China Readings for April 4th

"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner

  • 温家宝:中央已统一思想打破银行垄断_新闻_腾讯网
  • China Needs to End Big Banks’ ’Monopoly,’ Wen Says – Bloomberg – China needs to break a banking “monopoly” of a few big lenders that make easy profits because it’s difficult to borrow money elsewhere, Premier Wen Jiabao said, as cited by China National Radio.
    The country can extend nationwide the successful parts of a pilot program in Wenzhou in Zhejiang province that allows private financing, including non-bank lending, Wen said yesterday at a roundtable with private-company executives in Fujian province, according to a story on the broadcaster’s Website.
  • China Accelerates Markets Opening as QFII Quota Doubles – Bloomberg – China accelerated the opening of its capital markets by more than doubling the amount foreigners can invest in stocks, bonds and bank deposits as the government shifts its growth model to domestic consumption from exports.
  • Neijiang’s Internet Espionage – China Digital Times (CDT) – The following report from Neijiang, Sichuan was originally published by Radio France Internationale last December in a detailed report on social trends in 2010. Read the original here (scroll down to the middle of section four). Translation by Deng Bolun.

    Report from the Neijiang, Sichuan government website: “The Neijiang Bureau of Public Security’s intense work on key online controls has yielded outstanding results.” This material is hard to come by. This “verified record of investigation” has historical value. It is therefore excerpted here in detail:

  • Apple holds the master decryption key when it comes to iCloud security, privacy – Ars recently attempted to delve into the inner workings of the security built into Apple's iCloud service. Though we came away reasonably certain that iCloud uses industry best practices that Apple claims it uses to protect data and privacy, we warned that your information isn't entirely protected from prying eyes. At the heart of the issue is the fact that Apple can, at any time, review the data synced with iCloud, and under certain circumstances might share that information with legal authorities.

    We consulted several sources to understand the implications of iCloud's security and encryption model, and to understand what types of best practices could maximize the security and privacy of user data stored in increasingly popular cloud services like iCloud. In short, Apple is taking measures to prevent access to user data from unauthorized third parties or hackers. However, iCloud isn't recommended for the more stringent security requirements of enterprise users, or those paranoid about their data being accessed by authorities.

    Apple holds the (encryption) key

    As we noted in our original investigation, Apple can potentially decrypt and access all data stored on iCloud servers. This includes contacts, notes, unencrypted e-mails, application preferences, Safari bookmarks, calendars, and reminders.

    This was recently confirmed by a source speaking to Ars, and security researcher and forensic data analysis expert Jonathan Zdziarski agreed. "I can tell you that the iCloud terms and conditions are pretty telling about what the capabilities are at Apple with respect to iCloud, and suggests they can view any and all content," Zdziarski told Ars.

  • The World’s No. 1 Threat to Internet Freedom: It’s America – By Rebecca MacKinnon | Foreign Policy – more than two years after Secretary of State Hillary Clinton gave her first speech declaring "Internet freedom" to be a major component of U.S. foreign policy, it turns out that many of the most sophisticated tools used to suppress online free speech and dissent around the world are actually Made in the USA. American corporations are major suppliers of software and hardware used by all sorts of governments to carry out censorship and surveillance — and not just dictatorships. Inconveniently, governments around the democratic world are pushing to expand their own censorship and surveillance powers as they struggle to address genuine problems related to cybercrime, cyberwar, child protection, and intellectual property.

    Even more inconveniently, the U.S. government is the biggest and most powerful customer of American-made surveillance technology, shaping the development of those technologies as well as the business practices and norms for public-private collaboration around them. As long as the U.S. government continues to support the development of a surveillance-technology industry that clearly lacks concern for the human rights and civil liberties implications of its business — even rewarding secretive and publicly unaccountable behavior by these companies — the world's dictators will remain well supplied by a robust global industry.

  • James Bamford-Shady Companies With Ties to Israel Wiretap the U.S. for the NSA | Threat Level | – In addition to constructing the Stellar Wind center, and then running the operation, secretive contractors with questionable histories and little oversight were also used to do the actual bugging of the entire U.S. telecommunications network.

    According to a former Verizon employee briefed on the program, Verint, owned by Comverse Technology, taps the communication lines at Verizon, which I first reported in my book The Shadow Factory in 2008. Verint did not return a call seeking comment, while Verizon said it does not comment on such matters.

    At AT&T the wiretapping rooms are powered by software and hardware from Narus, now owned by Boeing, a discovery made by AT&T whistleblower Mark Klein in 2004. Narus did not return a call seeking comment.

