Wednesday, April 13, 2022

The West's Technological Edge in Geopolitical Competition

The US and its allies enjoy a significant technological advantage over China and Russia.  The Chinese are working hard to catch up but the West is not standing still. It is making huge investments in research and development to maintain this edge as it becomes increasingly clear that the outcome of the ongoing international geopolitical competition will largely be determined by technology. 

East-West Comparison of GDP, R&D. Source: IMF (GDP), OECD (R&D) via WSJ

In 2019, the United States and its allies invested $1.5 trillion in research and development, far outpacing the combined Chinese and Russian R&D investment of half a trillion USD.  This gap will likely narrow if the East's GDP continues to grow faster than the West's, allowing for higher investment in technology. 

After the Russian invasion of Ukraine, the US, EU, Japan, South Korea and Taiwan have made it clear that the Western allies can and will use technology sanctions to control the behavior of China and Russia. 

Taiwan Semiconductor Manufacturing Company (TSMC) will no longer fabricate computer chips for Russia, according to media reports. The ban will particularly affect Russia's Elbrus and Baikal processors, unless China agrees to step in to manufacture these chips, and risk additional US sanctions itself. Both Russian processors use mature 28 nm technology. The world's most advanced TSMC fabrication technology today is 5 nanometers. The best US-based Intel can do today is 7nm technology. China's SMIC (Semiconductor Manufacturing International Corporation) has the capability to produce chips using 14 nm technology.  Semiconductor chips form the core of all modern systems from automobiles to airplanes to smartphones, computers, home appliances, toys, telecommunications and advanced weapons systems.  

While China is the  biggest volume producer of semiconductor components in the world,  the Chinese design centers and fabs rely on tools and equipment supplied by the West to deliver products. Western companies dominate all the key steps in this critical and highly complex industry, from chip design (led by U.S.-based Nvidia, Intel, Qualcomm and AMD and Britain’s ARM) to the fabrication of advanced chips (led by Intel, Taiwan’s TSMC and South Korea’s Samsung ) and the sophisticated machines that etch chip designs onto wafers (produced by Applied Materials and Lam Research in the U.S., the Netherlands’ ASML Holding and Japan’s Tokyo Electron ), according to the Wall Street Journal

There is no question that the current western technology sanctions can seriously squeeze Russia. However, overusing such sanctions could backfire in the long run if the US rivals, particularly China and Russia, decide to invest billions of dollars to build their own capacity. This would seriously erode western technology domination and result in major market share losses for the US tech companies, particularly those in Silicon Valley. 

Related Links:

Haq's Musings

South Asia Investor Review

Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Has Intel's Indian Techie Risked US Lead in Semiconductor Technology?

US-China Tech Competition

Can Pakistan Benefit From US-China Tech War?

Ukraine's Muslims Oppose Russia



79 comments:

Riaz Haq said...

Renewed Great Power Competition:
Implications for Defense—Issues for
Congress
Updated March 10, 2022


https://sgp.fas.org/crs/natsec/R43838.pdf

National Defense Strategy (NDS),
5 which formally reoriented U.S. national security strategy and
U.S. defense strategy toward an explicit primary focus on great power competition with China
and Russia.
The Biden Administration’s March 2021 Interim National Security Strategy Guidance states that
“we face a world of rising nationalism, receding democracy, growing rivalry with China, Russia,
and other authoritarian states, and a technological revolution that is reshaping every aspect of our
lives,” and that protecting the security of the American people “requires us to meet challenges not
only from great powers and regional adversaries, but also from violent and criminal non-state
actors and extremists, and from threats like climate change, infectious disease, cyberattacks, and
disinformation that respect no national borders.”
6 The document further states (emphasis as in
original)
We must also contend with the reality that the distribution of power across the world is
changing, creating new threats. China, in particular, has rapidly become more assertive.
It is the only competitor potentially capable of combining its economic, diplomatic,
military, and technological power to mount a sustained challenge to a stable and open
international system. Russia remains determined to enhance its global influence and play a
disruptive role on the world stage. Both Beijing and Moscow have invested heavily in
efforts meant to check U.S. strengths and prevent us from defending our interests and allies
around the world. Regional actors like Iran and North Korea continue to pursue gamechanging capabilities and technologies, while threatening U.S. allies and partners and
challenging regional stability. We also face challenges within countries whose governance
is fragile, and from influential non-state actors that have the ability to disrupt American
interests. Terrorism and violent extremism, both domestic and international, remain
significant threats. But, despite these steep challenges, the United States’ enduring
advantages—across all forms and dimensions of our power—enable us to shape the future
of international politics to advance our interests and values, and create a freer, safer, and
more prosperous world….
Defending America also means setting clear priorities within our defense budget. First and
foremost, we will continue to invest in the people who serve in our all-volunteer force and
their families. We will sustain readiness and ensure that the U.S. Armed Forces remain the
best trained and equipped force in the world. In the face of strategic challenges from an
increasingly assertive China and destabilizing Russia, we will assess the appropriate
structure, capabilities, and sizing of the force, and, working with the Congress, shift our
emphasis from unneeded legacy platforms and weapons systems to free up resources for
investments in the cutting-edge technologies and capabilities that will determine our
military and national security advantage in the future. We will streamline the processes for
developing, testing, acquiring, deploying, and securing these technologies. We will ensure
that we have the skilled workforce to acquire, integrate, and operate them. And we will
shape ethical and normative frameworks to ensure these technologies are used responsibly.
We will maintain the proficiency of special operations forces to focus on crisis response
and priority counterterrorism and unconventional warfare missions. And we will develop
capabilities to better compete and deter gray zone actions. We will prioritize defense
investments in climate resiliency and clean energy. And we will work to ensure that the
Department of Defense is a place of truly equal opportunity where our service members do
not face discrimination or the scourge of sexual harassment and assault….

Tang said...

Chinas great disadvantage is that the US already has all the rich and advanced nations on its side while China is all alone in that front. Russia has some tech and industry but it’s not significant in most industries.

Riaz Haq said...

Unpacking the geopolitics of technology


https://www.atlanticcouncil.org/in-depth-research-reports/report/unpacking-the-geopolitics-of-technology/

How second- and third-order implications of emerging tech are changing the world
Developing new technologies used to be primarily an economic and commercial issue, but it is increasingly also about foreign and security policy. Emerging technologies in particular have become both an object and a driver of international cooperation and competition, shaping the global landscape in different and sometimes unexpected ways. To put it simple, high tech has come to signify high politics, too. Today, digital and tech advancements are geopolitical issues of the highest order, even more so with the second wave of digital innovations, which are more systemic in reach and will determine future economic and technological supremacy as well as respective security environments.

The development of cutting-edge artificial intelligence (AI) capabilities, for instance, has become the new playing field for great power competition between the United States and China, both striving for digital supremacy and spheres of economic influence. Such increasing bipolarity in the international system comes with a price tag for many countries around the globe. European states in particular are torn between their alignment in terms of values with the United States and their dependency on close economic ties with China for the sake of their own economic health. In worrying about an escalating rivalry, many countries and state conglomerates have started to pursue their own digital sovereignty, yet lag behind in the global race of tech development, innovation, and cyber capabilities.

On technology-induced societal changes
The international debate concerning technological change also includes many ethical, social, and legal questions in fields such as human rights and individual freedoms, competition and market structure, consumer protection, or public health. Furthermore, the COVID-19 pandemic has raised significant questions about the role of technology in crisis management. Conversations around technological advances, new forms of work, and the change in skills needed have dominated the employment policy debate in many countries around the world. The platform economy, technological advances, and artificial intelligence are irrevocably changing economic structures, tasks, and ways of working, and even what we understand by “work.”

Europe, for example, is already a patchwork of highly varied local economies and markets. McKinsey Global Institute claims that by 2030, more than half of Europe’s workforce will face significant transitions. Automation will most likely require almost all workers to gain new skills. About ninety-four million employees may not need to change occupations altogether, but will need retraining, as technology already handles 20 percent of their current activities. While some workers in declining occupations might be able to find similar types of work, estimates indicate that some 21 million will need to change occupations by the end of this decade. Newly created jobs are going to require more sophisticated skills, which are already scarce today, and the potential social implications cannot be underestimated in scale.

Similar trends are becoming obvious in the United States, too. Having studied 702 occupational groupings, Oxford University researchers Carl Frey and Michael Osborne asserted already in 2013 that technology will inevitably transform many sectors of life: there is high probability, they estimated, that 47 percent of US workers will see their jobs automated within two decades. These fears have subsequently been echoed by similar studies inter alia from the European think tank Bruegel, the McKinsey Global Institute, and the Organisation for Economic Co-operation and Development (OECD), showing automation affecting between 14 and 54 percent of jobs in the “near future.”

Ben said...

Yes, that is why China is developing it's own tooling and software to etch transistors onto wafers.

It can get by with it's current fab process till it can independently go down to sub-10nm processes.

By 2030 it should have caught up with the Western companies, Korea and Japan in this field. It just needs a lot of money and brainpower which China has in abundance.

Riaz Haq said...

Ivy League Professor Amy Wax joins Tucker Carlson to go on a wildly racist rant that will make you wince. Adrienne Lawrence breaks it down on Rebel HQ.

https://youtu.be/xU-MAVo1GVU

Riaz Haq said...

#US Professor Calls #India "Sh*****E". "They're taught that they are better than everybody else because they are Brahmin elites and yet, on some level, their country is a sh*thole,” UPennProfessor Amy Wax said. #Caste #Brahmin #Xenophobia #Hindu https://www.ndtv.com/indians-abroad/us-professor-calls-india-sh-e-indian-americans-slam-remarks-2892529 via @ndtv

Leading Indian-Americans, including US Congressman Raja Krishnamoorthi, have slammed a law professor from University of Pennsylvania for her disparaging comments about the Asian American community, with a specific disdain for Indian-Americans.
In a recent interview to Fox News, Prof Amy Wax from the University of Pennsylvania alleged that “Blacks” and “non-Western” groups have “a tremendous amount of resentment and shame against western people for [their] outsized achievements and contributions.” “Here's the problem. They're taught that they are better than everybody else because they are Brahmin elites and yet, on some level, their country is a sh*thole,” Wax, who has a long history of inflammatory remarks, said.

She also said that the westerners have outgunned and outclassed the Asian Americans in every way.

“They've realised that we've outgunned and outclassed them in every way… They feel anger. They feel envy. They feel shame. It creates ingratitude of the most monstrous kind,” she said.

Wax then targeted the influential Indian-American doctors' community as well. “They are on the ramparts for the antiracism initiative for ‘dump on America,'” she alleged.

The comment was condemned by the Indian-Americans across the US.

“After President Trump left office, I thought the days of calling others “shithole” countries were over,” Krishnamoorthi said in a tweet.

“As an Indian-American immigrant, I'm disgusted to hear this UPenn Professor define Indian-American immigrants, and all non-white Americans, in such insulting terms,” he said.

Stating that such comments are borne of hatred and fear, he emphasised that such talks make it much harder to accomplish common-sense immigration reform.

“Comments like these are borne of hatred and fear, and they lead to real harm for my constituents and our minority communities. They fuel hate crimes against minorities, and they make it much harder to accomplish common-sense immigration reform,” Krishnamoorthi said.

Indian-American Law professor Neil Makhija also slammed Wax for her comments.

“It's irresponsible to use your position to lend credibility to these overtly racist sentiments that don't recognise Indian-Americans for who we are," he told Axios.

Indian-American Impact is slated to hold a summit next month in DC Makjiha told Axios he's planning to adjust programming to discuss the incident and create solutions against anti-Asian and South Asian hate in educational settings.

“The most unfortunate thing is that we have a lot of brilliant and incredible students at the law school,” he told NBC News.

“It makes you question whether she can fairly grade or educate,” he said.

This is not the first time Wax's controversial comments about race have gone viral, the US media reported.

