“We’re all living inside the president’s head, and nobody knows anything,” wrote The Atlantic recently – an encapsulation of the market turmoil surrounding Trump’s tech tariffs.

The tariff policy has intensified rapidly, marking an escalation from the president’s previous trade approach. The latest threat to impose an additional 50% duty on Chinese imports unless Beijing withdraws its retaliatory measures would push the total tariff rate to 104%, more than quadrupling the cost of importing Chinese goods into the US.

Beijing’s 34% retaliatory tariffs, imposed in direct response to Trump’s initial tariff announcements, represent China’s own calculated approach – not seeking to match the complete US duties but sending a message that it won’t absorb economic punishment without a proportional response.

China’s Commerce Ministry stated, they “firmly oppose” the US threats and will “resolutely respond,” calling Trump’s approach “doubling down on its mistakes” and “exposing its nature of coercion.”

The severity of this action goes far beyond the 25% peak rates seen during Trump’s first administration, when economists warned of significant market disruption. Now, global technology supply chains that took decades to optimise face the prospect of a complete restructuring, as duties exceeding 100% would effectively close off the world’s largest consumer market to Chinese manufacturers.

This represents a continuation of Trump’s first-term policies and an amplification that creates immediate consequences for technology companies and consumers. “If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump declared on his Truth Social platform this week.

Immediate market response to Trump’s tech tariffs

The escalating tariffs have created an unexpected short-term boom for companies like Apple, with consumers flooding stores to purchase electronics before potential price increases. “Almost every customer asked me if prices were going to go up soon,” reported one Apple store employee, who requested anonymity as they weren’t authorised to speak publicly.

Bloomberg reports that Apple’s US retail locations experienced higher sales this past weekend than in previous years. The sudden purchasing surges illustrate the real-world impact of tariff policies on consumer behaviour, with the prospect of iPhones potentially costing thousands of dollars creating what one employee described as an atmosphere resembling “the busy holiday season.”

The mathematical absurdity of “reciprocal” tariffs

What makes Trump’s approach particularly problematic is the disconnect between his “reciprocal tariff” rhetoric and the calculation method employed. Documents from the office of the US Trade Representative reveal that the tariff levels do not match other countries’ rates; instead, they are based on bilateral trade deficits. The formula mathematically ensures that any nation selling more to America than it buys faces punitive duties, regardless of their actual trade practices.

The reductive approach treats complex global trade relationships as a simplistic zero-sum game, ignoring the reality of how modern supply chains function.

Tech industry fallout

Few sectors stand to lose more from the escalation in trading relations than technology. The industry’s heavy reliance on transnational production networks means that components often cross borders multiple times before reaching consumers. Each crossing potentially incurs tariffs, creating a compound effect that industry analysts call a “tariff cascade.”

Apple exemplifies companies subject to this effect. While it has worked to diversify its manufacturing base since Trump’s first term, shifting some production to Vietnam, India, and other locations, China remains central to its supply chain. The company’s stock suffered its worst three-day rout since 2001 following Trump’s tariff announcements. Bloombergreported that Apple “lost more than half a trillion dollars in valuation” in just two trading days.

Beyond rhetoric: the real-world impact

Despite the president’s claims that tariffs will revitalise American manufacturing, economic forecasts paint a different picture. Fitch Ratings warned that the tariffs have “significantly raised the risk for a recession in the United States” through higher consumer prices, squeezed wages, and dampened business investment.

Larry Fink, CEO of BlackRock, said “most CEOs I’ve talked to would say we are probably in a recession right now.”

For tech consumers, the Yale Budget Lab estimates American households could face an additional $2,100 in annual costs due to the April 2nd tariff announcement alone. Lower-income households will bear a disproportionate burden of these increases, as they spend a higher percentage of their income on consumer electronics and other goods affected by the tariffs.

Strategic incoherence

Perhaps most concerning for the technology sector is the lack of coherent objective.

As Navin Girishankar, head of the economic security programme at the Centre for Strategic and International Studies, told the South China Morning Post, “The Trump administration has been transparent all along about its desire to use tariffs primarily as an instrument of choice for several different objectives,” but “less coherent, I would say incoherent, about the actual goals.”

The strategic ambiguity leaves tech companies in a precarious position, unable to make informed long-term investment decisions. Should they accelerate reshoring efforts, potentially at great expense, or hope for a negotiated resolution?

Cracks in support

Even some of Donald Trump’s most staunch supporters have begun to express concern. Elon Musk, who serves as a senior adviser to Trump, has expressed discomfort with the policy. Meanwhile, billionaire investor Bill Ackman stated bluntly, “I am just frustrated watching what I believe to be a major policy error occur.”

The coming days will determine whether Trump follows through on his threat to escalate duties to their new levels. What’s already clear is that his approach to trade represents a wrecking of the integrated global technology ecosystem that has fuelled innovation worldwide.

For tech companies and consumers across Asia, the message is unmistakable: the era of predictable trade in digital goods is over, at least for now. As markets reel and supply chains reconfigure, uncertainty is the only certainty.

The post US panic-buying as Trump’s tech tariffs hit 100%+ appeared first on TechWire Asia.

Tesla is designing a cheaper Model Y and enhancing its autonomous-driving capabilities in China as it scrambles to reverse a worldwide sales slide.

The Tesla sales decline has become a challenge for the electric vehicle maker. To combat plummeting market share, the new Model Y variant is planned to be 20% cheaper than existing models.

Once the undisputed leader in the global EV market, Tesla is grappling with consumer backlash against CEO Elon Musk’s political association with the Trump administration and increasingly fierce competition from local rivals in key markets. According to the South China Morning Post, the company’s market share in China has dropped dramatically from more than 16% in 2022 to just 4.3% in February 2025.

