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TikTok’s CEO Navigates the Limits of His Power

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TikTok recently tried to tamp down concerns from U.S. lawmakers that it poses a national security threat because it is owned by the Chinese internet company ByteDance. The viral video app insisted it had an arm’s-length relationship with ByteDance and that its own executive was in charge.

“TikTok is led by its own global C.E.O., Shou Zi Chew, a Singaporean based in Singapore,” TikTok wrote in a June letter to U.S. lawmakers.

But in fact, Mr. Chew’s decision-making power over TikTok is limited, according to 12 former TikTok and ByteDance employees and executives.

Zhang Yiming, ByteDance’s founder, as well as by a top ByteDance strategy executive and the head of TikTok’s research and development team, said the people, who declined to be identified for fear of reprisals. TikTok’s growth and strategy, which are led by ByteDance teams, report not to Mr. Chew but to ByteDance’s office in Beijing, they said.

increasingly questioned TikTok’s data practices, reigniting a debate over how the United States should treat business relationships with foreign companies.

On Wednesday, TikTok’s chief operating officer testified in Congress and downplayed the app’s China connections. On Thursday, President Biden signed an executive order to sharpen the federal government’s powers to block Chinese investment in tech in the United States and to limit its access to private data on citizens.

a March interview with the billionaire investor David Rubenstein, whose firm, the Carlyle Group, has a stake in the Chinese giant. Mr. Chew added that he had become familiar with TikTok as a “creator” and amassed “185,000 followers.” (He appeared to be referring to a corporate account that posted videos of him while he was an executive at Xiaomi, one of China’s largest phone manufacturers.)

Jinri Toutiao. The two built a rapport, and an investment vehicle associated with Mr. Milner led a $10 million financing in Mr. Zhang’s company that same year, three people with knowledge of the deal said.

The news aggregator eventually became ByteDance — now valued at around $360 billion, according to PitchBook — and owns TikTok; its Chinese sister app, Douyin; and various education and enterprise software ventures.

By 2015, Mr. Chew had joined Xiaomi as chief financial officer. He spearheaded the device maker’s 2018 initial public offering, led its international efforts and became an English-speaking face for the brand.

“Shou grew up with both American and Chinese language and culture surrounding him,” said Hugo Barra, a former Google executive who worked with Mr. Chew at Xiaomi. “He is objectively better positioned than anyone I’ve ever met in the China business world to be this incredible dual-edged executive in a Chinese company that wants to become a global powerhouse.”

In March 2021, Mr. Chew announced that he was joining ByteDance as chief financial officer, fueling speculation that the company would go public. (It remains privately held.)

appointed Mr. Chew as chief executive, with Mr. Zhang praising his “deep knowledge of the company and industry.” Late last year, Mr. Chew stepped down from his ByteDance role to focus on TikTok.

Kevin Mayer, a former Disney executive, left after the Trump administration’s effort to sunder the app from its Chinese parent. China was also cracking down on its domestic internet giants, with Mr. Zhang resigning from his official roles at ByteDance last year. Mr. Zhang remains involved in decision making, people with knowledge of ByteDance said.

Mr. Chew moved to establish himself as TikTok’s new head during visits to the app’s Los Angeles office in mid-2021. At a dinner with TikTok executives, he sought to build camaraderie by keeping a Culver City, Calif., restaurant open past closing time, three people with knowledge of the event said. He asked attendees if he should buy the establishment to keep it open longer, they said.

a TikTok NFT project involving the musical artists Lil Nas X and Bella Poarch. He reprimanded TikTok’s global head of marketing on a video call with Beijing-based leaders for ByteDance after some celebrities dropped out of the project, four people familiar with the meeting said. It showed that Mr. Chew answered to higher powers, they said.

Mr. Chew also ended a half-developed TikTok store off Melrose Avenue in Los Angeles, three people familiar with the initiative said. TikTok briefly explored obtaining the naming rights of the Los Angeles stadium formerly known as the Staples Center, they said.

He has also overseen layoffs of American managers, two people familiar with the decisions said, while building up teams related to trust and safety. In its U.S. marketing, the app has shifted its emphasis from a brand that starts trends and conversations toward its utility as a place where people can go to learn.

In May, Mr. Chew flew to Davos, Switzerland, for the World Economic Forum, speaking with European regulators and ministers from Saudi Arabia to discuss digital strategy.

