Month: October 2021

Twitter has appealed a French court decision that ordered it to give activists full access to all of its relevant documents on efforts to fight hate speech, lawyers and a judicial source said on Saturday.

In July, a French court ordered Twitter to grant six French anti-discrimination groups full access to all documents relating to the company’s efforts to combat hate speech since May 2020. The ruling applied to Twitter’s global operation, not just France.

Twitter has appealed the decision and a hearing has been set for December 9, 2021, a judicial source told AFP, confirming information released by the groups’ lawyers.

Twitter and its lawyers declined to comment.

The July order said that Twitter must hand over “all administrative, contractual, technical or commercial documents” detailing the resources it has assigned to fight homophobic, racist and sexist discourse on the site, as well as the offense of “condoning crimes against humanity”.

It also said Twitter must reveal how many moderators it employs in France to examine posts flagged as hateful, and data on the posts they process.

The July ruling gave the San Francisco-based company two months to comply. Twitter can ask for a suspension pending the appeal.

The six anti-discrimination groups had taken Twitter to court in France last year, accusing the US social media giant of “long-term and persistent” failures in blocking hateful comments from the site.  

The groups campaign against homophobia, racism and anti-Semitism.

Twitter’s hateful conduct policy bans users from promoting violence or threatening or attacking people based on their race, religion, gender identity or disability, among other forms of discrimination.  

Like other social media giants, it allows users to report posts they believe are hateful, and employs moderators to vet the content.  

But anti-discrimination groups have long complained that holes in the policy allow hateful comments to stay online in many cases.

 
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Since China’s government declared all cryptocurrency transactions illegal last week and banned citizens from working for crypto-related companies, the price of bitcoin went up despite being shut out of one of its biggest markets.

Experts say large-scale Chinese miners of cryptocurrency — the likes of Bitcoin and Ethereum — will take their high-powered, electricity-guzzling servers offshore. Exchanges of the digital money and the numerous Chinese startups linked to the trade also are expected to rebase offshore after dropping domestic customers from their rosters.

The shift highlights how virtual currencies can evade government regulation.

“The exchanges have been pushing offshore anyways, and with the exchange business you need cloud infrastructure, you need developers, you need management to move things in the right direction, and so whether that is sitting in Taipei, San Francisco, Singapore or Shanghai, it doesn’t really matter — those businesses are very virtual,” said Zennon Kapron, Singapore-based founder the financial consulting firm Kapronasia.

“The real impact we’ve probably seen though is in the miners, and most of those miners [are in] the process of shifting overseas or [have] already completed moving overseas,” he said.

Strongest anti-crypto action to date

On Sept. 24, the People’s Bank of China, Beijing’s monetary authority, released a statement saying cryptocurrencies lack the status of other monetary instruments. The notice, issued in tandem with nine other government agencies, including the Bureau of Public Security, declared all related business illegal and warned that cryptocurrency transactions originating outside China will also be treated as crimes.

Explaining the ban, China’s official Xinhua News Agency reported Friday that cryptocurrencies have disrupted the controlled economy’s financial systems and contributed to crimes such as money laundering.

Cryptocurrencies — digital commerce tools that aren’t linked to a centralized banking authority — first appeared in China around 2008. Chinese banks began to prohibit the use of digital currencies in 2013 and stepped up regulations after 2016.

China was the world’s biggest Bitcoin miner and supported the largest exchange by volume, according to the news website CryptoVantage. It says many of those who suddenly made millions when Bitcoin prices soared four years ago were in China.

Chinese miners and traders head to Singapore

The Chinese ban carries penalties for international exchanges that do business with people inside China, and news reports indicate international crypto exchanges are trying to cut ties with Chinese clients in recent days. But the companies themselves are largely staying quiet.

A spokesperson for digital currency exchange Coinbase said Wednesday it does not “have anything to share at this time” about the crackdown in China. U.S.-based Worldcoin Global, a new type of cryptocurrency, did not reply to a request for comment.

China’s growing pressure on crypto over the past few years had prompted stakeholders to leave the country, Kapron said, adding that less than a quarter of the country’s original cryptocurrency peer-to-peer lending startups — small firms that connect individual lenders and borrowers — remain in China.

Mining for digital currency — the process of using computers to enter bitcoins into circulation and verify cryptocurrency transactions in exchange for a payout — should get easier overseas as Chinese exit the market, Kapron said.

Smaller operators, he added, may be able to mine more easily without the competition of giant Chinese operations.

Singapore looms as a prime go-to place for operations that need not be physically onshore. The country had accepted about 300 cryptocurrency license applications as of July. From China, e-commerce giant Alibaba as well as digital financial firms Yillion Group and Hande Group have applied, news reports in Asia say.

Other Asian countries lack the legal welcome mat that Singapore has extended, said Jason Hsu, vice president of the Taiwan Fintech Association industry group.

“Where would that money flow to? I think it’s a question that needs to be answered,” Hsu said. “I think in Asia, Singapore would be a destination for them to go to. Singapore obviously has the clearest regulations and also wants to attract more digital fintech [financial-technology] companies.”

Outside Asia, Amsterdam and Frankfurt are “establishing their footprint as international centers” for financial technology, said Rajiv Biswas, Asia Pacific chief economist with market research firm IHS Markit. Financial technology covers cryptocurrency.

Western Europe ranked this year as the world’s biggest crypto economy in the world with inflows of more than $1 trillion or 25% of all global trade, activity, news and data service Chainalysis says. Europe’s surge follows similarly rapid growth in 2020.

Eventual resurgence for crypto in China?

Authorities in China are targeting crypto now as part of a wider “crackdown on overnight riches” and to “clean out the wild, wild West,” Hsu said, referring to largely unregulated market sectors. The trade will go underground for now, he forecasts, and China will eventually come out with an official digital currency issued through major banks.

Several countries are considering adopting new digital currencies that would allow people to exchange money without an intermediary, such as a bank. Proponents argue these currencies could capture the benefits of cryptocurrencies that make exchanging money easy, but without the price volatility of decentralized digital assets like bitcoin.

Chinese authorities may eventually swing to a more tolerant view of non-state-sanctioned digital currencies, though subject to strict criteria on what’s legal or otherwise, said Song Seng Wun, economist in the private banking unit of Malaysian bank CIMB. Blockchain, the core technology behind the public transaction ledger that makes crypto commerce transparent, could continue to develop in China for other ends, he added. 

 
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During the three-day World Internet Conference held in Wuzhen, China, this week, the country’s biggest tech tycoons rushed to show their support for Beijing’s “common prosperity” initiative.

Their enthusiasm for the initiative comes amid a yearlong crackdown on the country’s tech industry, where several high-profile companies have faced investigations and fines. Formerly high-flying celebrity CEOs are now keeping a low profile.

Daniel Zhang, CEO at e-commerce giant Alibaba group, said his company’s donation of $15 billion to the initiative over the next five years represented its willingness to help China achieve its goal of prosperity for all.

Zhou Hongyi, billionaire entrepreneur and chairman and CEO of the country’s largest Internet security firm, Qihoo 360, said his company will donate an as yet undisclosed sum to the initiative and step up to help smaller firms thrive.

Stressing the need to develop these enterprises, Zhou said, “Our success depends on our country’s policies. … We must take the initiative to align our development with our national strategies and serve our country with science and technology.”

Lei Jun, CEO of consumer electronics manufacturer Xiaomi, said that technological development must be used to achieve social good and that tech companies should help build a good life for everyone.

Other tech giants, such as technology conglomerate Tencent, online agricultural marketplace Pinduoduo and food delivery platform Meituan, answered Beijing’s call before the Sept. 26-28 gathering, pledging financial support for social causes.

‘Common prosperity’ initiative

During his first eight years in office, Chinese President Xi Jinping occasionally mentioned the term “common prosperity.” Since February, when he declared China had eliminated poverty, “common prosperity” has become one of his favorite themes.

At a meeting of the Communist Party’s Central Committee for Financial and Economic Affairs on Aug. 17, Xi stressed that those who are already rich need to guide and help others achieve prosperity.

“Common prosperity means prosperity for all, not just a few people,” Xi said, according to a meeting note published by China’s state-run Xinhua News Agency. “We can allow some to get rich first, but we must then launch a scientific public policy to make sure every citizen can have their fair share.”

Central to achieving common prosperity is a concept known as the three distributions, first introduced by the Chinese economist Li Yining in the 1990s.

According to the explanation from China’s National Development and Reform Commission, the first distribution of wealth comes through market competition. The second is achieved through the state via taxes, subsidies and social welfare programs. The third distribution taps enterprises and individuals to redistribute their wealth through voluntary donations.

‘Third distribution’

“The target of this round of the common prosperity initiative is the wallet of wealthy domestic entrepreneurs,” said Lu Jun, founder of the influential nongovernmental organization Beijing Yirenping Center, in a phone interview with VOA Mandarin. His NGO focuses on eliminating discrimination and defending the rights of disadvantaged groups.

Wang Hsin-Hsien, a political science professor and chair of the East Asian Studies Institute at National Cheng-Chi University in Taiwan, told VOA Mandarin that businesses are essentially forced to make charity donations under the current system.

“China’s current common prosperity initiative is controlled by the party-state. That means large enterprises must make donations in order to show that they are choosing the right side. So I don’t think these donations will be voluntary,” he told VOA Mandarin via phone.

“This is not the charitable donation we see in Western countries, because eventually the money will be returned to the state for redistribution,” he added.

Meanwhile, analysts say this new wave of donation will not likely help boost China’s civil society.

NGOs under microscope

China has been tightening its grip on NGOs since 2016, demanding they provide specific funding sources and membership information or face being banned.

This year, China announced a new wave of crackdowns targeting NGOs. In May, the Ministry of Civil Affairs started to target “illegal NGOs with measures such as limiting their access to conference venues, publicity resources and manpower,” according to the state-owned news outlet China Daily.

“The moves were part of a sweeping campaign launched last month by the ministry and 21 other central agencies to clamp down on the unregistered NGOs, which have masqueraded as foundations, industrial associations and other nongovernmental groups to rake in money from the public,” China Daily said.

Lu told VOA Mandarin that the NGOs that can survive or get funding will be those that align their goals with the government’s agenda — unlike many NGOs outside China, whose views diverge from those of the government.

“I don’t think this is necessarily good news for NGOs, as I believe the money donated by private companies will go to the government-run or government-affiliated NGOs,” he said of the third distribution.

“Beijing won’t allow companies to donate to independent NGOs freely, let alone the ones they don’t like, such as NGOs working on human rights, labor rights and women’s rights.”  

 
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A popular Chinese-manufactured phone has a built-in censorship tool that can blacklist search terms on the web, according to research by the Lithuanian government, which is urging owners of the phones to replace them. 

The Lithuanian Ministry of Defense analyzed three popular Chinese-made phones currently sold in Europe: the Xiaomi Mi 10T 5G; the Huawei P40 5G; the OnePlus 8T 5G. It reported finding a censorship tool built into the Xiaomi phone that can block certain search terms, including “Long live Taiwan’s independence,” “Free Tibet,” “Democratic Movement,” and “Voice of America.” 

“It is very, very worrying that there is a built-in censorship tool and of keywords, which filters or could filter your search on the web,” Lithuanian Vice Defense Minister Margiris Abukevicius told VOA.

Xiaomi 

Xiaomi is the most popular smartphone brand in Europe. The Lithuanian researchers said the blacklist function was turned off on the Xiaomi phone sold in Europe, but it can be activated remotely. The list of blocked search terms appears to be continually updated. There were 449 words or phrases on the blacklist in April 2021. By September, that number had tripled to 1,376.

“We clearly saw that all of those key words are politically motivated,” Abukevicius said. “Terms such as Tibet, Taiwan, democracy, U.S., and some companies like yours [Voice of America], are mentioned in that list. And they are adding [words] not only in Chinese, they are also adding words in Latin [script].”

German security services also have begun a technical examination of the Xiaomi phone. 

Xiaomi did not respond to VOA requests for comment. The firm said this week it was engaging an independent expert to assess the findings. 

Huawei 

The Lithuanian researchers found the Huawei P40 5G model collected users’ data — including how long they spent using the apps — and stored it on servers outside the European Union, beyond the jurisdiction of the EU’s strict data laws.

The report said Huawei’s official app store, called AppGallery, directed users to apps containing malware.

“A portion of the mobile applications contained on the application distribution platforms are imitations of the original applications, with malicious functionality or virus infestation; such applications can be downloaded and installed by the user on the mobile phone, thereby jeopardizing the security of the device and the data contained in it,” the report said. 

“Data security risks have also been identified in the Xiaomi device; factory-installed system applications send statistical data on the activity of certain applications installed on the device to servers of the Chinese cloud service provider Tencent, located in Singapore, the USA, the Netherlands, Germany and India,” the researchers wrote. 

In a statement, Huawei told VOA, “Huawei has always adhered to the principle of integrity, abided by the laws and regulations of the countries and regions where it operates. Huawei has a strong cybersecurity record in more than 170 countries and regions and has served over 3 billion users. Data is never processed outside the Huawei device.” 

It added, “Huawei is transparent about the necessary data it collects from customers, which is kept to a minimum and used to enhance personalization and the user’s experience. Huawei makes it clear that these apps are from publicly available sources, so the user isn’t forced to download an app.”

National security 

Lithuania has told government workers to get rid of the Xiaomi and Huawei phones. Abukevicius told VOA that other countries should take note of the research. 

“On the basis of national security, really, we are looking for ways to protect our state institutions and institutions working in national security and give them a chance to only work with trusted suppliers. When it comes to consumers, we are giving recommendations of course, you know, to really avoid using cloud services, avoid using some applications, Chinese-made applications,” Abukevicius said. 

China has yet to comment on the report. Many Western countries, including the United States, have blocked Huawei from the rollout of 5G mobile networks, fearing the company poses a security risk. 

“I think our research is an illustration of how we should go beyond that discussion in the telecommunications sector, that we should think about other sectors,” Abukevicius said. 

Diplomatic tensions 

The report comes against a backdrop of tense relations between Lithuania and China.

Both countries have withdrawn their ambassadors after Lithuania agreed to allow Taiwan to open a de facto embassy there using its own name. China claims Taiwan as its own territory. 

In many countries, Taiwan’s diplomatic missions are named after the capital, Taipei, rather than the island itself. In retaliation, Beijing last month halted rail freight to Lithuania and suspended trading licenses for Lithuanian producers.

The United States has reiterated its support for Lithuania in the face of what Washington called “economic coercion” by China. 

 
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