    What is especially troubling is that both companies have had extensive ties to Israel, as well as links to that country’s intelligence service, a country with a long and aggressive history of spying on the U.S.

    In fact, according to Binney, the advanced analytical and data mining software the NSA had developed for both its worldwide and international eavesdropping operations was secretly passed to Israel by a mid-level employee, apparently with close connections to the country. The employee, a technical director in the Operations Directorate, “who was a very strong supporter of Israel,” said Binney, “gave, unbeknownst to us, he gave the software that we had, doing these fast rates, to the Israelis.”

    Because of his position, it was something Binney should have been alerted to, but wasn’t.

    “In addition to being the technical director,” he said, “I was the chair of the TAP, it’s the Technical Advisory Panel, the foreign relations council. We’re supposed to know what all these foreign countries, technically what they’re doing…. They didn’t do this that way, it was under the table.” After discovering the secret transfer of the technology, Binney argued that the agency simply pass it to them officially, and in that way get something in return, such as access to communications terminals. “So we gave it to them for switches,” he said. “For access.”

    But Binney now suspects that Israeli intelligence in turn passed the technology on to Israeli companies who operate in countries around the world, including the U.S. In return, the companies could act as extensions of Israeli intelligence and pass critical military, economic and diplomatic information back to them. “And then five years later, four or five years later, you see a Narus device,” he said. “I think there’s a connection there, we don’t know for sure.”

  • Richard Clarke: A Little Knowledge Is A Dangerous Thing | Digital Dao – Richard Clarke's editorial in today's New York Times underscores what I've written before about Mr. Clarke. He's not well-informed about the scale and scope of cyber espionage or any other cyber-related threat. And when you combine that lack of depth with his "name" power, then you have the dangerous combination of ignorance informing policy. Here's a quick survey of what's wrong with Clarke's editorial.

    While China does engage in cyber espionage against U.S. companies, so do many other nation states. In my ebook, A Traveler's Guide to Cyber Security, I created an Appendix which lists multiple examples of cyber espionage by Brazil, China, France, Germany, Greece, Iran, Israel, Nigeria, Russia, Turkey, and Venezuela. The reality is that acts of espionage – cyber or other-wise – is very wide spread. You would never know that fact by reading Clarke's sinophobic writings.

  • Shady Companies With Ties to Israel Wiretap the U.S. for the NSA | Threat Level |
  • Deloitte’s China Problem Comes To A Head – Forbes
  • Han Han Finds Limits of China’s Microblog Freedom – China Real Time Report – WSJ – In just his second post since firing up his long-dormant Sina Weibo account earlier in the week, bad boy blogger and race car driver Han Han took umbrage at the notion that the comment shutdown, which also affected users of Tencent Holdings’ microblogging service, was motivated by political rumors:

    “It has nothing to do with cleaning up rumors, it’s about showing off state power and serving a warning: If I can make comments disappear for three days, I can also make you lose your little Weibos altogether,” he wrote, according to a translation by Tea Leaf Nation, a blog that tracks Chinese social media. “This country suffers from the spread of rumors and false accusations because authorities educate the masses to believe whatever they see, and listen to whoever is speaking, without asking that extra question and without thinking one level deeper. The natural outcome is a proliferation of rumors, and everyone is hurt.”

    Posted around 10 a.m. on Tuesday, the post was deleted roughly seven hours later, according to a Hong Kong University database of deleted Weibo posts – long enough for it to have been reposted more than 60,000 times and copied to various discussion forums.

  • China detains 22 after Inner Mongolia protest: group | Reuters – Chinese police detained 22 ethnic Mongolians after hundreds of them protested against the seizure of land in Inner Mongolia, an overseas rights group said on Tuesday, in the latest case of unrest in the vast and remote northern region.
    More than 80 police used "brutal force" on Monday to break up a demonstration by hundreds of Mongolians from Tulee village near the city of Tongliao, the New York-based Southern Mongolian Human Rights Information Centre said.
  • Bank of America Sold Card Debts to Collectors Despite Faulty Records – American Banker Article – Bank of America has sold collections agencies rights to sue over credit card debts that it has privately noted were potentially inaccurate or already repaid.

    In a series of 2009 and 2010 transactions, Bank of America sold credit card receivables to an outfit called CACH LLC, based in Denver. Co. Each month CACH bought debts with a face value of as much as $65 million for 1.8 cents on the dollar. At least a portion of the debts were legacy accounts acquired from MBNA, which Bank of America purchased in 2006.