June letter to U.S. lawmakers, he noted that ByteDance employees in China could gain access to the data of Americans when “subject to a series of robust cybersecurity controls.” But he said TikTok was in the process of separating and securing its U.S. user data under an initiative known as Project Texas, which has the app working with the American software giant Oracle.

“We know we’re among the most scrutinized platforms,” Mr. Chew wrote.

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How Do Japanese Show They Care? By Sending a Telegram.

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TOKYO — When he got married this summer, Hiroshi Kanno, who works at a security services firm in Tokyo, wanted to make a big statement that would impress his future in-laws.

So he asked for his company’s president to send a congratulatory telegram.

It arrived during the wedding party and was read aloud. “It really pumped up the atmosphere,” Mr. Kanno, 33, said. “I felt like a celebrity,” added his wife, Asuka, a 31-year-old office administrator. They posted photos of that message and another wedding telegram on Twitter, along with the his-and-her Hello Kitty dolls that were delivered with the notes.

The telegram, a form of communication associated more with the Roaring ’20s than the 2020s, has kept a foothold in Japan, where millions of the messages still crisscross the nation every year, carrying articulations of celebration, mourning and thanks.

ended its service in 2006. India, one of the last major national holdouts, shut down its state-run service in 2013 after 162 years.

The telegram services that remain have changed greatly since Samuel Morse’s invention of the telegraph put the Pony Express out of business.

Today, messages are mostly composed online and transmitted digitally before being printed out and hand delivered. In Japan, senders can choose from among a variety of fonts and elegant card stocks and select an accompanying gift from catalogs full of luxury goods and branded items — Disney and Hello Kitty are popular. Flowers or stuffed animals are common choices for weddings, incense sticks for funerals.

Payment schemes have also evolved: Instead of being charged by the character, as in the old days, customers are billed at a fixed rate for a fixed number of characters, and pay extra if they go over.

The telegram’s essence, however, has remained: a concise message printed on a small card and (relatively) swiftly delivered.

The telegram’s transformation into a vessel of etiquette was a decades-long process. Telegram use peaked in Japan in 1963, when the medium — then considered the gold standard for urgent communication — was used to send around 95 million messages, according to a government report assessing the recent state of the industry.

By the 1990s, telegram traffic had nearly halved. At the same time, the messages’ content had undergone an unexpected evolution: Nearly all of them conveyed congratulations or condolences.

In 2020, the most recent year for which data is available, more than four million telegrams were delivered in Japan. That makes it the third largest market for the medium behind Russia and Italy, according to statistics provided by International Telegram, a private firm that provides telegram services worldwide. (In the United States, fewer than a million telegrams are sent annually, the company said.)

The bulk of telegrams in Japan are sent by Nippon Telegraph and Telephone, known as NTT. The company, which started life as a state-owned entity, was given an effective monopoly on the telegram business when it was privatized in 1985. In exchange, the company had to guarantee that it would provide the service indefinitely.

Under NTT’s monopoly, the industry stagnated, and the company’s profits from it eventually vanished. But as government overhauls opened the business to competition in the past two decades, a number of small companies sprang up, introducing innovations like online ordering that have helped the industry survive.

For these firms, telegrams remain a moneymaking niche business.

Keisuke Yamamoto, the president of Roys International, started his company 15 years ago. At the time, he was working in licensing and had noticed a growing demand for telegrams that featured popular brands and characters like Peter Rabbit and Paddington Bear.

At the time, the market was 45 billion yen, he said, or about $325 million in today’s money, and he realized that “snagging even just 1 percent of that would make a successful business.”

He set out to differentiate his company, he said, by pairing the messages with gifts that would appeal to a younger generation. “It worked,” he said. “NTT has stolen our ideas over the years.”

The pandemic has hurt telegram traffic as people have avoided large events like weddings and funerals, but customers have become more likely to send telegrams with expensive presents, said Toshihiko Fujisaki, who heads the corporate planning department at Sagawa Humony, a company that offers telegram services.

The company has tried to bring young people onboard, giving university students the opportunity to experience ordering a telegram. It is also working on a smartphone app.

“Young people don’t know telegrams. They’re used to smartphones,” Mr. Fujisaki said. But compared with getting an email or a text message, “there’s a lot more emotion when you get a telegram.”

For those unfamiliar with the protocol, telegram companies offer online primers on sending messages for a variety of occasions. For weddings, guests should avoid using punctuation, because it could signify bringing something to an end. Senders are also advised to notify the recipient in advance to avoid any potentially unpleasant surprises.

