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Press review EX - 16 March

Extrema Ratio focuses on the topics we work on, including geopolitcs, cybersecurity, critical technologies, foreign interference, disinformation, international law, national security.


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Italy looks to the Indo-Pacific by sending carrier, fostering defence tie | The Axis of Tyrannies | US agency breached by cybercriminals, gov’t hackers | Russia’s spring offensive in Ukraine could include cyberattacks, Microsoft says | UK expected to ban TikTok from government mobile phones


  • The deployment of the flagship Cavour aircraft carrier confirms Rome’s desire to become a proactive player in the region, closely connected to the Mediterranean. That same push is behind the Defence Minister’s ongoing trip to Japan. The Cavour is headed to the Indo-Pacific. Decode 39

  • Cybercriminals and a government-backed hacking group had access to the systems of an unnamed federal civilian executive branch agency from August 2022 to January 2023. In a report released Wednesday by the Cybersecurity and Infrastructure Security Agency, FBI and other agencies, officials said hackers used several vulnerabilities affecting products from Bulgarian software developer Progress Telerik. The Record by Recorded Future

  • A hacking group with ties to the Russian government appears to be preparing new cyberattacks on Ukraine’s infrastructure and government offices, Microsoft said in a report on Wednesday, suggesting that Russia’s long-anticipated spring offensive could include action in cyberspace, as well as on the ground. The New York Times

  • Britain is expected to announce a ban on the Chinese owned video-sharing app TikTok on government mobile phones imminently, bringing the UK inline with the US and European Commission and reflecting deteriorating relations with Beijing. The Guardian

Decode 39

Gabriele Carrer and Emanuele Rossi

The deployment of the flagship Cavour aircraft carrier confirms Rome’s desire to become a proactive player in the region, closely connected to the Mediterranean. That same push is behind the Defence Minister’s ongoing trip to Japan.

The Cavour is headed to the Indo-Pacific. Italy’s flagship aircraft carrier will reach the area by the end of 2023 (or early 2024 at the latest). This was confirmed on Tuesday by Admiral Giuseppe Berutti Bergotto, Deputy Chief of the Navy General Staff, during a conference in Milan.

FDD

WALLER R.NEWELL and CLIFFORD D.MAY

Today, a new axis has emerged. We might call it the Axis of Tyrannies. It formed a year ago, when Xi Jinping and Vladimir Putin signed an agreement stating that henceforth there would be “no limits to Sino-Russian cooperation…no forbidden zones.”

Twitter

Gabriele Iuvinale

Chinese-Russian trade reached a record high of $190 billion in 2022, rising 30 percent from 2021 largely due to goods restricted by the United States and its allies and partners. U.S.-China trade reached a record high in 2022. According to U.S. government data, two-way trade flows between the United States and China amounted to over $690.6 billion in 2022, with imports totaling $536.8 billion and exports reaching $153.8 billion.

In late January, the United States shot down a 200-foot balloon that had hovered for days over U.S. territory. The “spy balloon” incident heightened tensions between Washington and Beijing, prompting U.S. Sec. of State Antony Blinken to criticize China’s actions as “a clear violation of our sovereignty, a clear violation of international law, and clearly unacceptable.” A White House press statement similarly claimed the spy balloon violated U.S. sovereignty and international law.

There is considerable debate about whether the spy balloon (and the U.S. shootdown of it) violated international law. But the incident also raises deeper questions about the legality and morality of espionage more broadly – questions policymakers must address as States rely on more subtle and pervasive forms of spying through artificial intelligence, mass surveillance, and cyber operations.

China

Is Xi Jinping a good leader? China’s AI chatbots won’t tell you The Wall Street Journal Shen Lu For companies trying to ride the ChatGPT wave, there is an added layer of headaches if their chatbots are in China: how to weed out any talk of politics. This week, the Chinese search-engine company Baidu Inc. is set to release Ernie Bot, its answer to ChatGPT, driving attention to China’s homegrown chatbots, as well as their capability to ensure politically kosher dialogues. In a country that has built rigid digital borders, censors have learned to adapt to new forms of content and evolving censorship demands. Controlling AI-generated responses from a chatbot presents a new challenge, one that might prove more complex than policing search and social media but could strengthen ideological control and further separate China digitally from the rest of the world, Chinese tech executives, engineers and AI experts say.

