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China’s tech crackdown & the Jack Ma problem
Is the Communist Party losing support in China?
On GZERO World with Ian Bremmer, Shaun Rein, founder and managing director of the China Market Research Group, explains why wealthy Chinese citizens fear that the country is moving towards socialism and is no longer pro-business as it was in the past.
“People have trusted the Chinese government to do the right thing. It was almost like they were invincible,” Rein explains, “But zero-COVID wasn’t done well, so they’re starting to lose some support, especially among the wealthy.”
Along with zero-COVID sapping domestic consumption and production, Rein also points to the example of Jack Ma. Ma was a hero to many young Chinese, rising from a peasant to become the billionaire owner of one of China’s biggest tech companies, Alibaba. But Communist Party's crackdown on the private sector forced Alibaba to split into six separate companies and forced Ma to give up his control.
Rein says he agrees with the decision because companies like Alibaba were becoming too powerful, controlling too many industries and stifling fair market competition. But the Beijing's crackdown has rattled the business community and some worry that China’s ethos of “socialism with Chinese characteristics” is starting to look a lot more like traditional socialism, full stop.
Watch the GZERO World episode: China’s economy in trouble
And watch GZERO World with Ian Bremmer every week on gzeromedia.com/gzeroworld and on US public television. Check local listings.
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Gang members wait to be taken to their cell after 2000 gang members were transferred to the Terrorism Confinement Center, in Tecoluca, El Salvador. Handout distributed March 15, 2023.
What We’re Watching: El Salvador’s lingering state of emergency, Northern Ireland on alert, Alibaba’s breakup, Greek election matters
El Salvador’s state of emergency one year later
This week marks one year since El Salvador’s bullish millennial president, Nayib Bukele, introduced a state of emergency, enabling his government to deal with the scourge of gang violence that has long made his country one of the world’s most dangerous.
Quick recap: To crack down on the country’s 70,000 gang members, Bukele’s government denied alleged criminals the right to know why they were detained and access to legal counsel. The arrest blitz has seen nearly 2% of the adult population locked up.
Despite these draconian measures and Bukele’s efforts to circumvent a one-term limit, he enjoys a staggering 91% approval rating.
Bukele has also sought to distinguish himself as an anti-corruption warrior, which resonates with an electorate disillusioned by years of corrupt politicians (Bukele’s three predecessors have all been charged with corruption. One is in prison; two are on the run.)
Externally, relations with the Biden administration have been icy under Bukele, with San Salvador refusing to back a US-sponsored UN resolution condemning Russia’s war in Ukraine.
What matters most to Salvadorans is the dropping crime rate, which is why Bukele will likely cruise to reelection next year.
Fears of domestic terror attack in Northern Ireland
Britain's MI5 intelligence agency has raised the domestic terror threat in Northern Ireland from “substantial” to “severe” amid fears of an imminent attack in the British-run region. This follows a series of attacks by Irish nationalist groups, mainly against police, in Northern Ireland in recent months.
The New Irish Republican Army, a paramilitary group with roots in the original militant group of the same name, has taken responsibility for a series of crimes against law enforcement and journalists.
For context, the IRA dominant in the 20th century disbanded with the signing of the Good Friday Agreement in 1998 that put an end to decades of violence between pro-British unionists wanting to stay part of the UK, and Irish nationalists calling for the unification of Northern Ireland with Ireland.
This warning comes as US President Joe Biden is preparing to travel to Belfast next month to mark the 25th anniversary of the peace deal, which put an end to the conflict, known as the Troubles.
Indeed, tensions have risen since Brexit, which revived age-old questions about the status of Northern Ireland’s borders. The threat level in Britain, meanwhile, remains “substantial,” meaning that an attack is still a strong possibility, according to authorities.
Alibaba breaks up … itself
Now we know the real reason Alibaba founder Jack Ma resurfaced in China this week. On Tuesday, the Chinese e-commerce giant announced it would spin off its different businesses into six units with separate CEOs under a single holding company. Each unit will be allowed to seek outside capital or go public independently.
Alibaba claims that the Chinese government did not order the restructuring, but it's an open secret that Xi Jinping thought the company had become too rich and powerful. The restructuring plan was unveiled the day after Ma made his first public appearance in the country since late 2020 to boost confidence in the tech company and within the broader sector. (His public criticism of regulators set off a broader crackdown against China's tech sector that hit Alibaba hard.)
Politics aside, Alibaba is just following in the footsteps of its main rivals, Tencent and JD.com, which showed earlier they got the memo from Xi: Break yourself up before you become too big to fail, or it'll be worse if we have to do it for you. The question is, would this ever happen in the US to curb the power of Big Tech?
