Archive for the ‘China’ Category

Remember that thumbsucker I did on the Great Firewall? Well, here’s some data, via this post (thanks, Jamie). It seems that Fang Binxing, China’s Chief Bellhead, boss of the Beijing University of Post & Telecoms, and king of the great firewall, really is in trouble due to his special relationship with Bo Xilai. He briefly came up on the web to threaten to sue a Japanese newspaper which thinks he was detained for investigation. Then, the former head of Google in China (who obviously isn’t neutral in this) prodded him, and he denied having the power to block the offending story.

The FT, meanwhile, thinks Zhou Yongkang, the head of the security establishment, is on the out. That shouldn’t be overstated because he’s due to retire, but he has been doing a rubber chicken circuit of second-division official appearances, and his key responsibilities have been taken over by others.

Fang is supposedly being replaced by Yan Wangjia, CEO of Beijing Venustech, who was responsible for engineering the Great Firewall. Her company’s Web site is convincing on that score. Here’s the announcement that they got the contract to provide China Mobile with a 10 gigabit DPI system:

Recently, Venustech successfully won the bid for centralized firewall procurement project of China Mobile in 2009 with its 10G high-end models of Venusense UTM, thus becoming the first company of its kind to supply high-end security gateway to telecom operators.

It is said this centralized firewall procurement project is the world’s largest single project of high-end 10G security gateway procurement ever implemented, drawing together most of world-renowned communication equipment vendors and information security vendors such as Huawei and Juniper. Through the rigorous test by China Mobile, Venusense UTM stood out, making Venustech the only Chinese information security vendor in this bid.

Looking around, it sounds like they are the hardware vendor of the Great Firewall, specialising in firewall, intrusion detection, and deep-packet inspection kit for the governmental, educational, and enterprise sectors “and of course the carriers”. Well, who else needs a 10Gbps and horizontally scaling DPI box but a carrier? Note the careful afterthought there. Also, note that they’re the only people in the world who don’t think Cisco is a leading network equipment vendor.

Well, this is interesting, both on the Bo Xilai story and also on the general theme of the state of the art in contemporary authoritarianism. It looks like a major part of the case is about BXL’s electronic surveillance of Chongqing and specifically of top national-level Chinese officials:

One political analyst with senior-level ties, citing information obtained from a colonel he recently dined with, said Mr. Bo had tried to tap the phones of virtually all high-ranking leaders who visited Chongqing in recent years, including Zhou Yongkang, the law-and-order czar who was said to have backed Mr. Bo as his potential successor. “Bo wanted to be extremely clear about what leaders’ attitudes toward him were,” the analyst said.

That’s Zhou Yongkang as in the head of the whole Chinese internal security structure, cops, spooks, and all. Bo’s police chief (and future sort-of defector) Wang Lijun is described as being “a tapping freak”, addicted to the productivity and hence apparent power of electronic intelligence. Not only that, Wang eventually began tapping Bo, who was also tapping the CDIC feds who came down to keep an eye on him.

The practicalities are, as always, interesting.

The architect was Mr. Wang, a nationally decorated crime fighter who had worked under Mr. Bo in the northeast province of Liaoning. Together they installed “a comprehensive package bugging system covering telecommunications to the Internet,” according to the government media official.

One of several noted cybersecurity experts they enlisted was Fang Binxing, president of Beijing University of Posts and Telecommunications, who is often called the father of China’s “Great Firewall,” the nation’s vast Internet censorship system.

It’s worth pointing out that the provincial networks belonging to China Mobile, China Telecom etc. are usually organised as companies in their own right, and they often have their own AS numbers, and indeed they often contract for substantial network development projects with Western vendors (Nokia Siemens recently had a big mobile network contract in Sichuan, notably) on their own right.

Anyway, Fang’s involvement is very interesting indeed. He is responsible for the state-of-the-art authoritarian solution to the Internet. This is not just, or even primarily, a question of blacklisting websites or turning off the Internet. The Great Firewall’s detailed design, as the Cambridge Computer Lab found out a while ago, is specifically intended to be a semi-permeable membrane. Rather like Hadrian’s Wall, it is more about the gates through it than the wall itself, and the defences point in both directions.

When a computer within it tries to initiate a TCP connection to one outside that is classified as dodgy, the Firewall sends an RST message back to kill the connection. This permits much higher performance than the DNS-based blacklisting typical of, say, the UAE.