  • Why People Hate the Banks – – It’s not The New York Times, Mr. Dimon. It really isn’t. It’s the country that hates the banks these days. If you want to understand why, I would direct your attention to the bible of your industry, The American Banker. On Monday, it published the third part in its depressing — and infuriating — series on credit card debt collection practices.
  • Fortescue’s Power Says China Steel Demand ‘Very Strong’ – Bloomberg
  • China Grows 8.4% in Estimate Cited by NDRC Vice Chairman – Bloomberg
  • WeiWeiCam Camera
  • 美驻华大使骆家辉参加博鳌论坛住不起会场套房_新闻_腾讯网
  • 北京墓价9年涨15倍 “活在北京葬在河北”成风_新闻_腾讯网
  • Chinese Applicants Flood U.S. Graduate Schools – – More than ever, Chinese students have their sights set on U.S. graduate schools.

    Application volume from that country rose 18% for U.S. master's and doctoral programs starting this fall, according to a new report from the Council of Graduate Schools that provides a preliminary measure of application trends. Specific programs of interest include engineering, business and earth sciences.

    That is on top of a 21% jump last year and a 20% rise in 2010—and is the seventh consecutive year of double-digit gains from China, according to the graduate-school industry group. Applications from China now comprise nearly half of all international applications to U.S. graduate programs.

  • Google Building Data Center in Taiwan – – but hopeless in china w 8% market share and dropping//
    Google Inc. is building a data center in Taiwan — its third in Asia after Hong Kong and Singapore — to meet the rapidly growing online demand across the region, the company said Tuesday.

    The three data centers — with investment totaling $700 million — will provide users with faster, more reliable access to various Google products, the Internet search giant said as its Taiwan facility broke ground in the western county of Changhua.

  • 《朝闻天下》 警惕 新型地沟油流向市场_zwtx2011_新浪播客 – some video on the "rotting animal organs" brand gutter oil
  • Hong Kong’s chief-executive “election”: The worst system, including all the others | The Economist – Even China must now realise that it needs a better way to pick Hong Kong’s leader
  • Leaders signal accord on Bo | China News Watch | Latest Hong Kong, China & World News | – The mainland leadership's move over the weekend to launch a sweeping crackdown on microblogging sites is notable not only for its scale and severity but also for its timing.

    It came after the authorities had largely turned a blind eye to frenzied rumours of political infighting at the highest levels and allowed them to circulate over the internet for weeks.

    The decision to crack down was made apparently after the leaders were incensed by the internet-fuelled rumours of a coup and gunshots following the March 15 sacking of Bo Xilai as the Chongqing party secretary. Although those rumours were immediately dismissed as fabrication, several Western newspapers picked them up, lending them more credence.

    More importantly, the crackdown was also aimed at sending out a subtle signal that the top mainland leaders, who were until recently rumoured to have different opinions on how to deal with Bo, have reached consensus.

  • 腐败动物内脏炼成新型地沟油-搜狐滚动 – gutter oil from rotting animal organs..who says there is no innovation in china?
  • How China Steals Our Secrets – – Under Customs authority, the Department of Homeland Security could inspect what enters and exits the United States in cyberspace. Customs already looks online for child pornography crossing our virtual borders. And under the Intelligence Act, the president could issue a finding that would authorize agencies to scan Internet traffic outside the United States and seize sensitive files stolen from within our borders.

    And this does not have to endanger citizens’ privacy rights. Indeed, Mr. Obama could build in protections like appointing an empowered privacy advocate who could stop abuses or any activity that went beyond halting the theft of important files.

    If Congress will not act to protect America’s companies from Chinese cyberthreats, President Obama must.

    Richard A. Clarke, the special adviser to the president for cybersecurity from 2001 to 2003, is the author of “Cyber War: The Next Threat to National Security and What to Do About It.”

  • Michael Santos | LinkedIn – International executive with over 20 years experience in Asia/Pacific IT/telecom/internet market. Direct experience with running multinational sales/marketing organizations, business development, venture capital for start-ups, IPOs, mergers and acquisitions and investor relations. Interested in early stage start-ups as well as multinational corporations.

    E-Learning, Education Management, Sales/Marketing, Business Development, Fund Raising, Mergers and Acquisitions, Investor Relations. IT/Telecom/Internet industry expertise specifically in satellite and wireless industries.

