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US should consider barring Chinese citizens from its national labs, Senate hears

US should consider barring Chinese citizens from its national labs, Senate hears

Published: 7:01am, 21 Feb 2025
The US must do more to keep Chinese citizens from accessing its scientific research, including barring them from the country's national laboratories, lawmakers and experts warned on Thursday, in the latest sign of intensifying government scrutiny of America's research and development systems. 'There's been literally a whole generation of successful efforts by Communist China on stealing stuff,' said Paul Dabbar, CEO of California-based Bohr Quantum Technology and Donald Trump 's former Department of Energy undersecretary for science.
Testifying at a hearing convened by the Senate Committee on Energy and Natural Resources, Dabbar recommended a default 'ban [on] Chinese nationals at the national labs' with the department able to grant waivers. US senator Tom Cotton, an Arkansas Republican, has championed legislation to prohibit citizens of China, Cuba, Iran, North Korea and Russia from gaining access to national labs unless they obtain a waiver. via AFP Dabbar's comments came as Washington debates how best to attract top talent for innovation while safeguarding American intellectual property rights and national security.

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Trump exaggerated impact of US strikes: Khamenei
Trump exaggerated impact of US strikes: Khamenei

RTHK

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Trump exaggerated impact of US strikes: Khamenei

Trump exaggerated impact of US strikes: Khamenei Iran's supreme leader Ayatollah Ali Khamenei has addressed his nation two days after a ceasefire ended a 12-day war between Iran and Israel. Photo: Reuters Iran's supreme leader Ayatollah Ali Khamenei on Thursday said US President Donald Trump "exaggerated" the impact of US strikes on his country's nuclear sites, in his first appearance since a ceasefire in the war with Israel took hold. In a statement and a televised speech carried by Iranian state media, he hailed his country's "victory" over Israel and vowed never to surrender to the United States, while claiming that Washington had been dealt a "slap" after striking Iranian nuclear sites. Khamenei's remarks come two days after a ceasefire ended a 12-day war between Iran and Israel, the foes' deadliest and most destructive confrontation in history. It also follows a stinging row in the United States over the actual extent of the damage inflicted by American strikes on key Iranian nuclear sites during the conflict. "The American president exaggerated events in unusual ways, and it turned out that he needed this exaggeration," Khamenei said. The United States "has gained nothing from this war," he said, adding that American strikes "did nothing significant" to Iran's nuclear facilities. "The Islamic republic won, and in retaliation dealt a severe slap to the face of America," he said, a reference to Iran's missile launch targeting the largest US base in the Middle East. "I want to congratulate the great Iranian nation... for its victory over the fallacious Zionist regime," he added, claiming that Israel had "almost collapsed" because of Iran's strikes. Both Iran and Israel had already claimed they won, with Israeli Prime Minister Benjamin Netanyahu hailing on Tuesday a "historic victory" for Israel. Meanwhile, US Defense Secretary Pete Hegseth on Thursday said he was unaware of any intelligence suggesting Iran had moved any of its highly enriched uranium to shield it from US strikes on Iran's nuclear programme over the weekend. "I'm not aware of any intelligence that I've reviewed that says things were not where they were supposed to be, moved or otherwise," Hegseth said. (AFP/Reuters)

US missing the point on China's industrial cyberespionage
US missing the point on China's industrial cyberespionage