It also means that it’s possible to ignore the RST and look through the firewall by using your own firewall utility (specifically, set something like iptables to drop any RSTs for connections in states other than ESTABLISHED before a suitable time has elapsed). However, it would be a fair guess that any traffic doing this is logged and analysed more deeply.

Further, there is a substantial human infrastructure linking the media/PR/propaganda system, the police system, and the Ministry of the Information Industry. This uses tools such as moderation on big Web forums, direct recruitment, harassment, or persuasion of important influencers, the development of alternative opposition voices, and the use of regime loyalist trolls (the famous wumaodang).

The firewall, like Hadrian’s Wall or the original Great Wall, also has an economic function. This acts as a protectionist subsidy to Chinese Internet start-ups and a tariff barrier to companies outside it. Hence the appearance of some really big companies that basically provide clones of Twitter et al. Because the clones are inside the firewall, they are amenable to management and moderation.

And none of this detracts from the genuine intention of the people at 31 Jin-rong Street, the China Telecom HQ, to wire up the whole place. Iran’s surprisingly important role providing broadband to Afghanistan and diversionary links to the Gulf reminds us that providing connectivity can be a powerful policy tool and one that you can use at the same time as informational repression.

So, Fang’s achievement is basically a package of technical and human security measures that let whoever is in charge of them command the context Web users experience.

Last autumn, several of the Chinese web startups were subjected to the combined honour and menace of a visit from top securocrats. Tencent, the owner of QQ and the biggest of the lot, got Zhou Yongkang in person. In hindsight, this will have been around the time the CDIC landed in Chongqing.

So, where am I going with this? Clearly, there was serious disquiet that somebody was usurping the right to control the wires. Even more disquieting, the surveillance establishment in Fang’s person seemed to be cooperating with him. And the systems he set up worked just as well for someone increasingly seen as a dangerous rebel as they did for the central government. (In fact, the people who like to complain about Huawei equipment in the West have it the wrong way round. It’s not some sort of secret backdoor they should be worrying about: it’s the official stuff.)

I do wonder, depending on what happens to Fang (he’s still vanished, but his Weibo feed has started updating again), if we might not see a relaxation of the firewall, which the pundits will consider “reform”. In fact it will be no such thing, rather a cranking up of internal chaos to facilitate a crackdown on opposition.

So, this post was picked up by SHWI survivor Randy McDonald‘s blog, who says that:

great efforts are being made to keep new Chinese soldiers depoliticized

I don’t think this gets it. Great efforts are being made to keep them politicised, so long as the politics inculcated in them is what the Party wants it to be. It’s a very important point that the Chinese army doesn’t exist in the same context of civil-military relations that a Western army does, and not even in the same way an army in a Western authoritarian state does. Specifically, they reject the idea that the military is “above politics”. They do, very much, believe that the army must serve the civilian power – but the nature of that power is different.

The Communist Party is a party. It also at least believes itself to be Communist, even if it’s not obvious how it isn’t capitalist. Rather than maintaining a status quo, the point of a Communist Party is to change things, to wage the revolution and re-shape society. In the context of Chinese history, even if the nation seems indestructible, the state has been fragile, has been contested, its borders have moved, its sovereignty has been variable in quality. At the moment, there are two of them, and there have been many more in the past.

In that sense, the People’s Liberation Army (the name is significant – it’s not called the Chinese Army) is one of the instruments with which the Party intervenes in Chinese society to create the kind of state it wants. The link between the propaganda/media-management plan, the army recruitment cycle, and the National People’s Congress process, should be seen in this light. Conscription played a very similar role in French and German history, so this shouldn’t be surprising. Rather than permanent revolution, permanent statebuilding is going on – given the uncertainty of the future, and the strangeness of a Communist Party with Maoist intellectual heritage in charge of a capitalist superpower, it’s probably much more useful to think in terms of process rather than of an end-state.

It’s also true that armies in unevenly-developed societies tend to try to take over the state they are told they are building. As a result, it’s very important to the CCP that this process remains integrated into the Party’s ideas, culture, and organisation. An army in China that wasn’t political in the CCP sense would be very political indeed in the Western, and usually pejorative, sense.