Her appearance on Carlson's show is not the first time Wax has made anti-Asian remarks. In an interview in December, she said that Indians Americans should be more “grateful” to be in the US and that the country would be “better off with fewer Asians.” Penn has confirmed that the school is in the middle of disciplinary proceedings against Wax, NBC News reported.

“The University of Pennsylvania Carey Law School has previously made clear that Professor Wax's views do not reflect our values or practices,” it quoted a representative as saying.

“In January 2022, Dean Ruger announced that he would move forward with a University Faculty Senate process to address Professor Wax's escalating conduct, and that process is underway,” the report quoted the Penn representative as saying.

Anonymous said...

this must confuse the hell out of Hindu Brahmin right wingers who thought that their relatively lighter skin color and "Indo Aryan" stuff makes them brothers with far right/alt right. Meanwhile, WIRED mag latest issue is smelling cow dung in silicon valley

https://www.wired.com/story/trapped-in-silicon-valleys-hidden-caste-system/

Riaz Haq said...


Christopher Clary
@clary_co
·
11m
Hmm. Wouldn't have guessed that rank ordering. "The Microsystems Technology Office’s core mission is to develop high-performance intelligent microsystems & next-generation components to ensure U.S. dominance in the areas of C4ISR, Electronic Warfare (EW), & Directed Energy (DE)."
Quote Tweet
Lee Hudson
@LeeHudson_
· 17m
JUST IN: @DARPA Director Stefanie Tompkins outlines FY23 budget investment areas:
$896M microelectronics
$414M biotech
$412M AI
$184M cyber
$143M hypersonics
$90M quantum
$82M space

https://twitter.com/clary_co/status/1516778943713529865?s=20&t=TlrTGXh6jWRz4vxonckPmA


Ahmed said...

Dear Sir

I hope you remember this is Ahmed , I was intouch with you on this blog some times ago.
Sir I hope you remember that I gave you suggestion about how we can work together in taking Pakistan forward in the field of quantum computing , I read some articles online and was surprised to know that few authors in Pakistan have written articles about future of quantum computing and they want to take Pakistan forward in this field , very few universities in Pakistan eg LUMS and NUST have started working on quantum computing but I don’t think other Universities in Pakistan have setup labs or research centres for quantum computing .

Sir I would deeply appreciate if you could do something about it .

Regards
Ahmed

Riaz Haq said...

World military expenditure passes $2 trillion for first time

https://sipri.org/media/press-release/2022/world-military-expenditure-passes-2-trillion-first-time


Total global military expenditure increased by 0.7 per cent in real terms in 2021, to reach $2113 billion. The five largest spenders in 2021 were the United States, China, India, the United Kingdom and Russia, together accounting for 62 per cent of expenditure, according to new data on global military spending published today by the Stockholm International Peace Research Institute (SIPRI).

Military expenditure reaches record level in the second year of the pandemic
World military spending continued to grow in 2021, reaching an all-time high of $2.1 trillion. This was the seventh consecutive year that spending increased.

‘Even amid the economic fallout of the Covid-19 pandemic, world military spending hit record levels,’ said Dr Diego Lopes da Silva, Senior Researcher with SIPRI’s Military Expenditure and Arms Production Programme. ‘There was a slowdown in the rate of real-terms growth due to inflation. In nominal terms, however, military spending grew by 6.1 per cent.’

As a result of a sharp economic recovery in 2021, the global military burden—world military expenditure as a share of world gross domestic product (GDP)—fell by 0.1 percentage points, from 2.3 per cent in 2020 to 2.2 per cent in 2021.

United States focuses on military research and development
US military spending amounted to $801 billion in 2021, a drop of 1.4 per cent from 2020. The US military burden decreased slightly from 3.7 per cent of GDP in 2020 to 3.5 per cent in 2021.

US funding for military research and development (R&D) rose by 24 per cent between 2012 and 2021, while arms procurement funding fell by 6.4 per cent over the same period. In 2021 spending on both decreased. However, the drop in R&D spending (–1.2 per cent) was smaller than that in arms procurement spending (–5.4 per cent).

‘The increase in R&D spending over the decade 2012–21 suggests that the United States is focusing more on next-generation technologies,’ said Alexandra Marksteiner, Researcher with SIPRI’s Military Expenditure and Arms Production Programme. ‘The US Government has repeatedly stressed the need to preserve the US military’s technological edge over strategic competitors.’

Russia increases military budget in run-up to war
Russia increased its military expenditure by 2.9 per cent in 2021, to $65.9 billion, at a time when it was building up its forces along the Ukrainian border. This was the third consecutive year of growth and Russia’s military spending reached 4.1 per cent of GDP in 2021.

‘High oil and gas revenues helped Russia to boost its military spending in 2021. Russian military expenditure had been in decline between 2016 and 2019 as a result of low energy prices combined with sanctions in response to Russia’s annexation of Crimea in 2014,’ said Lucie BĂ©raud-Sudreau, Director of SIPRI’s Military Expenditure and Arms Production Programme.

The ‘national defence’ budget line, which accounts for around three-quarters of Russia’s total military spending and includes funding for operational costs as well as arms procurement, was revised upwards over the course of the year. The final figure was $48.4 billion, 14 per cent higher than had been budgeted at the end of 2020.

As it has strengthened its defences against Russia, Ukraine’s military spending has risen by 72 per cent since the annexation of Crimea in 2014. Spending fell in 2021, to $5.9 billion, but still accounted for 3.2 per cent of the country’s GDP.

Continued increases by major spenders in Asia and Oceania
China, the world’s second largest spender, allocated an estimated $293 billion to its military in 2021, an increase of 4.7 per cent compared with 2020. China’s military spending has grown for 27 consecutive years. The 2021 Chinese budget was the first under the 14th Five-Year Plan, which runs until 2025.


Ahmed said...

Dear Sir

Thanks for your post about military expenditures by different countries especially by America . I think the reason why American government spends so much on military and defence is because America has a large and complex industry of military and it has to compete with the military and defence of China in the future . American government understands the threat which it can face from China in the future .

Riaz Haq said...

Scientists urge China to replace its faltering Covid vaccines | Financial Times

https://www.ft.com/content/729f1dc0-32d1-42c9-bb62-63a41f1e8de2

Scientists are urging China to look for alternatives to its two homegrown Covid-19 vaccines to tackle its Omicron outbreak, amid mounting concerns about the jabs’ efficacy against the variant. The country is struggling with two problems as it faces its worst Covid-19 surge since the start of the pandemic: the sluggish take-up of booster doses — authorities said this week that only 57 per cent of people over 60 have been fully vaccinated with three jabs — and homegrown vaccines that are much less effective than foreign-produced jabs. Studies have recommended that China’s Sinovac jab be boosted with a more effective shot, such as one of the mRNA vaccines produced by Germany’s BioNTech and Moderna of the US. With little data on China’s Sinopharm jab, many researchers believe it will also struggle against Omicron.

Eric Topol, director of the Scripps Research Translational Institute, said the data was “limited” but the inactivated vaccines, which are made using a dead part of the virus, were less effective than their rivals and declined further with time. “The vaccines were at 60 per cent efficacy, it was never rosy, but Omicron really exposed the problem,” he said. China may have to overcome its reluctance to approve a foreign-made vaccine to tackle the latest outbreak, as well as rapidly rolling out boosters of its domestic shots. Otherwise, it will probably have to impose stricter — and costly — lockdowns to prevent a potentially huge death toll.

Sinovac matches Pfizer’s effectiveness only after three doses
Risk of mortality for people aged 60 and over relative to an unvaccinated peer by vaccination status (%)

A study from the University of Hong Kong published last month found that people over 60 who had received two doses of Sinovac’s vaccine CoronaVac were three times more likely to die from Covid compared with people who received two doses of the BioNTech/Pfizer vaccine. The paper, which has yet to be peer-reviewed, concluded a third dose of either vaccine provided high levels of protection against severe disease. Sinovac did not respond to a request for comment.

Riaz Haq said...

Chip consortium ISMC (joint venture between #AbuDhabi-based Next Orbit Ventures and #Israel's Tower Semiconductor) to set up $3 billion plant in India's Karnataka. It will be #India's first #Semiconductor #fabrication plant. #technology https://finance.yahoo.com/news/chip-consortium-ismc-plans-3-080237787.html?soc_src=social-sh&soc_trk=tw&tsrc=twtr via @Yahoo

ISMC and Indian conglomerate Vedanta Ltd have applied for Prime Minister Narendra Modi's $10 billion incentive plan to push companies to set up semiconductor and display operations in India, the government's next big bet on electronics manufacturing.

-----------

BENGALURU (Reuters) - International semiconductor consortium ISMC will invest $3 billion in India's southern Karnataka state to set up a chip-making plant, the state government said on Sunday.

ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor. U.S. chip giant Intel Corp has announced plans to acquire Tower.

India’s first semiconductor fabrication unit is expected to generate more than 1,500 direct jobs and 10,000 indirect jobs, the state's investment promotion division said in a tweet.

ISMC and Indian conglomerate Vedanta Ltd have applied for Prime Minister Narendra Modi's $10 billion incentive plan to push companies to set up semiconductor and display operations in India, the government's next big bet on electronics manufacturing.

Munsif Vengattil
Sun, May 1, 2022, 1:02 AM·1 min read

A silicone semiconductor is seen at the offices of Tower Semiconductor in northern Israel
By Munsif Vengattil

BENGALURU (Reuters) - International semiconductor consortium ISMC will invest $3 billion in India's southern Karnataka state to set up a chip-making plant, the state government said on Sunday.

ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor. U.S. chip giant Intel Corp has announced plans to acquire Tower.

India’s first semiconductor fabrication unit is expected to generate more than 1,500 direct jobs and 10,000 indirect jobs, the state's investment promotion division said in a tweet.

ISMC and Indian conglomerate Vedanta Ltd have applied for Prime Minister Narendra Modi's $10 billion incentive plan to push companies to set up semiconductor and display operations in India, the government's next big bet on electronics manufacturing.

- ADVERTISEMENT -

Vedanta told Reuters on Saturday it was in "advanced talks" with Gujarat and Maharashtra in west India and Telangana in the south to choose a site by mid-May. It has a planned investment outlay of $20 billion for its semiconductor and display push.

Modi and his IT ministers outlined plans on Friday for investment incentives in the sector, saying they want India to become a key player in a global chip market dominated by manufacturers in Taiwan and a few other countries.

India's semiconductor market is forecast to grow to $63 billion by 2026 from $15 billion in 2020, the government says.

(Reporting by Munsif Vengattil and Aditya Kalra in New Delhi; Editing by Clarence Fernandez and William Mallard)

Ahmed said...

Dear Sir

Question is where does Pakistan stands in the field of IT ? What work is being done in this field in Pakistan ? What has PTI and previous governments of Pakistan done to promote IT related products to be produced in Pakistan ?

Isn’t it embarrassing to see that in India now they are setting up manufacturing units for semi-conductors ?

Riaz Haq said...

India Semiconductor Ambitions Are a Heavy Lift
Governments everywhere see both a threat and an opportunity from the current chip shortage. India is no exception.

https://www.wsj.com/articles/india-semiconductor-ambitions-are-a-heavy-lift-11652269561?mod=business_major_pos11


Indian Prime Minister Narendra Modi isn’t known for keeping his head down and working silently on a goal. Fanfare and zealous speeches are more on brand. The latest case in point: his speech at the Semicon India 2022 conference in late April, pitching India as a potential semiconductor manufacturing hub.

This goal, however, may require some humility and patience, particularly when leading economies like the U.S., Germany and Japan have already attracted large investments from top chip makers. And unlike manufacturing powerhouse China, which is also vying to be a serious global chip-making player, India lacks a robust domestic market for chips.

So far, the country has received proposals worth $20.5 billion from five companies. These include Indian oil-and-gas major Vedanta in joint venture with Foxconn, Singapore-based IGSS Ventures Pte, and the ISMC—a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor. Noticeably absent are many of the top global chip makers such as Taiwan Semiconductor Manufacturing Co. and Samsung —although Intel is in the process of acquiring Tower Semiconductor.

