Category Archives: China

Chinese Spy Leading California Public Pension Fund?

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This may add some very new and different questions when it comes to the Biden foreign operations….read on….

Rep. Jim Banks, R-Ind., joined “Mornings with Maria” to explain why he wrote a letter to California Gov. Gavin Newsom highlighting his concerns about the state public pension fund’s chief investment officer having ties to China.

The fund has invested $3.1 billion in Chinese companies, some of which have been blacklisted by the U.S. government, Banks told FOX Business’ Maria Bartiromo.

“If this were up to me, I would fire [Chief Investment Officer Yu Ben Meng] immediately because of these suspicious ties,” he said. “We learned that Mr. Meng, who is the chief investment officer of CalPERS, was actually recruited to this position by the [Chinese Communist Party] through something called the Thousand Talents Program. Now he’s denied it.”

CalPERS stands for the California Public Employees’ Retirement System, the largest public pension fund in the nation.

“What is unusual is that many of these companies are companies that we’ve blacklisted, that make Chinese military equipment or are responsible for technologies like Hikvision, which is the equipment that’s used by the Chinese for surveillance on the Uighur Muslim population that they’ve been abusing in their own country,” Banks said.

The Commerce Department blacklisted Hikvision in October “for engaging in or enabling activities contrary to the foreign policy interests of the United States.”

CalPERS defended Meng.

“This is a reprehensible attack on a U.S. citizen. We fully stand behind our Chief Investment Officer who came to CalPERS with a stellar international reputation,” a CalPERS spokeswoman told Reuters.

China's Social Credit System – It's Coming To The United ...

Hold on, it is actually worse… going back 4 months ago….

(Reuters) – Some of the biggest public pensions funds in the United States have invested in one of the world’s largest purveyors of video surveillance systems that the U.S. government claims are used in wide-scale repression of the Muslim population of western China.

The Trump administration’s decision to put the company, Hangzhou Hikvision Digital Technology Co (002415.SZ), on a blacklist last week has prompted at least two of the pension plans to say they are reviewing or monitoring that development.

The blacklist applies to Hikvision and seven other companies because they allegedly enabled the crackdown that has led to mass arbitrary detentions in the Xinjiang region.

“We are tracking the situation given this new development with the Department of Commerce’s announcement,” a spokeswoman for the California State Teachers’ Retirement System (CalSTRS) said in an email.

CalSTRS owned 4.35 million Hikvision shares at the end of June 30, 2018, the last data available. The holding, owned directly and through emerging market exchange-traded funds, would be worth $24 million at that share count.

The New York State Teachers Retirement System also owned Hikvision, reporting 81,802 shares at the end of June, up from 26,402 shares at the end of 2018, fund disclosures show.

“Our holdings are primarily held according to their weights in passive portfolios matching the MSCI ACWI ex-U.S. index, our policy benchmark. We are monitoring the situation,” said a spokesman for the teachers’ fund. The ex-U.S. All Country World Index includes stocks from 22 developed and emerging markets.

The blacklisting means Hikvision and the other companies will not be able to buy U.S. technology, such as software and microchips, without specific U.S. government approval. It does not prevent U.S. investors from buying the companies’ shares. In August, Hikvision had been banned from selling to U.S. federal agencies because the government said its products could allow access to sensitive systems.

Hikvision’s General Manager Hu Yangzhong told Reuters on Wednesday it has been talking to the U.S. government about Xinjiang and has hired human rights lawyers to defend itself against the blacklisting.

A spokeswoman for law firm Sidley Austin LLP, which has lobbied for Hikvision this year, declined to comment.

Another major fund investing in Hikvision shares is the Florida Retirement System (FRS), with 1.8 million shares at the end of June.

A spokesman for the fund said it was working closely with external money managers “related to the issue in order to meet all regulatory and fiduciary requirements.”