Even as the broader market for telegrams has shrunk, they have remained popular among corporate clients and politicians, who see them as important tools for keeping up relationships.

Politicians send them not just to constituents but to each other, said Mr. Matsuda, the political consultant.

“They send them to each other when they can’t participate in a fund-raising event or when their colleagues get appointed to an important post,” he said.

Mr. Yamaguchi’s scandal, however, may have cooled that enthusiasm. During a recent talk show appearance, Toshinao Sasaki, a freelance journalist and political commentator, said the Unification Church controversy could finally end politicians’ love affair with the telegram.

“Times have changed,” he said, adding, “I think it’s the beginning of the end.”

For Asuka and Hiroshi Kanno, though, the telegram remains something to cherish. They proudly display their wedding telegrams in their living room, and Ms. Kanno said she planned to send one when her own future child gets married.

Still, the couple would never think to send a telegram under other circumstances, she said. When it comes to events like birthdays, “I’d probably go digital.”

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Apple Warns Of Security Flaw For iPhones, iPads, Macs

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By Associated Press

and Newsy Staff
August 19, 2022

Apple did not say in the reports how, where or by whom the vulnerabilities were discovered. In all cases, it cited an anonymous researcher.

Apple disclosed serious security vulnerabilities for iPhones, iPads and Macs that could allow attackers to take complete control of these devices.

Apple released two security reports about the issue on Wednesday, although they didn’t receive wide attention outside of tech publications.

Apple’s explanation of the vulnerability means a hacker could get “full admin access” to the device. That would allow intruders to impersonate the device’s owner and subsequently run any software in their name, said Rachel Tobac, CEO of SocialProof Security.

Security experts have advised users to update affected devices — the iPhone6S and later models; several models of the iPad, including the 5th generation and later, all iPad Pro models and the iPad Air 2; and Mac computers running MacOS Monterey. The flaw also affects some iPod models.

Apple did not say in the reports how, where or by whom the vulnerabilities were discovered. In all cases, it cited an anonymous researcher.

Commercial spyware companies such as Israel’s NSO Group are known for identifying and taking advantage of such flaws, exploiting them in malware that surreptitiously infects targets’ smartphones, siphons their contents and surveils the targets in real time.

NSO Group has been blacklisted by the U.S. Commerce Department. Its spyware is known to have been used in Europe, the Middle East, Africa and Latin America against journalists, dissidents and human rights activists.

Security researcher Will Strafach said he had seen no technical analysis of the vulnerabilities that Apple has just patched. The company has previously acknowledged similarly serious flaws and, in what Strafach estimated to be perhaps a dozen occasions, has noted that it was aware of reports that such security holes had been exploited.

Additional reporting by The Associated Press.

Source: newsy.com

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U.S. To Hold Trade Talks With Taiwan

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The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi visited.

The U.S. government will hold trade talks with Taiwan in a sign of support for the island democracy that China claims as its own territory, prompting Beijing to warn Thursday it will take action if necessary to “safeguard its sovereignty.”

The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi this month became the highest-ranking American official to visit the island in 25 years.

Chinese President Xi Jinping’s government criticized the planned talks as a violation of its stance that Taiwan has no right to foreign relations. It warned Washington not to encourage the island to try to make its de facto independence permanent, a step Beijing says would lead to war.

“China firmly opposes this,” Ministry of Commerce spokesperson Shu Jueting said. She called on Washington to “fully respect China’s core interests.”

Also Thursday, Taiwan’s military held a drill with missiles and cannons simulating a response to a Chinese missile attack.

Taiwan and China split in 1949 after a civil war and have no official relations but are bound by billions of dollars of trade and investment. The island never has been part of the People’s Republic of China, but the ruling Communist Party says it is obliged to unite with the mainland, by force if necessary.

President Joe Biden’s coordinator for the Indo-Pacific region, Kurt Campbell, said last week that trade talks would “deepen our ties with Taiwan” but stressed policy wasn’t changing. The United States has no diplomatic relations with Taiwan, its ninth-largest trading partner, but maintains extensive informal ties.

The U.S. Trade Representative’s announcement of the talks made no mention of tension with Beijing but said “formal negotiations” would develop trade and regulatory ties, a step that would entail closer official interaction.

Being allowed to export more to the United States might help Taiwan blunt China’s efforts to use its status as the island’s biggest trading partner as political leverage. The mainland blocked imports of Taiwanese citrus and other food in retaliation for Pelosi’s Aug. 2 visit.