India has proven itself in smartphone assembly and is now the second-largest smartphone assembler after China. It understandably wants to move up the value chain—but cheap labor won’t be nearly enough. Chip making is a technology- and capital-intensive industry and needs, at a minimum, reliable access to power and water, things that Indian governments have often struggled to supply in the past.

Mr. Modi’s grandiloquence aside, getting on the map in the next 10 years and partly supplying India’s own domestic requirements looks like a reasonable goal to shoot for—in addition to focusing on the chip design and assembling, testing, and packaging aspects of the value chain. It isn’t surprising that the Indian government wants to seize the moment. But here, the adage about walking before running seems apt.

Anonymous said...

Sorry . Didn’t see the later posts . You are doing an amazing job .

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

By his own account, Ilias Sabirov, a Moscow businessman, had supplied Russia's military with high-performance computer chips made in the United States for years.
Then, in 2014, Russia seized the Ukrainian peninsula of Crimea, and the U.S. government began imposing a series of new sanctions and export controls on Russia, including severely restricting sales of such chips.
But that didn't stop Sabirov from obtaining more, according to U.S. authorities and a Reuters review of Russian customs records.

In the spring of 2015, a parcel containing more than 100 memory chips specially hardened to resist radiation and extreme temperatures – critical components in missiles and military satellites – arrived at Sabirov's business address in Moscow, according to the Russian customs records and a U.S. federal indictment. American prosecutors allege that the "rad-hard"chips were sourced from a company in Austin, Texas, called Silicon Space Technology Corp, or SST, but shipped to Russia via a firm in Bulgaria to evade U.S. export law.

After Russia launched a full-scale invasion of Ukraine in February, the United States and more than 30 other nations responded with an unprecedented barrage of additional sanctions and export restrictions. But the story of how the American chips made it from Texas to Moscow back in 2015 shows how sensitive Western technology can still end up in Russia despite strict U.S. export controls.
This account of the criminal case against Sabirov and two Bulgarian businessmen, which remains open, contains new details from interviews with U.S. officials and several of the main actors, including two fugitives. And it points to the challenges of imposing a rigorous export-control regime, especially on so-called dual-use components that can serve both civilian and military purposes.
The Texas scheme and other U.S. criminal cases involving sensitive technology that ended up in Russia, reviewed by Reuters, reveal a chain of willing suppliers, front and shell companies and false claims on export forms that specialized Western components were intended for civilian rather than military use. Sought-after parts have included microelectronics and precision tooling for the Russian military.
During war, said U.S. Department of Defense spokeswoman Sue Gough, rad-hard chips play an essential role for communications, intelligence and surveillance.

The Texas company, which had been repeatedly warned by its own lawyers that it couldn't ship rad-hard chips to Russia without a license, admitted that from 2014 to 2019, it had conspired with the three men to do just that. Reuters couldn't determine whether the chips ultimately were used for a military purpose. The U.S. attorney's office in the western district of Texas declined to comment.
In a statement, Vorago said it "is, and always has been, committed to zero tolerance compliance with all U.S. laws, including export controls." It said it "has been fully cooperative" in the U.S. investigations and "has implemented strengthened compliance procedures and training to prevent a recurrence."

The company also said it was "deliberately misled into believing that shipments were going to Bulgaria for use in Europe - a legal export. These customers provided a seemingly valid end-user certificate to Vorago certifying that the end user of Vorago's products was not in Russia

Sabirov denied any wrongdoing in an interview with Reuters and said the rad-hard chips never went from Bulgaria to Moscow, contradicting evidence gathered by U.S. prosecutors and customs records reviewed by Reuters. He said he always complied with U.S. export rules and never laundered money. "The sanctions they applied on myself, on my companies and on my friends are absolutely unfair, absolutely fake and absolutely wrong," he said.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

Fishenko and 10 other people were indicted in 2012 for participating in a conspiracy to sell controlled technology to Russia without required licenses. He later pleaded guilty to, among other charges, acting as an agent of the Russian government. Seven others were convicted either through pleas or at trial. Fishenko spent more than seven years behind bars.
New York lawyer Richard Levitt, who represented Fishenko in the case, declined to comment, and Fishenko himself couldn't be reached.
"It is common for illegal exports of controlled technology to go through middlemen overseas to hide the true destination of the goods," said Daniel Silver, a former federal prosecutor in Brooklyn who handled the Fishenko case. "These global networks can shield U.S. exporters by making it harder for law enforcement agents to connect the dots."
In recent years, Russia has tried to blunt Western export restrictions by making more parts at home or shifting to suppliers located in allied countries, such as China. Still, Russian companies remain heavily reliant on the West for high-precision machinery and some high-performance semiconductors like the radiation-hardened chips Sabirov imported.
"If a Russian satellite orbits around the Earth without a glitch, you can definitely assume that it contains Western electronics," an executive with a U.S. semiconductor maker said, asking not to be named. Russia doesn't make such chips and China, despite heavy investment, has yet to bridge the gap with rivals, the person said.


To supply its military, Russia has found high-tech suppliers in the U.S. and other Western countries. Between 2015 and 2018, Almaz-Antey, a state-owned manufacturer of Russia's sophisticated air-defense missile systems, managed to bypass German export restrictions and procure nearly $10 million worth of high-precision metalworking machines, according to a person familiar with the matter and an official case summary filed with a Hamburg court. Export-license papers claimed the machinery was destined to various Russian producers of civilian goods in the city of Yekaterinburg when, in fact, they were delivered to a nearby Almaz-Antey facility, according to the person familiar with the matter and the case summary. Almaz-Antey didn't respond to a message seeking comment.
Suzette Grillot, a professor of international studies at the University of Oklahoma, said Western trade restrictions on Russia worked during the Cold War because the West then dominated world trade. "When you went from the U.S. to Russia in the early 1990s, it was a different world technologically speaking, the place was definitely behind the times in communications and other technologies," she said.
But replicating Cold War sanctions to squeeze the Russian economy and military industry today seems like an elusive goal, Grillot said, because Russia has had almost unlimited access to Western technology for the past 30 years and can now also rely on alternative suppliers such as China and India. "You can't unring a bell," she said.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

Trained as a physicist and chemist, Wesley Morris had developed solutions to harden semiconductors against heat and radiation. In 2004, he founded SST (now called Vorago Technologies) in a bid to monetize his patented inventions. Morris told Reuters that his techniques caught the attention of the U.S. military, and SST received millions of dollars in research grants from the U.S. Department of Defense, including from top-secret missile programs, to hone its technology.
But 10 years later, in the spring of 2014, SST was still chasing its first significant commercial order. That's when Morris, the company's chief executive, said he learned from a newly recruited salesman that a Russian businessman, Sabirov, was interested in buying rad-hard chips from SST. Sabirov, the salesman said, wanted to purchase them for Russia's space agency, making him an attractive customer prospect because Russia relies almost entirely on imports for its rad-hard requirements.
The Russian space agency, Roscosmos, said it had no information about Sabirov's involvement in procuring electronic components for Russia.
Sabirov arrived at a meeting at SST's office in Austin in May 2014, accompanied by a Bulgarian associate, Dimitar Dimitrov. The two men formed an odd pair, Morris and several other people who dealt with them said. The Russian spoke English fluently and projected the confidence of a man with solid connections in his country's state bureaucracy. The Bulgarian appeared to be a brilliant scientist whose scuffed shoes suggested that he didn't worry too much about his attire. Both men seemed to have solid technical backgrounds.
According to Morris, Sabirov told him that one of his Russian companies, Kosmos Komplekt, had been buying rad-hard chips from SST's bigger U.S. rival, Aeroflex, since 2011, and was interested in transitioning to SST's products.
"I wanted to get the business," Morris recalled thinking at the time.
A spokesman for Cobham Group, which acquired Aeroflex in September 2014, said Aeroflex had stopped shipping rad-hard chips to Sabirov in Russia prior to the acquisition.
A week after the May 2014 meeting in Austin with Sabirov, SST's outside lawyer dampened Morris's expectations of quickly clinching a lucrative contract. "Anything that requires a license to Russia is currently subject to a presumption of denial," the lawyer told Morris and other executives, according to Commerce Department documents.
Morris told Reuters he wasn't ready to abandon what could be the transformational contract SST had longed for. From his conversation with Sabirov, Morris said he had grown hopeful the Russian would order $10 million worth of goods. He said he believed that the chips would be used in satellites, not in missiles.
Morris said that in July 2014, he and Sabirov discussed their options upon meeting on the sidelines of a nuclear-technology conference in Paris. Morris said his ideas hinged on obtaining one of the few export licenses U.S. authorities were still granting as part of Washington's cooperation with Russia on joint space programs.
Days after the Paris meeting, however, Morris lost hope. Geopolitical tension with Moscow had escalated after a Malaysian airliner flying through Ukrainian airspace was downed by a Russian-made missile, killing 298 people. Even though Moscow denied involvement in the tragedy, obtaining an export license to Russia was now virtually impossible, Morris concluded after conferring with SST's lawyer.
"We can't send you anything," the American CEO said he told Sabirov.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

In November 2015, the two men exchanged more emails. Lienhard offered a steep discount if Sabirov ordered more wafers before year end.
"How would you feel about the following scenario? Could you buy only 3 wafers this quarter and we would reduce the price per wafer from currently $125,000 to $100,000?" Lienhard emailed Sabirov. "You would help us a lot."
Five days later, Sabirov asked if there were "any obstacles for direct shipment to Moscow?" Lienhard responded that the wafers would have to be sent to Bulgaria to comply with export regulations, according to the Commerce Department documents, which contained excerpts from the communications.
In December 2015, a new Vorago sales executive, Anne Joubert, met with Sabirov and Dimitar Dimitrov in Munich to discuss additional wafer purchases, according to interviews and Commerce Department documents. Days later, MTIG sent Vorago a purchasing order for five more wafers. Federal documents show that Vorago shipped two of them to MTIG in December 2015.
In July 2016, Joubert flew to Bulgaria where she met with Sabirov and the two Dimitrovs. During the meeting, Joubert asked if MTIG was shipping Vorago's rad-hard chips to Russia, according to interviews and federal court records. "Maybe," Sabirov replied. When Joubert said this would violate U.S. export regulations, Dimitar Dimitrov assured her that all of the chips the Texas company previously had shipped to MTIG had remained in Bulgaria
According to the federal indictment, this claim was false because some chips had been sent to Russia. The indictment says that the "Ship to" address on an MTIG invoice was Sabirov's company, Sovtest, in Moscow. Joubert declined to comment.
Sabirov continued discussing ordering more wafers, including during a meeting with Lienhard in Sofia in August 2018, according to the Commerce Department documents.
That December, an export control officer from the Commerce Department went to Sofia to verify that Vorago chips had been used by MTIG in Bulgaria. The officer met with the younger Dimitrov, Milan, who denied the semiconductors had been sent to Russia and said they were still in Bulgaria, according to the federal indictment.
By then, Vorago, Sabirov and the Dimitrovs were under investigation by both the Federal Bureau of Investigation and the Commerce Department for alleged export violations, according to interviews.
In early 2016, the company's founder, Morris, informed the FBI about what he viewed as alleged irregularities at the firm, including the sales involving Sabirov, according to people familiar with the matter.
Weeks after the tip-off, in April 2016, FBI agents raided Vorago's head office in Austin, searching the premises while staffers were told to remain in one room, according to the people familiar with the matter. "It was a very disruptive day," one former employee recalled.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

The Texas company, which had been repeatedly warned by its own lawyers that it couldn't ship rad-hard chips to Russia without a license, admitted that from 2014 to 2019, it had conspired with the three men to do just that. Reuters couldn't determine whether the chips ultimately were used for a military purpose. The U.S. attorney's office in the western district of Texas declined to comment.
In a statement, Vorago said it "is, and always has been, committed to zero tolerance compliance with all U.S. laws, including export controls." It said it "has been fully cooperative" in the U.S. investigations and "has implemented strengthened compliance procedures and training to prevent a recurrence."