POSTER CHILD

Risk consultants say the ease with which money used for the retirements of tens of millions of Americans is being invested in such companies should concern U.S. authorities at every level, as well as Americans generally.

“Hikvision has emerged as the corporate poster child for enabling Chinese human rights abuses, with its surveillance cameras visible atop the walls of detention camps incarcerating some one million or more Uighurs in Xinjiang,” said Roger Robinson, president and CEO of Washington DC-based risk consultancy RWR Advisory Group.

Beijing denies any mistreatment of people at the camps, which it says provide vocational training to help stamp out religious extremism and teach new work skills.

Robinson said that many Americans are unwittingly owning shares in such companies because they are in index funds. “They are picked up by the index providers in sizable numbers and sluiced into U.S. investor portfolios with seemingly very little, if any, due diligence or disclosure in the categories of national security and human rights.”

MSCI Inc (MSCI.N), whose products are designed for global investors, added Hikvision to its benchmark emerging markets index last year. MSCI declined to comment.

One other company among the blacklisted eight that is owned by some of the big pension funds is iFlytek Co Ltd (002230.SZ), a speech-recognition firm. Its shares were owned by funds in Florida, New York State as well as CalSTRS and the California Public Employees Retirement System (CalPERS) indirectly through the iShares MSCI Emerging Markets ETF at their last disclosure dates. IShares, a top ETF provider owned by BlackRock Inc (BLK.N), declined to comment.

CUTTING TIES

Not all the funds have stuck with Hikvision.

The New York State Common Fund, one of the country’s biggest pension funds, liquidated its position months ago. It had owned 2.7 million shares worth $14.2 million at the end of March through an external fund manager, but sold them in May, a spokesman said, declining to say why.

U.S. mutual funds have also cut or eliminated positions in Hikvision amid the negative publicity, which included it being named in a Human Rights Watch report on mass surveillance in Xinjiang in May.

Just 9% of global emerging markets funds now own Hikvision, down from 20% in 2018, according to Copley Fund Research. One fund to pull out is the $2.7 billion Artisan Developing World Fund (APDYX.O), which had a $66 million position in Hikvision at the end of March but reported holding no shares three months later, fund disclosures show. Artisan did not respond to a request for comment.

At least one U.S. pension fund had worried this summer about whether to invest in the Chinese surveillance company.

The $33 billion Alaska Permanent Fund had considered an investment in a China fund featuring Hikvision as a top holding, according to minutes of a June meeting of its trustees and staff. The minutes were published last month.

Schroders Global Asset Management, a finalist for the fund’s mainland China investment mandate, touted Hikvision as a top performer.

Some Alaska trustees, however, worried about “headline risks” of investing in companies that aid the Chinese government’s surveillance activities, according to the minutes.

Jack Lee, portfolio manager of the China fund, assured Alaska pension officials he had spoken with Hikvision executives. Hikvision will “try to avoid that kind of business,” the trustees were told, but “they don’t necessarily know how their equipment is used,” Lee told the trustees, according to the minutes.

Reuters could not determine whether Alaska made an investment in the Schroders fund that included Hikvision stock.

A spokeswoman for the Alaska Retirement Management Board, which oversees the pension, said it does not have any additional information to share regarding Schroders’ efforts. A Schroders spokesman declined to comment.

 

 

Huawei Snooping via Backdoor on US Telecom Network

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For ten years…..

U.S. officials say Huawei Technologies Co. can covertly access mobile-phone networks around the world through “back doors” designed for use by law enforcement, as Washington tries to persuade allies to exclude the Chinese company from their networks.

Chinese tech giant Huawei can reportedly access the networks it helped build that are being used by mobile phones around the world. It’s been using backdoors intended for law enforcement for over a decade, The Wall Street Journal reported Tuesday, citing US officials. The details were disclosed to the UK and Germany at the end of 2019 after the US had noticed access since 2009 across 4G equipment, according to the report.