Australian Strategic Policy Institute

Professor Xu Yi-Chong

This report surveys China’s enormous energy transition to renewables. It begins by sketching the energy challenges China faces and its climate-change-related energy policies, in the context of the global geopolitics of the energy transformation. Next the report focuses on conventional energy sources, followed by electricity, and energy technologies.

  • Chinese doctor who exposed SARS died. Jian Yanyong, a former military surgeon and the man who exposed the Chinese coverup of the SARS epidemic in 2003, died of pneumonia in Beijing. He won acclaim for the lives he saved. He spoke out, too, against the Chinese government’s refusal to acknowledge that the 1989 crackdown on Tiananmen Square was deadly and wrong, and subsequently was detained, though he continued to speak out on the subject. He was 91.

  • China's foreign minister says he spoke with his Ukrainian counterpart Thursday. According to Kyiv's Foreign Minister Dmytro Kuleba, "we discussed the significance of the principle of territorial integrity," and Kuleba "underscored the importance of President Zelenskyy's Peace Formula for ending the aggression and restoring just peace in Ukraine," he wrote on Twitter. According to Beijing, "China hopes that all parties will remain calm, rational and restrained, and resume peace talks as soon as possible," Reuters reported Thursday.

  • Xi proposes the Global Civilization Initiative. Global Civilization Initiative: this is the name of the new global initiative that Chinese President Xi Jinping presented yesterday at the "Dialogue with World Political Parties High-level Meeting" in Beijing. What is it about? In Xi's words, quoted by the Xinhua news agency, "tolerance, coexistence, exchanges and mutual learning among different civilizations play an irreplaceable role in advancing the modernization process of humanity and world civilization" . Does the Chinese leader chart a new anti-US path?

  • Guo Wengui arrested in the US End of games for Guo Wengui? The controversial Chinese businessman, a convert to dissidence, was arrested yesterday in New York - to gether with an alleged accomplice -, and formally charged by a local court with 11 charges, from wire fraud to international money laundering. If found guilty, the former real estate developer risks life imprisonment. According to prosecutors, Guo and the Hong Kong financier, Kin Ming Je, would have attracted investors starting in 2018, lying about the use of the funds raised, which were intended to support a campaign against the Chinese government. In reality, the proceeds were spent on the purchase of luxury goods, including a Ferrari, a yacht and a penthouse on New York's 5th Avenue. Accused of corruption, the businessman had fled China in 2014 and in the United States he had built a network of influential patrons, including Steve Bannon, the former "chief strategist of the White House" under Donald Trump.

  • Chinese technological self-sufficiency starts from the automotive industry. To adequately respond to the measures and technological bans in the field of semiconductors implemented by the United States, China wants to bet everything on the self-sufficiency of microchips, starting with the automotive industry. A will that Xi made evident during the "two sessions", so much so that he placed his loyalists, chosen for their engineering and technological training, at the helm of key government positions. Feng Xingya, general manager of Guangzhou Automobile Group (the automaker which has joint ventures with Toyota and Honda) publicly expressed Xi's intentions. "We need to use more domestically produced chips in our vehicles," the Chinese automaker's head said during a discussion session with other delegates from Guangdong province. His words echo what happened last November 8, when top auto executives nationwide were summoned to a secret meeting in Shanghai. During the closed-door meeting, writes the Nikkei, the automotive managers were told to use only Chinese components and chips. The invitation came from Miao Wei, a former minister of industry and information technology, as well as an influential former automotive executive. The Asian giant is gearing up to respond to US sanctions against Chinese hi-tech sectors. And Washington may not like the answer. Beijing has in fact increased its investments in research and development in the microchip sector by 52.9%. In addition, the number of patent applications by Chinese companies has increased by an average of 57.6% since the US sanctions, according to research by Changan University in Xian.