Asia Times

time5 hours ago

  • Asia Times

US missing the point on China's industrial cyberespionage

The United States is attempting to decouple its economy from rivals such as China. Efforts toward this include policymakers raising tariffs on Chinese goods, blocking exports of advanced technology and offering subsidies to boost American manufacturing. The goal is to reduce reliance on China for critical products, in the hope that this will also protect US intellectual property from theft. The idea that decoupling will help stem state-sponsored cyber-economic espionage has become a key justification for these measures. For instance, then-US Trade Representative Katherine Tai framed the continuation of China-specific tariffs as serving the 'statutory goal to stop [China's] harmful … cyber intrusions and cyber theft.' Early tariff rounds during the first Trump administration were likewise framed as forcing Beijing to confront 'deeply entrenched' theft of US intellectual property. This push to 'onshore' key industries is driven by very real concerns. By some estimates, theft of US trade secrets, often through hacking – costs the American economy hundreds of billions of dollars per year. In that light, decoupling is a defensive economic shield – a way to keep vital technology out of an adversary's reach. But will decoupling and cutting trade ties truly make America's innovations safer from prying eyes? I'm a political scientist who studies state-sponsored cyberespionage, and my research suggests that the answer is a definitive no. Indeed, it might actually have the opposite effect. To understand why, it helps to look at what really drives state-sponsored hacking. Intuitively, you might think a country is most tempted to steal secrets from a nation it depends on. For example, if Country A must import jet engines or microchips from Country B, Country A might try to hack Country B's companies to copy that technology and become self-sufficient. This is the industrial dependence theory of cyber theft. There is some truth to this motive. If your economy needs what another country produces, stealing that know-how can boost your own industries and reduce reliance. However, in a recent study, I show that a more powerful predictor of cyberespionage is industrial similarity. Countries with overlapping advanced industries, such as aerospace, electronics, or pharmaceuticals, are the ones most likely to target each other with cyberattacks. Why would having similar industries spur more spying? The reason is competition. If two nations both specialize in cutting-edge sectors, each has a lot to gain by stealing the other's innovations. If you're a tech powerhouse, you have valuable secrets worth stealing, and you have the capability and motivation to steal others' secrets. In essence, simply trading with a rival isn't the core issue. Rather, it's the underlying technological rivalry that fuels espionage. For example, a cyberattack in 2012 targeted SolarWorld, a US solar panel manufacturer, and the perpetrators stole the company's trade secrets. Chinese solar companies then developed competing products based on the stolen designs, costing SolarWorld millions in lost revenue. This is a classic example of industrial similarity at work. China was building its own solar industry, so it hacked a US rival to leapfrog in technology. China has made major investments in its cyberespionage capabilities. Crucially, cutting trade ties doesn't remove this rivalry. If anything, decoupling might intensify it. When the US and China exchange tariff blows or cut off tech transfers, it doesn't make China give up – it likely pushes Chinese intelligence agencies to work even harder to steal what they can't buy. This dynamic isn't unique to China. Any country that suddenly loses access to an important technology may turn to espionage as Plan B. History provides examples. When South Africa was isolated by sanctions in the 1980s, it covertly obtained nuclear weapons technology. Similarly, when Israel faced arms embargoes in the 1960s, it engaged in clandestine efforts to get military technology. Isolation can breed desperation, and hacking is a low-cost, high-reward tool for the desperate. There's no easy fix for state-sponsored hacking as long as countries remain locked in high-tech competition. However, there are steps that can mitigate the damage and perhaps dial down the frequency of these attacks. One is investing in cyber defense. Just as a homeowner adds locks and alarms after a burglary, companies and governments should continually strengthen their cyber defenses. Assuming that espionage attempts are likely to happen is key. Advanced network monitoring, employee training against phishing, and robust encryption can make it much harder for hackers to succeed, even if they keep trying. Another is building resilience and redundancy. If you know that some secrets might get stolen, plan for it. Businesses can shorten product development cycles and innovate faster so that even if a rival copies today's tech, you're already moving on to the next generation. Staying ahead of thieves is a form of defense, too. Ultimately, rather than viewing tariffs and export bans as silver bullets against espionage, US leaders and industry might be safer focusing on resilience and stress-testing cybersecurity firms. Make it harder for adversaries to steal secrets, and less rewarding even if they do. William Akoto is assistant professor of global security, American University This article is republished from The Conversation under a Creative Commons license. Read the original article.

Will China finally become a consumer powerhouse?
Will China finally become a consumer powerhouse?

Asia Times

time6 hours ago

  • Asia Times

Will China finally become a consumer powerhouse?