The backdoors were inserted for law enforcement use into carrier equipment like base stations, antennas and switching gear, the Journal said, with US officials reportedly alleging they were designed to be accessible by Huawei.

“We have evidence that Huawei has the capability secretly to access sensitive and personal information in systems it maintains and sells around the world,” Robert O’Brien, national security adviser, reportedly said.

The White House and Huawei didn’t immediately respond to a request for comment, but the tech giant rejected the claims according to the Journal.

UK Prime Minister Boris Johnson approved Huawei for 5G last month with some conditions: The British restrictions are to exclude Huawei from building core parts of the UK’s 5G networks, have Huawei’s market share capped at 35% and exclude Huawei from sensitive geographic locations. The European Union allowed higher-risk vendors for 5G with similar restrictions at the end of January.

Huawei’s 5G approval there came despite the US urging the UK to ban the Chinese telecommunications giant.

Huawei was blacklisted in May when it was added to the United States’ “entity list” (PDF). In addition, US President Donald Trump at the same time signed an executive order essentially banning the company in light of national security concerns that Huawei had close ties with the Chinese government. Huawei has repeatedly denied that charge.

*** Huawei faces further investigation into Chinese 'spying ... source

Huawei disputed the latest allegations, as it has done in the past, saying it “has never and will never do anything that would compromise or endanger the security of networks and data of its clients.” Huawei also said that the United States made its latest accusations “without providing any kind of concrete evidence.”

“No Huawei employee is allowed to access the network without an explicit approval from the network operator,” a Huawei official said, according to the Journal.

The US government has been moving to reduce the amount of Huawei and ZTE equipment in telecom networks. The Federal Communications Commission voted unanimously in November to ban Huawei and ZTE gear in projects paid for by the FCC’s Universal Service Fund (USF). FCC Chairman Ajit Pai said at the time that Huawei and ZTE “have close ties to China’s Communist government and military apparatus” and “are subject to Chinese laws broadly obligating them to cooperate with any request from the country’s intelligence services and to keep those requests secret.”

The ban is expected to hit small carriers the hardest, as Huawei has appealed to small network operators by selling low-cost gear. By contrast, big telcos like AT&T “have long steered clear of Huawei,” a March 2018 Wall Street Journal report said.

 

 

4 Members of the Chinese Military Hacked Equifax

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(AP) — Four members of the Chinese military have been charged with breaking into the networks of the Equifax credit reporting agency and stealing the personal information of tens of millions of Americans, the Justice Department said Monday, blaming Beijing for one of the largest hacks in history to target consumer data.

The 2017 breach affected more than 145 million people, with the hackers successfully stealing names, addresses, Social Security and driver’s license numbers and other personal information stored in the company’s databases.

4 Chinese military members charged in Equifax case

The four — members of the People’s Liberation Army, an arm of the Chinese military — are also accused of stealing the company’s trade secrets, including database designs, law enforcement officials said.

The accused hackers exploited a software vulnerability to gain access to Equifax’s computers, obtaining log-in credentials that they used to navigate databases and review records. The indictment also details efforts the hackers took to cover their tracks, including wiping log files on a daily basis and routing traffic through dozens of servers in nearly 20 countries.

  Source

“The scale of the theft was staggering,” Attorney General William Barr said Monday. “This theft not only caused significant financial damage to Equifax, but invaded the privacy of many millions of Americans, and imposed substantial costs and burdens on them as they have had to take measures to protect against identity theft.”

Equifax, headquartered in Atlanta, maintains a massive repository of consumer information that it sells to businesses looking to verify identities or assess creditworthiness. All told, the indictment says, the company holds information on hundreds of millions of Americans in the U.S. and abroad.

The case is the latest Justice Department accusation against Chinese hackers suspected of breaching networks of American corporations. It comes as the Trump administration has warned against what it sees as the growing political and economic influence of China, and efforts by Beijing to collect data on Americans and steal scientific research and innovation.