Something interesting (h/t Jamie) about the Chinese military. The strand I found worthwhile is this:

As a result, for the past decade, a major theme pounded into the troops by the General Political Department is the persistent threat from outside forces (non-Party elements) to separate the military from politics, depoliticize the military and “nationalize” the military (PLA Daily, March 19).

It is unclear who, if anybody within the PLA, proposes to separate, depoliticize or nationalize the military, but these warnings often reach high peak around the National People’s Congress, shortly after over half a million new recruits have entered the PLA and PAP. These young soldiers have just finished basic training and are entering their units. They are likely targets of this political education campaign as are other sectors of the society where such “deviant” thought may exist. A political campaign based on a non-existent (or minimally existing) straw man would not be unique to China or the CCP.

Well, no. But the thing that interests me here is that there is a link between the propaganda/media plan, the big political get-together in the NPC, and the annual conscription cycle. It’s as if they were constructing the state anew every year, in a massive theatrical exercise. A real-time exercise in state formation. And it’s very interesting that the propaganda construct that is exercised is explicitly directed against nationalism.

Via Jamie Kenny, a must-read translation of a Chinese investigative report into the case of Wu Ying, a Chinese businesswoman who is in deep trouble with the law. What’s interesting here is that the report provides a deep view into some of the most important interfaces in the political economy of China – between the official and shadow banking sectors, between both and the Party, and between the Party and organised crime. It’s been suggested by quite a few people, notably Ken Livingstone’s economic advisor John Ross, that Chinese macro-economic policy is basically all about investment – whereas other countries might target inflation, the money supply, nominal or real GDP, an exchange-rate peg, or full employment with a range of fiscal or monetary tools, Chinese policy makers have a primary policy target of maintaining sufficient employment growth to keep up with the growth of the urban workforce, and a primary policy tool of controlling the rate of capital investment. This is achieved through a combination of fiscal policy through the government budget, both formal regulation and informal influence over the banking sector, and monetary policy, specifically the management of the RMB exchange rate and the terms on which central bank intervention is sterilised or not.

An investment-centric view of the economy could be characterised as both palaeo-Keynesian – investment, driven by animal spirits and radical uncertainty, is the swing item in the national accounting identity and therefore the driver of the business cycle, and should be managed by government in order to maintain a stable growth path – and also Marxist, in that it puts the accumulation of capital and its allocation between sectors centre-stage and suggests that it’s too important to be left to capitalists.

An alternative view, which we might pin on Patrick Chovanec, is that investment is the driver of the Chinese economy but that nobody’s in anything that could be described as control. In this view, Chinese economic policy is more orthodox, leaning against the world recession in 2009 with a major stimulus plan and a monetary expansion, but its impact is very noisy. Much of the stimulus money went into an unsustainable property bubble, which is now deflating messily.

In a sense, these arguments are not all that different. The major differences are the degree of agency the central government is perceived to have, and the underlying call on the future of the economy. John Ross would argue that the surge in investment is creating the capital goods needed for future growth and removing inflationary constraints. Some Americans wonder at the system’s capacity to pour money into a massive windpower infrastructure. On the other hand, the San Francisco Fed reckons that a very large proportion of Chinese goods exported to the US consists of imports to China, notably from the US – it’s been estimated that out of the production cost of an iPhone, more of the value-added represents US than Chinese production. Isn’t this strong evidence that there has been huge overinvestment in a very particular kind of low-margin export processing, plus property?

Now, back to Wu Ying’s cell. This story is all about how the system tries to control investment, how Chinese entrepreneurs and officials try to subvert this control, what happens when it breaks down, and how it is then restored. It’s fairly typical of economies with strong official controls on bank balance sheets that a big market in direct inter-company lending develops (it happened in post-war Britain). If you can’t get a loan from the bank, perhaps you could arrange something with a business that happens to be awash with cash. Obviously, this is a lot easier if there is some sort of intermediary who can make the deal. And in China there are specific, geographically linked networks of entrepreneurs who have become specialised in this unofficial shadow-banking sector. Technically it is entirely illegal, so it’s up to the intermediary to enforce the terms of the contract in their own sweet way. Which of course brings in another actor, organised crime or privatised protection.

