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The subtle rise of a China, U.S. tech cold war

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tech cold war

Stakes have been mounting between two of the world’s major superpowers; however, the matter has shied away from ideologies and nuclear weapons and has moved matters into a realm etched into the very fabric of our everyday life: technology.

Noticeably everything sharply ignited by former U.S. president Donald Trump’s blacklisting of Chinese tech titan Huawei back in 2019, tensions have trickled down to other facets in the tech sphere.

But while many have titled these tensions as an uneasy peace between both superpowers, tensions can be felt throughout the entirety of the global tech ecosystem.

The U.S. has made moves to curb the reach of China’s technological power among its allies, by merely pressuring them to block Chinese tech companies from being included within the rollout and deployment of the fifth generation of mobile networks citing data security and cybersecurity at the helm. 

But now, matters have escalated forward, going from a trade war to tech war; and China is starting to fight back.

Taming the tech dragon

The first escalation was seen when the eastern country began taming its very own tech sector, especially those that deal with large private user data, its security, as well as overseas listings.

On the surface, this move seems as though China is shooting itself in the foot, by curbing the scale of which its tech sector could innovate, while scaring off investors; but a closer look would show that the eastern superpower is aligning its most dangerous weapons with its political agenda.

But while China’s Premier Li Keqianq declared during the country’s annual legislative session in March that “the state supports the innovation and development of platform companies,” Beijing had subtly pushed another message for its tech giants: No matter how big or innovative they may be, commercial success is secondary to the mission of bolstering Chinese technological security.

An example was made from e-commerce behemoth Alibaba and its FinTech subsidiary Ant Group; the former was slapped with a whopping $2.8 billion fine by regulators citing anti-competitive tactics earlier in April, while the latter was suspended from debuting its ballooning IPO in November of last year.

And now the pressure has intensified.

Injured giants

According to report by Bloomberg, due to continuous pressure from China’s regulators, the country’s tech giants have lost a combined $823 billion in market share since their peak in February.

This was followed by the issuance of a sweeping warning on Tuesday to the country’s Big Tech companies, that the government intends to buckle down on its oversight of data security and oversees listing; a timely move, as local ride hailing Didi had concluded its initial public offering in the U.S.

Prior to that, the country’s internet watchdog pushed matters further by opening a security review into Didi last week, while demanding that the app be removed from local app stores; a move which stunned everyone, including the company’s biggest backer Tencent.

Bloomberg highlighted that these moves have increased pressure not only on the companies themselves, but on their investors who are indirectly being forced to sell their stocks within some of the country’s biggest tech names including Tencent, Alibaba, JD, Baidu, and Meituan.

“The Hang Seng Tech Index, whose members include many of China’s biggest tech companies, fell as much as 1.9 percent before paring losses to 0.6 percent Wednesday, marking its sixth consecutive day of declines. Tencent slid 1.9 percent, among the biggest decliner on the Hang Seng Index. Alibaba dropped 1.7 percent, while Meituan fell 1.3 percent,” Bloomberg’s report explained.

This has rendered any Chinese tech investments in the near future as caveat emptor.

Hong Kong’s collateral damage

With these actions and steps to crack down on its tech sector, the move will likely reflect Beijing’s political belief and strategy of weeding off those who doesn’t succumb to its agenda.

Meanwhile on the side of the camp, U.S.-based tech firms are making threats to pull out of the Hong Kong market due a new security law which aims at curbing doxing.

Doxing is the act of searching and publishing private or identifiable information found online for malicious reasons; this tactic was used during the 2019 mass-democracy protests in Hong Kong. During the events, everyone bore witness to personal details being released by all sides of the spectrum targeting law enforcement, journalists, activists, and their families.

In a letter penned by a coalition representing tech giants such as Facebook, Google, Apple, Twitter, and LinkedIn, the Asia Internet Coalition (AIC) warned the city’s Privacy Commissioner that the laws in the bill could unleash “severe sanctions” on individuals and organizations for what it deems as doxing.