The administration has also been pressing allies not to allow Chinese tech giant Huawei to be part of their 5G wireless networks due to concerns that the equipment could be used to collect data and for surveillance.

The accused hackers are based in China and none is in custody. But U.S. officials nonetheless view criminal charges like the ones brought in this case as a powerful deterrent to foreign hackers and a warning to other countries that American law enforcement has the capability to pinpoint individual culprits behind hacks.

A spokesperson for the Chinese embassy did not immediately return an email seeking comment Monday.

The case resembles a 2014 indictment from the Obama administration Justice Department that accused five members of the PLA of hacking into major American corporations to steal their trade secrets. U.S. authorities also suspect China in the massive 2015 breach of the Office of Personnel Management and of intrusions into the Marriott hotel chain and Anthem health insurance company.

“This kind of attack on American industry is of a piece with other Chinese illegal acquisitions of sensitive personal data,” Barr said of Monday’s announcement, adding that “for years we have witnessed China’s voracious appetite for the personal data of Americans.”

The criminal charges — which include conspiracy to commit computer fraud and conspiracy to commit economic espionage — were filed in federal court in Atlanta.

Equifax last year reached a $700 million settlement over the data breach, with the bulk of the funds intended for consumers affected by it.

Equifax didn’t notice the intruders targeting its databases for more than six weeks. Hackers exploited a known security vulnerability that Equifax hadn’t fixed.

Once inside the network, officials said, the hackers spent weeks conducting reconnaissance. They stole login credentials and ultimately downloaded and extractedate data from Equifax to computers outside the United States.

The indictment says the hackers obtained names, birth dates, and Social Security numbers for about 145 million American victims, along with credit card numbers and other personal information for about 200,000.

According to the Government Accountability Office, the investigative arm of Congress, a server hosting Equifax’s online dispute portal was running software with a known weak spot. The hackers jumped through the opening to reach databases containing consumers’ personal information.

Equifax officials told GAO the company made many mistakes, including having an outdated list of computer systems administrators. When the company circulated a notice to install a patch for the software vulnerability, the employees responsible for installing the patch never got it.

Equifax’s $700 million settlement with the U.S. government gives affected consumers free credit-monitoring and identity-restoration services, plus money for their time or reimbursement for certain services. However, because so many people made claims, officials said some consumers would get far less than the eligible amounts because of caps in the settlement pool.

AG Barr/Director Wray Warning on China Threat

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Question is, who is listening? Corporation America, small business, academia, individuals? 5G needs national attention readers, what do you know? Learn it fast, it is here.

AG Barr Hints at His Dangerous Position Overseeing Deep ...

Attorney General Barr recalled, a fellow student once told him Russia wanted to conquer the world and the United States could deal with that. But China, the student said at the time, wanted to own the world and that was a bit more difficult.

“There was a certain truth in that,” Barr told the audience Thursday.

Barr made his remarks at the Center for Strategic and International Studies in Washington, reminding his audience that the Communist Party remains in control of the Chinese economy and is “authoritarian through and through.”“Their goal is the eventual demise of capitalism,” the attorney general said.

The United States has long accused China of intellectual property theft on a grand scale. “It has been estimated that the annual cost to the U.S. economy could be $600 billion,” Barr said.

U.S. officials are also worried that China is threatening to become the dominant world force in the race to transition to 5G.

Aside from serving as the attorney general once before, Barr also spent several years in the telecom industry and used that experience to sound another dire warning.

The attorney general called the impending jump to 5G “a quantum leap” which will have major economic implications. The Chinese telecom giant Huawei “is the leading supplier of 5G on every continent except North America,” Barr said, adding that the U.S. market needed to “pick a horse” to back in the race for domestic 5G influence.

“The Chinese are using every lever of power to expand their 5G market share around the globe,” he said.

U.S. officials say Chinese leaders are working toward being the geopolitical, economic and military world leader by the year 2049, the 100th anniversary of the Peoples Republic of China.