  • China in the crosshairs of the EU tightening on the export of sensitive technology. Not just the United States. The EU could also curb the ability of China and other rivals to acquire sensitive technologies from the West. Indeed, Brussels is evaluating how to monitor the productive investments of European companies abroad. Valdis Dombrovskis, the bloc's EU trade commissioner, told the Financial Times new restrictions were needed to prevent companies from circumventing export bans on sensitive technology by manufacturing it elsewhere. The plans are at an early stage and could take years to implement in the face of skepticism from member states. Countries like the Netherlands and Germany want to preserve deep economic ties with China, while Bulgaria doesn't even control domestic investment, reports the FT, among other things.

  • The Trilateral Commission defines 2023 as the year of the new world order. Last weekend in India the global plenary meeting of the secret Trilateral Commission was staged for the first time with the presence of politicians, bankers, representatives of multinationals, journalists and academics from all over the world. But let's take a step back to explain what this non-governmental organization is that aims to develop dialogue and improve understanding between the United States, Europe and Asia. In 1972, on the initiative of David Rockefeller and with the involvement of other qualified exponents of economic, political and cultural circles from Europe, Japan and North America, the Trilateral Commission was born, where the denomination "trilateral" indicates the three areas that at the time could be considered leaders in the world for economic development and for the democratic values of their institutions. Thus was born a technocracy, which sowed the seeds of the political and economic world that we all know today. The members of the Commission are not elected, but invited.This is the story. Now let's go back to what happened last weekend in India. A speaker – who is protected by anonymity according to the rules of the Commission – said: “The Biden administration is trying to convince the world that there is this titanic struggle between autocracies and democracies. I'm skeptical about it,” he said in what is an attack on Washington. "In contrast, the world is fragmented, with countries, including the United States, seeking their own self-interest." The speaker then added that the globalization of recent decades, based on the free market and deflationary, is giving way to a fragmented globalization, based on industrial policy and structurally inflationary. “This year, 2023, is year one of this new global order,” the speaker said.

  • U.S.-China trade reached a record high in 2022. According to U.S. government data, two-way trade flows between the United States and China amounted to over $690.6 billion in 2022, with imports totaling $536.8 billion and exports reaching $153.8 billion. The trade goods deficit was $382.9 billion, the second-highest number ever recorded for U.S.-China trade.

  • U.S. companies are planning expanded retail footprints in China. As China’s economy recovers amid the end of Beijing’s zero-COVID policies, U.S. companies—including McDonald’s, Starbucks, and Ralph Lauren—have reported plans to launch new stores across China. Nevertheless, according to a recent survey by the American Chamber Commerce in China, only 45 percent of respondents listed China as a top three investment priority in 2023—the first time in approximately 25 years that fewer than half of firms have placed China in that position.

  • China’s National People’s Congress announced an overhaul of China’s financial regulatory structure. A new body directly under the State Council, the National Financial Regulation Administration, will replace the banking and insurance regulator and also supervise investor protection. China’s securities regulator will also fall under the State Council, increasing its bureaucratic sway, while changes to the People’s Bank of China will reduce its regulatory functions and increase its focus on monetary policy.

  • A report released in February indicated that Ant Group, parent company of the world’s largest digital payment platform Alipay, saw its earnings fall 82.7 percent in the third quarter of 2022. Ant has been a target of Chinese regulators seeking to crack down on “disorderly” financial practices in China’s fintech sector, notably having its initial public offering (IPO) blocked in 2020. In January 2023, Ant Group announced that founder Jack Ma’s voting rights would shrink from above 50 percent to 6.2 percent, and ten individuals representing management, staff, and the founder would independently exercise non-controlling voting rights.

  • China’s Ministry of Commerce (MofCOM) named U.S. defense contractors Lockheed Martin and Raytheon as the first entities on its Unreliable Entities List for their sale of arms to Taiwan. The blacklist prohibits firms from conducting business in China and bans their executives from entering the country. MofCOM also announced it would fine both firms twice the total respective value of their arms sales to Taiwan since it announced the list in September 2020.