Taiwan’s Foreign Ministry expressed “high welcome” for the trade talks, which it said will lead to a “new page” in relations with the United States.

“As the situation across the Taiwan Strait has recently escalated, the U.S. government will continue to take concrete actions to maintain security and stability across the Taiwan Strait,” it said in a statement.

U.S.-Chinese relations are at their lowest level in decades amid disputes over trade, security, technology, and Beijing’s treatment of Muslim minorities and Hong Kong.

The U.S. Trade Representative said negotiations would be conducted under the auspices of Washington’s unofficial embassy, the American Institute in Taiwan.

“China always opposes any form of official exchanges between any country and the Taiwan region of China,” said Shu, the Chinese spokesperson. “China will take all necessary measures to resolutely safeguard its sovereignty.”

Washington says it takes no position on the status of China and Taiwan but wants their dispute settled peacefully. The U.S. government is obligated by federal law to see that the island has the means to defend itself.

“We will continue to take calm and resolute steps to uphold peace and stability in the face of Beijing’s ongoing efforts to undermine it, and to support Taiwan,” Campbell said during a conference call last Friday.

China takes more than twice as much of Taiwan’s exports as the United States, its No. 2 foreign market. Taiwan’s government says its companies have invested almost $200 billion in the mainland. Beijing says a 2020 census found some 158,000 Taiwanese entrepreneurs, professionals and others live on the mainland.

China’s ban on imports of citrus, fish and hundreds of other Taiwanese food products hurt rural areas seen as supporters of President Tsai Ing-wen, but those goods account for less than 0.5% of Taiwan’s exports to the mainland.

Beijing did nothing that might affect the flow of processor chips from Taiwan that are needed by Chinese factories that assemble the world’s smartphones and consumer electronics. The island is the world’s biggest chip supplier.

A second group of U.S. lawmakers led by Sen. Ed Markey, a Democrat from Massachusetts, arrived on Taiwan on Sunday and met with Tsai. Beijing announced a second round of military drills after their arrival.

Taiwan, with 23.6 million people, has launched its own military drills in response.

On Thursday, drills at Hualien Air Base on the east coast simulated a response to a Chinese missile attack. Military personnel practiced with Taiwanese-made Sky Bow 3 anti-aircraft missiles and 35mm anti-aircraft cannon but didn’t fire them.

“We didn’t panic” when China launched military drills, said air force Maj. Chen Teh-huan.

“Our usual training is to be on call 24 hours a day to prepare for missile launches,” Chen said. “We were ready.”

The U.S.-Taiwanese talks also will cover agriculture, labor, the environment, digital technology, the status of state-owned enterprises and “non-market policies,” the U.S. Trade Representative said.

Washington and Beijing are locked in a 3-year-old tariff war over many of the same issues.

They include China’s support for government companies that dominate many of its industries and complaints that Beijing steals foreign technology and limits access to an array of fields in violation of its market-opening commitments.

Then-President Donald Trump raised tariffs on Chinese goods in 2019 in response to complaints that its technology development tactics violate its free-trade commitments and threaten U.S. industrial leadership. President Biden has left most of those tariff hikes in place.

Additional reporting by The Associated Press.

Source: newsy.com

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Kenya Elects New President, but Disputes Erupt

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NAIROBI, Kenya — On a continent where military coups and rubber stamp elections have proliferated in recent years, Kenya stands out.

Despite its flaws and endemic corruption, the East African nation and economic powerhouse has steadily grown into a symbol of what is possible, its democracy underpinned by a strong Constitution and its hard-fought elections an example to other African nations seeking to carve a path away from autocracy.

been appointed by Mr. Odinga’s most prominent ally in the race, President Uhuru Kenyatta, who is barred by term limits from running again.

a barefoot childhood and an early career selling chickens on the side of a busy highway.

engaged in what the court said was “witness interference and political meddling.”

Mr. Ruto was running not just against Mr. Odinga but, in effect, against his own boss, Mr. Kenyatta, whom he accused of betrayal for backing Mr. Odinga.

planned to address the nation on Tuesday.

Declan Walsh and Matthew Mpoke Bigg reported from Nairobi, and Abdi Latif Dahir from Eldoret.

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China’s Options for Punishing Taiwan Economically are Limited

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In retaliation for Speaker Nancy Pelosi’s visit to Taiwan last week, China conducted large-scale military exercises around the self-governing island democracy and suspended some trade between the sides.

