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Sunday, 14 May 2023

Chinese modernization leads to Age of Great Majority: Martin Jacques

Martin Jacques: China has achieved a great deal in the past years

We are at a historic moment. Until very recently, modernity was virtually synonymous with the West. Indeed, the West believed - and still does - that there was only one form of modernity and that was Western modernity. There was just one path: modernization was a process of westernization. This story has a long history. Modernization starts with Britain's Industrial Revolution in the first half of the 19th century. It provided the wherewithal for Britain's vast colonial empire, which came to embrace a quarter of the world's population, in the second half of the 19th century. By 1900, modernization had spread to the US and much of Europe. Apart from Japan, it was an exclusively Western phenomenon. Western-style modernization divided the world into two: the rich world, that was the West; and the great majority, most of whom were colonized. The turning-point came in the second half of the 20th century. The Chinese Revolution in 1949 and decolonization created the possibility for modernization to spread to the great majority of the world's population.

China was to prove the decisive factor in this new possibility. Its demographic size, its sense of independence and identity, its rich historical inheritance, and a remarkable political leadership enabled it to achieve a Chinese path to modernization. It was not the first East Asian country to do so, but it was by far the most important. And its success has greatly enhanced the ability of other developing countries to undertake the process of modernization. We now find ourselves at a great historical juncture. Hitherto modernization was the preserve of a small minority of privileged countries in the world, with the great majority of the world excluded. Now modernization is no longer for a tiny sliver of humanity but is increasingly accessible to the great majority.

We stand on the eve of a very different kind of world. China has been the author and architect of this possibility. It has been the exemplar of what it is possible for the developing world to achieve - huge reduction in poverty, extraordinary economic growth, the transformation of the lives of the people, an economy to match that of America - who would have thought in 1950 that the economy of a former semi-colony, virtually stagnant for the best part of two centuries, could have reached such a point in, historically speaking, the blink of an eye?

When we think of modernization, we think, probably more than anything else, of technology. When we recall Britain's Industrial Revolution, we remember the steam engine and railways. China's remarkable technological advances - WeChat, high-speed rail, 5G, space exploration, quantum computing, AI and its electric cars that are about to take the world by storm - are a source of great pride not only for China but the whole developing world, a demonstration of what can be achieved. And, of course, they are the compelling evidence that China now stands on the verge of becoming the world's technological leader.

But modernization is about much more than economics and technology. Let us return to what Western modernization meant for the world. It paved the way for colonialism, it divided the world into two, one part very small and rich, the other very large and poor. Chinese modernization promises something very different. While the West colonized large tracts of the world, China, in contrast, offers them a win-win relationship and the Belt and Road Initiative. Or take global governance. The Western-made world is a minoritarian world, a global order dominated by a small oligarchy of rich countries in the G7 representing little more than 12 percent of the world's population. For the first time in modern history, we can now see the possibility of a majoritarian form of global governance based first and foremost on the peoples of the developing countries, including, of course, China, which together account for over 85 percent of the world's population. Such a prospect would have been unimaginable in 1950, let alone 1900. While the Age of the West was the Age of the Small Minority, the Age of China will be the Age of the Great Majority. The whole world will be enfranchised.

But it will mean much more than that. There will be a new kind of respect for countries and cultures. Countries will be encouraged to pursue their own path based on their own distinctive history. Western modernization required them to follow a Western path and pursue a Western-style modernity. One of the tragedies of colonialism (and neo-colonialism, indeed) was that it sought to undermine, eliminate, and destroy the indigenous traditions, customs, and practices of those who were colonized. In the process, much of the history and continuity of these societies was lost. The present-day Western hostility to the idea of civilization is because the very term is testament to, and an acknowledgement of, independence and difference, which the West sought to excise in the name of modernization and Westernization. On the contrary, civilizations and civilizational difference need to be recognized, honored, and respected in the manner articulated in China's Global Civilization Initiative. China as a civilization-state has a deep understanding of the value of civilizational difference.

It seems highly likely that the era of Chinese modernization will coincide with a dramatic new phase of technological innovation which will transform the world in ways far greater than anything we have ever seen in the past across a range of fields from artificial intelligence to medical science. While the potential dangers and pitfalls are many, the future holds huge hope for humanity.