  • Chinese consumption strengthened in February while industrial activity lagged as China’s economy emerges unevenly from strict COVID-19 measures. Beijing declared the COVID-19 pandemic “basically” over on February 23, removing all remaining curbs on movement and activity. Shopping and tourism spiked in February as data from Bloomberg and Baidu showed the number of people riding the subway in major cities is now above pre-pandemic levels. Although China was roiled by COVID outbreaks to the end of 2022, UBS data from the January 2023 Lunar New Year holiday period found that Chinese consumption was up 12.2 percent year-over-year. However, a brief surge in consumption around the Lunar New Year does not necessarily indicate consumption will recover fully to pre-pandemic levels. While household savings are high due to a slowdown in spending during the pandemic, sluggish income growth and continued outbreaks and caution around COVID are likely to constrain consumer spending throughout the year. This is reflected across several industries, including box office sales, which grew in January and February but are still 18 percent below their 2019 pre-pandemic numbers.

  • Industrial activity was more mixed as domestic manufacturing appeared to rebound, while headwinds persisted in Chinese exports. The official Purchasing Managers’ Index, which measures the performance of the manufacturing sector via a survey of domestic industrial purchasing managers, rose to 52.6, its highest in a decade. However, soft export demand continues to hamper Chinese industry. Chinese exports in January and February were 6.8 percent lower than a year before, led by the United States (down 21.8 percent) and the EU (down 12.2 percent), exacerbating an export slump amid weak global demand for Chinese goods. In med-February, long-term contract costs for shipping a container from China to the U.S. West Coast dipped to late 2020 levels, when the COVID-19 pandemic drastically slowed shipping.

  • Amid an uneven economic recovery, China set an economic growth target at 5 percent for 2023. This moderate growth target is the lowest in decades and underpinned China’s lack of intention for large-scale fiscal stimulus to spur growth this year. In his work report to the National People’s Congress, outgoing Premier Li Keqiang emphasized the conservative economic outlook as he outlined challenges in China’s economy, including insufficient demand, unemployment, and fiscal troubles facing local and provincial governments.

  • China’s local governments are facing their most severe fiscal crisis in decades, as China’s overall budget deficit increased 53.5 percent from $824 billion in 2021 to $1.27 trillion last year. Local government revenues have declined precipitously during the pandemic, while expenditures have risen sharply, straining funding for services such as transportation, healthcare, and education. Spending on COVID testing and prevention measures alone accounted for 5 percent of wealthy Guangdong Province’s general public income in 2022. A sharp decline in tax revenues coupled with China’s ongoing campaign to limit local government and property developer debt growth have further strained government finances. As a result, local governments are struggling to meet their expenditure obligations and support local economies.

  • A tax system that favors the central government compounds local governments’ inability to address their fiscal challenges. Local governments in China are allowed almost no discretion in setting and raising taxes, and a substantial share goes to central government coffers. The central government transfers funds to local governments both to meet general budgetary needs and pay for specific projects. For the vast majority of these transfers, higher levels of government retain significant discretion in distributing funds to lower levels of administrative hierarchy. Consequently, the lowest rungs on the ladder are given short shrift in transfers to meet their expenditure obligations on social services.

  • Fiscal troubles spell both political and financial risks for China. Local governments have been reducing government health insurance expenditures and cutting civil servants’ salaries, with teachers’ salaries in particular in arrears throughout the country. Further, some local governments have been unable to pay transportation services such as bus operators, with one claiming it could not afford payroll or utility costs. Desperate to find any source of revenue, in 2022 local governments began selling land to their own SOEs, who fund the purchases through high-interest borrowing, exacerbating local government debt risks. Some estimates suggest such sales could have accounted for nearly a third of all land sales revenue in 2022. China’s Finance Minister Liu Kun attempted to assuage concerns about the local government fiscal crisis, arguing in a March briefing that local finances were “generally stable,” a claim met with skepticism by analysts.

  • China’s expanding trade with Russia is hampering its attempts to foster deeper economic ties with the EU. China’s Ambassador to the EU Fu Cong called to “resuscitate” a stalled investment agreement with the EU, just as foreign investment into China hit an 18-year low. The Comprehensive Agreement on Investment (CAI) would improve market access for European firms, particularly those in auto manufacturing, healthcare, and chemicals, while bringing investment into China. Although a consensus was reached in 2020, the EU failed to ratify the CAI over concerns regarding the use of forced labor in Xinjiang. Now, China’s continued economic support for Russia is likely to undermine negotiations and makes the prospects of a CAI revival unlikely.