The exercises led to a few shipping disruptions, but they did not affect traffic at Taiwanese or Chinese ports, analysts say. And the trade bans were notable mainly for what they did not target: Taiwan’s increasingly powerful semiconductor industry, a crucial supplier to Chinese manufacturers.

The bans that Beijing did impose — on exports of its natural sand to Taiwan, and on imports of all Taiwanese citrus fruits and two types of fish — were hardly an existential threat to the island off its southern coast that it claims as Chinese territory.

Taiwanese pineapples, wax apples and grouper fish, among other products.

a self-governing island democracy of 23 million people, as its territory and has long vowed to take it back, by force if necessary. The island, to which Chiang Kai-shek’s Chinese forces retreated after the Communist Revolution of 1949, has never been part of the People’s Republic of China.

“The political message is greater than the economic hit,” said Chiao Chun, a former trade negotiator for the Taiwanese government.

Even though about 90 percent of Taiwan’s imported gravel and sand comes from China, most of that is manufactured. China accounted for only about 11 percent of Taiwan’s natural sand imports in the first half of this year, according to the Bureau of Mines.

The two types of Taiwanese fish exports that China restricted last week — chilled white striped hairtail and frozen horse mackerel — are collectively worth about $22 million, less than half the value of the Taiwanese grouper trade that was banned earlier this year. They are also less dependent on the Chinese market.

As for Taiwan’s half-a-billion-dollar citrus industry, its shipments to China account for only 1.1 percent of the island’s total agricultural exports, according to Taiwan’s Agriculture Council. A popular theory is that Beijing singled out citrus farmers because most orchards are in southern Taiwan, a stronghold for the governing political party, the Democratic Progressive Party, a longtime target of Beijing’s anger.

Future bans may become more targeted to punish industries in counties that are D.P.P. strongholds, said Thomas J. Shattuck, an expert on Taiwan at the University of Pennsylvania’s Perry World House. There may also be less retaliation against counties run by the Kuomintang opposition party “in an attempt to put a finger on the scale for Taiwan’s local, and even national, elections,” he added.

increasingly indispensable node in the global supply chains for smartphones, cars and other keystones of modern life. One producer, the Taiwan Semiconductor Manufacturing Company, makes roughly 90 percent of the world’s most advanced semiconductors, and sells them to both China and the West.

simulated a blockade of Taiwan.

Even though some of the exercises took place in the Taiwan Strait, a key artery for international shipping, they did not disrupt access to ports in Taiwan or southern China, said Tan Hua Joo, an analyst at Linerlytica, a company in Singapore that tracks data on the container shipping industry. He added that port congestion would build only if the strait was completely blocked, port access was restricted or port operations were hampered by a labor or equipment shortage.

“None of these are happening at the moment,” he said.

Vessels that chose to avoid the Taiwan Strait last week because of the Chinese military’s “chest beating” activities would have faced a 12- to 18-hour delay, an inconvenience that would generally be considered manageable, said Niels Rasmussen, the chief shipping analyst at Bimco, an international shipping association.

If Beijing were to escalate tensions in the future, it would indicate that it was willing to put at risk China’s own economy as well as its trade and relations with Japan, South Korea, Europe and the United States, Mr. Rasmussen said by phone from his office near Copenhagen.

“That’s just difficult to accept that they would take that decision,” he added. “But then again, I didn’t expect Russia to invade Ukraine.”

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South Korea To Pardon Samsung’s Lee, Other Corporate Giants

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By Associated Press
August 12, 2022

South Korea’s justice minister said the pardons of business tycoons were aimed at “overcoming the economic crisis through encouraging business.”

Samsung’s de facto leader secured a pardon Friday of his conviction for bribing a former president in a corruption scandal that toppled a previous South Korean government, an act of leniency that underscored the tech company’s huge influence in the nation.

Lee Jae-yong’s pardon is partially symbolic since he was released on parole a year ago after serving 18 months of a prison term that would have ended in July, and critics say the billionaire has remained in control of Samsung even while behind bars. Still, the pardon will allow the heir to the electronics juggernaut to fully resume his management duties and could make it easier for the company to pursue investments and mergers.

The Justice Ministry said President Yoon Suk Yeol, who as a prosecutor investigated the corruption scandal involving Lee, will issue the pardon Monday, a national holiday when some 1,700 people are set to receive clemency, including other top business leaders.

Lee, 54, was convicted in 2017 of bribing former President Park Geun-hye and her close confidante to win government support for a merger between two Samsung affiliates that tightened Lee’s control over the corporate empire. Park and the confidante were also convicted in the scandal, which enraged South Koreans, who staged massive protests for months demanding an end to the shady ties between business and politics. The demonstrations eventually led to Park’s ouster from office.