The company also said it was "deliberately misled into believing that shipments were going to Bulgaria for use in Europe - a legal export. These customers provided a seemingly valid end-user certificate to Vorago certifying that the end user of Vorago's products was not in Russia

Sabirov denied any wrongdoing in an interview with Reuters and said the rad-hard chips never went from Bulgaria to Moscow, contradicting evidence gathered by U.S. prosecutors and customs records reviewed by Reuters. He said he always complied with U.S. export rules and never laundered money. "The sanctions they applied on myself, on my companies and on my friends are absolutely unfair, absolutely fake and absolutely wrong," he said.

Milan Dimitrov also denied any wrongdoing. The accusations of export violations are "nonsensical," he told Reuters. "The whole thing is a misunderstanding. "His father, Dimitar Dimitrov, couldn't be reached for comment.
Sabirov, who is in Russia, and the two Bulgarians remain fugitives in the criminal case.

A review by Reuters of U.S. court and other federal records shows that the Texas case isn't unique.
Between 2008 and 2014, a father-and-son team smuggled more than $65 million worth of sensitive microchips from New Jersey to Moscow-area companies directly associated with Russian military, intelligence and nuclear-warhead design programs, according to U.S. authorities.
Alexander Brazhnikov Jr. of New Jersey, a naturalized U.S. citizen born in Russia, pleaded guilty in federal court in 2015 to purchasing microelectronics inside the United States, repackaging and relabeling them, and then shipping the goods to Moscow apartments and vacant storefronts linked to his father, a Russian national. There were 1,923 shipments in all, and the son admitted that the money to pay for it was laundered from Russia through 50 foreign shell companies, registered in countries stretching from the Marshall Islands in the Pacific to Panama and Belize in Central America, court records show.
"We believe that the microchips were all going to the military-industrial complex because Russia doesn't produce anything else that would have required that level of chips," said Peter Gaeta, one of the prosecutors on the case, which remains open.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

The son, whose field of study was listed as "nuclear physics" in court records, was sentenced to 70 months in prison and was released in December 2018. His father, Alexander Brazhnikov Sr., owner of a Moscow-based microelectronics import-export firm, was charged with conspiracy and remains a fugitive. The company allegedly distributed the components acquired in the United States to Russian defense contractors licensed to procure parts for the Russian military and security service, and Russian companies involved in the design of nuclear weapons.
"The scale of this case is just daunting," Gaeta told Reuters. "But this was not a lone wolf operation. This is happening across the board with Russia."
Alexander Brazhnikov Jr. declined to comment on the case. His father couldn't be reached.
In another case, Alexander Fishenko, a dual citizen of the United States and Russia, ran a years-long scheme to procure and ship sensitive microelectronics from U.S.-based companies to Russian government customers, including its military and intelligence services.
Fishenko owned a Houston, Texas-based export company and also was an executive in a Moscow-based procurement company, according to federal prosecutors. Between 2002 and 2012, his export company shipped goods through New York to contacts in countries including Finland, Canada and Germany who would send them onto Russia. Among the items were electronics with applications in radar and surveillance systems, weapons guidance systems and detonation triggers.
Fishenko and 10 other people were indicted in 2012 for participating in a conspiracy to sell controlled technology to Russia without required licenses. He later pleaded guilty to, among other charges, acting as an agent of the Russian government. Seven others were convicted either through pleas or at trial. Fishenko spent more than seven years behind bars.

New York lawyer Richard Levitt, who represented Fishenko in the case, declined to comment, and Fishenko himself couldn't be reached.
"It is common for illegal exports of controlled technology to go through middlemen overseas to hide the true destination of the goods," said Daniel Silver, a former federal prosecutor in Brooklyn who handled the Fishenko case. "These global networks can shield U.S. exporters by making it harder for law enforcement agents to connect the dots."
In recent years, Russia has tried to blunt Western export restrictions by making more parts at home or shifting to suppliers located in allied countries, such as China. Still, Russian companies remain heavily reliant on the West for high-precision machinery and some high-performance semiconductors like the radiation-hardened chips Sabirov imported.
"If a Russian satellite orbits around the Earth without a glitch, you can definitely assume that it contains Western electronics," an executive with a U.S. semiconductor maker said, asking not to be named. Russia doesn't make such chips and China, despite heavy investment, has yet to bridge the gap with rivals, the person said.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

To supply its military, Russia has found high-tech suppliers in the U.S. and other Western countries. Between 2015 and 2018, Almaz-Antey, a state-owned manufacturer of Russia's sophisticated air-defense missile systems, managed to bypass German export restrictions and procure nearly $10 million worth of high-precision metalworking machines, according to a person familiar with the matter and an official case summary filed with a Hamburg court. Export-license papers claimed the machinery was destined to various Russian producers of civilian goods in the city of Yekaterinburg when, in fact, they were delivered to a nearby Almaz-Antey facility, according to the person familiar with the matter and the case summary. Almaz-Antey didn't respond to a message seeking comment.
Suzette Grillot, a professor of international studies at the University of Oklahoma, said Western trade restrictions on Russia worked during the Cold War because the West then dominated world trade. "When you went from the U.S. to Russia in the early 1990s, it was a different world technologically speaking, the place was definitely behind the times in communications and other technologies," she said.
But replicating Cold War sanctions to squeeze the Russian economy and military industry today seems like an elusive goal, Grillot said, because Russia has had almost unlimited access to Western technology for the past 30 years and can now also rely on alternative suppliers such as China and India. "You can't unring a bell," she said.

Trained as a physicist and chemist, Wesley Morris had developed solutions to harden semiconductors against heat and radiation. In 2004, he founded SST (now called Vorago Technologies) in a bid to monetize his patented inventions. Morris told Reuters that his techniques caught the attention of the U.S. military, and SST received millions of dollars in research grants from the U.S. Department of Defense, including from top-secret missile programs, to hone its technology.
But 10 years later, in the spring of 2014, SST was still chasing its first significant commercial order. That's when Morris, the company's chief executive, said he learned from a newly recruited salesman that a Russian businessman, Sabirov, was interested in buying rad-hard chips from SST. Sabirov, the salesman said, wanted to purchase them for Russia's space agency, making him an attractive customer prospect because Russia relies almost entirely on imports for its rad-hard requirements.
The Russian space agency, Roscosmos, said it had no information about Sabirov's involvement in procuring electronic components for Russia.
Sabirov arrived at a meeting at SST's office in Austin in May 2014, accompanied by a Bulgarian associate, Dimitar Dimitrov. The two men formed an odd pair, Morris and several other people who dealt with them said. The Russian spoke English fluently and projected the confidence of a man with solid connections in his country's state bureaucracy. The Bulgarian appeared to be a brilliant scientist whose scuffed shoes suggested that he didn't worry too much about his attire. Both men seemed to have solid technical backgrounds.
According to Morris, Sabirov told him that one of his Russian companies, Kosmos Komplekt, had been buying rad-hard chips from SST's bigger U.S. rival, Aeroflex, since 2011, and was interested in transitioning to SST's products.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

"I wanted to get the business," Morris recalled thinking at the time.
A spokesman for Cobham Group, which acquired Aeroflex in September 2014, said Aeroflex had stopped shipping rad-hard chips to Sabirov in Russia prior to the acquisition.
A week after the May 2014 meeting in Austin with Sabirov, SST's outside lawyer dampened Morris's expectations of quickly clinching a lucrative contract. "Anything that requires a license to Russia is currently subject to a presumption of denial," the lawyer told Morris and other executives, according to Commerce Department documents.
Morris told Reuters he wasn't ready to abandon what could be the transformational contract SST had longed for. From his conversation with Sabirov, Morris said he had grown hopeful the Russian would order $10 million worth of goods. He said he believed that the chips would be used in satellites, not in missiles.
Morris said that in July 2014, he and Sabirov discussed their options upon meeting on the sidelines of a nuclear-technology conference in Paris. Morris said his ideas hinged on obtaining one of the few export licenses U.S. authorities were still granting as part of Washington's cooperation with Russia on joint space programs.
Days after the Paris meeting, however, Morris lost hope. Geopolitical tension with Moscow had escalated after a Malaysian airliner flying through Ukrainian airspace was downed by a Russian-made missile, killing 298 people. Even though Moscow denied involvement in the tragedy, obtaining an export license to Russia was now virtually impossible, Morris concluded after conferring with SST's lawyer.
"We can't send you anything," the American CEO said he told Sabirov.
But Morris said Sabirov proposed to him an alternative solution: how about using Bulgaria, a country for which an export license wasn't necessary, as a transit point? To avoid the need for a U.S. license, chips could be mounted on electronic boards in Sofia, effectively changing the product's designation in export documents before they were shipped to Moscow.
In early August 2014, Morris again conferred with SST's lawyer, who said the plan wouldn't fly. Unless Sabirov could prove he was "adding substantial value in Bulgaria," a license for export to Russia likely would be required, the lawyer advised in an email, according to Commerce Department documents. The documents don't name the lawyer.
That same month, Sabirov told SST that since sanctions had disrupted his business of procuring parts for Russia, he had set up a Bulgarian company that would target civilian markets in Europe, according to former SST employees and the Commerce Department documents. The plan was to assemble modules with chips and sell them to car makers for use in engines and exhaust systems. Rad-hard chips aren't commonly used in automobiles because of their cost.
Sabirov's Bulgarian business – Multi Technology Integration Group EOOD, or MTIG – was set up by a relative of a business partner in Sofia. The next month, September 2014, MTIG ordered a silicon wafer of rad-hard memory chips from SST for $125,000, according to interviews and federal court documents. Sabirov told SST that MTIG would test the chips and that more orders would follow, according to interviews and Commerce Department documents.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

According to the federal indictment, this claim was false because some chips had been sent to Russia. The indictment says that the "Ship to" address on an MTIG invoice was Sabirov's company, Sovtest, in Moscow. Joubert declined to comment.
Sabirov continued discussing ordering more wafers, including during a meeting with Lienhard in Sofia in August 2018, according to the Commerce Department documents.
That December, an export control officer from the Commerce Department went to Sofia to verify that Vorago chips had been used by MTIG in Bulgaria. The officer met with the younger Dimitrov, Milan, who denied the semiconductors had been sent to Russia and said they were still in Bulgaria, according to the federal indictment.
By then, Vorago, Sabirov and the Dimitrovs were under investigation by both the Federal Bureau of Investigation and the Commerce Department for alleged export violations, according to interviews.
In early 2016, the company's founder, Morris, informed the FBI about what he viewed as alleged irregularities at the firm, including the sales involving Sabirov, according to people familiar with the matter.
Weeks after the tip-off, in April 2016, FBI agents raided Vorago's head office in Austin, searching the premises while staffers were told to remain in one room, according to the people familiar with the matter. "It was a very disruptive day," one former employee recalled.
According to people familiar with the matter, the federal investigations made slow progress. In July 2019, the FBI raided the third floor of an office building, also in Austin, where Vorago had relocated. That same month, arrest warrants were issued for Sabirov and the Dimitrovs.
Seventeen months later, in December 2020, the U.S. Justice Department announced the indictment of the three men on charges of illegally procuring rad-hard chips and money laundering.
Then, last September – six years after the Texas company first began shipping the specialized chips to Bulgaria – the Commerce Department announced a settlement in which Vorago agreed to pay a penalty: $497,000, the proceeds of its sales. Neither Vorago nor its executives were charged in the criminal case.
((David Gauthier-Villars reported from Istanbul, Steve Stecklow from London and John Shiffman from Washington. Additional reporting by Karen Freifeld in New York and Tsvetelia Tsolova in Sofia. Editing by Janet McBride))

Riaz Haq said...