  • Chinese-Russian trade reached a record high of $190 billion in 2022, rising 30 percent from 2021 largely due to goods restricted by the United States and its allies and partners. China is now Russia’s largest trade partner: last year, 20 percent of Russian exports went to China and 35 percent of Russian imports were from China. Chinese automakers Chery, Great Wall Motor, and Geely claimed 16.5 of passenger car and small commercial vehicle sales in Russia during 2022, up from just 6.3 percent the year before. Other foreign automakers pulled out of the country and several domestic firms had to suspend production after being unable to acquire parts due to sanctions. Chery alone increased its sales in Russia by 31 percent in 2022, even though total new car sales in Russia dropped by 59 percent for the year. Similarly, Chinese smartphone maker Xiaomi increased its market share from 45 percent to 80 percent, and Huawei displaced HP to become the second-largest seller of notebook computers in Russia. Imports of Chinese semiconductors, a significant component in military technology, also jumped from $200 million in 2021 to over $500 million in 2022.

  • China increased its imports of oil and gas as well, helping Russia side-step embargos imposed by the United States and its allies and partners. China more than doubled its imports of Russian liquified petroleum gas in 2022. In January 2023, China’s oil imports from Russia hit a record level 1.66 million barrels per day. The Free Russia Foundation, an international nongovernmental organization, estimates that energy purchases by China and several other countries more than offset declining energy purchases from the United States, the United Kingdom, and other allied European countries.

  • China’s securities regulator announced a major change in the IPO process, switching from an extensive case-by-case review and approval to a simple “registration-based” process akin to that of U.S. exchanges. China’s exchanges for small-cap companies—Shenzhen’s ChiNEXT, Shanghai’s STAR Market, and the Beijing Stock Exchange—had already implemented registration-based systems on a trial basis. Until now, however, companies listing on the main boards of the Shanghai Stock Exchange and Shenzhen Stock Exchange went through a nontransparent and lengthy approval process that was directly under the control and discretion of the China Securities Regulatory Commission (CSRC). Following the deployment of the registration-based system to all of China’s bourses, any company that meets the listing requirements will be able to go public, although the CSRC retains veto power over the listing. With this reform, the CSRC seeks to widen a funding channel for smaller or emerging companies. Nonstate companies are starved for capital in China’s bank-dominated financial system. Moreover, the CSRC aims to make it more attractive to list domestically. Previously, the backlog of listings under the approval-based system incentivized emerging companies to list overseas.

  • The reform aims to speed up the listing process for startups without compromising the CSRC’s ability to direct investment to sectors favored by the Chinese Communist Party (CCP). Despite the reform delegating greater authority to the exchanges, a company’s application to go public still requires final approval from the CSRC, which bases its approvals on opinions submitted by the exchanges. The CSRC will still assess whether the issuer is in line with national industrial policy objectives. The CSRC is reportedly setting up a “traffic light” system for financial institutions that underwrite IPOs, warning bookrunners to increase scrutiny of firms in “yellow light” industries and avoid supporting IPOs in “red light” sectors, such as alcohol and sectors currently under CCP political scrutiny, like private education providers.

  • Rumors that the Chinese government would enact plans to raise the country’s retirement age went viral in February 2023, prompting widespread anger on social media. A research report by Chinese investment bank CITIC Securities predicted the change to the retirement age would be announced this year and would begin in 2025, starting with adjusting the retirement age to 55 for all women, regardless of employment type. According to the report, retirement ages for both men and women would be gradually raised to 65, with men’s retirement ages to be increased by two months every year and women’s retirement ages to be increased by four months every year until 2055. An employee of CITIC said the bank could not guarantee the authenticity of information circulating online and that the report had not been published on the company’s official website.

  • Controversy over the rumored policy changes reflects broader concerns over China’s aging population and welfare. Many Chinese netizens expressed anger over the rumored policy changes, citing fears about rising costs of living, trouble finding employment in older age, and lack of confidence that life expectancy would continue to increase. Experts have argued, however, that raising the retirement age is a necessary response to a shrinking workforce and aging population. Some provinces in China have already begun optional delays of retirement for certain workers, and in some fields, such as engineering, workers have been hired past their formal retirement ages.

  • New rules on overseas IPOs suggest that Chinese regulators are easing restrictions on overseas listings after Chinese IPOs on U.S. exchanges dried up in 2022. The rules, which are set to go into effect on March 31, establish a formal process for companies seeking to go public on a foreign exchange. Companies are required to register their listing with the CSRC, enabling the securities regulator to block any proposed listing that violates China’s national security measures and the Personal Data Protection law. The CSRC also signaled support for listings using VIE structures, provided that they comply with domestic regulatory requirements. After DiDi’s fateful listing, no companies have listed on U.S. markets using a VIE structure. The CSRC’s endorsement of the VIE structure indicates that the freeze may be over, which could increase the risks to U.S. investors as additional companies list using VIEs. As of January 9, 2023, 161 out of 252 Chinese companies listed on U.S. exchanges use a VIE, accounting for a market cap of $910.1 billion or 89 percent of the total market cap of all U.S.-listed Chinese companies.

  • The CSRC’s rules are the latest in a series of developments that signal a likely acceleration in Chinese listings on U.S. exchanges. U.S.-listed Chinese firms are no longer at risk of delisting under the Holding Foreign Companies Accountable Act, after the Public Company Accounting Oversight Board (PCAOB) determined it was able to inspect China and Hong Kong-based auditors late last year.‡ The February 9, 2023, IPO of Hesai Technology—a Chinese company that manufactures lidar sensing equipment for automobiles—was widely viewed by financial press as marking a revival in overseas IPOs by Chinese tech companies. While no large Chinese technology companies have announced plans to list on U.S. exchanges, the gates may be opening.

USA

CISA: US agency breached by cybercriminals, gov’t hackers The Record by Recorded Future Jonathan Greig Cybercriminals and a government-backed hacking group had access to the systems of an unnamed federal civilian executive branch agency from August 2022 to January 2023. In a report released Wednesday by the Cybersecurity and Infrastructure Security Agency, FBI and other agencies, officials said hackers used several vulnerabilities affecting products from Bulgarian software developer Progress Telerik.

Where the venture community goes from here The Information Hemant Taneja It’s hard to overstate the importance of Silicon Valley Bank to the tech and venture ecosystem. It was foundational in every possible way, making early and well-funded strategic bets on the next generational founders and entrepreneurs that would define the era of innovation most of us have lived in. At the time of its collapse, according to its own website, SVB banked around half of all U.S. venture-backed startups. Given the value those companies have created in terms of job and wealth creation, that is a stupefying statistic. SVB was the go-to resource for nascent businesses when more conservative banks were reluctant to work with them.

SEC proposes new cybersecurity rules for financial firms The Wall Street Journal Paul Kiernan Brokers and asset managers would have to notify their customers of data breaches as part of a raft of cybersecurity and resiliency rules the Securities and Exchange Commission proposed Wednesday. The customer-notification requirement would give firms no more than 30 days to alert individuals whose sensitive information was likely to have been accessed without authorization.

U.S. threatens ban if TikTok’s Chinese owners don't sell stakes The Wall Street Journal John D. McKinnon The Biden administration is demanding that TikTok’s Chinese owners sell their stakes in the video-sharing app or face a possible U.S. ban of the app, according to people familiar with the matter.

Marcus Weisgerber

The move comes as the military looks to increasingly bulk buy munitions.

GZERO Daily

Ian Bremmer

China announced last Friday it had brokered a deal to restore diplomatic relations between Iran and Saudi Arabia for the first time in seven years. Beijing will also reportedly host a summit later this year, bringing together representatives from Iran and the six-nation Gulf Cooperation Council. Like all early stage diplomatic breakthroughs, this one remains fragile. It will take at least two months to hammer out details, and Iranians and Saudis aren’t about to become fast friends. But President Xi Jinping wouldn’t trumpet this news unless he believed all relevant parties were sincerely interested in an agreement of substance.

Just Security

On March 14, two Russian Su-27 “Flanker” fighters intercepted a U.S. Air Force MQ-9 “Reaper” in international airspace over the Black Sea. The remotely-piloted aircraft (RPA) was unarmed and conducting an ISR (intelligence, surveillance, and reconnaissance) mission. The intercept reportedly lasted 30-40 minutes.

According to U.S. European Command (EUCOM), the Flankers dumped fuel on the Reaper and repeatedly flew in front of it. The dumping of fuel was likely meant to interfere with its sensors, while “zooming” in front of an aircraft can create dangerous “jet wash.” Eventually, one of the Flankers hit a propeller on the Reaper (denied by Russia), which led to the decision by U.S. forces to ditch it in international waters. The Russian aircraft may have been damaged but landed safely.

EUCOM labeled the Russian intercept “reckless and unprofessional,” demonstrating a lack of competence on the part of the pilots. Department of Defense spokesperson, Brigadier General Patrick Ryder, echoed that characterization, adding that the intercept was “unsafe.” Ned Price of the State Department went furthest, calling the Russian actions a “brazen violation of international law” and noting that the United States was “conveying in strong terms our objections.” He stopped short, however, of stating what law had been violated by Russia’s actions, which I will turn to below. As will be explained, I see two possibilities, failure to exercise due regard and the unlawful use of force.

North Asia

South Korea plans mega chip-making base to stay ahead The Wall Street Journal Jiyoung Sohn South Korea announced plans to create the world’s largest semiconductor base in the country over the coming two decades, looking to protect its position as a leader in the industry as the U.S. and other countries move to bolster their own chip production.

Ukraine - Russia

Russia’s spring offensive in Ukraine could include cyberattacks, Microsoft says The New York Times Julian E. Barnes, David E. Sanger and Marc Santora A hacking group with ties to the Russian government appears to be preparing new cyberattacks on Ukraine’s infrastructure and government offices, Microsoft said in a report on Wednesday, suggesting that Russia’s long-anticipated spring offensive could include action in cyberspace, as well as on the ground.

Sam Skove

The MQ-9 UAV sank so deep into the Black Sea that it's difficult to recover, the Joint Chiefs chairman added.

Russia has been waging its illegal genocidal war against Ukraine for a year. Critical Western support has helped Ukraine defend itself from being overrun by Russian forces. Unfortunately, as vital and important as that assistance has been, it has been tentative and piecemeal. At every stage, military aid has been accompanied by handwringing about how likely each additional capability or weapons system is to upset Vladimir Putin, or tip his fragile ego over the edge to use nuclear weapons against Ukraine or against NATO nations.

It is crucial that Western messaging about the conflict is consistent and clear. This includes how Western leaders communicate about military action that Ukraine is legally entitled to take. As it defends against Russia’s illegal invasion (in violation of Article 2(4) of the United Nations Charter), Ukraine is well within its rights to attack Russian forces inside Ukraine’s sovereign 1991 borders, and to strike Russian military targets in Russia.

Europe

New threat group hacked EU healthcare agency and embassies, researchers say The Record by Recorded Future Jonathan Greig A new hacking group is targeting European countries and organizations in an espionage campaign that began in June 2022, according to new research. Cisco’s Talos cybersecurity team calls the new group “YoroTrooper” and said it has already successfully compromised accounts connected to a “critical” European Union healthcare agency and the World Intellectual Property Organization. The researchers also found that it attacked several embassies.

UK

UK expected to ban TikTok from government mobile phones The Guardian Dan Sabbagh, Dan Milmo and Safi Bugel Britain is expected to announce a ban on the Chinese owned video-sharing app TikTok on government mobile phones imminently, bringing the UK inline with the US and European Commission and reflecting deteriorating relations with Beijing.

New body will help the UK combat national security threats Security Service MI5 A new body has been created to help the UK combat national security threats. State-sponsored attempts at stealing sensitive research and information can undermine UK businesses and harm our country’s competitiveness on the world stage. As part of the Integrated Review Refresh, the government announced on March 13th the creation of the National Protective Security Authority to help businesses and organisations defend themselves against national security threats.

1,100 scientists and students barred from UK amid China crackdown The Guardian Hannah Devlin More than 1,000 scientists and postgraduate students were barred from working in the UK last year on national security grounds, amid a major government crackdown on research collaborations with China. The sharp increase follows a hardening of the government’s stance on scientific ties with China, with warnings from MI5 of a growing espionage threat, major research centres being quietly shut down and accusations by a government minister that China’s leading genomics company had regularly sought to hack into the NHS’s genetic database.