The AIC described the law to be “not aligned with global norms and trends.”

“The only way to avoid these sanctions for technology companies would be to refrain from investing and offering their services in Hong Kong, thereby depriving Hong Kong businesses and consumers, whilst also creating new barriers to trade,” the letter said.

But while Hong Kong’s chief executive, Carrie Lam, refuted those claims and stressed that the proposed law only targets “illegal doxing,” it was still internationally condemned, especially with regards to its vagueness.

Lam argued that the law, which was introduced last year, has been successful in maintaining order and stability in the city.

The letter, signed by AIC managing director, Jeff Paine, highlighted that the language used in the draft law would subject intermediaries and local subsidiaries to criminal investigations and prosecution for doxing offences, including for not removing material from platforms.

“This is a completely disproportionate and unnecessary response to doxing, given that intermediaries are neutral platforms with no editorial control over the doxing posts, and are not the persons publishing personal data,” it said.

“In reality, most intermediaries already have notice and takedown regimes in place to deal with doxing content and such requests would be responded to without undue delay.”

This battle could be interpreted as a point of pressure for Beijing – who has started exerting its influence on the metropolitan city – since an exit of such vital tech resources would track back Hong Kong’s ability to remain as a tech innovator across the board.

The semiconductors Frontier

The rising economic and technological tensions between both superpowers have evolved drastically over the years, from a trade war to a tech war, and now stands at the heart of the world’s largest innovation and competition rivalry.

Escalations will continue to simmer over this slow burn, especially as U.S. president Joe Biden looks to bolster the western country’s position in the tech world, by banking on technology’s biggest resource: semi-conductors.

Earlier last month, The U.S. Senate overwhelmingly approved the Innovation and Competition Act – a rare show of unity between Democrats and Republicans – with Beijing responding to the bill and labelling it “filled with cold war zero-sum mentality.”

Yehia is an investigative journalist and editor with extensive experience in the news industry as well as digital content creation across the board. He strives to bring the human element to his writing.

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UK to block Facebook parent Meta’s $315M acquisition of Giphy

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It is expected that the UK’s Competition and Markets Authority (CMA) will reverse Facebook parent company Meta’s purchase of Giphy in the coming days, according to the Financial Times.

 If that happens, it will mark the first time that the country’s competition regulator has unraveled a major tech acquisition.

Meta (Facebook previously) announced in May 2020 that it bought the GIF platform with the goal of rolling it into Instagram. Reports set the price of the deal at $400 million.

As such, Meta has previously argued that because Giphy doesn’t have any operations in the UK, the CMA has no jurisdiction in this case. In addition, it claimed Giphy’s paid services couldn’t be classed as display advertising according to the CMA’s market definition.

“After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat,” Holly Vedova, acting head of the U.S.’ Federal Trade Commission’s (FTC) competition bureau, said in a statement.

The FTC filed a revised complaint against the firm just weeks after a judge threw out its original case in June. The judge had accused federal regulators of failing to provide enough evidence that Facebook created a monopoly in the social networking space.

The CMA opened an investigation into the deal the following month after it raised concerns about the acquisition. The regulator declared in August that the deal could prevent rivals such as TikTok and Snapchat from accessing Giphy’s library of GIFs, as well as removing a potential competitor to Meta in the UK advertising sector.

Meta ended Giphy’s paid ad partnerships, which the CMA said ceased the company’s ad expansion, including to other countries. Also, the watchdog suggested Meta could be forced to sell the service, having until December 1st to publish its final decision.

The UK regulator fined Meta, in October, more than $67.2 million for a “major breach” of an order to remain separate from Giphy during its investigation. The fine was the largest ever handed down by the agency. This step was taken after the regulator accused Meta of “consciously refusing to report” information about the merger.

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Australia plans laws to make social networks identify trolls

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In a step meant to set restrictions on social media platforms, the Australian government is planning to introduce laws that force social media platforms to “unmask” online trolls despite experts saying it will do little to reduce online abuse.

