sides.” More here.

China Annexed the DPRK, C’mon Admit it, China is an Adversary

Posted on May 25, 2018May 25, 2018 by Denise Simon

Primer: The Fiscal 2019 NDAA includes impose a ban on technology products from Chinese firms such as ZTE and Huawei. Yet, North Korea has it courtesy of China.

And:

The Financial Crimes Enforcement Network (FinCEN) is issued this advisory to further alert financial institutions to North Korean schemes being used to evade U.S. and United Nations (UN) sanctions, launder funds, and finance the North Korean regime’s weapons of mass destruction (WMD) and ballistic

missile programs.

Private companies in China are not private at all. The Chinese state holds at least some stock and often a larger voting block. Private Chinese companies invests all over the world including Venezuela, United States, Britain as well as regions such as Latin America and Africa.

You can bet most of those companies in North Korea are actually owned by the Chinese State.

China does bad things and yet no world leader publicly states that fact nor declares China is an adversary while China has declared the United States as an adversary. President Xi, the now eternal ruler quotes a dynasty cliche ‘Tǒngzhì yīqiè zài yángguāng xià’, translation is rule everything under the sun.

So now we have ZTE: ZTE, once the scourge of U.S. authorities for its violations of Iran sanctions, has become a key source of evidence about North Korea’s use of the American financial system to launder money, said the people, who gave details about the confidential investigations on the condition of anonymity. Federal investigators have been poring through data supplied by ZTE to find links to companies that North Korea has used to tap into the U.S. banking system, the people said.

Using evidence from ZTE, prosecutors on June 14 filed a case seeking $1.9 million held in six U.S. bank accounts in the name of China’s Mingzheng International Trading Limited. Prosecutors allege that Mingzheng is a front company for a covert Chinese branch of North Korea’s state-run Foreign Trade Bank. Between October and November 2015, Mingzheng was a counterparty to 20 illicit wire transfers in violation of the International Emergency Economic Powers Act, according to prosecutors.

On Aug. 22, prosecutors in Washington filed a lawsuit seeking more than $4 million in funds tied to China’s Dandong Chengtai Trading Limited and a network of companies owned by Chi Yupeng, a Chinese national with close ties to North Korea’s military. That same day, the Treasury Department added Dandong Chengtai Trading and several of its business affiliates, as well as Mingzheng, to the sanctions list. More here.

During the negotiations for the talks between Kim Jung Un and President Trump, ZTE was thrown in the mix. Why? China made some demands during recent trade talks. It was just announced that Trump imposed a $1.5 billion fine on ZTE and relayed that to President Xi. More negotiations and the final fine was $1.3 billion and alter the Board members of ZTE, which means that China state cannot have any management or vote. China will skirt that too. How so?

AEI explained it for us and quite well.

One of the substantial challenges in curtailing North Korea’s nuclear program is preventing Chinese companies from doing business with their pals in Pyongyang. Usually, Chinese companies in North Korea operate through networks of shell companies to avoid falling afoul of US and international sanctions. And most of these companies are small in scope and can easily rebrand themselves if caught. Enter Zhongxing Telecommunications Equipment (ZTE), not a small, expendable subsidiary, but instead a large PRC state-owned enterprise (SOE) with over 74,000 employees.

ZTE has transferred US technology to North Korea, supplying the Kim regime with US telecommunications tech that strengthens its defense capabilities by allowing it indirect access to US semiconductors (dual use technology for communications). For that and other transgressions — including violating US Iran sanctions — ZTE paid a monster fine and entered into an agreement with the US to cease and desist. It was caught violating that agreement and banned from business with the United States as a result.

But President Trump offered China’s state-owned ZTE a lifeline via a May 13 tweet. Apparently, all that it took was for Chinese President Xi to dangle access for US agriculture exports to China in exchange for allowing ZTE to continue to do business with American firms. For what it’s worth, the president denied intending to lift the sales ban, but then followed up to describe a punishment that includes lifting the sales ban.

What’s Donald Trump’s message to Beijing (and Pyongyang and Tehran)? Companies that matter to China’s top leadership can violate US sanctions with impunity. All it takes is the will to blackmail the US and large Chinese SOEs will have carte blanche to supply the rogue regimes of the world.

Remember, Chinese SOEs that do business with North Korea are not motivated merely by profit. Instead, they are motivated by policy directives that originate in the Chinese Communist Party. Historically, China’s position on North Korea has been fairly opaque, yet its continued trade with the regime indicates Beijing has an interest in its wellbeing, in direct opposition to US interests and overall security in Asia.

At the end of the day, President Trump says he wants to cripple North Korea’s nuclear program. If North Korean dictator Kim Jong Un won’t denuclearize voluntarily, the US will have to rely on “maximum pressure,” including aggressive sanctions. Forgiving ZTE for violating US law is yet another example of the US shooting itself in the foot in dealing with North Korea. And probably not the last.

Meanwhile, as North Korea blew up the tunnels leading to the already destroyed nuclear test site, no one has asked where are those nuclear weapons now? No one has mentioned other possible military dimension sites or missile locations. Just as a reminder: