1117 Professor-Spies transfer Tech to China; China's Non-Traditional Espionage - statement by FBI

Professor-Spies transfer Tech to China; China's Non-Traditional
Espionage - statement by FBI

Newsletter published on February 6, 2020

(1) Israel Shamir objects to my Wuhan Biolab posts; and a Reply
(2) Nanoscientist Charles Lieber lied about his involvement in China’s
Thousand Talents Plan
(3) Academics are stunned by the arrest of such a high-profile scientist
(4) Lieber appeared in Boston federal court wearing orange jail garb and
chains around his ankles. Released on $1M Bond
(5) Also charged: Yanqing Ye (PLA, works at Harvard); Zaosong Zheng
(smuggled 21 vials of biological samples)
(6) Why did a Chinese university hire Charles Lieber to do battery research?
(7) Thousand Talents Program encourages economic espionage and theft of
intellectual property
(8) 'Hysteria' or 'non-traditional espionage'?
(9) China’s Non-Traditional Espionage - statement by FBI
(10) Did China's Tencent Accidentally Leak The True Terrifying
Coronavirus Statistics

(1) Israel Shamir objects to my Wuhan Biolab posts; and a Reply

From: israel shamir <israel.shamir@gmail.com>
Subject: Re: China bribed Harvard Chemistry Head in espionage case; 2 of his
  staff tried to smuggle biological materials to Wuhan

Peter, after your support for HK and Uygur, now this message. Is that
just a coincidence?

Shamir

REPLY (Peter M):

In recent newsletters, evidence has been presented that 2019-nCoV Virus
was made in a lab. James Lyons-Weiler suggested that it could be an
experimental vaccine; but what kind of vaccine has such a death toll?
Francis Boyle, author of the BioWeapons Act, says that it is a BioWeapon.

That means, either
- that it was developed in Wuhan BioLab, and leaked accidentally.
- or that it was developed in a USA BioLab, and planted deliberately.

There are no other options.

Several news items below deal with China's espionage within Western
universities and companies, for Technology Transfer.

This is the way China became wealthy and strong quickly: it stole, and
sometimes bought, technology from American, European and Japanese
companies which had been enticed to move factories to China, or build
infrastructure in China.

Those companies thought they were in China to make money; thus they were
lured. But the real reason, from the Chinese government's point of view,
was to gain Technology Transfer.

China's Thousand Talents Program, pitched at universities in the West,
is likewise a means of Technology Transfer.

China was able to conduct such economic espionage for the last 30 years,
because the rest of the world had not woken up to it, distracted by its
Mideast wars for Israel.

But now that the world is awake to China's intentions, a clampdown is
being applied. China is rushing to get as much technology as it can, by
any means.

"Made in China 2025" sets a deadline.

I submit that this rush explains the leak of 2019-nCoV from Wuhan BioLab.

China touts itself as a Confucian society. This is strange, because Mao
mounted an anti-Confucian drive as part of the Cultural Revolution. It
destroyed much of Chiona's heritage.

After Deng took over, Mao was criticised, but with the rise of Xi, Mao
is spoken of positively and past failings are hushed up.

Today's Confucianism is in the service of Marxism and the totalitarian
state.

Students are encouraged to spy on their teachers:
https://www.nytimes.com/2019/11/01/world/asia/china-student-informers.html

Confucian Classrooms in the West are are paid for by the Chinese
government. They indoctrinate Western children with propaganda:
https://www.sbs.com.au/news/what-are-confucius-classrooms-and-why-are-they-being-reviewed-in-nsw?

Is that real Confucianism? Would China allow other countries to
similarly influence children in China?

I have published many articles by Michael Hudson, esposing the rule of
Wall St and the IMF. So I'm not defending that rule by the 1%. And I
accept that there's a good side to the rise of China, because otherwise
the American Empire would engulf the world.

Hudson writes, "The United States is not telling China or Russia or
third world countries or Europe how to get rich in the way that it did,
by protective tariffs, by creating its own money and by making other
countries dependent on it. The United States does not want you to be
independent and self-reliant."
  https://michael-hudson.com/2020/01/note-to-china/

But the same is true of China's infrastructure-building in other
countries. It does not emulate China's path from the 1990s, of obtaining
Technology Transfer from other countries, of avoiding debt and
dependence on other countries, but instead creates debt and dependence
in those countries.

China is the new Soviet Union - a hi-tech Soviet Union. Perhaps that's
why you support it.

We seem to be in a re-run of the 1930s. The Cambridge Five of those
days, the Alger Hiss and Harry Hopkins and Dexter White, are the
Professor-Spies of today; with their apologists, of course.