Chinese Views of the US and Russia After the Russian Invasion of Ukraine
A new survey taken after the Russian invasion of Ukraine finds that the Chinese are very negative about the U.S., very positive about Russia – and very confident about China.



By Richard Q. Turcsanyi
May 14, 2022
https://thediplomat.com/2022/05/chinese-views-of-the-us-and-russia-after-the-russian-invasion-of-ukraine/



Among the 25 countries respondents were asked about (Figure 1), Russia was the most positively perceived country with 80 percent of respondents saying they viewed Russia in a positive light while only 12 percent held negative views. The United States, on the other hand, was the most negatively viewed country in China with slightly more than 60 percent of respondents perceiving it negatively and 31 percent holding positive attitudes.

The other very positively perceived countries among Chinese respondents were Pakistan (73 percent), Singapore (66 percent), North Korea (62 percent), and Germany (61 percent). In turn, other very negatively perceived countries included India (56 percent), Japan (54 percent), Vietnam (48 percent), South Korea (47 percent), and Ukraine (46 percent).

-------------------

To get a more nuanced picture of the perceptions of the United States and Russia, we asked two open-ended questions in which the respondents provided their first associations with the respective country, and also a reason for why their image of the U.S. or Russia got better or worse.

In terms of the U.S. (see Figure 2), the most common association was “hegemon,” while other frequent expressions were “advanced,” “developed,” and “powerful,” but also “bossy,” “war,” “bandit,” and “sowing discord.”

----------------------

In the Russian case, the most common association was “warrior nation,” followed by words such as “Putin,” “vodka,” “vast,” “bears,” “powerful,” “war with Ukraine,” and “Sino-Russian friendship.”

------------

The picture we are getting is that both the United States and Russia are seen as powerful, but American power is seen mostly in negative terms, while Russia’s is almost exclusively positive. It may be noteworthy, however, that perceptions of Russia among the Chinese seem to be somewhat stereotypical and linked to the current leader, and might be lacking deeper social roots. Hence, these perceptions may be easily open to change.

When asked about how positively or negatively the respondents assess the foreign policy of major powers (Figure 4), only Russia (besides China) was seen positively, while the U.S. topped the negative ranking, ahead of India, Japan, and the European Union.



------------

Another major finding of the survey is Chinese people’s confidence in China. When asked about how militarily and economically powerful they perceive relevant major powers, China was seen as the most powerful one, while China’s culture was also perceived as the most attractive and Chinese universities were the most recommended ones.

We also asked how willing the respondents would be to get a COVID-19 vaccine produced by various countries. Again, Chinese vaccines were far more trusted than any other. This seems to be a result of two-plus years of propaganda painting the Western response to the pandemic in negative colors, presenting Western vaccines as ineffective, and even suggesting theories about the virus originating as a U.S. bioweapon. This may be a problem now, however, as Chinese vaccines don’t seem to be working as efficiently against the newer variants of COVID-19 as some Western ones.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/



China’s transformation is due to the talent, the ingenuity, the hard work of the Chinese people. It was also made possible by the stability and opportunity that the international order provides. Arguably, no country on Earth has benefited more from that than China.

But rather than using its power to reinforce and revitalize the laws, the agreements, the principles, the institutions that enabled its success so that other countries can benefit from them, too, Beijing is undermining them. Under President Xi, the ruling Chinese Communist Party has become more repressive at home and more aggressive abroad.

We see that in how Beijing has perfected mass surveillance within China and exported that technology to more than 80 countries; how its advancing unlawful maritime claims in the South China Sea, undermining peace and security, freedom of navigation, and commerce; how it’s circumventing or breaking trade rules, harming workers and companies in the United States but also around the world; and how it purports to champion sovereignty and territorial integrity while standing with governments that brazenly violate them.

Even while Russia was clearly mobilizing to invade Ukraine, President Xi and President Putin declared that the friendship between their countries was – and I quote – “without limits.” Just this week, as President Biden was visiting Japan, China and Russia conducted a strategic bomber patrol together in the region.

Beijing’s defense of President Putin’s war to erase Ukraine’s sovereignty and secure a sphere of influence in Europe should raise alarm bells for all of us who call the Indo-Pacific region home.

For these reasons and more, this is a charged moment for the world. And at times like these, diplomacy is vital. It’s how we make clear our profound concerns, better understand each other’s perspective, and have no doubt about each other’s intentions. We stand ready to increase our direct communication with Beijing across a full range of issues. And we hope that that can happen.

But we cannot rely on Beijing to change its trajectory. So we will shape the strategic environment around Beijing to advance our vision for an open, inclusive international system.

President Biden believes this decade will be decisive. The actions that we take at home and with countries worldwide will determine whether our shared vision of the future will be realized.

To succeed in this decisive decade, the Biden administration’s strategy can be summed up in three words – “invest, align, compete.”

We will invest in the foundations of our strength here at home – our competitiveness, our innovation, our democracy.

We will align our efforts with our network of allies and partners, acting with common purpose and in common cause.

And harnessing these two key assets, we’ll compete with China to defend our interests and build our vision for the future.

We take on this challenge with confidence. Our country is endowed with many strengths. We have peaceful neighbors, a diverse and growing population, abundant resources, the world’s reserve currency, the most powerful military on Earth, and a thriving culture of innovation and entrepreneurship that, for example, produced multiple effective vaccines now protecting people worldwide from COVID-19.

And our open society, at its best, attracts flows of talent and investment and has a time-tested capacity for reinvention, rooted in our democracy, empowering us to meet whatever challenges we face.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/


First, on investing in our strength.

After the Second World War, as we and our partners were building the rules-based order, our federal government was also making strategic investments in scientific research, education, infrastructure, our workforce, creating millions of middle-class jobs and decades of prosperity and technology leadership. But we took those foundations for granted. And so it’s time to get back to basics.

The Biden administration is making far-reaching investments in our core sources of national strength – starting with a modern industrial strategy to sustain and expand our economic and technological influence, make our economy and supply chains more resilient, sharpen our competitive edge.

Last year, President Biden signed into law the largest infrastructure investment in our history: to modernize our highways, our ports, airports, rail, and bridges; to move goods to market faster, to boost our productivity; to expand high-speed internet to every corner of the country; to draw more businesses and more jobs to more parts of America.

We’re making strategic investments in education and worker training, so that American workers – the best in the world – can design, build, and operate the technologies of the future.

Because our industrial strategy centers on technology, we want to invest in research, development, advanced manufacturing. Sixty years ago, our government spent more than twice as much on research as a percentage of our economy as we do now – investments that, in turn, catalyzed private-sector innovation. It’s how we won the space race, invented the semiconductor, built the internet. We used to rank first in the world in R&D as a proportion of our GDP – now we’re ninth. Meanwhile, China has risen from eighth place to second.

With bipartisan congressional support, we’ll reverse these trends and make historic investments in research and innovation, including in fields like artificial intelligence, biotechnology, quantum computing. These are areas that Beijing is determined to lead – but given America’s advantages, the competition is ours to lose, not only in terms of developing new technologies but also in shaping how they’re used around the world, so that they’re rooted in democratic values, not authoritarian ones.

The leadership – Senator Romney and others – the House and Senate have passed bills to support this agenda, including billions to produce semiconductors here and to strengthen other critical supply chains. Now we need Congress to send the legislation to the President for his signature.

We can get this done, and it can’t wait – supply chains are moving now, and if we don’t draw them here, they’ll be established somewhere else. As President Biden has said, the Chinese Communist Party is lobbying against this legislation – because there’s no better way to enhance our global standing and influence than to deliver on our domestic renewal. These investments will not only make America stronger; they’ll make us a stronger partner and ally as well.

One of the most powerful, even magical things about the United States is that we have long been a destination for talented, driven people from every part of the planet. That includes millions of students from China, who have enriched our communities and forged lifelong bonds with Americans. Last year, despite the pandemic, we issued more than 100,000 visas to Chinese students in just four months – our highest rate ever. We’re thrilled that they’ve chosen to study in the United States – we’re lucky to have them.


Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/



We are not perfect. But at our best, we always strive to be – in the words of our Constitution – a more perfect union. Our democracy is designed to make that happen.

That’s what the American people and the American model offer, and it’s one of the most powerful assets in this contest.

Now, Beijing believes that its model is the better one; that a party-led centralized system is more efficient, less messy, ultimately superior to democracy. We do not seek to transform China’s political system. Our task is to prove once again that democracy can meet urgent challenges, create opportunity, advance human dignity; that the future belongs to those who believe in freedom and that all countries will be free to chart their own paths without coercion.

The second piece of our strategy is aligning with our allies and partners to advance a shared vision for the future.

From day one, the Biden administration has worked to re-energize America’s unmatched network of alliances and partnerships and to re-engage in international institutions. We’re encouraging partners to work with each other, and through regional and global organizations. And we’re standing up new coalitions to deliver for our people and meet the tests of the century ahead.

Nowhere is this more true than in the Indo-Pacific region, where our relationships, including our treaty alliances, are among our strongest in the world.

The United States shares the vision that countries and people across the region hold: one of a free and open Indo-Pacific where rules are developed transparently and applied fairly; where countries are free to make their own sovereign decisions; where goods, ideas, and people flow freely across land, sky, cyberspace, the open seas, and governance is responsive to the people.

President Biden reinforced these priorities this week with his trip to the region, where he reaffirmed our vital security alliances with South Korea and Japan, and deepened our economic and technology cooperation with both countries.

He launched the Indo-Pacific Economic Framework for Prosperity, a first-of-its-kind initiative for the region. It will, in the President’s words, “help all our countries’ economies grow faster and fairer.” IPEF, as we call it, renews American economic leadership but adapts it for the 21st century by addressing cutting-edge issues like the digital economy, supply chains, clean energy, infrastructure, and corruption. A dozen countries, including India, have already joined. Together, IPEF members make up more than a third of the global economy.

The President also took part in the leaders’ summit of the Quad countries – Australia, Japan, India, the United States. The Quad never met at the leader level before President Biden took office. Since he convened the first leaders’ meeting last year, the Quad has held four summits. It’s become a leading regional team. This week, it launched a new Indo-Pacific Partnership for Maritime Domain Awareness, so our partners across the region can better monitor the waters near their shores to address illegal fishing and protect their maritime rights and their sovereignty.

We’re reinvigorating our partnership with ASEAN. Earlier this month, we hosted the U.S.-ASEAN Summit to take on urgent issues like public health and the climate crisis together. This week, seven ASEAN countries became founding members of the Indo-Pacific Economic Framework. And we’re building bridges among our Indo-Pacific and European partners, including by inviting Asian allies to the NATO summit in Madrid next month.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/




We’re enhancing peace and stability in the Indo-Pacific; for example, with the new security partnership between Australia, the United Kingdom, and the United States, known as AUKUS.

And we’re helping countries in the region and around the world defeat COVID-19. To date, the United States has provided nearly $20 billion to the global pandemic response. That includes more than 540 million doses of safe and effective vaccines donated – not sold – with no political strings attached, on our way to 1.2 billion doses worldwide. And we’re coordinating with a group of 19 countries in a global action plan to get shots into arms.

As a result of all of this diplomacy, we are more aligned with partners across the Indo-Pacific, and we’re working in a more coordinated way toward our shared goals.

We’ve also deepened our alignment across the Atlantic. We launched the U.S.-EU Trade and Technology Council last year, marshaling the combined weight of nearly 50 percent of the world’s GDP. Last week, I joined Secretary Raimondo, Ambassador Tai, and our European Commission counterparts for our second meeting to work together on new technology standards, coordinate on investment screening and export controls, strengthen supply chains, boost green tech, and improve food security and digital infrastructure in developing countries.

Meanwhile, we and our European partners set aside 17 years of litigation about aircraft; now, instead of arguing with each other, we’re working to secure a level playing field for our companies and workers in that sector.