“China wants the fruits of America’s brainpower to harvest the seeds of its planned economic dominance,” said John Demers, the assistant attorney general for the National Security Division.

***  Christopher Wray vows independence: No 'pulling punches ...

FBI Director Wray described the threat from China as “diverse” and “multi-layered.” He noted that the Chinese government exploits the openness of the American economy and society.

“They’ve pioneered an expansive approach to stealing innovation through a wide range of actors,” Wray said during opening remarks at the half-day Department of Justice China Initiative Conference in Washington, D.C.

Wray told the audience that China is targeting everything from agricultural techniques to medical devices in its efforts to get ahead economically. While this is sometimes done legally, such as through company acquisitions, China often takes illegal approaches, including cyber intrusions and corporate espionage.

“They’ve shown that they’re willing to steal their way up the economic ladder at our expense,” he said.

The FBI is using traditional law enforcement techniques as well as its intelligence capabilities to combat these threats. He said the FBI currently has about 1,000 investigations into Chinese technology theft.

“They’ve shown that they’re willing to steal their way up the economic ladder at our expense.”

Just last month, a Harvard University professor was charged with lying about his contractual arrangement with China.

Wray also called for a whole-of-society response to these threats. He urged U.S. companies to carefully consider their supply lines and whether and how they do business with Chinese companies. While a partnership with a Chinese company may seem profitable today, a U.S. company may find themselves losing their intellectual property in the long run.

Additionally, U.S. universities should work to protect their foreign students from coercion from foreign governments, Wray said. When China violates our criminal laws and well-established international norms, we are not going to tolerate it, much less enable it,” he said. “The Department of Justice and the FBI are going to hold people accountable for that and protect our nation’s innovation and ideas.”

 

China Cutting $75B on Tariffs, Desperation

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Soybeans and cars…
China has reached out to the United States to launch an interim trade agreement prior to Phase II beginning February 14.
The virus epidemic in China has taken a substantial toll on the internal economy due to fear. Transportation, vacation travel, corporate production, factory production have take a toll. China is even suggesting the elimination of all tariffs between the two countries.
The economic stability of China is in question and will have affects on bi-lateral trade agreements China has not only with the United States but other nations as well. Since China is a large supporter of North Korea with financial aid, there is some expectation that North Korea could see larger in-country humanitarian spirals downward.

The United States has offered several lanes of assistance to China where most appear to be rejected. As a consequence, our own domestic farmers may be forced to be more patient exporting goods such as pork, cotton, wheat and soybeans due to the fact that Chinese consumption has fallen substantially in recent weeks due to the coronavirus.

It is impossible to determine the actual numbers of deaths due to the virus or those infected and being treated. China is a communist country holding full control of all media placing censorship on stories being published or communications from the mainland to other parts of the world.

So far, there are no indications that the virus is under control or is being managed in such a manner that fears of infection and spread of the illness would ease.

Forever war: US and China struggle to defuse trade conflict

Reuters is reporting in recent hours: – China has achieved “positive” results in its prevention and control efforts in fighting the new coronavirus, President Xi Jinping told Saudi Arabia’s King Salman by telephone, China’s official Xinhua news agency reported.

The two discussed “efforts to combat and control the novel coronavirus epidemic”, the report said.

China has declared a “people’s war” on the virus and the whole nation is working as one to combat it, Xi said.

“China has a strong mobilisation capacity, rich experience in responding to public health incidents and is confident and capable of winning the battle for epidemic prevention and control,” the report paraphrased him as saying.

China hopes countries respect and understand the World Health Organization’s guidance on travel, Xi said.

WHO chief Tedros Adhanom Ghebreyesus said on Monday there was no need for measures that “unnecessarily interfere with international travel and trade” in trying to halt the spread of the coronavirus.

China will continue to take an open and transparent approach towards dealing with the virus, Xi added.