The author is a visiting professor at the Institute of Modern International Relations at Tsinghua University and a senior fellow at the China Institute, Fudan University. Follow him on Twitter @martjacques. opinion@globaltimes.com.cn

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Record temperatures and heatstroke cases engulf South-East Asia nations

SINGAPORE, May 14 (Bloomberg): South-East Asia continues to grapple with blistering heat amid reports of record temperatures and cases of heatstroke that further add to signs of extreme weather changes.

Singapore posted its highest temperature in 40 years at 37C (98.6F) on Saturday and the warm and dry conditions will continue, the National Environment Agency said in a Facebook post. The temperature also surpassed the previous record for May of 36.7C, recorded last year, the agency said.

In Malaysia, as many as 14 heatstroke cases were reported by the Health Ministry as of Friday, and the government expects the number of victims to increase given the hot weather, which will likely run through August, Deputy Health Minister Lukanisman Awang Sauni told reporters Saturday according to state media Bernama.

"The situation is still under control and can be accommodated in health facilities,” Lukanisman said. "Ministry facilities and hospitals are prepared to receive heatstroke victims and heat cramp victims.”

The country recently reported the death of a child from heatstroke, which prompted the Health Ministry to issue a public advisory.

Dangerous Heat

With scientists warning 2023 will likely be another year marked by dangerously high temperatures, signs of strain are emerging across Asia as the heat wave that started in April continues to blast through the region, following a pattern of increasing extreme weather caused by the accumulation of greenhouse gases in the atmosphere.

Vietnam reported its highest ever temperature of 44.2C early this month and the Philippines cut classroom hours after the heat index reached the "danger” zone.

Expectations of shrinking palm oil supplies due to the scorching heat keep investors on edge as nearly all of the world’s oil palm is grown in Southeast Asia.

Thailand’s Joint Standing Committee on Commerce, Industry and Banking also warned that the threat of an El Nino-induced drought later this year could drive up food prices.

With climate change and a looming shift in patterns toward El Nino conditions, heat waves and large storms could become more frequent or intense.

Bangladesh and Myanmar are evacuating hundreds of thousands of people as Cyclone Mocha is set to make landfall Sunday, potentially causing widespread destruction to one of the most vulnerable areas in the region. - Bloomberg

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Friday, 12 May 2023

Surveillance empire: how US threatens global internet security through decades of cyber surveillance, attacks

How does U.S. #CIA conduct #cyberattacks on other countries? -

Editor's Note:

A decade has passed since the PRISM scandal was exposed by Edward Snowden and enraged the world. Under the guise of so-called "national interests," the US government and its related intelligence agencies utilize their technological and first-mover advantages to conduct cyber surveillance and attacks around the world.

Documents leaked from the Pentagon earlier this year offered further proof that the US has extended its hand to almost every corner of the globe. What evil deeds the US has orchestrated and probably continues to do in the cyber world? In this series, the Global Times will closely look into how this veritable "network surveillance empire" gradually damages global cyber security through its intelligence network, which has in turn severely hurt its own reputation and credibility.

Recently leaked Pentagon documents have once again exposed to the world the ugly face of US espionage campaigns orchestrated against other countries. While maintaining the close surveillance of both its "enemies" and allies, the US has extended its evil hand to almost every corner of the globe.

For years, the US has conducted large-scale surveillance and launched cyberattacks targeting overseas governments, companies, and individuals with its technological advantages and vast intelligence network, a severe violation of International Law and the basic norms governing international relations. Worse still, the US paints itself as the victim while perpetrating these villainous acts, by defaming other countries including China with groundless accusations.

Last month, China's Cybersecurity Industry Alliance (CCIA) released a report titled "Review of Cyberattacks from US Intelligence Agencies - Based on Global Cybersecurity Communities' Analyses."

The report details the malicious behavior of the US in conducting long-term cyberattacks and surveillance worldwide, such as attacks against key infrastructure in other countries, indiscriminate cyber theft and monitoring, and implantation of backdoor pollution standards and supply chain sources.

The report lays out evidence that reveals the true nature of the US' role as the world's biggest secret information stealer and "hacker empire," Qin An, deputy director of the expert committee of counter-terrorism and cyber security governance, China Society of Police Law, told the Global Times on Wednesday.