Stock market response

The impact has been felt on Wall Street, where Tesla’s stock dropped 15% on Monday, marking its steepest decline in five years. According to TIME, the drop came alongside a stock market plunge following President Donald Trump’s hint at a recession. The president acknowledged Tesla’s struggles in a post on Truth Social, where he blamed “radical left lunatics” for boycotting Musk’s EV company and pledged to “buy a brand new Tesla” himself.

European market struggles

The decline in Tesla sales is particularly pronounced in Europe. According to the European Automobile Manufacturers’ Association (ACEA), Tesla sold just under 7,517 vehicles in Europe in January, half of January 2024 sales. The decline comes despite the rise of overall battery and hybrid electric vehicle sales as the European Union (EU) continues to tighten regulations on emissions from new vehicles.

In February, electric vehicle sales in Germany, the largest market for EVs in the EU, rose 30% year over year, yet Tesla sales were down more than 70% compared to last year. TIME reports that less than 1,500 new Teslas were registered in Germany in February.

Other European countries have also witnessed Tesla’s market share erode. Between January and February of 2025, Tesla recorded a 50% drop in sales in Portugal and 45% in France, according to Reuters, while sales fell 42% in Sweden and by 48% in Norway.

Australian and Chinese markets

The Tesla sales decline includes Australia, where data from the Electric Vehicle Council shows that Tesla sales dropped over 70% compared to last year, with just 1,592 sales in February compared to 5,665 in February 2024, as reported by The Guardian.

In China, Tesla is facing particular challenges. Tesla sales in China dropped 49% in February, with the automaker shipping 30,688 vehicles – the lowest monthly figure since July 2022, according to Bloomberg. Tesla’s market share in the country has plummeted from more than 16% in 2022 to just 4.3% in February 2025, as reported by the South China Morning Post.

Chinese automaker BYD has emerged as a formidable competitor, selling more than 318,000 electric and hybrid cars last month – a 161% increase from last year. In December, sales of Tesla’s Model 3 fell behind those of the SU7, developed by smartphone vendor Xiaomi, by 25,815 to 21,046.

US market challenges & the bright spots amid global decline

Even in Tesla’s home market, the company is facing headwinds. In California – the biggest domestic market for EVs thanks to its state mandate that 35% of new 2026 car models sold must be zero-emissions – Tesla sales slumped for the fifth consecutive quarter, according to data from the California New Car Dealers Association (CNCDA).

However, not every market has seen a similar decline. Britain saw a record number of EV sales in 2024, and Tesla sales were up 20% in February, bucking the global trend.

Musk’s response to global challenges

When Fox Business’s Larry Kudlow asked Musk how he was managing his various businesses amid these challenges, Musk candidly admitted he was doing so “with great difficulty.” Tesla has not officially released a statement addressing its falling sales, but its actions in various markets speak of the company’s recognition of the severity of the situation.

Competition intensifies as price war unfolds

Mainland China is Tesla’s second-largest market worldwide, trailing only the US, and the Shanghai factory is the carmaker’s most extensive production base. However, the company faces increasingly sophisticated competition from local manufacturers offering comparable or superior technology at significantly lower prices. An entry-level edition of Xpeng’s Mona M03, an EV fitted with preliminary autonomous-driving technology, costs 119,800 yuan, just half the price of the Model 3.

The price disparity illustrates the fundamental challenge Tesla faces in markets like China, where domestic manufacturers have rapidly closed the technological gap while maintaining a substantial cost advantage. Chinese brands also employ aggressive pricing strategies that Tesla has struggled to match. According to China Passenger Car Association data, a record 227 models, including electric and petrol cars, had their prices cut in 2024, compared with 148 in 2023. The price war puts additional pressure on Tesla’s margins when the company is already contending with declining sales volumes.

The road ahead: Critical challenges mount

The decline in Tesla sales represents a pivotal moment for the company that once dominated the EV landscape. While Tesla is taking steps to address its challenges – particularly in China with its new lower-priced Model Y and enhanced autonomous capabilities – these moves may be too little, too late as competitors continue to gain momentum.

Tesla’s production problems compound its market challenges. Even as the company unveiled an upgraded Model Y in China in late February, buyers in Shanghai are still waiting for deliveries due to production shortages, according to the South China Morning Post. These operational issues further erode consumer confidence at an important juncture. The reality facing Tesla is stark: its first-mover advantage has largely evaporated, and the company now finds itself in unfamiliar territory – playing defence rather than setting the agenda for the industry.

With EV adoption accelerating globally and Tesla’s share of the growing market shrinking, the company faces existential questions about its positioning and strategy. For a company whose stratospheric valuation was predicated on market dominance and industry leadership, this period of retrenchment signals a fundamental recalibration of Tesla’s prospects.

Whether Musk’s company can regain its footing in an increasingly crowded landscape remains today’s a pressing question in the electric vehicle industry.

The post Tesla sales plummet worldwide as competition and political backlash intensify appeared first on TechWire Asia.

The latest escalation in the US-China trade war has sent shockwaves through global markets as Beijing unveiled a calculated series of retaliatory measures against American businesses, marking a significant intensification of economic tensions between the world’s two largest economies.

The Chinese government’s response, triggered by President Trump’s blanket 10% tariff on Chinese imports, demonstrates a sophisticated approach to economic warfare by the Chinese. Its measures target strategic sectors from technology to rare earth metals with careful calibration of their impact on domestic markets.

Strategic targeting of American business interests

Beijing has said it will introduce a 10% tariff on US agricultural machinery and a 15% charge on crude oil imports, which will likely pressure specific US sectors rather than wage all-out economic warfare.