This being China, though, it’s more complicated than that. Wu Ying’s creditor, Lin Weiping, was a former Cultural Bureau official turned moneylender or rather “funding coordinator”, who acted as a sort of broker between savers and borrowers. Well, it started off like that but the business prospered and pretty soon people were depositing spare cash with him overnight. This is an important moment – he wasn’t just introducing the two parties to a private arrangement any more, but rather, he was now operating a bank. The demand for credit outside the official system, and for high-yielding (2-5% monthly interest) deposits, was enormous. Fascinatingly, it turned out that the official banks were also keen to find sources of wholesale funding that let them get around the People’s Bank of China’s monetary policy – they started borrowing from him on overnight terms. This was implemented by sending a straw-man to open an account and deposit the cash. Lin, having turned himself into a bank, now went a step further and became a central bank. You might wonder how long it would have taken him to start issuing his own currency.

But Wu Xing would bring him down. He very rarely extended credit outside his home province, but made an exception for two of her projects, a tourist resort and another unofficial banking operation (which he may have thought of as being a branch of his own). It turned out, though, that she actually had an entirely different project in mind, in real estate. She justified this as necessary to influence important officials. In fact, the story was about to become a classic case of an entrepreneur who over-does the leverage and eventually runs out of credit, with the twist that one lot of creditors had her kidnapped by thugs in an effort to collect payment. However, Wu had become too big to fail, and eventually there was something like a race between Lin’s shadow-banking empire and the very official Agricultural Bank of China to put together a lifeboat package, which Lin eventually won. A syndicate of unofficial lenders bought out the loan portfolio at 70% of its face value.

It seems that this was intolerable to the authorities, as Wu and Lin and many others were then arrested. Lin got six years and is now back on the out and apparently dedicated to studying Chinese culture, specifically the bits relating to keeping his mouth shut. Wu is still in the court system, facing charges of running an illegal bank.

Chinese regulators quoted seem to be more interested in the sources of capital going into the shadow-banking system, on the grounds that quite a lot of it is deeply illegal in nature, and also that concentrated rather than diversified sources of funding tend to cause systemic risks. In so far as it’s the marginal transaction that matters, if this was to work it would represent an effort to make sure that it’s the official financial sector that represents the marginal lender and that state control of investment continues.

But that’s going to be very difficult in an environment where the central bank might be you.

Yadda yadda China cyberwar. I make the point that the Chinese infosec environment is characterised by chaos, there isn’t a well-defined centre of activity probably enjoying offical tolerance or more like the old Russian Business Network*, and that the great firewall is about censorship and also a sort of trade-barrier protecting the locals from competition. It’s an interesting point why the Chinese Internet got so awful. Structure is a big part of it; rapid economic growth, lots of software piracy, and therefore a hell of a lot of old Windows machines that don’t get patches. But I do wonder, as with all sorts of other Chinese issues, to what extent internal chaos with selectively porous borders is a strategy.

Meanwhile, Four Lions is still a documentary.

*You might say we’ve just not found it yet. But the distinction is that the Russians wanted you to know it was out there.

China’s neo-con blogging fever-swamp, via (of course) Jamie K.

For instance, Gao Yi, a well-known music critic, tweeted: “Compared with a war, US$7 billion is much more worthwhile. Right now, we lack the off-shore staging capacity for a mid-intensity war.

A well-known music critic? Now that’s special. You don’t get detailed comment on the Royal Fleet Auxiliary’s seabasing capability from Martin Kettle when he’s in one of his SUCK ON MY CULTURE, PROLE moods, or indeed when he’s editorialising, do you? Does Brian Sewell take a view on whether the much delayed Maritime Afloat Replenishment Ship project should go down the Dutch/Canadian JSS route, perhaps building on licence from Schelde in the UK, or stick with specialised tanker and dry-replenishment hulls?

It’s a pity that this doesn’t mean their politics is any more pacific.

Swinging off a discussion at Jamie Kenny’s of climate deniers, I wonder what Jamie thinks about Steve Levine’s thesis here that China’s emerging culture of mass protest, the famous Mass-Group Incidents or MGIs, may have major and positive consequences for Chinese energy policy and therefore for the world.