(2) Nanoscientist Charles Lieber lied about his involvement in China’s
Thousand Talents Plan
https://www.wsj.com/articles/harvards-chemistry-chair-charged-on-alleged-undisclosed-ties-to-china-11580228768

Harvard Chemistry Chairman Charged on Alleged Undisclosed Ties to China

Charles Lieber is accused of lying to Defense Department, National
Institutes of Health about Chinese government funding

{photo} Charles Lieber attended an awards ceremony in Jerusalem in 2012.
PHOTO: MENAHEM KAHANA/AFP/GETTYIMAGES

By Aruna Viswanatha and Kate O’Keeffe

Updated Jan. 28, 2020 9:25 pm ET

The chairman of Harvard University’s chemistry department was arrested
on charges of lying about receiving millions of dollars in Chinese
funding, in an escalation of U.S. efforts to counter what officials said
is a plot by Beijing to mine U.S. universities to catapult China to the
forefront of scientific development.

A federal criminal complaint alleges that Charles Lieber, a pioneer in
nanotechnology, misled the Defense Department and the National
Institutes of Health about his participation in China’s Thousand Talents
Plan while the U.S. agencies were spending more than $15 million to fund
his research group in the U.S.

Through its government-backed Thousand Talents Plan and hundreds of
similar programs, China pays scientists around the world to moonlight at
Chinese institutions, often without disclosing the work to their primary
employers.

The case was one of three presented Tuesday by federal authorities in
Massachusetts, with each underscoring U.S. concerns that the Chinese
government is trying to obtain cutting-edge U.S. research by exploiting
U.S. universities and their professors and researchers. Prosecutors have
brought a series of cases charging Chinese Americans and Chinese
nationals working in the U.S., prompting concern in the scientific
community that authorities were racially profiling people. Mr. Lieber is
among the first non-Chinese scientists and highest-profile targets to date.

As part of the Thousand Talents program, Wuhan University of Technology
gave Mr. Lieber more than $1.5 million to set up a research lab in
China, according to the complaint.

The school also agreed to pay him a $50,000 monthly salary and offered
about $150,000 in annual living expenses for "significant periods" from
2012 to 2017, it said.

In exchange, Mr. Lieber was required to work for WUT at least nine
months a year by "declaring international cooperation projects,
cultivating young teachers and Ph.D. students, organizing international
conference[s], applying for patents and publishing articles in the name
of" the Chinese school, the complaint said.

While accepting foreign funding isn’t illegal, U.S. authorities require
such funds to be disclosed by researchers who apply for U.S.
taxpayer-supported funding; U.S. officials said the Chinese programs
create conflicts of interest and incentives to transfer intellectual
property. Under a contract cited in the complaint, Mr. Lieber was
obligated to "conduct national important (key) projects...that meet
China’s national strategic development requirements or stand at the
forefront of international science and technology research field."

Mr. Lieber, 60 years old, appeared in court Tuesday and was remanded to
federal custody pending a detention hearing set for Thursday.

In a separate indictment unsealed Tuesday, a researcher at Boston
University was charged with acting as a Chinese government agent and
failing to disclose that she was a lieutenant in the Chinese military
when she applied for her visa.

Prosecutors also discussed the indictment last week of a
Harvard-sponsored researcher accused of trying to smuggle biological
research back to China.

"Chemistry, nanotechnology, polymer studies, robotics, computer science,
biomedical research—this is not an accident or a coincidence," said
Andrew Lelling, the top federal prosecutor in Boston, referring to the
science at issue in the cases. "This is a small sample of China’s
ongoing campaign to siphon off American technology and know-how for
Chinese gain."

Mr. Lieber, who has been at Harvard since 1991, has been placed on
administrative leave, and neither he nor his lawyer could be reached to
comment.

His work helped develop "bio-nanoelectronic sensors capable of detecting
diseases down to the level of a single infectious virus particle,"
according to a citation from the Welch Foundation, which funds chemical
research and recognized his work last year.

On his Lieber Research Group’s website, Mr. Lieber says he is developing
a mesh to be injected through a syringe into parts of the brain to
better understand how the brain works and to treat disease and brain
injury. The long-term goal is to enhance "human performance via
brain-machine interface." [...]

U.S. officials have described what they view as a shift in Chinese
intelligence priorities, moving from gathering broad swaths of expertise
overseas to seeking specific pieces of technology that fill gaps in
research being conducted at Chinese universities and designated as
priorities by Beijing.

In the Boston University case outlined Tuesday, the researcher, Yanqing
Ye, allegedly responded to direction from colleagues in the People’s
Liberation Army in China between 2017 and 2019 and researched U.S.
military websites and two U.S. scientists with expertise in robotics and
computer science.

In one April 2019 email, an unnamed co-conspirator and PLA member sent
her a message that said: "See if [we can] find projects in risk analysis
and policy sponsored by the US military by searching risk + US military
directly," the indictment said.

In an April 2019 WeChat message, she sent another unnamed co-conspirator
a pdf file from a U.S. Navy website using the "mil" domain, the
complaint said. The co-conspirator replied: "Now a days, we can’t
connect to a link with mil top level domain from China...This is
probably American taking precautions against us," the person replied,
according to the complaint.

Ms. Ye, who is believed to be in China, couldn’t be reached for comment.
A Boston University spokesman said Ms. Ye left the university in April
2019 and that it would assist in the investigation.

In the third case prosecutors discussed Tuesday, Zaosong Zheng, a cancer
researcher whose visa was sponsored by Harvard, was indicted last week
on charges of smuggling stolen vials of biological research. Before he
was about to board a December flight to Beijing, customs agents at Logan
International Airport found 21 vials "wrapped in plastic and hidden in a
sock," the indictment said.

When agents asked Mr. Zheng if he had any research materials in his
luggage, he said no, prosecutors alleged. He later acknowledged the
vials and admitted he was planning to take them to China and publish the
research in his own name, the indictment said. He is scheduled to be
arraigned later this week. A lawyer for Mr. Zheng said: "We are looking
forward to a jury trial so our client can be found not guilty."

The recent cases underscore the unusual nature of China’s efforts,
officials said.

"While we are still confronted with traditional spies...I can tell you
China is also using what we call nontraditional collectors such as
professors, researchers, hackers and front companies," said Joseph
Bonavolonta, who runs the FBI’s Boston office.

The people charged Tuesday "are manifestations of the China threat," he
said.

Douglas Belkin contributed to this article.

(3) Academics are stunned by the arrest of such a high-profile scientist

https://www.nature.com/articles/d41586-020-00291-2

03 FEBRUARY 2020

Harvard chemistry chief’s arrest over China links shocks researchers

Nanoscientist Charles Lieber allegedly lied about his involvement in
China’s Thousand Talents Plan.

Nidhi Subbaraman

{photo} Prof Charles M. Lieber

Charles Lieber has been accused of failing to disclose funding he
received from the Chinese government.Credit: Kris Snibbe/Harvard Public
Affairs & Communications, CC BY-SA 4.0

Researchers have reacted with shock to the arrest of Charles Lieber, a
prominent Harvard University chemist and nanotechnology pioneer, who has
been charged with making false statements to the US government about
receiving research funding from China.

Lieber, who is known for engineering new nanomaterials and developing
their applications in medicine and biology, was arrested on 28 January.
Two days later, a federal judge approved his release on cash bail of
US$1 million.

The charges focus on Lieber’s alleged involvement in China’s Thousand
Talents Plan, a prestigious programme designed to recruit leading
academics to the country. Documents outlining the charges allege that
Lieber received hundreds of thousands of dollars from the Wuhan
University of Technology (WUT) in China and agreed to lead a lab there —
and that when US government agencies asked about his involvement with
the programme he stated that he was not a participant and denied any
formal affiliation with WUT. Lieber’s legal team did not respond to
Nature’s requests for comment.

The arrest comes as US authorities are increasingly scrutinizing
universities’ foreign links, amid fears that overseas governments could
be stealing intellectual property or influencing US research.

Shockwaves

Colleagues and former students of Lieber contacted by Nature are stunned
by the detainment of such a high-profile scientist. Lieber has been a
faculty member at Harvard University in Cambridge, Massachusetts, since
1991, and is currently chair of the university’s department of chemistry
and chemical biology. His work, which has included the development of
nanometre-diameter wires that can be used as sensors, has won him top
awards, among them the 2017 NIH Director’s Pioneer Award and the 2012
Wolf Prize in Chemistry. In 2008, he was tipped by Thomson Reuters as a
potential Nobel prizewinner.

"Charlie is the purest scientific scholar I have ever seen and
personally I have 100% trust and confidence in him. I think there must
be some misunderstanding during the handling of the case," says
Xiaocheng Jiang, a former student of Lieber’s who is now a biomedical
engineer at Tufts University in Medford, Massachusetts.

"I was shocked," says Joshua Sanes, a molecular biologist at Harvard who
has co-authored two papers on the use of electronic devices to measure
nerve activity in the mouse eye with Lieber. "I didn’t know anything
about it until I saw the report in The New York Times." The newspaper
reported the allegations on 28 January. [...]

Details of Lieber’s alleged offences appear in a charging document
submitted by the FBI in connection with his arrest. It says that for
periods of time between 2012 and 2017, Lieber agreed to be paid a salary
of $50,000 per month, as well as about $150,000 a year in personal and
living expenses, by WUT, and was given more than $1.5 million to set up
a research lab there. According to a contract cited in the document,
Lieber was to work at or for WUT for at least nine months a year. Lieber
also agreed to host visiting scientists for two-month stints at his US
lab, according to the FBI, an agreement that Harvard was not aware of.

At the same time, Lieber continued his tenure at Harvard University and
applied for funding from US agencies, receiving at least $15 million in
federal grants from the Department of Defense (DOD) and the NIH since
2008. NIH policies require that researchers applying for federal funds
disclose any funding they receive from other governments or universities
outside the United States. Lieber was asked about his participation in
the Thousand Talents Plan in April 2018 by DOD investigators, and by
Harvard in late 2018 in response to an enquiry from the NIH. In both
instances, the FBI says, he denied being part of it. [...]

doi: 10.1038/d41586-020-00291-2

(4) Lieber appeared in Boston federal court wearing orange jail garb and
chains around his ankles. Released on $1M Bond
https://www.nbcboston.com/news/local/harvard-professor-charged-with-hiding-china-ties-due-in-court/2069587/

Harvard Professor Charged With Hiding Ties to China Released on $1M Bond

Charles Lieber, formerly chair of the chemistry and chemical biology
department, allegedly agreed to conduct research, publish articles and
apply for patents on behalf of China's Wuhan University of Technology in
exchange for $50,000 per month and about $150,000 in living expenses

By Alanna Durkin Richer

Published January 30, 2020

  Updated on January 31, 2020 at 1:04 am NBCUniversal, Inc.

A Harvard University professor charged with lying about his role in a
Chinese talent recruitment program was released from custody Thursday
and ordered to post a $1 million cash bond.

Charles Lieber appeared in Boston's federal court wearing orange jail
garb and chains around his ankles two days after his arrest at his Ivy
League university office, where he was chair of the chemistry and
chemical biology department.

Lieber is accused of lying about his participation in China's Thousand
Talents Plan, which targets overseas scientists and researchers willing
to bring their expertise to China in exchange for things like research
funding and lab space.

Prosecutors had proposed setting bond at $1.5 million secured by
Lieber's suburban Boston home. But Magistrate Judge Marianne Bowler
instead ordered Lieber to post a $1 million cash bond by next Thursday.

Lieber did not comment as he left the courthouse with his wife amid a
throng of reporters after the hearing. His lawyers also declined to comment.

Lieber is required to give up his passport and disclose any foreign bank
accounts and is barred from talking to any potential victims or
witnesses in the case, among other restrictions. His wife will also hand
over her passport after prosecutors raised concerns that she could move
cash to another country.

Prosecutors say Lieber agreed to conduct research, publish articles and
apply for patents on behalf of China's Wuhan University of Technology in
exchange for $50,000 per month and about $150,000 in living expenses. He
also received $1.5 million to establish a research lab at the Chinese
university, authorities said. [...]

Federal prosecutors in Boston also announced charges this week against a
researcher at Boston University, who is accused of concealing her ties
to the Chinese military. Yanqing Ye, who prosecutors say is a lieutenant
in the People's Liberation Army, lied about her military service to get
into the U.S. and researched U.S. military projects and gathered
information on two U.S. scientists for the Chinese military, authorities
allege.

The FBI on Thursday released a wanted poster for Ye, who is believed to
be in China.
entific innovation. Instead, he said, he hopes this investigation
encourages a "productive dialogue."

(5) Also charged: Yanqing Ye (PLA, works at Harvard); Zaosong Zheng
(smuggled 21 vials of biological samples)

https://www.bbc.com/news/world-us-canada-51288854

US charges three researchers with lying about links to China

28 January 2020

Harvard University described the charges as "extremely serious" The US
has charged a Harvard professor and two Chinese researchers based in
Boston with assisting the Chinese government.

Harvard department chair Charles Lieber is accused of lying about his
connections, while the researchers were charged with being foreign agents.

Mr Lieber allegedly accepted more than $1m in grant money from the
Chinese government.

Harvard University called the charges against him "extremely serious".

In a statement, the university added: "Professor Lieber has been placed
on indefinite administrative leave."

Who else was charged?

Prosecutors said Yanqing Ye, a Boston University robotics researcher,
concealed the fact that she was in the Chinese army.

Ms Ye is accused of falsely identifying herself as a student and also
continuing to work for the People's Liberation Army, while completing a
number of assignments in the US.

Cancer researcher Zaosong Zheng was arrested at Boston Logan
International Airport with 21 vials of biological samples in his bag.
Prosecutors allege he was planning to return to China to continue his
research there. [...]

https://www.sciencemag.org/news/2020/02/why-did-chinese-university-hire-charles-lieber-do-battery-research

(6) Why did a Chinese university hire Charles Lieber to do battery research?