The measured approach is particularly evident in China’s targeting of US tech giant Google through an anti-monopoly investigation, despite the company’s limited presence in the Chinese market since 2010. The energy sector measures are more noteworthy, with China imposing a 10% tax on liquefied natural gas (LNG) imports from the US. While China has been increasing its LNG imports from America, with volumes nearly doubling since 2018, the overall impact will be limited.

US imports account for just 1.7% of China’s total crude oil purchases from abroad, suggesting Beijing has chosen its targets carefully, as ones that won’t significantly disrupt domestic energy security. China’s strategic calculation is further reinforced its existing strong energy relationships with alternative supplying countries, particularly Russia, where it has secured oil at discounted rates.

Rare metals and resource control

The most significant aspect of China’s response lies in its restriction of rare metal exports, which will have far-reaching implications for global supply chains right across the technology sector. With China controlling approximately 90% of global refined rare metal output, imposing export controls on 25 important metals, such as tungsten, could affect everything from aerospace technology to consumer electronics.

The timing of President Trump’s subsequent overture to Ukraine for rare earth metals supply, in exchange for $300 billion in support, underscores the significance of this particular countermeasure.

The automotive sector has not been spared, with China implementing a 10% tariff on pick-up trucks and large cars made in the US. However, this measure’s impact may be limited given China’s relatively low import volume of American vehicles and its established automotive trade relationships with European and Japanese manufacturers.

Beijing’s strategy consistently targets sectors where alternative suppliers are readily available to it. In a move that signals Beijing’s willingness to use regulatory power as a trade weapon, the addition of PVH, owner of Calvin Klein and Tommy Hilfiger, to China’s ‘unreliable entity’ list represents a deliberate targeting of American consumer brands. The designation could lead to difficult challenges for these companies in the Chinese market, including potential fines, regulatory investigations, and complications with employee visas.

The Chinese policies mirror similar actions the US took through its entity list, highlighting the increasingly complex interplay between trade policy, regulatory oversight, and jingoism. Agricultural machinery tariffs deserve special attention. They align with China’s broader strategy of reducing dependence on foreign technology while building domestic capabilities. In recent years, China has significantly increased investments in the sector, making these tariffs more about protecting and promoting domestic industry than punishing US manufacturers.

The dual-purpose approach characterises much of Beijing’s response to US trade pressure. According to a research note by Julian Evans-Pritchard, head of China Economics at financial insight firm Capital Economics, China’s targeted measures affect approximately $20 billion worth of annual imports, representing about 12% of China’s total imports from the US. While this appears modest compared to the US’ $450 billion worth of targeted Chinese goods, Beijing’s selective response suggests a strategic approach aimed at maximising impact while maintaining economic stability.

Global implications and future outlook

The global implications of the trade dispute extend beyond bilateral relations. Restricting rare metal exports could create ripple effects throughout global supply chains, affecting industries from consumer electronics to defence manufacturing.

The global business community will watch closely as both nations prepare for potential negotiations, with Trump announcing plans to speak directly with Chinese President Xi Jinping.

The scheduled implementation of China’s measures on February 10 is a deadline that will reveal either a diplomatic breakthrough or a further deterioration in US-China trade relations. The current escalation represents more than just a trade dispute; it reflects deeper tensions between the world’s two largest economies as they navigate issues of technological supremacy, economic security, and global influence.

As this new chapter in the US-China trade war unfolds, one outcome may well be different speeds of innovation in an industry that has always used the word ‘global’ when discussing the rapid speed of technological change.

The post Trade War 2.0: China strikes back at US with tech and metal sanctions appeared first on TechWire Asia.

Taiwan needs to double down on advancing its chip technology and expanding its supply chain to keep its top spot in the global market, according to a leading trade group. The call came just hours after Donald Trump secured his second term as US president.

“I am confident that the long-standing Taiwan-US partnership, built on shared values and interests, will continue to be a pillar of regional stability and prosperity for all,” said Taiwanese leader William Lai Ching-te in a congratulatory note to Trump.

Taiwan has long been a semiconductor powerhouse, with its chips powering everything from everyday electronics to advanced wind turbines and military equipment.

“We need to ramp up R&D to keep our critical position in the global semiconductor supply chain,” said Cliff Hou, Chairman of the Taiwan Semiconductor Industry Association and senior vice president at TSMC. He also said that talks with the Taiwanese government are underway to bring in foreign partners to establish design and materials hubs in Taiwan.

Taiwan’s semiconductor industry is set to see its output rise by 22% this year, reaching over US$164 billion, driven by booming AI technology and a rebounding economy, according to a top TSMC executive.

While Taiwan enjoys its status as a global chipmaking leader, it faces the threat of physical invasion by China, which views it as a breakaway province. Trump’s re-election could shift how Taiwan fits into international relations. President Joe Biden had consistently backed Taiwan with clear support, while Trump has signalled that the island should pay for its own defence. In a Bloomberg interview, he commented on his relationship with Chinese President Xi Jinping, saying, “He was a very good friend of mine until Covid.”

Hou, a 27-year TSMC veteran with a US doctorate, stressed that Taiwan should also develop expertise in equipment and materials—areas still dominated by international companies. He told reporters at an event in Hsinchu that Taiwan’s strong bond with the US won’t waver, regardless of the political landscape.

Beyond TSMC, smaller Taiwanese suppliers are making big strides in AI-related tech, securing significant orders for data centre servers, cooling systems, and power solutions.

Despite his tough stance on Beijing during his previous presidency, Trump’s recent comments have been less favourable for Taiwan. He suggested that Taiwan’s defence budget should jump to 10% of its GDP and openly questioned the US’s role in defending the country. In October, he told podcast host Joe Rogan, “These chip companies, they stole 95% of our business. It’s in Taiwan right now. They do a great job, but that’s only because we have stupid politicians.”

John Bolton, Trump’s former national security adviser, previously noted that another Trump presidency could be dire for Taiwan, warning that “Taiwan is potentially toast.”