The US' behaviors have greatly damaged order in cyberspace, and destroyed the already fragile trust between countries, commented Tang Lan, director of Center for Cyberspace Security and Governance Studies at China Institutes of Contemporary International Relations.

"Its evil deeds have added much uncertainty to the international situation," Tang told the Global Times.

A spotty history

In September 2022, China's National Computer Virus Emergency Response Centre revealed the US' long-term cyberattack against the Northwestern Polytechnical University (NPU) in Northwest China's Shaanxi Province. The cyberattack was aimed at "infiltrating and controlling core equipment in China's infrastructure and stealing sensitive personal data tied to Chinese people," a source close to the matter told the Global Times at the time.

That was just the tip of the iceberg. For over a decade, the US has been monitoring 45 countries and regions through the advanced and covert backdoor "Telescreen" (Bvp47) created by Equation, an elite hacking group affiliated with the US government. It sparked global outrage when it was exposed by Chinese cybersecurity experts for the first time in early 2022.

The incident reminded the public of the more widely-known PRISM, as researchers found multiple programs and attack manuals that, when reviewed, matched the unique identifiers used in the operating manuals of cyberattack platforms under US' National Security Agency (NSA). The latter was exposed by former Central Intelligence Agency (CIA) analyst Edward Snowden in 2013, as a small part of the then international PRSIM scandal.

In June, 2013, The Guardian became one of the first media outlets to report on the US' secret program code-named "PRISM" that Snowden exposed. The exposé revealed that nine US internet giants, including Microsoft, Yahoo, Google, and Apple, cooperated with the US government in secretly monitoring phone records, emails, videos, and photos, and NSA even hacked into the networks of several countries like Germany and South Korea.

"The subsequent series of leaked documents jointly exposed that the monitoring and network intrusion operations had been implemented by the US government for a long time," noted the CCIA report.

Later, in June 2015, Snowden exposed documents revealing how intelligence agencies in the US and the UK had worked together to subvert anti-virus and other security software in order to track users and infiltrate networks. The infuriating project, named CAMBERDADA, mainly used the traffic acquisition ability of the US in the invasion of global operators to monitor communications between users and anti-virus companies, such as Skyscraper in Russia, to obtain new virus samples and other forms of information, the CCIA report said.

According to an article published on The Intercept news website that month, a leaked 2010 presentation on "Project CAMBERDADA" listed 23 additional anti-virus companies from all over the world under "More Targets!" China's Antiy was on the list.

The revelation once again sparked wide outrage, as observers warned that the project and its so-called "target list" would further divide the already frayed global security industry.

It's hard to exactly track how the US started its dishonorable cyber campaigns. The "Stuxnet" computer worm, which US intelligence agencies used in attacking Iran's nuclear facilities in 2010, was regarded by the cybersecurity industry as "the world's first cyber weapon."

The development of the Stuxnet virus allegedly began in 2005. In 2010, Stuxnet reportedly "destroyed almost one-fifth of Iran's nuclear centrifuges, infected over 200,000 computers, and caused 1,000 machines to physically degrade," according to data Kaspersky shared on its website.

That year, the US "opened the Pandora's box of cyberwar," commented the CCIA report.

Former French prime minister Francois Fillon reveals at a hearing on May 2, 2023 that the US National Security Agency had spied on his conversations with former French president Nicolas Sarkozy from 2007 to 2012. Photo: IC

Vast surveillance network

According to a report by a US media outlet in April, US intelligence agencies spend as much as $90 billion in a year. Behind the vast surveillance network in the US are intelligence agencies such as the NSA and CIA, which have repeatedly cited national security as a pretext for violating the sovereignty of other countries and infringing on the privacy of their citizens.

The Office of Tailored Access Operation (TAO) under the NSA that was involved in the NPU event has been conducting attacks against China by penetrating Chinese computer and telecommunications systems for decades.

TAO was established in 1998 and is currently a tactical implementation unit within the US government that specializes in large-scale network hacking and espionage against other countries. It is comprised of over 2,000 military and civilian personnel, according to a joint technical analysis and tracking investigation by the National Computer Virus Emergency Response Center and 360 Security Technology in September 2022.