By Robert F. Service

Feb. 4, 2020 , 12:45 PM

Among the ongoing mysteries surrounding last week’s arrest of Harvard
University nanoscientist Charles Lieber is the precise nature of the
research program Lieber was conducting in his cooperation with Chinese
researchers.

Lieber was arrested on 28 January on charges of making false statements
to U.S. law enforcement officials and federal funding agencies about a
collaboration he forged with researchers in China. He was released two
days later on a $1 million bond. An affidavit outlining the charges
against Lieber notes that in January 2013, he signed an agreement
between Harvard and Wuhan University of Technology (WUT) in China.
According to the affidavit, "The stated purpose of the agreement, which
had a five-year effective term, was to ‘carry out advanced research and
development of nanowire-based lithium ion batteries with high
performance for electric vehicles.’" [...]

In Lieber’s case, however, the battery angle poses a puzzle. That’s
because a search of the titles of Lieber’s more than 400 papers and more
than 75 U.S. and Chinese patents reveals  no mentions of "battery,"
"batteries," "vehicle," or "vehicles." (According to Lieber’s CV,
through 2019 he has co-authored 412 research papers and has 65 awarded
and pending U.S. patents. The website of the Chinese National
Intellectual Property Administration indicates that Lieber has been
awarded 11 Chinese patents.)

In fact, one U.S. nanoscientist and former student of Lieber’s says: "I
have never seen Charlie working on batteries or nanowire batteries."
(The scientist asked that their name not be used because of the
sensitivity surrounding Lieber’s case.)

Lieber joined Harvard in 1991. Early on he pioneered a variety of
techniques for growing nanowires from the bottom up in a chemical flask.
Researchers have long been able to etch large chunks of semiconductors,
metals, and other materials to make wirelike structures. But this
top-down approach typically requires the use of expensive clean room
facilities, the sorts used by computer chip–makers. Lieber’s strategy
opened the door to making pristine nanostructures with simple and
inexpensive chemical techniques. He went on to show that he could use
these nanowires to serve as transistors, complex logic circuits, data
storage devices, and even sensors.

More recently, Lieber’s Harvard lab has shifted gears to integrate
nanowires with biology. In 2017, for example, he reported creating soft,
flexible 3D nanowire mesh that could be injected into the brains or
retina of animals, unfurl and wrap around neurons, and eavesdrop on the
electrical communication between cells.

Other research groups have adopted Lieber’s nanowire growth methods to
fabricate nanomaterials useful in making batteries. But that’s never
been the focus of Lieber’s research. Which begs the question of why his
supposed collaboration in Wuhan was focused on a line of research
outside of his specialty.

(7) Thousand Talents Program encourages economic espionage and theft of
intellectual property

https://www.bloomberg.com/news/articles/2019-12-12/china-s-thousand-talents-program-finally-gets-the-u-s-s-attention

China’s Thousand Talents Program Finally Gets the U.S.’s Attention
Officials are concerned about spying and intellectual-property theft.

China’s Thousand Talents Program, an elaborate system which recruit
overseas researchers to send their skills home, has the U.S. worried.

What’s the big deal?

U.S. officials say TTP encourages economic espionage and theft of
intellectual property, the issue at the heart of President Trump’s trade
war with China. They also argue that China’s so-called military-civil
fusion strategy—in which the government employs resources, technologies,
and people to advance both sectors simultaneously—elevates the threat.

Was any of this a secret?

Hardly. Until last September, China published the names of recruits on
an official website. That all ended when a Chinese American engineer
(and TTP participant) working for General Electric Co. was arrested for
allegedly stealing tech secrets from the company.

How vulnerable is the U.S.?

According to public and nonpublic information compiled in a November
report issued by the Senate Homeland Security select subcommittee on
investigations, very. TTP members stole U.S.-funded Department of Energy
research for Chinese institutions. The National Institutes of Health is
only now investigating the loss of intellectual property and capital to
China; meanwhile, the National Science Foundation has no one dedicated
to grant oversight at all. Even the U.S. State Department—which under
Mike Pompeo’s leadership has taken a tough stance on China—is behind on
flagging Chinese nationals with potential ties to intellectual property
theft.

What now?

Beijing may be downplaying it, but TTP is very much a going concern.
Still, the takeaway for Republican Senator Rob Portman of Ohio, who
chairs the subcommittee that conducted the investigation, is not to
exclude China from contributing to sci

(8) 'Hysteria' or 'non-traditional espionage'?

By Zhaoyin Feng, US Correspondent, BBC Chinese

https://www.bbc.com/news/world-us-canada-51288854

China says its Thousand Talents Plan is designed to keep "high-end
talent" at home, in order to prevent a brain drain. The country has been
losing talent to places like the US and the UK, where hundreds of
thousands of Chinese attend top universities and subsequently settle down.