The day before the election, Cho Jung-tai, who heads Taiwan’s cabinet, was candid about defence spending, pointing out that the budget couldn’t be expanded “overnight.” Han Kuo-yu, a key legislator, echoed those concerns, saying that Taiwan’s political and economic challenges are likely to grow during a Trump presidency. He emphasised the importance of balancing ties with Washington while maintaining peace with Beijing.

Lai Shyh-bao, another legislator, added that Trump’s potential influence on Taiwan’s chip industry “should not be underestimated.”

Kuo Yu-jen, a professor from the Institute of China and Asia-Pacific Studies, advised that Taiwan should “watch Trump’s policies closely” to prepare for any shifts.

The president-elect hinted that tariffs could be his tool of choice to incentivise companies like TSMC to build chip facilities in the US. Hou, however, said Taiwan’s industry hasn’t been notified of any upcoming tariffs.

TSMC, which supplies Apple and Nvidia, has committed over US$65 billion for chip plants in Arizona, contingent on strong governmental support. Nonetheless, Taiwan aims to keep its most advanced tech within its borders. Recently, Economic Affairs Minister J.W. Kuo confirmed that local laws prevent TSMC from exporting its cutting-edge technologies abroad.

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For several years now, AI has disrupted the public’s ability to trust what it sees, hears, and reads. A noteworthy example is the Republican National Committee’s recent release of an AI-generated ad depicting an imagined nightmarish future in which President Joe Biden is re-elected. The advertisement included computer-generated visuals of devastated communities and border chaos.

In another instance, robocalls falsely claiming to be from Biden discouraged voters in New Hampshire from participating in the 2024 primary. Over the summer, the US Department of Justice shut down a Russian bot operation that used AI to impersonate Americans on social media. OpenAI also took action against an Iranian group using ChatGPT to create misleading social media content.

It is uncertain what direct harm AI can cause to people at present. However, many have expressed grave concerns that the technology facilitates the creation of convincing and misleading information. There have been numerous attempts to regulate AI, with little progress made in areas of major problems, like the technology’s possible influence on the approaching US election in 2024.

A slow-moving effort toward regulation

In an attempt to address the challenges posed by AI, the Biden administration introduced a blueprint for an AI Bill of Rights two years ago, aiming to address issues like algorithmic discrimination and abusive data practices. Following that, an executive order on AI was issued in 2023. US Senate Majority Leader Chuck Schumer also organised an AI summit that included high-profile figures like Bill Gates, Mark Zuckerberg, and Elon Musk. On an international level, the United Kingdom hosted an AI Safety Summit, resulting in the “Bletchley Declaration,” encouraging global collaboration on AI regulation. These findings indicate that the risks of AI-driven election interference have not gone unnoticed.

Despite these efforts, little has been done to explicitly address the use of artificial intelligence in US political campaigns. The two federal agencies with the authority to act, the Federal Communications Commission (FCC) and the Federal Election Commission (FEC), have taken very limited action thus far. For example, the FCC proposed requiring political advertisements on television and radio to disclose the use of AI. However, these regulations are unlikely to go into effect before the 2024 election, and the proposals have already stirred partisan disagreement.

Challenges in regulating AI in politics

The Federal Election Commission recently ruled that it cannot enact new laws to control AI-generated content in political advertisements; instead, it must enforce existing rules against all forms of fraudulent misrepresentation, whether or not AI is used. Advocacy groups, like Public Citizen, say that such a “wait-and-see” strategy is insufficient, since the potential disruption introduced into the election may be too pervasive to combat.

One reason for the absence of decisive action could be the complex legal system governing political speech. The First Amendment protects free speech in the United States and generally permits misleading statements in political ads. Despite this, a majority of Americans in recent polls have voiced a desire for tougher regulations on AI-generated content in elections, with many advocating for the removal of candidates who use AI to deceive voters.

The widespread use of AI creates a big challenge for regulators. The technology is not limited to creating fake news or political advertisements; it can be used in a variety of ways, each with its own level of monitoring. While airbrushing candidate images may appear harmless, creating deepfakes to harm an opponent’s reputation goes too far. The technology is already being used to create personalised campaign messaging, but where should the limits be set? And how do we handle AI-generated memes circulating on social media?

Despite the slow pace of legislative action, some US states have taken steps to regulate AI in elections. California, for example, was the first state to pass laws prohibiting the use of manipulated media in political campaigns, and more than 20 other states have followed suit with similar regulations.

The global context: AI’s impact on elections

Concerns about AI-generated disinformation in elections have surfaced globally. For example, in last year’s Slovakian election, deepfakes were used to defame a political leader, perhaps affecting the result in favour of his pro-Russia opponent. Similarly, in January, the Chinese government was accused of tampering with the Taiwanese election using AI-generated deepfakes. A deluge of dangerous AI-authored content emerged in the UK ahead of the July 4 election, including a deepfake of BBC reporter Sarah Campbell, that claimed that Prime Minister Rishi Sunak had approved a fraudulent investment platform. Meanwhile, during India’s general election, deepfakes of deceased leaders were used to influence votes.

In some circumstances, AI plays a more complex role in campaigns. In Indonesia, a former general running for president used an AI-generated cartoon to connect with younger people, raising questions about his involvement in the country’s military regime, although in that instance, there was no blatant deception. Despite being imprisoned, Pakistani opposition leader Imran Khan addressed his supporters via an AI-generated video, circumventing efforts to silence him. In Belarus, the official opposition used an AI-generated “candidate” – a chatbot posing as a 35-year-old Minsk resident – as part of efforts to engage voters at a time when the country’s opposition exists mainly in exile.

International efforts like the Bletchley Declaration are a good start, but much more work has to be done. Legislative proposals like the AI Transparency in Elections Act, the Honest Ads Act, and the Protect Elections From Deceptive AI Act show promise in the US, but their success is questionable owing to resistance from civil liberties organisations and the tech industry.

This regulatory uncertainty presents an opportunity for tech companies. In the absence of clear rules, platforms can continue to offer AI tools, ad space, and data to political campaigns subject to only minimal oversight. While some tech companies have made voluntary pledges to limit AI’s role in elections, safeguards are frequently easy to bypass and unlikely to provide a long-term solution.

What’s next? The need for comprehensive reform

As Greg Schneier and others have noted, the fragmented regulatory environment makes it difficult to effectively address AI’s impact on elections. US agencies often find themselves in jurisdictional battles over which organisation should take the lead. Meanwhile, the public is left to navigate an increasingly complex landscape in which artificial intelligence is utilised to both inform and mislead. To stay up with the rapid advancements in AI, stronger governance, transparency, and reforms are important.

The upcoming elections in the US present a pivotal moment for addressing the issue of using AI in political campaigns. With concerns about election disinformation growing globally, it is critical for governments and regulatory bodies to act decisively and, more importantly, quickly to ensure fair and transparent elections – both now and in the future.

The post AI’s growing influence: How election integrity is at risk worldwide appeared first on TechWire Asia.

China finds itself at the heart of global scrutiny once more. Following its recent shift in tech policy, including the move to phase out AMD and Intel microprocessors in governmental applications, serious allegations have emerged from the U.S. and the UK. Authorities in these countries have leveled charges, imposed sanctions, and accused Beijing of orchestrating a vast cyberespionage campaign, reportedly affecting millions, including lawmakers, academics, journalists, and companies, notably in the defense sector.

Termed Advanced Persistent Threat 31, or “APT31,” this hacking ensemble is characterized by officials as a branch of China’s Ministry of State Security. A broad spectrum of individuals and entities has been identified as targets, encompassing White House personnel, U.S. senators, British legislators, and international officials critical of Beijing, as reported by Reuters.

Although specific victims have not been fully disclosed, it’s clear that over the past decade, these hackers have penetrated defense contractors, dissidents, and various sectors in the U.S., such as steel, energy, and apparel. They’ve also targeted leaders in 5G and wireless technology, extending even to the spouses of prominent U.S. officials and lawmakers.

Deputy U.S. Attorney General Lisa Monaco stated that the operation aimed to stifle criticism of the Chinese regime, compromise government institutions, and steal trade secrets.

A recent indictment of seven alleged Chinese hackers has brought to light the magnitude of their operations, detailing breaches involving work accounts, personal emails, and more, impacting millions in the U.S. British officials have also highlighted APT31’s hacking of key UK lawmakers and have connected another group of Chinese spies to a significant breach of Britain’s electoral commission.

International reactions and repercussions on the “China hacking”

In response, Chinese officials in the UK and U.S. have dismissed these allegations as unfounded and slanderous.

Amidst these disclosures, the UK and U.S. have sanctioned individuals and entities believed to be linked to China’s state security apparatus and involved in these cyber operations.

This situation intensifies the already heightened tensions between Beijing and Washington over cybersecurity, with each side increasingly accusing the other of espionage. China has retorted with allegations of U.S. cyber intrusions into major Chinese corporations, such as Huawei Technologies.

One notable incident highlighted by U.S. prosecutors involved targeting staffers from a U.S. presidential campaign in 2020, corroborating Google’s reports of malicious emails sent to President Joe Biden’s campaign team, though no breach was confirmed.

The hacking of a significant American public opinion research firm in 2018, during the U.S. midterm elections, underscores the hackers’ strategic interest in political entities for their invaluable intelligence and data.

John Hultquist, chief analyst for U.S. cybersecurity intelligence firm Mandiant, has pointed out the substantial value political organizations offer to espionage efforts, underlining the critical insights and extensive data they provide to actors like APT31 in search of geopolitical intelligence.

The global stage of cyber warfare

The narrative has broadened beyond the initial U.S. and UK accusations against China regarding cyberespionage. The New Zealand government has also come forward, expressing its concerns to the Chinese government about a state-backed cyberattack on New Zealand’s parliament in 2021, discovered by the country’s intelligence services. This incident contributes to the intricate landscape of international cyber tensions.

This exposure of unauthorized access to New Zealand’s parliamentary systems through malicious cyber activities aligns with the allegations of cyberespionage by Britain and the U.S. against China. New Zealand and Australia have both denounced these extensive cyber operations.

New Zealand’s Foreign Minister, Winston Peters, has criticized such foreign interference as unacceptable. He highlighted that New Zealand has conveyed its concerns about cyber activities attributed to Chinese government-sponsored groups targeting democratic institutions in New Zealand and the UK to the Chinese ambassador.

The Chinese Embassy in New Zealand has not yet commented on these accusations.

We reject outright the groundless and irresponsible accusations against China on cyber attacks or intrusions, and have lodged serious démarches to New Zealand’s relevant authorities, expressing strong dissatisfaction and resolute opposition.

Cybersecurity is a global challenge.…

— Wang Xiaolong (@AmbChina2NZ) March 26, 2024

The New Zealand Communications Security Bureau (GCSB), in charge of cybersecurity and signals intelligence, has linked a state-sponsored Chinese entity, known as Advanced Persistent Threat 40 (APT40), to the malicious cyber activities against New Zealand’s parliamentary services and parliamentary counsel office in 2021. The GCSB associates APT40 with the Ministry of State Security, noting that while no sensitive or strategic information was compromised, the attackers extracted technical data, potentially enabling further intrusive activities.

According to the GCSB, a notable portion of the malicious cyber events targeting nationally significant organizations last year were traced back to state-sponsored actors, not exclusively China. The bureau also criticized similar cyber activities linked to Russia.

Judith Collins, the minister responsible for the GCSB, stated that cyberespionage efforts targeting democratic institutions are universally condemnable.

Towards a unified stance against cyber intrusions

This development follows charges, sanctions, and accusations by American and British officials against Beijing, accusing it of conducting a widespread cyberespionage campaign that allegedly affected millions globally, including lawmakers, academics, journalists, and businesses, such as defense contractors. The group behind these activities, identified as Advanced Persistent Threat 31 or “APT31,” is said to be an extension of China’s Ministry of State Security, with a broad list of global targets reported by officials from the two countries.

A joint statement from Australia’s Foreign Minister Penny Wong and Home Affairs Minister Clare O’Neil criticized the continuous cyber targeting of democratic institutions, emphasizing the adverse impact on democratic and open societies like Australia. They stated that such behavior is unacceptable and must cease.

In 2019, Australian intelligence attributed a cyberattack on its national parliament and the country’s three largest political parties before the general election to China, though the Australian government has not officially confirmed the perpetrator.

Well, it looks like the cyber saga is thickening, with China in the hot seat for allegedly orchestrating a vast network of cyberespionage that spans continents. The U.S., UK, New Zealand, and Australia are ramping up their cybersecurity defenses and calling out China’s actions on the global stage. It’s a classic case of “your move, China,” as the international community tightens its ranks against these cyber intrusions.

But what does the future hold? Well, if history has taught us anything, it’s that with every action comes a reaction. China might double down on its cybersecurity measures and retaliate, or perhaps, just perhaps, this international spotlight could usher in a new era of cyber diplomacy. In a world where technology continues to blur the lines between the possible and the impossible, who’s to say what the future might hold? One thing’s for sure: the global dialogue on cybersecurity is heating up.

The post Global concerns rise over alleged cyber hacking activities linked to China appeared first on TechWire Asia.

A month after it emerged that protesters in China were using the AirDrop function on iPhones to digitally share anti-government flyers with strangers without their consent, Apple began limiting file-sharing for Chinese iPhone users last week.

In what is apparently the latest in a string of incidents, Apple appears to be conceding to Chinese demands to block the spread of content deemed inflammatory to the government — but can it also be construed as Apple doubling down on its privacy and security pledges, and preventing misuse of its Airdrop universal share option to all Apple devices within a certain range?

Under the update to the AirDrop function last week, users of smartphones sold by Apple in China can only opt in to receive files from non-contacts during a 10-minute window, before it automatically shuts off. The feature did not previously have a time limit in China, or anywhere else.

The update was rolled out in the iOS operating system practically overnight, and makes it next-to-impossible to receive unrequested files from strangers. The change follows widespread reports of people using AirDrop to spread leaflets critical of the Chinese Communist Party in crowded public spaces — a digital version of a protest that was partly inspired by an incident in Beijing in which a man hung banners calling for the removal of President Xi Jinping.

As per their usual practice, Chinese censors quickly scrubbed online videos and posts appearing on the mainland that made reference to the protest, while hundreds of users on the popular payment and chat app WeChat had their accounts blocked after speaking about the rare act of rebellion. Apple declined AFP‘s request for comment on the record but the company is now understood to be planning a roll out of the Airdrop feature update across the globe.

Apple phones sold outside mainland China did not appear to be affected by the update last week, while iPhones sold in China displayed the limit regardless of which country the user’s App Store account was based in. The description for users said the update “includes bug fixes and security updates”.

Airdrop update highlights the cost of doing business in China

The world’s most valuable company based out of  Cupertino, California, touts security and privacy protections as key features of its device ecosystem, but has previously faced criticism for alleged concessions to Beijing.

Following widescale Western sanctions and a stifling zero-Covid policy that have derailed its international technological cooperation and thrown manufacturing supply chains into disarray, including for locally made iPhones, China is seen by observers as becoming increasingly repressive as President Xi Jinping embarks on his third term as the country’s most powerful figure.

“This is one small sample of a type of China cost…that’s making China much less appealing as a investment and manufacturing destination for many global multinationals many global companies,” Isaac Stone Fish, CEO of Strategy Risks, told AFP. “Apple has to understand the very real risks of being overly exposed to China in 2022.”

Other apparent concessions included opening a data center in China, as well as removing an app in 2019 that allowed Hong Kong pro-democracy protesters to keep track of police. It has also faced boycott threats in China as it stands in the crossfire of US-China tensions, with Beijing warning in 2020 that it could turn its citizens against Apple if Washington blocked Chinese apps.

Some Chinese social media users last week hailed the iPhone update as a positive step in preventing unsolicited messages from strangers. One Weibo user said the change would “greatly reduce the probability of iPhone users being harassed”.

A handful questioned why the function was only being rolled out on Chinese iPhones, with one Weibo commenter joking about Apple CEO Tim Cook’s friendliness with Beijing: “So is Tim Cook a Party member or not?”

 

 

 

 

 

 

With reporting by Jing Xuan TENG © Agence France-Presse

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Hong Kong Stock Exchange, the world’s third-largest financial bourse, has always positioned itself as the prime listing hub for Chinese companies that aim to raise capital abroad. The country has specifically gained from the lingering US-China geopolitical tension, recording its best nine months on record since 1980 as a flurry of Chinese companies redirected their IPOs to the city.

To make matters worse, Chinese companies that have plans to raise capital on Wall Street will now be entitled to greater scrutiny as the US regulators have even imposed a law that allows authorities to delist stocks whose auditors refuse to comply with US oversight. So the only respite for those Chinese companies is in Hong Kong but that might not be the case in the near future,

But now, IPOs in Hong Kong will not be that simple

Beijing has been intensifying probes into tech companies and their data security practices, especially when it comes to the transfer of data outside mainland China, which the government deems a matter of national security. It started when, in July, Chinese ride-hailing giant Didi Chuxing went public in New York — despite being told not to. 

Soon after that, the Cyberspace Administration of China (CAC) launched a cybersecurity review into the company and proposed a mandate for all Chinese firms with more than a million users to get approval before listing in foreign markets.

Here is where it gets trickier — while many had assumed that IPOs in Hong Kong would be exempt from various red tapes, the Cyberspace Administration of China (CAC) last month released the Network Data Security Management Regulation (Exposure Draft), clarifying that listings in the special administrative region would also need to go through a cybersecurity review if they “affect or may affect national security.”

The sprawling draft Regulation, consisting of 75 articles, unifies data security rules introduced by the Cybersecurity Law (CSL), Data Security Law (DSL), and Personal Information Protection Law (PIPL). The CAC is seeking public opinions on it until December 13, 2021

A partner at international law firm Pinsent Masons in Hong Kong Paul Haswell told South China Morning Post, “The mood at the moment, given how new the laws are and the fact that we are still waiting for an explanation on the ambit and meaning of some of their provisions, is one of concerned uncertainty.”

In short, the listing review would cause anxiety to Chinese tech firms which were counting on pivoting toward going public in Hong Kong without needing approval. As Bloomberg puts it, “there may not be a wave of Hong Kong share sales by Chinese tech companies as some predicted months ago.”

So far, there are three Chinese tech firms including Microblogging platform Weibo, NetEase’s music streaming service Cloud Village and artificial intelligence company SenseTime, that have upcoming Hong Kong listings. Those IPOs can be taken as test cases for the new regulations once enacted

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In a nutshell, China is home to the largest online community in the world — except it comes with a hefty price tag: being under the world’s most sophisticated,  and arguably most authoritarian censorship system.

Considering how the total number of internet users in China accounts for one in five of the world’s users, it inevitably reflects the booming development of internet applications and the continuous improvement in digital industrialization. Basically, online services have become a fixture of everyday Chinese life, expanding the reach and influence of the tech sector. 

A mobile-first kingdom

The gradual and constant rise in China’s internet population is mainly attributed to the high volume of affordable smartphones in the market. In 2019, over 90% of Chinese people accessed the internet through mobile phones, and, interestingly, statistics claim that Chinese mobile users spend over 70% of their time daily online. 

Mobile preferences among citizens are reflected such that out of the 600 million customers using online payment modes, 580 million prefer using mobile payment services, according to Statista records. That being said, it is only apparent how this large and engaged mobile internet population has provided a wide range of opportunities to hi-tech companies in China.

Unfortunately, it has also led to the internet becoming the frontlines of the battleground that is China’s new informational politics — the very reason why President Xi Jinping is overseeing a crackdown on the country’s tech sector as its influence rises.

The history of the Great Firewall of China

In China, the world’s largest internet population is subject to the world’s most sophisticated censorship system: The Great Firewall (of China).

This may come as a surprise to some, given the ruling communist party’s infamy for authoritarianism — but China didn’t initially restrict the web. The Great Firewall only started to come about a decade after the first email was sent from China.

It was only after China got access to the world wide web in 1994, that both the country’s earliest netizens and the government came to realize that the free flow of information could have some big political implications.

By the early 2000s, China’s internet controls were apparent. By the time Google launched a Chinese version of its search engine in 2000, it was already slow, unstable and blocked about 10% of the time. In 2002, Google was completely blocked in the country for the first time, but only for nine days. Google’s search engine was blocked again in 2003. That’s the year the Great Firewall went online, according to Fang’s Global Times interview.

Although China has never publicly revealed technical details about the Great Firewall, researchers around the world have studied it and concluded that techniques include blocking IP addresses, DNS attacks, and filtering specific URLs and keywords within URLs. The latter method has become more difficult with the increasing popularity of the encrypted HTTPS protocol. 

Truth be told, before President Xi Jinping, China’s internet was becoming a more vibrant political space for Chinese citizens. But like the web, the Great Firewall is a complex and multi-layered beast of a system that keeps evolving alongside the government’s whims.

That makes it difficult for people on the outside to completely understand how it works. Researchers have found China’s internet blocking mechanisms are changing frequently in response to different situations, and they may change based on the internet provider and region.

Over the years, the number of websites blocked in China has ballooned and the blacklist includes social networks like Facebook, Instagram and WhatsApp; news outlets like Bloomberg, The Wall Street Journal and The New York Times; and popular collaboration tools such as Dropbox and Google Drive (or anything else on Google, really).

Agenda: Censorship

Xi has always established that the Chinese internet would be a world unto itself, with its content closely monitored and managed by the Communist party. In one instance, during the country’s second World Internet Conference in 2015, Xi warned against foreign interference saying, “We should respect the right of individual countries to independently choose their own path of cyber-development; in other countries’ internal affairs”.

Abroad, Xi frequently asserts China’s sovereign right to determine what constitutes harmful content. At home, Xi paints the west’s version of the internet, which prioritises freedom of information flow, as anathema to the values of the Chinese government.

And, rather than acknowledging that aggressive efforts to control the flow of information on the internet are a source of embarrassment and a sign of potential authoritarian fragility, Xi ironically tried to turn his vision of a “Chinanet” into a model for other countries to follow.

Gradually, the experience of being online in China changed. While the Chinese people explored new ways to use the internet, the leadership also began to develop a taste for the new powers it offered, such as a better understanding of citizens’ concerns and new ways to shape — and arguably, control —  public opinion. The government responded with a stream of technological fixes and political directives, yet the boundaries of internet life continued to expand.