TAO's mission is simple - "it collects intelligence information on foreign targets by surreptitiously hacking into their computers and telecommunications systems, cracking passwords, compromising the computer security systems protecting the targeted computer, stealing the data stored on computer hard drives, and then copying all the messages and data traffic passing within the targeted email and text-messaging systems," according to Foreign Policy, quoting former NSA official Matthew M. Aid.

The US used 41 kinds of dedicated cyberattack weapons to launch thousands of attacks in a bid to steal core technology data from NPU. Additionally, the US has long engaged in indiscriminate voice monitoring of Chinese mobile phone users, illegally accessing text messages, and conducting wireless location tracking.

Apart from cyberattacks targeting China, the conflict between the US and Russia in cybersecurity is also well-known. According to reports, General Paul Nakasone, the head of the NSA, has confirmed that US military hackers conducted cyberattacks against Russia in support of Ukraine.

For some time, in the name of capacity building, the US has been trying to cajole relevant countries, especially China's neighbors, into cybersecurity cooperation with it. It even pursues the so-called "Forward Deployment" of cyber military forces. "Will such cooperation open the back door for malicious US cyber activities? Will such moves turn out to be chess pieces as the US instigates geostrategic rivalry? Relevant countries will judge for themselves," Wang Wenbin, spokesperson of the Chinese Foreign Ministry, told the Global Times on April 20, 2022 in response to the National Computer Virus Emergency Response Center alerting countries on the cyberattacks conducted by the US government.

Internet banditry

Scandals like the PRISM have shown that, apart from its intelligence agencies, many internet enterprises are also forced or tricked by the US government into the expansion of its cyber surveillance and attack network.

To serve its intelligence gathering and development of cyber weapons, the US reportedly installed backdoors in various hardware and software products, which is no more than an outright banditry, condemned cybersecurty experts reached by the Global Times.

For instance, media revealed in February 2020 that the CIA and Germany's Federal Intelligence Service (BND) were able to read encrypted communications from Crypto AG, a Swiss company that produced encryption systems for many governments, by jointly adding backdoors to Crypto AG's encryption products.

According to a CIA report mentioned in a Washington Post article in February 11, 2020, the operation was dubbed the "intelligence coup of the century."

Qin said that by using its management power of the Internet, US intelligence agencies have designed special backdoors and inserted them into products which were previously submitted to the CIA for a routine check before being approved for exportation, providing direct access to other countries' networks. It therefore becomes risky for enterprises in other countries to use products developed by American entities.

"With the decline of American hegemony in real space, the country will take bolder moves in cyberspace," Qin predicted.

In a bid to further malign other countries including China, in May 22, 2020, the US Department of Commerce added 33 Chinese companies to its entity list, most of which are companies focusing on AI technology and are providers of network communication services, such as Qihoo 360 and Cloudminds, alleging that these companies could threaten US national security and foreign policy.

However, experts close to Chinese network communication and cyberspace security reached by the Global Times said that these Chinese companies do not spy on other countries, nor do they have the ability to insert backdoors into the cyberspace of the US.

The US's behavior of including some Chinese technology companies on its entity list is a typical case of technological bullying, Qin said.

All these facts have repeatedly revealed the true face of the US as a bullying power and exposed who is responsible for insecurity and instability in cyberspace, Tang pointed out.

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Gold reserves on uptrend

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Why Gold Still Shines Through Inflation, Banking Crises and More | WSJ

Storage of bullion seen as key in inflation fight. Gold likely to perform better than the US$

PETALING JAYA: Asian central banks, including Bank Negara, were seen upping their gold reserves in the past decade given the versatile use of the precious metal as a hedge against inflation and, a protective measure against purchasing power risks.

Malaysia has emerged as having the fifth-highest increase in gold reserves between 2013 and 2022 among Asian countries, said Singapore-based brokerage firm City Index, which released the data yesterday.

The brokerage noted that Bank Negara has overseen a 6.84% increase in the country’s gold reserves, from 36.4 tonnes to 38.88 tonnes over the period under review.

This is 90% more than Indonesia, whose gold reserves only increased by 0.64% between 2013 to 2022

However, the republic continues to hold 50% more gold than Malaysia with 78.57 tonnes.