Similarly, we worked with the European Union and others to resolve a dispute on steel and aluminum imports, and now we’re coming together around a shared vision on higher climate standards and protecting our workers and industries from Beijing’s deliberate efforts to distort the market to its advantage.

We’re partnering with the European Union to protect our citizens’ privacy while strengthening a shared digital economy that depends on vast flows of data.

With the G20, we reached a landmark deal on a global minimum tax to halt the race to the bottom, make sure that big corporations pay their fair share, and give countries even more resources to invest in their people. More than 130 countries have signed on so far.

We and our G7 partners are pursuing a coordinated, high-standard, and transparent approach to meet the enormous infrastructure needs in developing countries.

We’ve convened global summits on defeating COVID-19 and renewing global democracy, and rejoined the UN Human Rights Council and the WHO, the World Health Organization.

And at a moment of great testing, we and our allies have re-energized NATO, which is now as strong as ever.

These actions are all aimed at defending and, as necessary, reforming the rules-based order that should benefit all nations. We want to lead a race to the top on tech, on climate, infrastructure, global health, and inclusive economic growth. And we want to strengthen a system in which as many countries as possible can come together to cooperate effectively, resolve differences peacefully, write their own futures as sovereign equals.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/




Our diplomacy is based on partnership and respect for each other’s interests. We don’t expect every country to have the exact same assessment of China as we do. We know that many countries – including the United States – have vital economic or people-to-people ties with China that they want to preserve. This is not about forcing countries to choose. It’s about giving them a choice, so that, for example, the only option isn’t an opaque investment that leaves countries in debt, stokes corruption, harms the environment, fails to create local jobs or growth, and compromises countries’ exercise of their sovereignty. We’ve heard firsthand about buyer’s remorse that these deals can leave behind.

At every step, we’re consulting with our partners, listening to them, taking their concerns to heart, building solutions that address their unique challenges and priorities.

There is growing convergence about the need to approach relations with Beijing with more realism. Many of our partners already know from painful experience how Beijing can come down hard when they make choices that it dislikes. Like last spring, when Beijing cut off Chinese students and tourists from traveling to Australia and imposed an 80 percent tariff on Australian barley exports, because Australia’s Government called for an independent inquiry into COVID’s origin. Or last November, when Chinese Coast Guard vessels used water cannons to stop a resupply of a Philippine navy ship in the South China Sea. Actions like these remind the world of how Beijing can retaliate against perceived opposition.

There’s another area of alignment we share with our allies and partners: human rights.

The United States stands with countries and people around the world against the genocide and crimes against humanity happening in the Xinjiang region, where more than a million people have been placed in detention camps because of their ethnic and religious identity.

We stand together on Tibet, where the authorities continue to wage a brutal campaign against Tibetans and their culture, language, and religious traditions, and in Hong Kong, where the Chinese Communist Party has imposed harsh anti-democratic measures under the guise of national security.

Now, Beijing insists that these are somehow internal matters that others have no right to raise. That is wrong. Its treatment of ethnic and religious minorities in Xinjiang and Tibet, along with many other actions, go against the core tenets of the UN Charter that Beijing constantly cites and the Universal Declaration of Human Rights that all countries are meant to adhere to.

Beijing’s quashing of freedom in Hong Kong violates its handover commitments, enshrined in a treaty deposited at the United Nations.

We’ll continue to raise these issues and call for change – not to stand against China, but to stand up for peace, security, and human dignity.

That brings us to the third element of our strategy. Thanks to increased investments at home and greater alignment with allies and partners, we are well-positioned to outcompete China in key areas.

For example, Beijing wants to put itself at the center of global innovation and manufacturing, increase other countries’ technological dependence, and then use that dependence to impose its foreign policy preferences. And Beijing is going to great lengths to win this contest – for example, taking advantage of the openness of our economies to spy, to hack, to steal technology and know-how to advance its military innovation and entrench its surveillance state.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/



So as we make sure the next wave of innovation is unleashed by the United States and our allies and partners, we’ll also protect ourselves against efforts to siphon off our ingenuity or imperil our security.

We’re sharpening our tools to safeguard our technological competitiveness. That includes new and stronger export controls to make sure our critical innovations don’t end up in the wrong hands; greater protections for academic research, to create an open, secure, and supportive environment for science; better cyber defenses; stronger security for sensitive data; and sharper investment screening measures to defend companies and countries against Beijing’s efforts to gain access to sensitive technologies, data, or critical infrastructure; compromise our supply chains; or dominate key strategic sectors.

We believe – and we expect the business community to understand – that the price of admission to China’s market must not be the sacrifice of our core values or long-term competitive and technological advantages. We’re counting on businesses to pursue growth responsibly, assess risk soberly, and work with us not only to protect but to strengthen our national security.

For too long, Chinese companies have enjoyed far greater access to our markets than our companies have in China. For example, Americans who want to read the China Daily or communicate via WeChat are free to do so, but The New York Times and Twitter are prohibited for the Chinese people, except those working for the government who use these platforms to spread propaganda and disinformation. American companies operating in China have been subject to systematic forced technology transfer, while Chinese companies in America have been protected by our rule of law. Chinese filmmakers can freely market their movies to American theater owners without any censorship by the U.S. Government, but Beijing strictly limits the number of foreign movies allowed in the Chinese market, and those that are allowed are subjected to heavy-handed political censorship. China’s businesses in the United States don’t fear using our impartial legal system to defend their rights – in fact, they’re frequently in court asserting claims against the United States Government. The same isn’t true for foreign firms in China.

This lack of reciprocity is unacceptable and it’s unsustainable.

Or consider what happened in the steel market. Beijing directed massive over-investment by Chinese companies, which then flooded the global market with cheap steel. Unlike U.S. companies and other market-oriented firms, Chinese companies don’t need to make a profit – they just get another injection of state-owned bank credit when funds are running low. Plus, they do little to control pollution or protect the rights of their workers, which also keeps costs down. As a consequence, China now accounts for more than half of global steel production, driving U.S. companies – as well as factories in India, Mexico, Indonesia, Europe, and elsewhere – out of the market.

We’ve seen this same model when it comes to solar panels, electric car batteries – key sectors of the 21st century economy that we cannot allow to become completely dependent on China.

Riaz Haq said...

Riaz Haq has left a new comment on your post "Ambassador Kishore Mahbubani on US-China Competition":

Riaz Haq has left a new comment on your post "Chinese Public Opinion: 73% Have Positive View of Pakistan, Second Only to Russia ":

Opinion The best China strategy? Defeat Russia.

By Fareed Zakaria


https://www.washingtonpost.com/opinions/2022/06/09/biden-administration-defeat-russia-contain-china-ukraine-war/


“We are now living in a totally new era,” said the 99-year-old Henry Kissinger, commenting on Russia’s invasion of Ukraine. In an op-ed last week, President Biden vividly outlined the stakes. “If Russia does not pay a heavy price for its actions,” he wrote, “it will send a message to other would-be aggressors that they too can seize territory and subjugate other countries. It will put the survival of other peaceful democracies at risk. And it could mark the end of the rules-based international order and open the door to aggression elsewhere, with catastrophic consequences the world over.”

In times like these, it seemed appropriate that Secretary of State Antony Blinken would deliver a major policy address, which he did late last month. Except that he chose to give the speech … on China. The talk itself contained nothing new; it was slightly more nuanced than the usual chest-thumping that passes for a China strategy these days. The real surprise was that, in the middle of the first major land war in Europe since 1945, with monumental consequences, Blinken chose not to lay out the strategy for victory but instead changed the subject. Washington’s foreign policy establishment is so wrapped up in its pre-crisis thinking that it cannot really digest the fact that the ground has shifted seismically under its feet.

Blinken declared that despite its aggression in Ukraine, Russia does not pose the greatest threat to the rules-based international order, instead giving that place to China. As Zachary Karabell suggests, this requires a willful blindness to decades of Russian aggression. Russia has invaded Georgia and Ukraine and effectively annexed parts of those countries. It brutally unleashed its air power in Syria, killing thousands of civilians. In responding to Chechnya’s desire for independence, it flattened large parts of the Russian republic, including its capital, with total civilians killed in that conflict estimated to be in the tens of thousands. Vladimir Putin has sent assassination squads to Western countries to kill his enemies, has used money and cyberattacks to disrupt Western democracies, and, most recently, has threatened the use of nuclear weapons. Does any other country even come close?

Riaz Haq said...

Opinion The best China strategy? Defeat Russia.

By Fareed Zakaria


https://www.washingtonpost.com/opinions/2022/06/09/biden-administration-defeat-russia-contain-china-ukraine-war/


Ironically, one of the people who attended Blinken’s speech was Sen. Mitt Romney (R-Utah), who during his presidential campaign in 2012 warned that Russia posed the single largest threat to the United States. Those, including myself, who dismissed his prognosis were wrong, because we looked only at Russia’s strength, which was not impressive. But Romney clearly understood that power in the international realm is measured by a mixture of capabilities and intentions. And though Russia is not a rising giant, it is determined to challenge and divide America and Europe and tear up the rules-based international system. Putin’s Russia is the world’s great spoiler.

This phenomenon of a declining power becoming the greatest danger to global peace is not unprecedented. In 1914, the country that triggered World War I was Austria-Hungary, an empire in broad decline, and yet one determined to use its military to show the world it still mattered and to teach a harsh lesson to Serbia, which it regarded as a minor, vassal state. Sound familiar?

America’s dominant priority must be to ensure that Russia does not prevail in its aggression against Ukraine. And right now, trends are moving in the wrong direction. Russian forces are consolidating their gains in eastern Ukraine. Sky-high oil prices have ensured that money continues to flow into Putin’s coffers. Europeans are beginning to talk about off-ramps. Moscow is offering developing nations a deal: Get the West to call off sanctions, it tells them, and it will help export all the grain from Ukraine and Russia and avert famine in many parts of the world. Ukraine’s leaders say it still does not have the weapons and training it needs to fight back effectively.

The best China strategy right now is to defeat Russia. Xi Jinping made a risky wager in backing Russia strongly on the eve of the invasion. If Russia comes out of this conflict a weak, marginalized country, that will be a serious blow to Xi, who is personally associated with the alliance with Putin. If, on the other hand, Putin survives and somehow manages to stage a comeback, Xi and China will learn an ominous lesson: that the West cannot uphold its rules-based system against a sustained assault.

Most of the people in top positions in the Biden administration were senior officials in the Obama administration in 2014, when Russia launched its first invasion of Ukraine, annexed Crimea and intervened in eastern Ukraine. They were not able to reverse Moscow’s aggression or even make Putin pay much of a price for it. Perhaps at the time, they saw the greatest threat to global order as the Islamic State, or they were focused on the “pivot” to Asia, or they didn’t prioritize Ukraine enough. Now they have a second chance, but it is likely to be the last.

Riaz Haq said...

US says China’s support for Russia over Ukraine puts it on ‘wrong side of history’
‘China claims to be neutral, but its behavior makes clear that it is still investing in close ties to Russia,’ state department says

https://www.theguardian.com/us-news/2022/jun/15/us-china-russia-ukraine-wrong-side-history

Xi Jinping has assured Vladimir Putin of China’s support on Russian “sovereignty and security” prompting Washington to warn Beijing it risked ending up “on the wrong side of history”.

China has refused to condemn Moscow’s invasion of Ukraine and has been accused of providing diplomatic cover for Russia by blasting western sanctions and arms sales to Kyiv.

China is “willing to continue to offer mutual support [to Russia] on issues concerning core interests and major concerns such as sovereignty and security,” state broadcaster CCTV reported Xi as saying during a call with Putin.


It was the second reported call between the two leaders since Putin launched his invasion of Ukraine on 24 February.

According to CCTV, Xi praised the “good momentum of development” in bilateral relations since the start of the year “in the face of global turmoil and changes”.

Beijing was willing to “intensify strategic coordination between the two countries”, Xi reportedly said.