While some civic groups criticized the decision, recent opinion polls have indicated South Koreans — years removed from the protests in 2016 and 2017 — largely favored granting Lee a pardon. That reflects the continuing hold Samsung has in a country where it makes not just smartphones and TVs but also issues credit cards, builds luxury apartment buildings and runs the country’s most sought-after hospital.

Business leaders and politicians had also called for Lee’s pardon, which they said would allow Samsung, one of the world’s largest makers of computer memory chips and smartphones, to be bolder and quicker in business decisions by fully reinstating his rights to run the business empire.

Justice Minister Han Dong-hoon said the pardons of the business tycoons were aimed at “overcoming the economic crisis through encouraging business activity” at a time when South Koreans are grappling with rising prices, high personal debt and a faltering job market.

Lee’s detractors say he already fully resumed his management duties once out on parole — even though South Korea’s law bans people convicted of major financial crimes from returning to work for five years following the end of their sentences. Former Justice Minister Park Beom-kye defended Lee’s involvement in Samsung’s management, insisting that his activities weren’t in violation of the ban because the billionaire wasn’t receiving wages from Samsung.

In a statement released through Samsung, Lee said he was grateful for “receiving an opportunity to start anew.”

“I want to express my apologies for causing concerns for many people because of my shortcomings. I will work even harder to fulfill my responsibilities and duties as a businessperson,” Lee said.

Lee still faces a separate trial on charges of stock price manipulation and auditing violations related to the 2015 merger.

Among others set to be pardoned is Lotte Group Chairman Shin Dong-bin, who received a suspended prison term in 2018 on similar charges of bribing Park, whom then-President Moon Jae-in pardoned in December. Chang Sae-joo, chairman of Dongkuk Steel Mill, and former STX Group Chairman Kang Duk-soo will also receive clemency.

A coalition of civic groups, including People’s Solidarity for Participatory Democracy, issued a statement criticizing the move to pardon the business leaders, accusing Yoon of cozying up to “chaebol,” referring to the family-owned conglomerates that dominate the country’s economy.

A notable exclusion from Yoon’s pardons was former President Lee Myung-bak, who in June was granted a temporary release from a 17-year prison term after prosecutors acknowledged his health problems.

Han, the justice minister, said that the government did not consider the pardons of any convicted politicians or government employees this time, saying that the focus was on the economy.

Additional reporting by The Associated Press.

Source: newsy.com

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Pres. Biden Signs $280B CHIPS Act In Bid To Boost U.S. Over China

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By Associated Press
August 9, 2022

The legislation sets aside $52 billion specifically to bolster the U.S. computer chip sector.

President Joe Biden on Tuesday signed a $280 billion bipartisan bill to boost domestic high-tech manufacturing, part of his administration’s push to boost U.S. competitiveness over China.

Flanked by scores of lawmakers, union officials, local politicians and business leaders, President Biden feted the legislation, a core part of his economic agenda that will incentivize investments in the American semiconductor industry in an effort to ease U.S. reliance on overseas supply chains for critical, cutting-edge goods.

“The future of the chip industry is going to be made in America,” President Biden said in a sweltering Rose Garden ceremony Tuesday, referring to the diminutive devices that power everything from smartphones to computers to automobiles. The legislation sets aside $52 billion specifically to bolster the U.S. computer chip sector.

The bill has been more than a year in the making, but finally cleared both chambers of Congress late last month with significant bipartisan margins. The Senate passed it 64-33, with 17 GOP senators supporting it, while the House quickly followed suit with a 243-187 vote that included 24 House Republicans in favor, even though party leaders began urging their ranks to vote against it after Democrats advanced a separate sweeping bill focused on climate and health care.

The White House sought Tuesday to begin selling the immediate impacts of the semiconductor measure, noting that Micron, a leading U.S. chip manufacturer, will announce a $40 billion plan to boost domestic production of memory chips, while Qualcomm and GlobalFoundries will unveil a $4.2 billion expansion of an upstate New York chip plant.

The administration has also repeatedly portrayed this legislation as a critical component in countering the influence of a rising China and ensure the U.S. can maintain a competitive edge against Beijing, particularly in semiconductor manufacturing. Administration officials have held multiple briefings for lawmakers to sketch out the national security implications of this bill, and President Biden noted during his remarks Tuesday that the Chinese government had lobbied U.S. businesses against the legislation.