City of Sydney chips in $29m for new climate tech hub The Australian Financial Review Paul Smith The City of Sydney has chipped in $29 million to support the creation of a new city centre hub for technology start-ups working on products related to tackling climate change that will open in July.

IPH enters trading halt after 'cyber incident' iTnews ASX-listed IPH, which operates a group of intellectual property services firms, yesterday entered a trading halt to deal with a “cyber incident”. In a brief filing, the company requested the halt “to enable it to manage its continuous disclosure obligations in relation to a cyber incident that IPH has recently become aware of”.

Optus and UniSA appoint cyber security and data science chair iTnews Jeremy Nadel Former United Nations University Institute computer science researcher Dr Mamello Thinyane will become the inaugural Optus chair of cyber security and data science at UniSA. The co-funded role will be run out of the cyber security research and data science collaboration hub, formed by Optus and UniSA in 2020. The partnership between the two organisations aims to bolster research outcomes in data science and cyber security and train future specialists in those fields.

Safe and ethical AI systems ‘to be a force for good’ The Australian Jamie Walker In a world-first, Australian business, science and standards organisations have signed up to develop “safe and ethical” artificial intelligence systems amid deepening concern at the technology’s helter-skelter rollout. The aim is to create a government-backed framework to entrench AI as a force for good, delivering fair and equitable outcomes to both individuals and the wider community.

Iran

FDD

Iranian media reported on Saturday that Tehran has agreed to purchase 24 advanced Sukhoi Su-35 fighters from Russia, significantly upgrading the capabilities of the Islamic Republic’s air force. Egypt originally agreed to purchase the planes but canceled the deal after pressure from Washington. U.S. National Security Council spokesperson John Kirby confirmed in December that Iran would likely be the new buyer. Iranian pilots have been training in Russia on the Su-35 since last spring.

CNBC

Natasha Turak

When arch-rivals Saudi Arabia and Iran announced they were restoring diplomatic relations, much of the world was stunned — not only because of the breakthrough after years of mutual animosity, suspected attacks and espionage between the two countries, but because of who brokered the deal: China.

Big Tech

Apple supplier Foxconn plans to rely less on China for revenue The Wall Street Journal Joyu Wang, Yoko Kubota Foxconn Technology Group, one of Apple’s biggest suppliers, said it would rely less on China as a source of revenue as it diversifies production sites to strengthen supply-chain resilience.

Meta unlawfully handled personal data of Dutch users, court says Bloomberg April Roach An Amsterdam court ruled Facebook acted unlawfully when handling the personal data of its users in the Netherlands for nearly a decade. Personal data processed by Meta Platforms Inc.’s Facebook Ireland unit were used without permission for advertising purposes and were also given to third parties without properly informing users, according to the Wednesday ruling.

Apple’s iPhone maker has $100 million of ‘indirect exposure’ to SVB fallout Bloomberg Debby Wu Apple Inc.’s main iPhone-making partner has indirect exposure to Silicon Valley Bank’s meltdown of about $100 million, joining the ranks of finance and tech firms shaken by the startup linchpin’s failure.

Artificial Intelligence

OpenAI ups the ante in AI wars with GPT-4 The Sydney Morning Herald Nick Bonyhady OpenAI has released the next generation of its artificial intelligence system, allowing it to turn image prompts like a sketch into simple websites, in an escalation of competition between its backer Microsoft and technology giant Google.

Misc

Russian media, crypto scammers seize on SVB Panic Bloomberg Margi Murphy Russian media outlets, far-right websites, short sellers and doomsday preppers were among those who pushed and amplified conspiracy theories online focused on the collapse of Silicon Valley Bank, according to disinformation specialists.

Research

Why does the global spyware industry continue to thrive? Trends, explanations, and responses Carnegie Endowment for International Peace Steven Feldstein, Brian Kot The global spyware and digital forensics industry continues to grow despite public backlash following an array of surveillance scandals, many linked to NSO Group’s Pegasus program. It highlights several factors driving the industry, including elevated demand for intrusion technology from government clients and private customers, as well as inconsistent political will from democratic governments to crack down on these technologies.


Photo: La Cina di Xi Jinping - Verso un nuovo ordine mondiale sinocentrico? Gabriele e Nicola Iuvinale 2023 Stango Editore




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