It’s surely time we started calling the MGIs a movement; they are big, they are angry, they are common and increasingly so. Also, they seem to be getting more simultaneous as well as more frequent. The range of issues involved is enormous, from pay to police violence via public corruption and land appropriation. And they’re effective – the Chinese Communist Party, although it has more than enough brute force to crush them, often seems to semi-tolerate mass protests by trimming policy or sacking discredited officials. I’ve suggested before that the top level of the Party may actually see them as a useful force in disciplining the industrial bosses and territorial proconsuls who rule below it. The emperor may be far and the mountains may be high, but that’s the last thing you want when an enraged mob is trying to burn down the Public Security Bureau offices.

Beyond that, it’s conventional to say that the Party wants stability above all and that the organising principle of Chinese politics is Hobbesian fear of chaos. JK would probably point out that they’re damn right – if you had China’s history, you’d be obsessed by chaos because there’s been so much of it and it was so fucking chaotic. Anyway, Jamie is the blogosphere’s MGI expert and therefore I’d like his opinion.

Levine’s argument is that forecasts of China’s economic and energy future tend to arrive at an enormous and prolonged boom in coal-fired generation. They do this by projecting current rates of growth into the future. This scares the shit out of everyone with any sense, as it’s this huge, epochal belch of CO2 (and a lot of other stuff besides) that will eventually fuck us all up. Of course, if the CAGRs for coal consumption were wrong quite a few assumptions would need to be reviewed.

Levine argues that it’s the other stuff you get with coal, especially the low grade brown coal China uses a lot of, that will intervene. Basically, he reckons, air pollution, power-plant development, and mining will become a major and rising source of serious MGIs and will result in the Party restraining the coal industry before the mob does it for them. L

Levine points out that Chinese interests were quite restrained during last year’s rush of coal-related mergers and acquisitions – which is interesting when you think that if the Party wanted them to, they could bid almost without limit thanks to SAFE’s enormous foreign exchange reserves.

Further, and I seem to remember James Hansen making this point, there are real constraints on how much coal the Chinese economy can get through, in that moving that much coal from mines and ports to power stations will fairly soon use up most of the State Railways’ freight capacity. As most of this coal is going to drive the machine tools in all those export processing factories…well, either the bulk haul trainload of coal moves or the intermodal linertrain of containers of exports moves. Are you feeling lucky, punk? Building a completely new railway is of course the sort of thing that gets people in an MGI mood.

From a technocratic perspective, as Joe Romm explains here, restrictions on all the other stuff coal-fired power stations shit into the atmosphere are basically as good as a ban on them.

The question is therefore whether “green MGIs” are a serious possibility. It’s not actually necessary that the MGIs be specifically about what Greenpeace would call a green issue, of course. Rioting over pay or safety down the mines, over ethnic resentment in the coalfields, or over land appropriation for new power stations or railway lines would do as well. But it’s worth noting that environmental protests happened in the 1980s in Eastern Europe and the Soviet Union and acted as a sort of gateway drug to dissidence more broadly. Not that people who are willing to burn down the police headquarters and run the mayor out of town when they feel their interests are insufficiently recognised need one.

Relatedly, and also via LeVine, meet the Unitec Model 5 pneumatic hacksaw, guaranteed by the manufacturer to slice through a 24″ pipeline in one blow and only 16lbs dead weight to tote away from the scene of the crime. And it’s nothing but good American workmanship, too. Mesh wireless is so pre-Iraq by comparison, don’t you think?

This is incredibly great, and will instantly catapult you into the top 3% of the information distribution on top-level Chinese politics. One for the RSS queue, even if his views on economics are very much what you might expect.

Here’s an interesting story about a successful response to the seizure of a ship, MV Full City, by pirates in the Indian Ocean. Indian, Chinese, and Turkish (NATO) ships responded, and the pirates abandoned the prize after an Indian Navy aircraft (slightly ironically, a Tupolev Bear) overflew the ship. But the really interesting thing isn’t so much that there was good international cooperation, or even that there were pirates 450 miles off the Indian coast, and certainly isn’t that Indian naval aviation was flying a Tu-142 (they have been for decades).

In fact, it’s that the Chinese Maritime Rescue Coordination Centre was in charge of the whole thing. The China MRCC is based in Beijing (not very maritime, but it is essentially a control room full of computers). The British one is at RAF Kinloss (so presumably will be moving pretty soon) and has coordinated operations everywhere in the world. This is the first time I’ve heard about an oceanic rescue being coordinated from the Chinese one, though. It’s a data point.

Meanwhile, they’re loading up on PhDs.





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