“The CHIPS and Science Act is going to inspire a whole new generation of Americans to answer that question: What next?” President Biden said Tuesday during the signing ceremony. “Decades from now, people will look back at this week and all we passed and all we moved on, that we met the moment at this inflection point in history.”

Tuesday’s ceremony is one of several public events President Biden has scheduled since recovering from COVID-19, including a visit to flood-ravaged Kentucky on Monday and another signing event on Wednesday for legislation aiding veterans who have suffered from toxic burn pits. But President Biden appeared to be dealing with some residual symptoms, coughing heavily several times during his remarks and apologizing at one point for doing so.

Additional reporting by The Associated Press.

Related StoryCongress OKs Bill To Aid U.S. Computer Chip Firms, Counter ChinaCongress OKs Bill To Aid U.S. Computer Chip Firms, Counter China

Source: newsy.com

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China Blocks Some Taiwan Imports But Avoids Chip Disruptions

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China blocked imports of hundreds of food items from Taiwan but has not disrupted the flow of processor chips and other industrial components.

China blocked imports of citrus, fish and other foods from Taiwan in retaliation for a visit by a top American lawmaker, Nancy Pelosi, but has avoided disrupting one of the world’s most important technology and manufacturing relationships.

The two sides, which split in 1949 after a civil war, have no official relations but multibillion-dollar business ties, especially in the flow of Taiwanese-made processor chips needed by Chinese factories that assemble the world’s smartphones and other electronics.

They built that business while Beijing threatened for decades to enforce the ruling Communist Party’s claim to the island by attacking.

Two-way trade soared 26% last year to $328.3 billion. Taiwan, which produces half the world’s processor chips and has technology the mainland can’t match, said sales to Chinese factories rose 24.4% to $104.3 billion.

“The global economy cannot function without chips that are made in either Taiwan or China,” Carl B. Weinberg of High-Frequency Economics said in a report.

On Wednesday, Beijing blocked imports of citrus and frozen hairtail and mackerel from Taiwan after Pelosi, speaker of the House of Representatives, arrived on the island. China has not disrupted the flow of chips and other industrial components, a step that would send shock waves through the shaky global economy.

Related StoryPelosi Says U.S. Will Not Abandon Taiwan As China ProtestsPelosi Says U.S. Will Not Abandon Taiwan As China Protests

Also this week, China blocked imports of hundreds of other food items from Taiwan including cookies and seafood, though the timing was unclear. The customs website showed their import status was switched to “suspended.”

Fruit, fish and other foods are a small part of Taiwan’s exports to China, but the ban hurts areas that are seen as supporters of President Tsai Ing-wen.

Beijing has used import bans on bananas, wine, coal and other goods as leverage in disputes with Australia, the Philippines and other governments.

Beijing also announced four days of military exercises with artillery fire in waters around Taiwan. That might delay or disrupt shipping to and from the island, one of the biggest global traders.

The potential disruption adds to concerns over weakening global economic growth, but Asian stock markets rose Wednesday after there was no immediate sign of Chinese military action.

The Communist Party says Pelosi’s visit might embolden Taiwan to make its decades-old de facto independence permanent. Beijing says that would lead to war.

The administration of U.S. President Joe Biden has tried to mollify Beijing, saying there is no change in Washington’s “one China policy.” That says the United States takes no position on the status of the two sides but wants their dispute settled peacefully.

Washington has no formal relations with Taiwan but maintains unofficial ties and is obligated by federal law to see the island has the means to defend itself.

Meeting leaders in Taiwan, Pelosi said she and members of Congress traveling with her were showing they will not abandon their commitment to the island democracy.

“America’s determination to preserve democracy, here in Taiwan and around the world, remains ironclad,” Pelosi said in a short speech during a meeting with the president, Tsai. She departed later in the day for South Korea.

“Facing deliberately heightened military threats, Taiwan will not back down,” Tsai said.

Taiwanese companies have invested nearly $200 billion in the mainland over the past three decades, according to the island’s government. Entrepreneurs, engineers and others have migrated to the mainland to work, some recruited by Chinese chipmakers and other companies that want to catch up with Taiwan.

A 2020 census found 158,000 Taiwanese living on the mainland, according to the police ministry.

Taiwan plays an outsized role in the chip industry for an island of 24.5 million people, accounting for more than half the global supply.

Its producers including Taiwan Semiconductor Manufacturing Corp. make the most advanced processors for smartphones, tablet computers, medical devices and other products.

