China-US tech competition: J.D.Vance

Author J.D. Vance – yes, of Hillbilly Elegy fame – made a comment in an interview that neatly laid out the issue with China and technology, one that has ramifications for Australia.

J.D. Vance (CC City Club of Cleveland)

“One of the really worrying things that I think about from a macro perspective is, if you invest in a real technology enterprise, one of the things you have to be worried about is that, when that company hopefully goes global and scales, it may have the very thing that makes it a good investment just stolen by the Chinese.”

“And in that world where we’re worried about investing in real technology companies because we’re terrified that the Chinese are just going to steal it, we’re not going to have as much technology innovation.”

“That means we’re not going to have as much productivity growth.”

“And ultimately, that means we’re not going to have as many people with good American jobs who are building and creating those new technologies. So I think that China is the threat.”

Vance, who works in venture capital, hits on a point that really illuminates the nature of long term techno-competition with China. As it stands China’s technology policy can dissuade companies and investors from expanding into new areas or moving up the food-chain of innovation. Why do it, if it’s just going to be stolen by China?

One feature of the Cold War was the considerable ignorance of the rival bloc’s technology. Today, the arc of China’s modern rise is to use the internet to hack and download things that aren’t available through the open market or through forced-technology transfers. So the technology a Western company makes is likely to be stolen and sold right back to Western countries – partially or in full.

Of course, this effect alone doesn’t account for the lull in innovation the US and West has experienced. There has also been a laziness and lack of adventure, not to mention the effects of the seductive lure of free trade ideology in recent decades. But one of those effects in a globalized, free-trade market, is what Vance describes so well.

The US is just waking up from this. Joe Biden, while recently espousing industrial policy, observed that “we’ll see more technological change in the next 10 years than we saw in the last 50.”

The comment from Vance points to the long-term landscape of competition between free democracies and China. How do you plan and invest if at any time, you’re precious IP is swiped and copied? Western inventions, governments and investors must prepare for innovation in a world, where this thievery is the new normal. How can they be successful?

For Australia, the more it diversifies its economy away from commodities and education and into technology, the more this problem will emerge. In fact, the higher the food chain of tech development Australia’s goes, the more it will come into conflict with China’s privateering industrial policy.

The US middle class and foreign policy: democracy’s new dance

Joe Biden

I wanted to push a little deeper on the question of how (or even why) US foreign policy should be more in sync with the middle class.

So I’ve recorded a podcast that discusses this potential new direction in US democracy – the effort, however early, to ensure that US foreign policy goals support working families. This is an idea US President Joe Biden mentioned in his foreign policy speech on February 4.

US President Joe Biden

In my podcast, I mention the report by the Carnegie Endowment for International Peace from 2020, which can be found here.

The 2018 World Unpacked podcast, by CEIP too and hosted by Jen Psaki in which CEIP’s Salman Ahmed discusses his findings from visiting Ohio, can be found here.

Both the report and podcast are well worth digging into, especially as the ideas appear to be shaping Biden’s approach.

The China side of MAGA, and the CCP’s racism claim

Donald Trump has claimed China’s handling of the coronavirus is proof that Beijing “will do anything they can” to make him lose the presidency in November. While on the surface, it’s a fanciful claim, the invocation of “China” as an all-around boogeyman is a trend that is being amplified online. Meanwhile, the Chinese Communist Party has been quick to claim “racism” as the motivator for its many critics.

Here is an excellent little summary of one wing of the coronavirus debate: anti-CCP activity backed by Guo Wengui (aka Miles Kwok) who owns GNews and former Trump-adviser Steve Bannon with his anti-CCP website America’s Voice.

From Graphika:

Guo Wengui and his media outlet GNews, along with Steve Bannon and his anti-CCP website America’s Voice, are pushing a pro-US, anti-CCP narrative. Wengui is a Chinese billionaire who now lives in the US and works with Steve Bannon. This partnership has often been accused of stoking tensions between the US and China using sensationalist and often conspiratorial content. Popular content … includes videos featuring Guo Wengui that claim the coronavirus is a bio-weapon and that the death toll has been underreported by the Chinese government. This narrative appears to have spread to other conspiracy groups, including the dedicated coronavirus “news” group, where GNews is among the most shared domains…Their goal, as stated in their website description, is to be the bridge between breaking Chinese news and the Western world, though their main outputs are Fox News and America’s Voice clips that have been translated into Mandarin Chinese. Similarly, the English account translates Guo Wengui and GNews clips into English.

The COVID-19 “Infodemic”, Graphika

But the Bannon-Kwok axis is just one side of the effort.

The Epoch Times, founded by the Falun Gong, has “evolved from a nonprofit newspaper that carried a Chinese-American religious movement’s anti-communism message into a conservative online news behemoth that embraced President Donald Trump and conspiracy content.”

Epoch Times‘ ads were blocked from Facebook last year for trying to evade Facebook’s review system. At the time it spend some “$2 million worth of ads that promoted the president and conspiracy theories about his political enemies.” That was more than the Trump campaign itself at the time.

(Hardcopies of the Epoch Times are distributed free in various locations in Australia. It’s not difficult to find them.)

I have no evidence Bannon-Kwok axis and Epoch Times are coordinated between each other, just that the share similar pro-Trump, anti-CCP goals.

To give a sense how this international meta-blame game is being directed with focus into the 2020 election, see how Trump, in recent weeks, has claimed that Democratic presidential candidate Joe Biden has been weak on China.

Biden has responded in kind, drawing attention to Trump’s initial trust of China on the coronavirus in the early phases of the pandemic.