But the US view is that China is repeating a notorious tactic in its
development playbook: intellectual property theft. For decades,
Washington has accused Beijing of stealing science and technology from
the US in order to gain an competitive advantage.

The FBI warns that the Thousand Talents Plan could be used by Beijing as
a channel to conduct "non-traditional espionage", though many reported
cases are not related to spying, but violations of ethics, such as not
fully disclosing financial conflicts of interest.

Washington has increased its scrutiny on China's Thousand Talents Plan
since 2018, when the two countries started to be locked in a trade
battle, and Beijing has reportedly refrained from talking publicly about
the program.

Chinese state tabloid Global Times labelled the American scepticism as
"hysteria".

Since 2008, more than 7,000 researchers and scientists based outside of
China have participated in the Thousand Talents Plan, many of whom are
of Chinese descent.

Many warn that Washington's crackdown efforts must not give way to
racial profiling. David Ho, a renowned Taiwanese-American HIV
researcher, suggested in an earlier media interview: "If you want to
implement policies, you should implement for all, not just the Chinese
scientists."

(9) China’s Non-Traditional Espionage - statement by FBI

https://www.fbi.gov/news/testimony/chinas-non-traditional-espionage-against-the-united-states

Bill Priestap

Assistant Director, Counterintelligence Division

Federal Bureau of Investigation

Statement Before the Senate Judiciary Committee

Washington, D.C.

December 12, 2018

China’s Non-Traditional Espionage Against the United States: The Threat
and Potential Policy Responses

Statement for the Record

Chairman Grassley, Ranking Member Feinstein, members of the committee,
thank you for the opportunity to appear before you today, and thank you
for highlighting the threat from Chinese espionage.

It is impossible to overstate the differences between the American and
Chinese systems. China is an authoritarian, one-party state where the
Chinese Communist Party reigns supreme. At the Chinese Communist Party’s
direction, the Chinese government dominates every facet of Chinese life,
through actions such as central economic planning, Internet and media
censorship, and leveraging intrusive technologies.

The Chinese government is attempting to acquire or steal, not only the
plans and intentions of the United States government, but also the ideas
and innovations of the very people that make our economy so incredibly
successful. The Chinese government understands a core lesson of the Cold
War between the United States and the Soviet Union: economic strength is
the foundation of national power. The competition between the United
States and China will be greatly influenced, if not ultimately decided,
on the strength of our economies.

The Chinese government means to compete with us in every way possible,
playing by the rules at times, bending them at others, and breaking them
when necessary to ensure their success. They also aim to rewrite the
rules to shape the world in their image, and they have already made
progress on this front. The rules they write seek to guarantee the
dominance of their businesses and root Chinese national power in the
very fabric of an international system.

 From my vantage point, it appears we are at the early stages of a
hyper-competitive world. This is not simply a competition between
businesses and industries but also between governments and the ways in
which they govern their societies. Make no mistake: the Chinese
government is proposing itself as an alternative model for the world,
one without a democratic system of government, and it is seeking to
undermine the free and open rules-based order we helped establish
following World War II. Our businesses and our government must adapt in
order to compete and thrive in this world.

Business in a Hyper-Competitive World

Many American businesses are just now starting to understand the new
environment in which they are operating. The continued proliferation of
cyber hacking tools and human intelligence capabilities means that this
environment will only become more hostile and more treacherous for our
companies. Our businesses face competitors in the form of foreign
enterprises assisted or directed by extremely capable intelligence and
security services. These capabilities are used to target not just
intellectual property, but any proprietary information that could give
Chinese or other countries businesses a crucial edge in the market. As a
result, American companies are increasingly having to compete against
businesses that are their mirror images, built on stolen ideas,
information and innovations, but operating more nimbly and cheaply, not
weighed down by the honest expense of developing intellectual property.

Part of this new environment is that some foreign governments,
especially the Chinese government, selectively and unfairly create and
enforce laws and regulations to disadvantage our businesses. The Chinese
government is not satisfied to "stack the deck" for its businesses
solely in their domestic market. They are also cultivating other
countries’ economic dependence, partly to gain geopolitical influence
and partly to ensure the success and dominance of Chinese businesses in
overseas markets.

Because the Chinese government creates an uneven playing field, and
because this is done partly to facilitate the transfer of technology to
China, our companies face what appears to be a very grim choice:
participate and compete in the Chinese market and put vital corporate
assets at grave risk, or neglect China and risk the loss of the second
largest market in the world. But this is a false choice for three reasons.