Beijing has invested billions of dollars in developing its own industry, which supplies low-end chips for autos and appliances but cannot support the latest smartphones, tablet computers, medical devices and other products.

Chips are China’s biggest import at more than $400 billion a year, ahead of crude oil.

That concentration has fueled concern in the United States and Europe about relying too heavily on supplies from East Asia. The U.S. government is trying to expand America’s production capacity.

Overall, China is Taiwan’s biggest trading partner, taking more than twice as much of its exports as the United States, the island’s No. 2 foreign market.

Beijing has tried to use access to its markets to undermine Tsai and other Taiwanese leaders it accuses of pursuing independence.

The Communist Party also has used military action in the past to try to hurt Taiwanese leaders by disrupting the island’s economy.

The mainland tried to drive voters away from then-President Lee Teng-hui ahead of the island’s first direct presidential elections in 1996 by firing missiles into shipping lanes.

That forced shippers to cancel voyages and raised insurance costs but backfired by allowing Lee to brag about standing up to Beijing in front of cheering supporters. Lee won the four-way election with 54% of the vote.

Additional reporting by The Associated Press.

Source: newsy.com

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EXCLUSIVE EU found evidence employee phones compromised with spyware -letter

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July 27 (Reuters) – The European Union found evidence that smartphones used by some of its staff were compromised by an Israeli company’s spy software, the bloc’s top justice official said in a letter seen by Reuters.

In a July 25 letter sent to European lawmaker Sophie in ‘t Veld, EU Justice Commissioner Didier Reynders said iPhone maker Apple had told him in 2021 that his iPhone had possibly been hacked using Pegasus, a tool developed and sold to government clients by Israeli surveillance firm NSO Group.

The warning from Apple triggered the inspection of Reynders’ personal and professional devices as well as other phones used by European Commission employees, the letter said.

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Though the investigation did not find conclusive proof that Reynders’ or EU staff phones were hacked, investigators discovered “indicators of compromise” – a term used by security researchers to describe that evidence exists showing a hack occurred.

Reynders’ letter did not provide further detail and he said “it is impossible to attribute these indicators to a specific perpetrator with full certainty.” It added that the investigation was still active.

Messages left with Reynders, the European Commission, and Reynders’ spokesman David Marechal were not immediately returned.

An NSO spokeswoman said the firm would willingly cooperate with an EU investigation.

“Our assistance is even more crucial, as there is no concrete proof so far that a breach occurred,” the spokeswoman said in a statement to Reuters. “Any illegal use by a customer targeting activists, journalists, etc., is considered a serious misuse.”

NSO Group is being sued by Apple Inc (AAPL.O) for violating its user terms and services agreement.

LAWMAKERS’ QUESTIONS

Reuters first reported in April that the European Union was investigating whether phones used by Reynders and other senior European officials had been hacked using software designed in Israel. Reynders and the European Commission declined to comment on the report at the time.

Reynders’ acknowledgement in the letter of hacking activity was made in response to inquiries from European lawmakers, who earlier this year formed a committee to investigate the use of surveillance software in Europe.

Last week the committee announced that its investigation found 14 EU member states had purchased NSO technology in the past.

Reynders’ letter – which was shared with Reuters by in ‘t Veld, the committee’s rapporteur – said officials in Hungary, Poland and Spain had been or were in the process of being questioned about their use of Pegasus.

In ‘t Veld said it was imperative to find out who targeted the EU Commission, suggesting it would be especially scandalous if it were found that an EU member state was responsible.

The European Commission also raised the issue with Israeli authorities, asking them to take steps to “prevent the misuse of their products in the EU,” the letter said.

A spokesperson for the Israeli Ministry of Defense did not immediately respond to a request for comment.

Apple’s alerts, sent late last year, told targeted users that a hacking tool, dubbed ForcedEntry, may have been used against their devices to download spyware. Apple said in a lawsuit that ForcedEntry had been the work of NSO Group. Reuters also previously reported that another, smaller Israeli firm named QuaDream had developed a nearly identical tool.

In November, the administration of U.S. President Joe Biden gave NSO Group a designation that makes it harder for U.S. companies to do business with them, after determining that its phone-hacking technology had been used by foreign governments to “maliciously target” political dissidents around the world.

NSO, which has kept its client list confidential, has said that it sells its products only to “vetted and legitimate” government clients.

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Reporting by Raphael Satter and Christopher Bing in Washington; editing by Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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