Greek PM calls spring election
PM Kyriakos Mitsotakis, whose popularity has dipped in the wake of a train disaster last month that killed 57, has called for a general election on May 21. The train crash sparked national protests and strikes as angry Greeks pointed blame at the government for poor transport-sector investment and regulation.
In this election, Greece is transitioning to a proportional representation system, making it harder for any party to enjoy an outright win.
Mitsotakis, whose term was set to end in July, has been dogged by protests and allegations of wiretapping of political opponents by security forces. His reputational dent mixed with his New Democracy Party’s declining numbers – though they remain slightly ahead of the opposition Syriza Party – raise the likelihood of Greece soon being ruled by a coalition.
Syriza, meanwhile, says that even if it wins an outright majority, it will form a "government of cooperation." But the left-wingers have ruled out the possibility of working in a coalition with Mitsotakis’s conservatives.
Tech innovation can outpace cyber threats, says Microsoft's Brad Smith
AI is having a giant moment of growth, as is the ability for actors to use it nefariously. In an uncertain global environment, how can the US outpace challenges in cyberspace?
“One of the things that I find just fascinating about the development of AI…it's actually an area where if you take the problems seriously and you have an engineering team that's willing and prepared to work on a moment's notice, you can correct the problems far faster than you can solve most problems in life,” said Microsoft Vice Chair and President Brad Smith at this year’s Munich Security Conference during aGlobal Stage livestream conversation, hosted by GZERO in partnership with Microsoft.
The early leads in the race for the future of AI, he adds, are in the US private sector and the Chinese public sector, and the world’s democracies are setting the right role model in creating international norms for the responsible use of AI, but must stay the course in doing so.
Watch the full Global Stage conversation from Munich here: Is there a path ahead for peace in Ukraine?
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Can the US stay ahead of China on AI?
Microsoft’s partnership with OpenAI and DeepMind is at the forefront of maintaining America’s edge in artificial intelligence.
But can America stay ahead of China in the push for AI leadership? Nic Robertson, CNN’s international diplomatic editor, puts the question to Microsoft Vice Chair and President Brad Smith during a Global Stage livestream conversation hosted by GZERO in partnership with Microsoft at the Munich Security Conference.
Smith says that while the US is currently in the lead, it’s only by a matter of months. He explains that Microsoft is in a constant race with the Beijing Academy of Artificial Intelligence and companies like Baidu. “There is no reason to assume that one country or the other will have a sustainable leadership position,” he says. “We’re all going to have to keep racing ahead.”
While both the US and China will continue competing for the top spot, the true advantage will go to the one that can deploy AI both quickly and, Smith says, “in a manner that will both lead to its ongoing improvement and the productivity of their economies more generally.”
Watch the full Global Stage conversation from Munich here: https://gzeromedia.com/globalstage
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How democracies nurture the growth of artificial intelligence
China wants order to beat the US in the race to dominate artificial intelligence. But open-ended research? No way — and that's a problem for Beijing.
"If you are in a society where there are certain things that you can't ask, you don't know what you can't ask, and the penalty for asking those things you don't know that you can't ask is very high ... it will start to limit the capabilities of researchers to explore," Azeem Azhar, founder of the Exponential View newsletter, says in a Global Stage livestream conversation hosted by GZERO in partnership with Microsoft.
Meanwhile, he adds, the US or Europe are freer societies where culture wars hurting academic freedom are the biggest threat to AI research.
What does this mean? For Azhar, democracies are ahead because "people have the freedom of thought to think and challenge in their process of research."
Watch the full Global Stage conversation: AI at the tipping point: danger to information, promise for creativity
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People march during a protest against the government and rising fuel prices, in Port-au-Prince, Haiti.
What We’re Watching: UN mulls Haiti intervention, petrol workers join Iran protests, Biden tightens tech exports to China
Haiti pleads for help
Haiti’s spiraling social unrest has prompted Prime Minister Ariel Henry to appeal to the international community for “specialized armed forces” to help quell demonstrations and gang violence wreaking havoc across Port-au-Prince, the capital. Henry’s request comes a month after planned cuts to fuel subsidies amid an economic crisis unleashed a torrent of unrest across the poorest country in the Western Hemisphere. (Protesters are demanding the resignation of Henry, who has been implicated in the 2021 assassination of President Jovenel Moïse and has failed to hold fresh parliamentary elections.) Making matters worse, gangs recently stormed a key fuel terminal in the capital, preventing the distribution of millions of gallons of gas, and have also looted food aid centers. As a result, hospitals and schools have been forced to close. The US, for its part, has not shut down the request, but it seems unlikely that President Joe Biden will support sending boots on the ground. Still, the deteriorating situation in the Caribbean country is not something he can afford to ignore given the uptick in Haitian migrants arriving at the US southern border over the past year. Meanwhile, UN Secretary-General António Guterres supports sending a rapid action force, but some experts warn that this would further inflame the situation. Indeed, Haitians have little love for the UN, whose “peacekeeping” forces (2004-2017) reportedly raped hundreds of Haitian women and girls and unleashed a cholera outbreak that killed thousands.