The increase in Malaysia’s gold reserves also paled in comparison to third-placed Singapore’s 20.7% climb in bullion stock at 153.7 tonnes, which itself is dwarfed by China’s near-doubling of its storage of gold to 2,010 tonnes, taking the top spot among Asian nations.

“Gold reserves in China averaged 1,694.78 tonnes from 2013 until 2021, reaching an all-time high of 2,010.51 tonnes in the fourth quarter of 2022, accounting for 3.6% of its total foreign reserves,” City Index pointed out.

Notably, the brokerage firm said China’s increase in gold imports is largely considered to be the result of an effort to reduce its reliance on the US dollar and to diversify holdings of the People’s Bank of China.

According to City Index head of market research Matt Weller, the surge in gold investment demand signals a growing concern among investors regarding the inflationary pressures in the market.

“As central banks continue to use gold as an inflation hedge, it’s not surprising to see individual investors following suit in the form of coins or jewellery, especially in countries such as India and China, where gold has long been considered a traditional store of value,” he said.

Meanwhile, the brokerage firm said Thailand has had the second-largest increase in gold reserves in the last decade, increasing by 60.2% from 152.4 tonnes to 244.1 tonnes.

Quoting the World Gold Council, City Index said gold remains a popular and effective inflation hedge amid global economic uncertainty in Thailand, exemplified by a 40% increase in demand for the metal year-on-year in 2022, fuelled by the rebound in tourism.

The debate, though, continues on whether gold could live up to its reputation as a buffer against inflation compared to other means employed to stem the inflationary tide, namely bonds, the greenback, and much more recently, cryptocurrencies such as bitcoin.

This is evidenced by the price of gold taking a beating from mid 2022, coinciding with the Federal Reserve’s 50-basis-point hike in May which was followed by four giant 75-basis-point surges, sending gold price from approximately US$1,800 (RM8,032) an ounce to just over US$1,600 (RM7,140) by November as the US dollar strengthened.

Meanwhile, Bernard Aw and Eve Barre, economists at Singapore-based Coface Services South Asia-Pacific Pte Ltd, pointed out that the relationship between the dollar and gold tends to be inverse, although this negative correlation has weakened since 2018.

“Although there is an easing trend, inflation rates are expected to be above historical trend at least through 2023, while global growth remains sub-par. Gold may therefore perform well relative to the dollar since the United States rate hike cycle appears to be nearing its peak.

“Moreover, geopolitical factors have also contributed to emerging market central banks stocking up on gold reserves, pushing up demand for gold, amid a very gradual shift away from the US dollar,” they told StarBiz.

Concurrently, chief executive of Centre for Market Education Dr Carmelo Ferlito also believes the decision to increase gold reserves among Asian countries may be seen as a signal of worry among these countries, and their consideration of the dollar as a less dominant currency in the future.

“Thus, despite the decrease in its price last year, gold is perceived as a more stable store of value,” he said.

Ferlito opined that the cessation of the gold standard has been the biggest source of inflation in history, as inflation in the last 50 years have exceeded any before it.

“In fact, currently measuring inflation through the Consumer Price Index is meaningless with the fiat system. A more effective way would probably be to measure price indices against wage indices,” he said.

With Asian central banks embarking to fortify their bullion stockpile in an apparent effort to mitigate inflation, Ferlito said returning to the gold standard would be ideal but practically impossible at this point in time, as the quantity of money in circulation is exceedingly high.

“Free banking and competition among currencies may be a better option for the current financial climate,” he added.

Coface’s Aw and Barre too did not advocate a return to the gold standard, believing the system will deeply restrain the ability of governments to support economic activity when needed since money supply would be limited to the amount of gold detained.

They said: “Considering the way central banks acted during the last two economic crises by expanding their policy instruments, as well as the massive fiscal support provided by governments during the lockdowns, it is difficult to imagine a return to the gold standard, which would imply the end of this important interventionism.”

Providing an interesting balance to the gold against inflation idea, Forbes in an article published earlier this month reported that gold has at times in history been found wanting as an inflation hedge.