Prime Minister Scott Morrison revealed plans for legislation that could force social networks to reveal the identities of trolls and others making defamatory comments. A complaint mechanism would require online platforms to take these hostile posts down, and if they don’t, the court system could order a given site to provide details of the offending poster.

“Digital platforms, these online companies, must have proper processes to enable the takedown of this content. There needs to be an easy and quick and fast way for people to raise these issues with these platforms and get it taken down,” Morrison said on Sunday afternoon.

The PM’s announcement of the anti-troll social media legislation comes two months after he said social media platforms were a “coward’s palace” and declared that they would be viewed as publishers if they are unwilling to identify users that post foul and offensive content.

In addition, the proposed laws would also make it mandatory for social media platforms to have a standardised complaints system that allows defamatory remarks to be removed and trolls identified with their consent.

As such, Digital Rights Watch executive director Lucie Krahulcova, made some remarks regarding these laws, saying they are not focused on pursuing people who libel, malign, harass, or commit similar crimes online.

“They’re not actually very excited about enforcing [existing laws] on behalf of women, people of colour, and historically I think there’s plenty of evidence of that in Australia,” Krahulcova said.

The laws, if passed, would also redirect the liability for potential defamation from organisations running a social media page to social media platforms instead.

Federal Attorney-General Michaelia Cash explained the attempt to shift defamation liability is in response to the recent Voller High Court case, which set a legal precedent where Australians who maintain social media pages could be publishers of defamatory comments made by others on social media even if they did not know about the comments. Since the ruling, media outlet CNN disabled its Facebook page in Australia.

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Nissan investing in electric vehicles, battery development

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Nissan investing in electric vehicles, battery development

Nissan said Monday it is investing 2 trillion yen ($17.6 billion) over the next five years and developing a cheaper, more powerful battery to boost its electric vehicle lineup.

The Japanese automaker’s chief executive, Makoto Uchida, said 15 new electric vehicles will be available by fiscal 2030. Nissan Motor Co. is aiming for a 50% “electrification” of the company’s model lineup, under what Uchida called the “Nissan Ambition 2030” long-term plan. Electrified vehicles include hybrids and other kinds of environmentally friendly models other than just electric vehicles.

The effort is focused mainly on electric vehicles to cut emissions and meet various customers’ needs, said Uchida. Nissan also will reduce carbon emissions at its factories, he added.

The company has been struggling to put the scandal of its former Chairman Carlos Ghosn behind it. Ghosn, who led Nissan for two decades, after he was sent to Japan by French alliance partner Renault, was arrested in Tokyo in 2018 on various financial misconduct charges.

Uchida made no mention of the scandal but referred to “past mistakes” he promised won’t be repeated at Nissan.

Nissan’s “electrification” rests on developing a new ASSB, or all solid state battery, that it categorized as “a breakthrough” for being cheaper and generating more power than batteries now in use.

That means electric powertrains can be more easily used in trucks, vans and other heavier vehicles because the batteries can be smaller. The ASSB will be in mass production by 2028, according to Nissan.

The costs of electric vehicles will also fall thanks to the battery innovation to levels comparable with regular gasoline cars, Uchida said.

“Nissan has emerged from a crisis and is ready to make a new start,” he said.

All top automakers, including Nissan’s Japanese rival Toyota Motor Corp., are working on electric vehicles, amid growing concern over climate change and sustainability. Global consumers are also demanding more safety features.

Uchida said Nissan was hiring 3,000 engineers to strengthen its research, including digital technology for vehicles.

Nissan, based in Yokohama, Japan, has suffered recently from the computer chips shortage that’s slammed all automakers because of lockdowns and other measures at chip factories to combat the coronavirus pandemic.

The maker of the Infiniti luxury models, Leaf electric vehicle and Z sportscar is projecting a return to profitability for the fiscal year through March 2022 after racking up two straight years of losses.


TOKYO (AP)

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