The Kremlin said the two leaders had agreed to ramp up economic cooperation in the face of “unlawful” western sanctions.

“It was agreed to expand cooperation in the energy, financial, industrial, transport and other areas, taking into account the situation in the global economy that has become more complicated due to the unlawful sanctions policy of the west,” the Kremlin said following the phone call.

But the United States swiftly weighed in with a frosty retort to Beijing’s expressed alignment with Moscow.

“China claims to be neutral, but its behavior makes clear that it is still investing in close ties to Russia,” a US state department spokesperson said.

Washington was “monitoring China’s activity closely”, including how, nearly four months into Russia’s war in Ukraine, the Asian giant was “still echoing Russian propaganda around the world” and suggesting Moscow’s atrocities in Ukraine were “staged,” the official said.

“Nations that side with Vladimir Putin will inevitably find themselves on the wrong side of history.”

The west has adopted unprecedented sanctions against Russia in retaliation for its invasion of Ukraine, and Moscow considers that Europe and the United States have thus caused a global economic slowdown.

Moscow is also looking for new markets and suppliers to replace the major foreign firms that left Russia following the invasion.

The European Union and the US have warned that any backing from Beijing for Russia’s war, or help for Moscow to dodge western sanctions, would damage ties.

Once bitter cold war enemies, Beijing and Moscow have stepped up cooperation in recent years as a counterbalance to what they see as US global dominance.

The pair have drawn closer in the political, trade and military spheres as part of what they call a “no limits” relationship.

Last week they unveiled the first road bridge linking the two countries, connecting the far eastern Russian city of Blagoveshchensk with the northern Chinese city of Heihe.

The leaders’ call on Wednesday fell on Xi’s 69th birthday and was their first reported communication since the day after Russia launched its Ukraine invasion.

Beijing is Moscow’s largest trading partner, with trade volumes last year hitting $147bn, according to Chinese customs data.

Riaz Haq said...

SMIC's 7-nm chip process a wake-up call for US - Asia Times

https://asiatimes.com/2022/07/smics-7-nm-chip-process-a-wake-up-call-for-us/

But SMIC has no choice. It must use DUV because the US Commerce Department put in on its Entity List in December 2020, stating at the time that “Items uniquely required to produce semiconductors at advanced technology nodes – 10 nanometers or below – will be subject to a presumption of denial to prevent such key enabling technology from supporting China’s military-civil fusion efforts.”


---------


Reports of a China chip-making breakthrough are behind the curve but US sanctions are increasingly too little, too late and out of date
By SCOTT FOSTER
JULY 25, 2022


A TechInsights report stating that a bitcoin mining integrated circuit (IC) sold by MinerVa “appears to be manufactured in SMIC 7-nm technology node” has triggered an outburst of commentary about the failure of American sanctions to stop the advance of Chinese semiconductor technology.

TechInsights is a Canadian provider of semiconductor-related analysis and intellectual property services to technology companies and other subscribers. It is known for its reverse engineering capability.

Referred to as “China-based” by Bloomberg, MinerVa Semiconductor is registered in Canada. But the three directors listed in its registration are Chinese and the address given for one of them is in China’s Henan province. The “About Us” section on the company’s website is blank.

MinerVA Semiconductor claims that its MinerVa7 is “one of the best-valued chips” for mining Bitcoin and that it “utilizes mature foundry technology to ensure chip yield, quality and reliability.”

Semiconductor Manufacturing International Corp, or SMIC, is China’s largest semiconductor foundry (contract manufacturer) and a prominent target of US technology sanctions aimed at curbing China’s access to advanced chips and the capacity to produce them.

The report describes SMIC’s efforts to put 7-nm process technology into production as a qualified success. After noting similarities with Taiwan Semiconductor Manufacturing Company’s (TSMC) 7-nm process, it goes on to say that SMIC’s System-on-Chip (SoC) device seems to be a low-volume “steppingstone” that has the logic but not the memory aspects of a standard TSMC or Samsung product.

This is possible because “bitcoin miners have limited RAM [random access memory] requirements,” the report said. For reference, an SoC is an IC that incorporates a processing unit (logic), memory and other components, creating a specialized computer or other type of electronic system in a single device.

TechInsights also points out that SMIC’s use of Deep Ultra-Violet (DUV) lithography has resulted in a more complex and costly process that probably has lower yields than the Extreme Ultra-Violet (EUV) lithography-based processes now used by TSMC and Samsung.

Riaz Haq said...

Samsung says it is manufacturing 3nm chips in global first
South Korean tech company seizes lead over TSMC in advanced semiconductor race

https://asia.nikkei.com/Business/Tech/Semiconductors/Samsung-says-it-is-manufacturing-3nm-chips-in-global-first

SEOUL -- Samsung Electronics said on Thursday that it has started mass producing 3-nm chips at its semiconductor plant in Hwaseong, south of Seoul, becoming the first to reach the milestone.

The latest advance in a relentless race to cut the size and increase the power of semiconductors gives Samsung an edge over its archrival Taiwan Semiconductor Manufacturing Co. for now, though competition is only set to intensify.

The South Korean tech giant said the new advanced chip allows a 16% decrease in surface area, 23% higher performance and 45% lower power consumption compared with current 5-nm chips. Samsung has been competing with TSMC to develop cutting-edge chips.

Smaller, more advanced chips are harder to make because they squeeze more transistors onto the same space. The ability to mass produce them is an indication of a manufacturer's technological prowess.

"Samsung has grown rapidly as we continue to demonstrate leadership in applying next-generation technologies to manufacturing," Choi Si-young, head of the company's chip foundry business, said in a news release. "We seek to continue this leadership with the world's first 3-nm process."

The company also said: "Samsung is starting the first application of the nanosheet transistor with semiconductor chips for high performance, low power computing application and plans to expand to mobile processors."

It declined to say which customers will be buying the new chips, citing confidentiality.

Analysts said that while the development is a technological advance, the initial impact will likely be limited.

"While 3nm will be the most available leading-edge technology, in our estimates, the total capacity would account for less than 10% of [the] global foundry industry in leading-edge nodes (16-nanometer and below) in 2023, not a significant factor yet for industrywide demand/supply outlook," Dale Gai, an analyst at Counterpoint Research, told Nikkei Asia in an email. He added that capacity constraints could limit output going forward.

Analysts also say that while the start of the 3-nm chip production is positive for Samsung in reaching the milestone ahead of TSMC, it will take time until the advanced technology creates new revenue for the company.

"It's meaningful that Samsung is mass producing 3-nm chips based on new architecture technology for the first time," said SK Kim, an analyst at Daiwa Captial Markets. "However, it will not automatically lead to attracting new customers and improving earnings because it is not yet ready to produce main stream chips such as mobile CPUs." CPU stands for central processing unit.

The announcement comes amid a global shortage of semiconductors due to bottlenecks caused by the coronavirus pandemic. Manufacturers are still struggling to raise production.

Despite its latest improvement, Samsung will not be able to rest on its laurels.

C.C. Wei, CEO of TSMC, said during an earnings call in April that his company's 3-nm technology will be entering mass production in the second half of this year, adding he believes it will be the world's most advanced in terms of performance, power, and size as well as transistor technology.

TSMC also said in June that it would begin production of ultra-advanced 2-nm chips by 2025. The Taiwanese chipmaking titan is gearing up to introduce 3-nm chip production technology in the second half of this year. Its key manufacturing site is in the city of Tainan in southern Taiwan.

Riaz Haq said...

Senate Approves $280 Billion Bill to Boost U.S. Science, Chip Production
Chips act goes to House, where speaker has promised quick action

https://www.wsj.com/articles/senate-approves-280-billion-bill-to-boost-u-s-science-chip-production-11658942295?mod=hp_lead_pos3

The Senate on Wednesday approved a $280 billion bill to boost scientific research and the U.S. semiconductor industry, sending the legislation on to the House, where Speaker Nancy Pelosi has promised quick action.

The CHIPS and Science Act of 2022 creates a $39 billion fund that would provide direct financial assistance for the construction and expansion of semiconductor manufacturing facilities, among other purposes, according to a summary from the Senate Commerce Committee.

The bill was approved 64-33, with 17 Republicans joining Democrats to vote in favor.

Companies that could tap the funding for U.S. expansions include Intel Corp., Taiwan Semiconductor Manufacturing Co., GlobalFoundries Inc., Micron Technology Inc., Applied Materials Inc. and more.

A separate $11 billion program seeks to join with industry to advance semiconductor manufacturing research and workforce training, while another $2 billion fund aims to more quickly translate laboratory advances into military and other applications. Lawmakers added $24 billion in tax credits for investments in semiconductor manufacturing.

The bill has been in the works for more than three years. Senate Majority Leader Chuck Schumer (D., N.Y.) first started discussing it in 2019 with Sen. Todd Young (R., Ind.) when the two were exercising in the Senate gym.

“In the 1970s and 80s our companies could do just fine on their own,” Mr. Schumer said in an interview this week. “But in the 21st century, with countries like China and Germany investing heavily, we could sit back on the sidelines and who would lose out? American workers, American economic dominance, and our national security.”

During debate on the Senate floor this week, the bill’s supporters said that while competition with China was a primary motivator, they were spurred on by the disruption in semiconductor supplies during the Covid-19 pandemic. Most semiconductors, ubiquitous in modern electronics, are made abroad, and companies in industries from medical products to missiles have urged lawmakers to shore up supplies for the long term. A pandemic-related boom in chip demand has helped cause bottlenecks, though it is showing signs of easing in some industries.

“That vulnerable supply chain, if disrupted, could cause not only a severe economic depression in America but also threaten our national security directly,” said Sen. John Cornyn (R., Texas).

Opponents of the bill pushed to attach more strings to the funding and questioned the wisdom of a large subsidy to a profitable industry. Sen. Rick Scott (R., Fla.) called the package “one of the grossest gifts to corporate America I’ve ever seen.”

Sen. Bernie Sanders (I., Vt.) accused Intel Chief Executive Patrick Gelsinger of extorting lawmakers, pointing to the executive’s assertion that his and other companies would likely invest in manufacturing facilities in Europe or Asia if the bill doesn’t pass this summer.

“I worry not only about this bill. I worry about the precedent,” Mr. Sanders said. “Any company who is prepared to go abroad, who has ignored the needs of the American people, will then say to the Congress, ‘Hey, if you want us to stay here, you better give us a handout.’”


Riaz Haq said...

#Russian #weapons in #Ukraine powered by hundreds of Western #electronic components made in #US, #Japan, #SouthKorea & #Europe. About two-thirds of the components were manufactured by US-based #technology companies. https://www.investing.com/news/stock-market-news/exclusiverussian-weapons-in-ukraine-powered-by-hundreds-of-western-parts--rusi-2866574

More than 450 foreign-made components have been found in Russian weapons recovered in Ukraine, evidence that Moscow acquired critical technology from companies in the United States, Europe and Asia in the years before the invasion, according to a new report by Royal United Services Institute defence think tank.

Since the start of the war five months ago, the Ukrainian military has captured or recovered from the battlefield intact or partially damaged Russian weapons. When disassembled, 27 of these weapons and military systems, ranging from cruise missiles to air defence systems, were found to rely predominantly on Western components, according to the research shared with Reuters.

It is the most detailed published assessment to date of the part played by Western components in Russia's war against Ukraine.

About two-thirds of the components were manufactured by U.S.-based companies, RUSI found, based on the weapons recovered from Ukraine. Products manufactured by the U.S.-based Analog Devices (NASDAQ:ADI) and Texas Instruments (NASDAQ:TXN) accounted for nearly a quarter of all the Western components in the weapons.

Other components came from companies in countries including Japan, South Korea, Britain, Germany, Switzerland, and the Netherlands.

-----------

The U.S. government said in March that Russian firms were front companies that have been buying up electronics for Russia's military. Russian customs records show that in March last year one company imported $600,000 worth of electronics manufactured by Texas Instruments through a Hong Kong distributor, RUSI said. Seven months later, the same company imported another $1.1 million worth of microelectronics made by Xilinx, RUSI said.