From the Los Angeles Times:

President Trump’s intensifying criticism of China isn’t just about deflecting blame during the coronavirus crisis — it’s opening up a new line of attack against Joe Biden, the presumptive Democratic nominee…. Trump’s reelection chances now rest heavily on his ability to successfully frame the choice voters will face in November as a referendum on China, according to the president’s campaign aides and allies.

For Trump, it’s an update of the unapologetic nationalism he ran on four years ago, when he played up dangers supposedly posed by Mexicans and illegal immigration, and cast opponents as weak and naive… Unwilling to let Trump’s arguments go unanswered, Biden’s campaign battled back Friday with a spate of ads disputing his alleged support for China, and going on offense — blaming Trump for being too trusting of President Xi Jinping as the coronavirus spread.

April 17, 2020

Amping up a loathing for “China” (rather than specifically “the Chinese Communist Party and its various organs”) can create a level of tension that cuts through the ambient noise of the US political information sphere. At the same tine, the emotion of fear and loathing for “China” could overwhelm voters’ creeping anxiety for Trump’s record. (60,000 US dead of coronavirus so far).

A campaign stretching around the world and involving perceptions of China and Trump would likely hit all the right notes: blame-shifting away from Trump and the US, towards China and Biden. Specific stories can be seeded in global media this way. But the real power would the scale and persistence.

Already I see friends on social media with Asian backgrounds calling out a resurgent anti-Asian bigotry (comments, signs in public aimed at “Chinese.”) The Biden campaign has come under fire of its ad assailing Trump’s handling of “China.”

Part of tension arises from the fact that the parties involved, China-born Falun Gong members, people of ethnic Asian backgrounds, people with no -Asian identity have real feelings about the China and its rise. Instrumentalizing existing organisations like the Epoch Times helps embed the feeling more deeply into individuals already invested in them. Why reinvent the wheel? The Kremlin did something similar with WikiLeaks fans and the cadres of Noam Chomsky leftists, who adopt views that the Kremlin promotes – all in the name of combating Western “imperialism.”

There is another dimension that many people outside of China, many people in the US may not realize: The Chinese Communist Party itself – the actual rival to the US government (not the Chinese people) uses race and claims of “racism” as a way to advance the regime’s goals.

As John Garnaut has written of the Australian example:

A key to the party’s operations in Australia is collapsing the categories of Chinese Communist Party, China, and the Chinese people into a single organic whole—until the point where the party can be dropped from polite conversation altogether. The conflation means that critics of the party’s activities can be readily caricatured and attacked as anti-China, anti-Chinese, and Sinophobic—labels that polarize and kill productive conversation.

Mind your Tongue, ASPI, 2019

The CCP has access to some huge megaphones to project this message.

All of which means that the hot blast of racism around the issues of “China” and people who are “Chinese” may be flowing from both side of the Pacific. The Trump campaign is happy to marshal anti-Chinese racism for domestic political gain. The CCP, meanwhile, would seek to conflate racism with any criticism of the authoritarian party.

In this world view, the CCP calling itself “China” speaks for people as unrelated to mainland China as former Democratic presidential candidate Andrew Yang, for example.

As always, the defense against the polarization on race, identity and otherness is to refocus the debate onto issues of governments, politics, actions, and the ideals that define democracy.

In our current information environment, imprecise, reckless communication is easier than ever. The issue of “China” in the 2020 election will likely prove that.

Unit 61398 – Remember that number…(More on Chinese hacking)

An interesting element in the New York Times story is the US’s increasing impatience with the Chinese in this matter.

The story says:

The United States government is planning to begin a more aggressive defense against Chinese hacking groups, starting on Tuesday. Under a directive signed by President Obama last week, the government plans to share with American Internet providers information it has gathered about the unique digital signatures of the largest of the groups, including Comment Crew and others emanating from near where Unit 61398 is based.

It goes on to note:

Obama administration officials say they are planning to tell China’s new leaders in coming weeks that the volume and sophistication of the attacks have become so intense that they threaten the fundamental relationship between Washington and Beijing.

This is where the landscape of relations between China and the US could rapidly change – if Obama’s administration takes the step. Someone in the White House must be doing the math on what kind of systemic risk this sort of hacking is to the US economy – and doing it in a time when the number of intrusions on US agencies alone rose: almost ninefold, to 48,562 in fiscal 2012 from 5,503 in 2006, according to Bloomberg.

This has to be looked at against the wider backdrop. China’s strategy is to quietly overwhelm the US in many areas of competition – economic, technological, trade. Having the freedom to tap into the US’s critical infrastructure gives Beijing great strategic leverage. Stealing data and designs by the terabyte underpins the innovative burst in many of China’s industries.

For years, part of the issue for US companies was their unwillingness to talk about getting hacked for fear that it reflected poorly on their own corporate practices. That changes when you realise everyone is getting hosed down by the same guy. By illuminating the issue, US media helps put China’s real role in the systematic hacking of whole systems for plunder and gain under closer examination.

The more public this issue becomes, the more potential it has to enter into the dynamics of global diplomacy and security. It has implications far beyond China and the US, as well. If Obama’s Admin is willing to act, it will embolden less powerful countries with similar grievances, some of which could possibly be tied back to Unit 61398 in Shanghai. It becomes a talking point right alongside trade, security, currency, etc.

Basically, we’ve just exited the Kumbaya phase of globalisation. Now it’s clear that the global linkages which have been sold to people around the world brings linkages that are direct threats to the well-being of a lot of nations.