Chinese Premier Li Qiang's bold talk of building a 'mega-sized consumer powerhouse' has a serious economic gravity problem. Although Li has only been on the job since March 2023, his boss, Xi Jinping, took the reins of power a decade earlier. Back in 2013, as Xi pledged to let market forces play a 'decisive role' in China's economy, a key policy priority was pivoting from exports and investment to a more domestic demand-led growth model. Recent data serve as a reminder of how much this aspiration remains, at best, a work in progress. Chronically weak consumer confidence and spending is pushing China further and further down the road to deflation. Although the 0.1% drop in consumer prices in May was mild, marking the fourth straight month of declines despite various stimulus moves, producer prices fell 3.3% year on year. And price cuts in key sectors like autos may hasten the downward trend. A decade-plus of foot-dragging on recalibrating growth engines is catching up with China. Donald Trump's trade war is generating ever bigger headwinds, while potential war in the Middle East and the resulting risk-off shift in markets is complicating the global economic outlook. At People's Bank of China headquarters, too. There, Governor Pan Gongsheng faces an unpalatable set of options. He could ease monetary policy to curb deflation and boost household and business confidence, or avoid rate cuts to keep the yuan exchange rate from falling. A weaker currency is a multi-edged sword. On the one hand, it would increase default risks among giant property developers as it becomes more expensive to make payments on overseas debt. On the other, it would set back Xi's years-long effort to reduce leverage in the financial system. Xi's yuan internationalization push also might take a hit. One of Xi's top reform prizes has been securing the yuan's inclusion in the International Monetary Fund's 'special drawing rights' basket, alongside with the dollar, euro, yen and pound. Last week, Pan told a business forum that Beijing remains determined 'to weaken excessive reliance on a single sovereign currency.' There, he detailed China's strategy to create a financial infrastructure to hasten the currency's global use and, including by increasing incentives for the trading of yuan foreign exchange futures. Of course, China needs to step up capital markets reforms and create a globally trusted regulatory system. 'China's rule of law is inferior to the US, it does not offer a large and deep pool of liquid assets that is open to foreign investors like the US,' says strategist Matt Gertken at BCA Research. Yet Li's plan to morph China 'into a mega-sized consumer powerhouse on top of its solid foundation as a manufacturing power' should be the most important priority of the Xi era. As Li puts it, 'this will bring vast markets to enterprises from all countries.' On one level, Li talked of China's desire to be viewed as the protector of globalization as Trump goes tariff wild. 'Economic globalization will not be reversed; it will only carve out a new path,' Li said. 'We will further integrate and connect with the global market.' He added that 'we will not and shall not return to closed-off and isolated islands.' Li also said China is well-positioned to 'move forward steadily, and continue to inject more stability and certainty into the world economy.' Though Li was careful not to mention Trump, the US leader was written between the lines in bold font. Li urged 'all parties to avoid the politicization of economic and trade issues.' Vice Premier He Lifeng amplified Beijing's desire to 'actively expand domestic demand to boost consumption,' as reported by the official Xinhua News Agency. Li, meanwhile, played up China's advances in areas such as electric vehicles and artificial intelligence. He said China would 'share indigenous technologies and innovative scenarios with countries around the world.' Clearly, Li is referring to Washington's efforts to deprive China of advanced semiconductors and other high-tech equipment on national security grounds. Yet, as recent data reminds, China's real battle is with domestic consumers who save more than they spend. There's not a moment to waste. For years, economists from East to West knew that China needed to prod consumers to save less and spend more. Unless Xi can truly pivot to a consumption-driven model, it will delay the moment when China surpasses the US in gross domestic product (GDP) terms. Or, even miss its chance to be the world's No 1 economy. Chinese households are serious savers. That's becoming a headwind all its own at a moment when Beijing is less willing to stimulate GDP, local governments are focused on reducing debt and deleveraging, and China's export machine is facing a rocky global economy and rising protectionist walls to its products. The PBOC's latest consumer survey, covering the October-December 2024 period, reports that 61.4% of Chinese mainlanders would rather save money than spend or invest it. This reading has been above 60% since late 2023. For years now, the International Monetary Fund has been among those urging China to get serious about increasing the role of consumer spending. As IMF economist Diego Cerdeiro puts it, 'an ambitious but feasible set of reforms can improve these prospects, importantly in a way that is inclusive by raising the role of household consumption in demand. Reforms such as gradually lifting the retirement age to increase labor supply, strengthening unemployment and health insurance benefits, and reforming state-owned enterprises to close their productivity gap with private firms would significantly boost growth in coming years.' It's not just China, of course. Brad Setser at the Council on Foreign Relations points out that 'the combined savings of China, Japan, Korea, Taiwan and the two city-states of Hong Kong and Singapore is about 40% of their collective GDP, a 35-year high. No other region of the world currently contributes more to the global glut in savings that has brought interest rates around the world down to record lows.' Setser adds that Asia's current account surplus – its excess of savings over investment – has increased significantly in the past two years and is now about as large, relative to the GDP of its trading partners, as it was prior to the global financial crisis of 2008. 'Without a policy push to bring down savings,' he says, 'East Asia's excess savings will continue to give rise to new economic and financial risks, both inside the region and globally.' Generally speaking, China's 1.4 billion people sock away about one-third of income. That's roughly three times the average of American consumers. Deploying that cash is the key to China becoming a domestic demand-led powerhouse. Consumption is the key to allowing Beijing to throttle back on fiscal policy and local governments to rely less on leverage. And it's central to phasing out the gigantic shadow banking system and letting the PBOC withdraw massive stimulus from the economy. The need for a recalibration from over-investment to consumption was well-known even before Xi rose to power over a decade ago. So is the need to create broader safety nets across sectors. But time and time again, the hard work of engineering it took a backseat to short-term considerations. Building a bigger network of stable and trusted safety nets would pay the biggest dividends. As Boston University economist Laurence Kotlikoff posits, the key is crafting a 'modern version of Social Security' that's 'fully-funded, transparent, efficient, fair and progressive' and 'features personal accounts that are collectively invested by the government at zero cost to workers.' Philosophically, such a system needs 'to be fundamentally reformed without undermining its legitimate mission — forcing people to save and insure and providing forms of social insurance that the private market would either not provide or provide poorly.' The point, too, he says is to build a social safety net that is not 'incomprehensible, inefficient, inequitable, and, most important, insolvent.' Easier said than done, of course. In general, say IMF economists, the 'prioritization of spending on households over investment would also deliver larger stabilization benefits. For example, means-tested transfers to households would boost aggregate demand 50% more than an equivalent amount of public investment. To ensure consistency across policies, fiscal policy should be undertaken within a medium-term fiscal framework.' Trouble is, the world's second-largest economy is still struggling with weak consumer sentiment and deflation. Whatever life there is in consumer activity, it tends to be driven by government-subsidized home goods trade-in programs, not organic economic optimism. Clearly, China has a 'mega-sized' opportunity to reorder the global economy – especially as Trump walls off the US economy in the name of making America great again. It just needs to act on increasing the role of domestic consumption, and not just talk about it. Follow William Pesek on X at @WilliamPesek

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