The victims of China’s internet crackdown

Looking back at all of China’s achievements in the past two decades, one of the most impressive is the rise of its technology industry. First China, then global tech giant Alibaba Group hosts twice as much e-commerce activity as Amazon does. Tencent runs one of the world’s most popular WeChat apps, with 1.5 billion users. Both Alibaba and Tencent form the fintech duopoly on e-wallets in China, too, with their Alipay and WeChat Pay e-wallets respectively.

Chinese people in cities largely perceive cash or card payments as alien — a whopping 92% of all financial transactions in cities are carried out via e-wallets. The sheer volume of digital payments made has become so dominant that the People’s Bank of China had to forbid what it sees as cash discrimination by merchants who refuse to accept anything but digital payments, according to CGap. This very fact is immensely remarkable, given that barely two decades ago, China was pretty much a cash economy.

China’s tech revolution has also helped transform its long-run economic prospects at home, by allowing it to leap beyond manufacturing into new fields such as digital healthcare and artificial intelligence. 

That is why Xi’s recent assaults on his country’s US$4 trillion tech industry are making a lot of industry players, especially stock markets local or otherwise, very nervous. There have been over 50 regulatory actions against scores of firms for a dizzying array of alleged offenses, from antitrust abuses to data violations.

To recall, since the suspension of Ant Group’s IPO in November 2020, Beijing has embarked on an unprecedented clampdown of its technology sector. These crackdowns didn’t stop at tech, however — recently, Xi has set its all-seeing eye towards regulating and coming down harshly on companies in other sectors.

The casualties include some of China’s leading tech companies, such as Tencent (internet conglomerate), Meituan (food delivery), Pinduoduo (e-Commerce), Didi (ride-hailing), Full Truck Alliance (freight logistics), Kanzhun (recruitment), online private tutoring companies like New Oriental Education and TAL Education, and cryptocurrencies.

As reported by The Washington Post earlier this week, “It’s striking and significant. This is clearly not a sector-by-sector rectification; this is an entire economic, industry, and structural rectification,” said Jude Blanchette, who holds the Freeman Chair in China Studies at the Center for Strategic and International Studies.

China’s internet woes: a deeper agenda?

Whilst the government insists such moves were designed to control the country’s businesses from abuses, inequality, and inequity, critics imply that these swathes of crackdowns have a deeper agenda behind them.

As the authoritarian state’s leaders become increasingly embroiled in friction between Western nations such as the United States, critics opine that these moves are to gain more control and oversight over the flow of information of citizens — particularly, intelligence on state officials — from being leaked outside the country.

Crackdowns on social behaviors and activities related to “morality” (from a Chinese perspective, obviously) seem aimed at forcibly asserting and reiterating anti-Western propaganda through controlling popular thought and culture — which arguably, could be seen as a supportive tool to achieve the agenda mentioned above.

The seemingly nationwide crackdown is not ending anytime soon and while regulators have tried to calm the markets after their latest tutoring bans, experts highlighted some sectors that are highly concentrated, have little relation to state priorities and have previously become targets of public scrutiny.

Alas, Xi intends to reiterate the same point to the world — the crackdown on China’s unruly tech is a demonstration of the party’s untrammeled power.

Note: The views represented here are of the author’s and do not represent Tech Wire Asia.

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Over the last few years, the Chinese government, seeking to strengthen consumers’ trust and participation in the digital economy, has begun to implement data privacy protections that in many respects resemble those in America and Europe today.

China under President Xi Jinping especially has been cracking down on its most powerful tech stars, including Alibaba Group Holding Ltd., Tencent Holdings Ltd, and Didi Global Inc. in a bid to ensure its hold on society. 

It appears that the government is constantly moving to address consumer worries about the gradual erosion of their privacies as tech companies make rapid advances in the use of tools from facial recognition to big data. That said, the most recent move by the Chinese authorities is passing legislation setting out tougher rules for how companies handle user data.

Last Friday, the legislature of the Asian nation approved the Personal Information Protection Law (PIPL), said China Central Television. Based on earlier drafts, companies are required to get user consent to collect, use and share information, and to provide a way for them to opt out. 

Companies found breaking the rules could face fines of up to 50 million yuan (US$7.7 million) or 5% of their annual revenue. The national privacy law, China’s first, closely resembles the world’s most robust framework for online privacy protections, Europe’s General Data Protection Regulation.

Right before this law, the nation’s legislature passed a related law in June that gave President Xi Jin Ping the power to shut down or fine tech companies that stood in the way of his efforts to control vast reams of data they build. The moves come as some US lawmakers call for breaking up internet titans like Facebook Inc. and Alphabet Inc., and as European regulators prioritize antitrust actions and giving users more control over data.

What else does the data privacy law cover?

According to the Wall Street Journal, the new privacy law, which unifies previously piecemeal legislation on personal information protection, also tackles a number of concerns that have come to light in recent years, such as the proliferation of facial recognition. According to the latest PIPL draft, facial recognition cameras installed in public places must be marked with prominent alerts and only be used to maintain public security.

The new law will also seek to address the issue of algorithmic discrimination, which has drawn increasing public concern, especially in cases where online platforms offer different prices to different users based on their online behavior. The latest draft, which requires automated decision-making to be transparent and fair, also instructs companies to give individuals the option to opt-out of personalized marketing.

Unlike the GDPR, however, the PIPL comes with one major caveat: It’s largely written to protect people from private companies monopolizing their data while giving state authorities a free pass to largely do just that. It is inevitably a loophole that kind of undercuts the biggest problem that a lot of people tend to have with China’s surveillance state.

The PIPL also has pretty strict guidelines for foreign companies doing business in the region—and that includes data-hoovering giants like Facebook that offer services to Chinese customers through obscure subsidiaries.

The PIPL states that any of these outfits aren’t only required to abide by the new law but that they need to “pass a security assessment organized by the State cybersecurity and information department” before they get a pass to operate in the country.

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