  • Open Letter From ChinaCast’s Board of Directors to Our Shareholders – Yahoo! Finance – Ron Chan and his accomplices have refused to provide the necessary financial information so as to allow the Company's auditors (Deloitte) access to the Shanghai offices in order to complete their field work and enable the Company to issue its 2011 audited financial statements within the time periods required by the SEC.  Additionally, this group of uncooperative managers has improperly declined to pay outstanding invoices for the services of Deloitte and various other outside advisors and service providers. 
    Despite repeated efforts by the Board to get Ron Chan and these few managers to carry out their responsibilities and act in the best interest of the Company and all of its shareholders, it became clear last week that there would be no cooperation forthcoming.  Consequently, our Board had to take extraordinary measures by terminating Ron Chan. 
    As previously disclosed, the Board replaced Ron Chan as Chairman and CEO with Derek Feng, and also appointed Doug Woodrum as Chief Financial Officer, replacing Tony Sena, who resigned.  Derek has been an advisor to education companies and previously served as senior executive at Knowledge Universe, a global education company.  Doug previously served as the CFO of CNET Networks, Inc., an online media company.  The Board has also moved swiftly to take a number of other important actions in connection with the transition, including terminating other uncooperative managers in Shanghai…
    the Board must report some disturbing events as well. Ron Chan and a few other executives have chosen to unlawfully resist their terminations by refusing to return key company property, including corporate chops necessary to run the business in China. On Friday, in fact, Ron Chan improperly entered our Shanghai offices along with another terminated employee and informed Derek Feng that he had no intention to relinquish the corporate chops, an act which we believe constitutes theft. Additionally, we have uncovered questionable activities and transactions which raise the specter of possible illegal conduct by Ron Chan and his accomplices and may have led to the frustration of the audit of the Company's financial statements.
  • 路虎司机殴打环卫工后开车碾过-搜狐滚动 – land rover driver in xian beats, runs over sanitation worker.
  • How Casinos in Macau, China Made Siu Yun Ping Rich : The New Yorker – The United States government has come to believe that the cash changing hands on the tables in Macau is only a small part of the picture. “The growth of gambling in Macau, fuelled by money from mainland Chinese gamblers and the growth of U.S.-owned casinos, has been accompanied by widespread corruption, organized crime, and money laundering,” according to the 2011 annual report by the U.S. Congressional-Executive Commission on China. The place has emerged as the “Macau Laundry Service,” as U.S. diplomats put it in an internal cable in 2009. Juan Zarate was a senior counterterrorism official in the Bush Administration who worked on sanctioning a private bank in Macau that allegedly facilitated, among other things, the financing of nuclear proliferation by North Korea. “Anyone who knows anything about anti-money laundering understands both the inherent and the real risks in Macau,” Zarate said. “You have an admixture of commercial-financial activity, a way station for people and goods, a casino sector, all in a potentially volatile regional environment.” David Asher, who was a State Department senior adviser for East Asian and Pacific Affairs in the Bush Administration, calls Macau “a cesspool” of financial crimes. “It’s gone from being out of a James Bond movie to being out of ‘The Bourne Identity,’ ” he said…
    “Americans tend to see themselves in control of their fate, while Chinese see fate as something external,” Lam said. “To alter fate, the Chinese feel they need to do things to acquire more luck.” In surveys, Chinese casino gamblers tend to view bets as investments and investments as bets. The stock market and real estate, in the Chinese view, are scarcely different from a casino. The behavioral scientists Elke Weber and Christopher Hsee have compared Chinese and American approaches to financial risk. In a series of experiments, they found that Chinese investors overwhelmingly described themselves as more cautious than Americans. But when they were tested the stereotype proved to be a fallacy, and the Chinese took consistently larger risks than Westerners of comparable wealth. (The gap applies only to investing; asked about decisions in health care and education, the groups were indistinguishable…
    Unlike Las Vegas, where most of the profits come from coins fed into slot machines, three-quarters of the revenue in Macau is derived from the enormous bets made in the V.I.P. rooms, where high rollers play around the clock. Casinos rely on outside companies, known as “junkets,” to solve some of the practical problems inherent in running a casino in Macau. It is illegal to advertise gambling in mainland China, and Chinese citizens are barred from carrying more than the equivalent of about three thousand dollars on any single trip to Macau. Most troubling, from the casinos’ perspective, is that it’s illegal to try to collect a gambling debt in the People’s Republic. Working through junket operators is a legal bypass around those problems, because the operators will recruit rich customers from across China, issue them credit, and then handle the complicated business of collection. The system is an attractive arrangement for customers who need to secrete large quantities of cash out of China. If a corrupt official or executive wants to hide the proceeds, a junket is a way to hand over cash on one side of the border and recover it on the other, in chips that can then be played and cashed out in clean foreign currency. (Another option is to smuggle it by hand across Macau’s relaxed borders, a practice known in laundering circles as “smurfing,” for the army of small-time couriers involved.)