First, a lack of participation in the Chinese market will not spare a
company from the risks the Chinese government and its companies pose.
While the risks may be more acute for companies with business in China,
all companies, even those solely operating in the United States, are at
risk.

Second, while U.S. companies may be able to operate and profit in China
for a time, it is on borrowed time. The Chinese government will permit
foreign companies to operate only so long as it is advantageous to
China. Is the U.S. company making a product that China needs but cannot
yet produce domestically, such as sophisticated agricultural machinery?
If so, the U.S. company will be allowed to operate, but only until China
learns enough about the business that they can replace it with a
domestic version. Is the U.S. company using sophisticated intellectual
property or a unique business model? Then such companies may also be
allowed to operate, as long as they divulge the required technology,
data, or expertise to a Chinese entity. Alternatively, a company may be
allowed to operate simply to give China a better opportunity to
understand how to copy the business and outcompete it globally. From the
viewpoint of the Chinese government, many of the foreign companies doing
business in China represent a temporary failure of the domestic market
to meet demand. The government believes that if something can be made in
China, then it should be made in China.

Third, the bulk of the competition between U.S. companies and Chinese
companies is not in the Chinese or American market. It is everywhere
else in the world. American businesses will need a strategy to compete
with China’s national champions globally. Such a strategy will likely
require new and innovative corporate business models that are tailored
to withstand the challenges of various business "ecosystems" in the
world. For example, U.S. companies must carefully construct their
internal enterprise IT infrastructures so that vital data,
communications, and intellectual property are protected, even in
jurisdictions without strong rule of law and even if local regulations
are coercively designed to collect data. They must carefully consider
where to manufacture their products, as this may expose them to risks
that cannot be mitigated. Ultimately, they may need to compete in the
Chinese market, if only to maintain a window on the ecosystem that will
be creating their global competitors.

Government in a Hyper-Competitive World

It is unclear what it means for governments to compete in the 21st
century. Will it be a second Cold War where we once again count missiles
and warheads aimed at each other? Or, will it be United States, Inc.
versus China, Inc.? Based on our experience so far, it seems far more
likely that competition in the commercial realm will play a decisive role.

Let me describe what I believe is coming. There will be competition
between companies and industries as outlined above, but we will also
compete with China at a more basic level. Our governments and economic
systems will compete. They will compete for people, for resources, for
ideas and, ultimately, they will compete throughout the world to be the
governmental and economic system of choice: the one picked by other
nations to organize their societies. This will be a competition of
economics, but also of ideals and values, to determine which system
better utilizes the talents and resources of the people, for the good of
the people.

The United States must ensure that we are both developing our domestic
talent and attracting foreign talent from around the globe as we always
have. Our nation will compete for this talent with other nations just as
companies now compete for unique and exceptional employees. The Chinese
government is already far ahead of us in creating direct financial
incentives to draw gifted scientists and researchers to relocate and do
work in their country. At the same time, the Chinese government has
created comprehensive programs to identify, develop, and retain their
most talented citizens. These talent recruitment and "brain gain"
programs (as some in China call them) also encourage theft of
intellectual property from U.S. institutions. For example, China’s
talent recruitment plans, such as the Thousand Talents Program, offer
competitive salaries, state-of-the-art research facilities, and
honorific titles, luring both Chinese overseas talent and foreign
experts alike to bring their knowledge and experience to China, even if
that means stealing proprietary information or violating export controls
to do so.

To be clear, there are distinct advantages to our decentralized
approach, including the flexibility and agility to respond quickly to
problems, as well as the openness of our system and strength of its
governing institutions. The independence and historical dominance of the
U.S. private sector has helped us attract global talent for decades.
Alternatively, if we do not also develop a holistic national response
and recognize the importance of sharpening our country’s competitive
advantages, we will not continue to attract or keep the people we need.

This competition between the American and Chinese systems will manifest
not only directly, but indirectly as other countries choose with whom to
align themselves and how best to develop their societies. Countries
throughout the world are being affected by unprecedented transformations
in their societies and economies brought on by rapid technological
change. They are searching for the correct model by which to organize
their societies in order to survive these changes and even benefit from
them.

To many, our system of openness and transparency appears to be under
attack. We are being exploited by China, so we are right to shore up our
defenses against this. However, we must also make certain that, as we
address the loopholes and vulnerabilities within our system, we do not
simultaneously undermine the open, free, and fair principles that have
made it thrive. Our efforts must inspire other nations to preserve
similar systems. We must persuade them to choose freedom, reciprocity,
and the rule of law. What hangs in the balance is not just the future of
the United States, but the future of the world.