“From 1980 to 1984, annual (US) inflation averaged 6.5%, but gold prices fell 10% on average each year. Returns not only fell short of the inflation rate, but they also underperformed real estate, commodities and the S&P 500. Annual inflation averaged about 4.6% from 1988 to 1991, but gold prices fell approximately 7.6% a year on average,” the report revealed.

On the other hand, while concluding that gold has been an inconsistent inflation hedge, Forbes recommended holding some amount of the precious metal as a diversification strategy.

“Gold has historically had a low or even negative correlation to both stocks and bonds, suggesting it offers value as a tool of diversification,” it said.

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Will US debt ceiling deadlock push capital to yuan market?

Global de-dollarisation fast underway; US Printed More Money in One Month Than in Two Centuries, US$ is fast becoming Banana Currency

Thursday, 11 May 2023

Will US debt ceiling deadlock push capital to yuan market?

Illustration: Carlos Latuff

Expert: The role of the U.S. dollar declines

The US Government is BROKE | The 2023 Debt Ceiling

Every few years, there is a bipartisan political farce over the debt ceiling negotiations in the US. It may look like a routine political drama, but quantitative change can lead to a qualitative difference, especially at a time when a global de-dollarization trend is gaining momentum, that is to say, the US trick of raising the debt limit to mitigate its default risk may now be very close to pushing the US treasuries to a dangerous tipping point.

The de-dollarization caused by the US debt crisis and the abuse of the dollar hegemony created unprecedented opportunities for the yuan internationalization, with more and more countries expressing willingness to settle trade in the yuan, but China must proceed with caution.

With the US on track to default without a debt ceiling increase, US President Joe Biden's talks with House of Representatives Speaker Kevin McCarthy on Tuesday failed to make any meaningful progress, with political divides remaining between the two parties, Reuters reported. Biden even told the media that he has been looking at the 14th Amendment as a way to unilaterally work around the debt ceiling, though it will not be a viable short-term solution.

The political stalemate over raising the debt limit has already led to US Treasury Secretary Janet Yellen warning of an "economic catastrophe" if the US fails to meet all government payment obligations, which could happen "potentially as early as June 1."

So far, most people still believe that the two parties will eventually reach a deal to avoid an ugly sovereign default before the deadline, just like what happened every time in the past debt ceiling struggles.

But unlike in the past, a new question has been raised in the market, that is, are the US treasuries still highly liquid? The US dollar's credit is the cornerstone of US treasuries. Because the dollar is an international settlement currency and US treasuries have stable yields and are highly liquid, countries are willing to hold US debt, making the US the world's largest debtor.

Yet, things may be different now with countries accelerating their de-dollarization efforts. The past year saw growing number of countries and regions such as India, Brazil, and the EU trying to establish new settlement systems for their trade.

Under the influence of the de-dollarization wave, some countries have reduced their holdings of US treasuries. Japan, the world's largest holder of US debts, slashed its holdings by $224.5 billion and China by $173.2 billion in 2022.

Moreover, the US' unlimited expansion of the size of its debt has also upset the market with the risks in the US treasuries. According to Yellen's testimony in a congressional hearing in March, gross federal debt would swell to $51 trillion after a decade. The scale and speed of the debt expansion means the US is getting increasingly closer to a real explosion of a debt crisis.

Also, the root cause of the US banking crisis this year is the holding of a large number of US treasuries assets, which shrank significantly in value as interest rates continued to climb. That could be a warning to various governments and precipitated them to speed up the pace of de-dollarization. Since the collapse of the Silicon Valley Bank, international investors stepped up sell-off of treasuries, and prices of all kinds of safe-haven assets like gold have surged.

Of course, de-dollarization is likely to be a long-term process, but once it started, the US treasuries could lose its aura quickly, especially as the US government repeatedly raises debt ceiling or faces risk of default. In other words, as the world realizes that the US cannot and does not have the willingness to control or reduce the size of its debt, the credibility of the US debt as a safe-haven asset is collapsing rapidly.

It should be noted that amid the de-dollarization trend, the yuan internationalization has made a series of positive new developments and breakthroughs. The yuan's international status as a trading currency has been significantly improved recently.

To ensure future development of the yuan internationalization, China needs to ensure liquidity and maintain exchange rate stability. Thus, China's financial markets as well as the yuan's onshore and offshore markets need more preparation to adapt to the new needs.