Iranian petroleum workers join the fight
It’s been almost a month since women-led protests erupted across Iran following the in-custody death of Mahsa Amini, 22, who was reportedly beaten by the Islamic Republic’s “morality police.” The protests, which have gained the support of large swaths of the population, have now spread to a crucial sector: the oil industry. Indeed, around 1,000 workers at the Bushehr and Damavand petrochemical plants ditched work on Monday to join protesters calling for the downfall of Supreme Leader Ayatollah Ali Khomenei. It is unclear how this will play out in the country’s petroleum sector, but the development marks a big shift in a country burdened by economic sanctions that can’t afford further disruptions to its energy industry. Indeed, oil workers are crucial to the Iranian economy, and their strikes in 1979 played a crucial role in ousting the Shah. There are signs that the regime is worried: Iran’s Chief Justice Gholam-Hossein Mohseni Ejei on Monday called for dialogue with protesters, a very unusual step for the notorious hardliner, who is close to the supreme leader and has been linked to the alleged murder of a journalist. Meanwhile, students at Tehran’s Polytechnic university appeared undeterred Monday, with demonstrators marching and chanting “the machine gun no longer works.”
Biden’s big move on Beijing
New restrictions on US high-tech exports to China represent a major escalation from President Joe Biden’s administration in the emerging tech Cold War between the two countries. Late last week, the US Commerce Department announced new limits on sales to China of US semiconductors and of chip-making equipment to Chinese companies. This move is part of a broad bipartisan effort in Washington to maintain a competitive edge in the development of tech tools that US officials believe will determine the long-term global balance of economic and military power. It’s also part of an effort to protect Taiwan’s competitive advantage – and strategic importance – as the world’s leading manufacturer of advanced semiconductors. Today, the Taiwan Semiconductor Manufacturing Company, which makes some 90% of the world’s most advanced chips, provides the island nation with a so-called Silicon Shield against Chinese attack, because military action against Taiwan that inflicts damage on TSMC would deal a severe blow to China’s economy. The Biden administration knows that China’s bid in coming years to develop its domestic semiconductor industry would remove that obstacle to a future invasion of the island. More importantly, tech breakthroughs that help China build technological supremacy in quantum computing would undermine US national security. Chinese officials and media have denounced the move as a “savage attack on free trade.This article comes to you from the Signal newsletter team of GZERO Media. Sign up today.
Beating China at AI
The US and China compete on many fronts, and one of them is artificial intelligence.
But China has a different set of values, which former Google CEO Eric Schmidt is not a big fan of — especially when those values shape the AI on apps his children use.
"You may not care where your kids are, and TikTok may know where your teenagers are, and that may not bother you," he says. "But you certainly don't want them to be affected by algorithms that are inspired by the Chinese and not by Western values."
For Schmidt, the Chinese government is ensuring that the internet reflects the priorities of the ruling Communist Party.
Watch his interview with Ian Bremmer on GZERO World:Be more worried about artificial intelligence
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Security flaws in China’s My2022 Olympics app could allow surveillance
Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:
Does the Beijing 2022 Olympics app have security flaws?
Well, the researchers at the Citizen Lab of the University of Toronto do believe so. And if their revelations, this time, will set off a similar storm as they did with the forensics on NSO Group's spyware company, then there will be trouble ahead for China. The researchers found that the official My2022 app for the sports event, which attendees are actually required to download and to use for documenting their health status, has flaws in the security settings. Loopholes they found could be used for intrusion and surveillance.
Now, of course, China is not exactly known as a bastion of privacy protections. But beyond the flaws, the app also has a censorship keyword list, which has relation to terms like Tiananmen protests, the Dalai Lama, or the Uyghur Muslim minority. And in response, Dutch supporters will be provided with a burner phone. And sure, that might be a short-term solution, but I'm not sure whether other officials visiting China, now for the Olympics, or for business or politics, are always as careful. I remember attending a World Economic Forum events in China, as a member of European Parliament, and being one of the only ones to proactively take precautions.
Now, unfortunately, one of the researchers of the Citizen Lab confirmed that, "Our findings expose how My2022 security measures are wholly insufficient to prevent sensitive data from being disclosed to unauthorized third parties." But the Beijing organizing committee has stood by its app, and said it passed the examination of international mobile app markets, such as Google, Apple, and Samsung. So unfortunately, no clear solution in sight to make sure that systematically, human rights and privacy are better protected in China.