Chairman Grassley, Ranking Member Feinstein, and members of the
committee, thank you again for this opportunity to discuss the concerns
the Federal Bureau of Investigation is seeing with the China threat. We
are grateful for the support each of you, and this committee, continue
to provide to the Federal Bureau of Investigation. I look forward to
answering any questions you may have on this topic.

(10) Did China's Tencent Accidentally Leak The True Terrifying
Coronavirus Statistics

https://www.zerohedge.com/health/did-chinas-tencent-accidentally-leak-true-terrifying-coronavirus-statistics

by Tyler Durden

Wed, 02/05/2020 - 08:40

Ten days ago, shortly after China first started reporting the cases and
deaths associated with the coronavirus epidemic, a UK researcher
predicted that over 250,000 Chinese would be infected with the virus by
February 4. And while according to official Chinese data, the number of
infections has indeed soared in the past two weeks, at just under 25,000
(and roughly 500 deaths), it is a far cry from this dismal prediction,
about ten times below that predicted by the epidemiologists.

Is this discrepancy possible? Is the epidemic truly far less serious
than conventional epidemiological models predicted? Or is China merely
hiding the full extent of the problem?

After all, it the WSJ itself reported in late January , China was
explicitly manipulating the casualty number by listing pneumonia as the
cause of death instead of coronavirus. Subsequent reports that Wuhan
officials were rushing to cremate coronavirus casualties before they
could be counted did not add to the credibility of the official data.

But the biggest hit to the narrative and China's officially reported
epidemic numbers came overnight, when a slip up in China's TenCent may
have revealed the true extent of the coronavirus epidemic on the
mainland. And it is nothing short than terrifying.

As the Taiwan Times reports, over the weekend, "Tencent seems to have
inadvertently released what is potentially the actual number of
infections and deaths, which were astronomically higher than official
figures", and were far closer to the catastrophic epidemic projections
made by Jonathan Read.

According to the report, late on Saturday evening, Tencent, on its
webpage titled "Epidemic Situation Tracker", showed confirmed cases of
novel coronavirus (2019nCoV) in China as standing at 154,023, 10 times
the official figure at the time. It listed the number of suspected cases
as 79,808, four times the official figure.

And while the number of cured cases was only 269, well below the
official number that day of 300, most ominously, the death toll listed
was 24,589, vastly higher than the 300 officially listed that day.
Tencent screengrab as of late Feb 1, showing far higher infections.

Moments later, Tencent updated the numbers to reflect the government's
"official" numbers that day.

{photo} Screengrab showing higher numbers (left), chart showing
"official" numbers (right). (Internet image)

This was not the first time Tencent has done this: as Taiwan Times
notes, Chinese netizens have noticed that Tencent has on at least three
occasions posted extremely high numbers, only to quickly lower them to
government-approved statistics.

This is where it gets even more bizarre: contrary to claiming that this
was just a "fat finger" mistyping of data, observant Chinese netizens
also noticed that each time the screen with the large numbers appears,
it shows a comparison with the previous day's data which demonstrates a
"reasonable" incremental increase, much like comparisons of official
numbers.

This led many in the mainland to speculate that Tencent has two sets of
data, the real data and "processed" data.

In short, two camps have emerged: one, the more optimistic, speculates
that a coding problem could be causing the real "internal" data to
accidentally appear. The other, far more pessimistically inclined,
believes that someone behind the scenes is trying to leak the real
numbers, as "the "internal" data held by Beijing may not reflect the
true extent of the epidemic."

Indeed, as repeatedly pointed out here and according to multiple sources
in Wuhan, many coronavirus patients are unable to receive treatment and
die outside of hospitals. Furthermore, a severe shortage of test kits
also leads to a lower number of diagnosed cases of infection and death.
In addition, there have been many reports of doctors being ordered to
list other forms of death instead of coronavirus to keep the death toll
artificially low.

What is the truth?

We leave it up to readers, but keep this in mind: on Jan 29, Zeng Guang,
the chief scientist of epidemiology at China’s CDC, made a rare candid
admission about why Chinese officials cannot tell people the truth in an
interview with the state-run tabloid Global Times: "The officials need
to think about the political angle and social stability in order to keep
their positions."

And then, on Monday, none other than China Xi's called on all officials
to quickly work together to contain the Coronavirus at a rare meeting of
top leaders, saying the outcome would "directly impact social stability
in the country."

Well, if China is mostly concerned about social stability - as it should
be for a nation of 1.4 billion - it is easy to comprehend why the entire
political apparatus in China would be geared to presenting numbers which
seem somewhat credible - in light of the barrage of videos of people
dying on the street - but not so terrifying as to cause a countrywide panic.

Then again, if China indeed had over 154,000 cases and almost 25,000
deaths as of 5 days ago, then no attempts to mask the full extent and
true severity of the pandemic have any hope of "containing" the truth.

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