Texas Instruments and AMD-owned Xilinx did not respond to a request for comment about the customs data.

Russia's military could be permanently weakened if Western governments strengthen export controls, manage to shut down the country's clandestine procurement networks and prevent sensitive components being manufactured in states that support Russia, RUSI said.

Riaz Haq said...

#China tops #US in quantity and quality of #scientific papers. #Chinese #research accounted for 27.2%, or 4,744, of the world's top 1% of most cited papers, overtaking the U.S. at 24.9%, or 4,330. #UK came in 3rd at 5.5%. #India stands 4th & #Japan 5th. https://asia.nikkei.com/Business/Science/China-tops-U.S.-in-quantity-and-quality-of-scientific-papers

China now leads the world both in the number of scientific research papers as well as most cited papers, a report from Japan's science and technology ministry shows, which is expected to bolster the competitiveness of its economy and industries in the future.

Research papers are considered higher quality the more they are cited by others. Chinese research accounted for 27.2%, or 4,744, of the world's top 1% of most cited papers, overtaking the U.S. at 24.9%, or 4,330. The U.K. came in third at 5.5%.

The ministry's National Institute of Science and Technology Policy compiled the report based on data from research-analytics company Clarivate. The figures represent 2019 levels, based on the annual average between 2018 and 2020 to account for fluctuations in publication numbers. The report was released Tuesday, the same day U.S. President Joe Biden signed into law the CHIPS and Science Act, a $280 billion bill framed as essential to winning economic competition with China through greater research.

Scientific research is the driver behind competitive industries and economies. Current research capabilities will determine future market shares in artificial intelligence, quantum technology and other cutting-edge fields, and may have a direct impact on national security as well.

China has quickly increased its footprint in advanced research in recent years. It overtook the U.S. in the total number of scientific papers in the 2020 report, then in the number of top 10% most cited papers in the 2021 report.

China published 407,181 scientific papers in 2019 according to the latest report, pulling further ahead of the U.S. at 293,434. In terms of the top 10% most cited papers, China accounted for 26.6% of publications, while the U.S. accounted for 21.1%.

"China is one of the top countries in the world in terms of both the quantity and quality of scientific papers," said Shinichi Kuroki, deputy director-general of the Asia and Pacific Research Center at the Japan Science and Technology Agency.

"In order to become the true global leader, it will need to continue producing internationally recognized research," he said.

Meanwhile, Japan is falling behind. It ranked fifth in the total number of publications and 10th in the top 1% most cited papers in the latest report after losing ground to India. It dropped to 12th place in the number of the top 10% most cited papers, passed by Spain and South Korea.

The number of universities in India have increased roughly 4.6 times from 243 in 2000 to 1,117 in 2018. Over two million receive a bachelor's degree in the sciences each year. In contrast, research Japan has slowed since the mid-2000s with no recovery in sight, stoking concerns about the effect on the country's economy and industries.

Riaz Haq said...

Russia’s long-time chips failure coming home to roost
Russia will never be a first-rate power without a capable, innovative and commercially-oriented semiconductor industry

https://asiatimes.com/2022/08/russias-chips-failure-coming-home-to-roost/

In 1962, two Americans who spied for Russia and defected, Alfred Sarant and Joel Barr, proposed to turn the new Russian city of Zelenograd (“green city”) into a microelectronics and computer development and manufacturing center.

Zelenograd thus became the heart and soul of Russia’s effort to build modern electronics for its military. But it soon failed in its mission and the legacy of failure continues to this day.

Sarant and Barr, engineers who worked on classified US defense projects, mainly involving radar, had been part of the Rosenberg spy ring in the United States. Someone tipped them off that the arrests of Julius and Ethel Rosenberg were imminent.

Around the same time, British scientist and spy Klaus Fuchs was arrested in the United Kingdom. During World War II, he played a major scientific role at the US nuclear bomb-making site in Los Alamos.

Nikita Khrushchev took up Sarant and Barr’s proposal and turned Zelenograd into the heart of Soviet efforts to catch up with the US in electronics, including small computers and integrated circuits. Barr, who was a brilliant engineer, designed the first digital computers for Russia’s nuclear submarines and spearheaded the drive to build integrated circuits.

During the 1980s, the US launched a program of export controls and law enforcement efforts against Russian-backed “techno-bandits” who were supplying Russia with sophisticated equipment for their new electronics industry. Russian spying also went into high gear, going after US semiconductor designs needed to make Russian weapons more capable and “smart.”

There is a huge contrast in how the US dealt with Russia and its other emerging strategic rival, China. Russian development was stymied by strong controls while the US openly aided China in developing its now huge electronics industry.

One of the reasons Russian equipment destroyed in the Ukraine war is chock full of microchips made in the US, Europe and Asia is the plain fact that Russia cannot make them on its own. The export controls of the 1980s set the stage for Russia’s great microelectronics failure, which continues to afflict Zelenograd even today.

Russia’s two important semiconductor companies, Mikron and Angstrem, are located in Zelenograd. Angstrem was last reported in bankruptcy and there are also legal claims against former directors of its Angstrem-T division concerning “missing” equipment.

Mikron, the last great semiconductor hope for Russia, is working to develop technology that is already more than 2o years old, perhaps as out of date as 30 years. But the company is promising, not delivering.

It badly needs investments for a new foundry and for etching and laser equipment. Whether it will get the needed funding, or even if it could develop the requisite skill base, are open questions.

Bottom line: Russia cannot be a first-rate power without a capable electronics sector.

A good example is the lack of modern equipment in its aircraft and ground equipment. Russian tanks are operating without active protection systems, making them vulnerable to relatively cheap anti-tank weapons in Ukraine. Russian aircraft are flying without GPS mapping systems and some of them even lack ground targeting systems.

Riaz Haq said...

Russia’s long-time chips failure coming home to roost
Russia will never be a first-rate power without a capable, innovative and commercially-oriented semiconductor industry

https://asiatimes.com/2022/08/russias-chips-failure-coming-home-to-roost/



To be sure, these shortcomings do not mean that Russia will lose its war in Ukraine. However, Russia’s indigenous deficiencies in advanced electronics certainly does mean that it is suffering huge losses in equipment and manpower.

Russia’s high-tech industry is mostly focused on military requirements. That is far different from the US, China, South Korea, Japan, Taiwan or European producers, all of which have strong commercial sectors.

In the 1980s, the Pentagon wanted very high-speed integrated circuits. The Department of Defense thus started the Very High-Speed Integrated Circuit program (VHSIC) and invested in excess of $2 billion in the effort (about $5.5 billion in 2022 dollars).

It never succeeded in making any VHSIC integrated circuits, mostly because commercial processors far outperformed what the Pentagon aimed at producing. However, it did manage to subsidize US semiconductor equipment manufacturing, stimulating an industry that shipped much of its product abroad, mainly to Asia.

The VHSIC program illustrated, if a demonstration was needed, that a competitive commercial sector is vital to progress in electronics, as it is in many other industries.

The Russian approach, on the other hand, was to do everything in secret. During the Cold War, Zelenograd was a closed city and its work was classified.

Zelenograd increasingly fell into bad habits, mainly stealing others’ designs rather than developing them indigenously. A prominent example was the “Texas chip,” an important medium-scale integrated circuit the US was using in its aircraft radars and other hardware in the 1980s.

When Zelenograd’s engineers pushed for the development of their own home design, they were told by their superiors to copy the Texas chip and drop any independent design work.


Early on, a second disease infected Zelenograd. Joel Barr was Jewish and he was able to attract a lot of Jewish scientific and engineering talent to Zelenograd, even though it was a classified area where Jews in the USSR had trouble finding employment.

That was fine with Khrushchev but he was pushed out in 1964, two years after Zelenograd got started. Barr and the Jews were purged by Khrushchev’s successor Leonid Brezhnev, who considered all Jews agents of the West and unreliable. Similar anti-Jewish purges took place in all Russian defense industries and in universities and research organizations.

This was the period where the Soviet Jewry movement gained momentum in Russia, and where Jews and dissidents were demanding, among other things, the right to emigrate. The loss of a large component of Zelenograd’s creative sector, and its leader Barr, represented a significant setback for Moscow’s microelectronics program.

In the 1980s, the US had initially estimated that Russia was within a few years of catching up with it. But as a result of Russian secrecy, purges and a lack of access to Western know-how, Russia slipped irretrievably backward and behind.

By the late 1980s, Russia was seven to 10 years behind the US. Russia’s electronics technology slide was not reversed by the end of the Cold War – in fact, things got considerably worse.

The implications for Russian military power have been huge. Without advanced semiconductors, Russia will lose out on the next generation of smart weapons that will rely on very high-speed intelligent systems powered by artificial intelligence (AI).

AI requires specialized processors built to exacting specifications. China, for example, has just announced it now has a new advanced chip (a MinerVA Bitcoin mining chip) that can potentially compete with even better ones made by the world’s top chip maker, Taiwan Semiconductor Manufacturing Company (TSMC).

Riaz Haq said...

Russia’s long-time chips failure coming home to roost
Russia will never be a first-rate power without a capable, innovative and commercially-oriented semiconductor industry

https://asiatimes.com/2022/08/russias-chips-failure-coming-home-to-roost/


AI requires specialized processors built to exacting specifications. China, for example, has just announced it now has a new advanced chip (a MinerVA Bitcoin mining chip) that can potentially compete with even better ones made by the world’s top chip maker, Taiwan Semiconductor Manufacturing Company (TSMC).

While the Chinese chip is designed for Bitcoin applications, China is working toward advanced AI chips that can process massive amounts of information. China still has a way to go and lacks crucial extreme ultraviolet laser etching equipment, which it is being blocked access to by the US.

Russia may already be turning to China at least for lower-grade chips, but there is no evidence China is yet sharing any manufacturing know-how with Zelenograd. China has little to gain in helping Russia since supporting it would potentially result in broader sanctions against China’s electronics industry.

Today, Russia still lacks a credible and relevant domestic commercial electronics industry and is unlikely under current conditions to grow one in the near future. That would require significant foreign investment and access to the global electronics industry. Russia has shut itself out and what it hasn’t done to self-inflict harm, Western sanctions have done the rest.

Back in 1985, Mikhail Gorbachev visited Paris and met with then-president Francois Mitterand. Seeking a relaxation of the Cold War and better relations with the West, Gorbachev told Mitterand that Russia was merely a third-world country with nuclear weapons. Nearly 40 years later, that blunt assessment still rings true.

Riaz Haq said...

China chipmaker SMIC to build $7.5bn plant in Tianjin
Key producer ramps up capacity as Beijing pushes for stronger semiconductor industry


https://asia.nikkei.com/Business/Tech/Semiconductors/China-chipmaker-SMIC-to-build-7.5bn-plant-in-Tianjin

CHENGDU, China -- Semiconductor Manufacturing International Corp. will invest $7.5 billion to construct a new factory in the city of Tianjin, the Chinese chipmaker announced Friday, as China and the U.S. race to bolster their domestic chip supplies.

SMIC, China's largest contract chipmaker, has reached an agreement to set up a new subsidiary based in an economic development zone in Tianjin. It will have the capacity to produce 100,000 12-inch wafers a month, though SMIC did not say when operations are expected to begin.

The facility will specialize in production processes of 28 nanometers or larger. U.S. authorities appear to be restricting companies there from supplying SMIC with chipmaking equipment capable of handling 10 nm or more advanced process tech, which are required for cutting-edge semiconductors.

Amid tensions with the U.S., Chinese President Xi Jinping has been working to strengthen domestic industries in order to minimize the impact of American sanctions. The semiconductor industry has been at the heart of this push. SMIC, which counts a Chinese state-owned fund among its investors, plans to double its output from 2021 levels by 2025.

In Washington, U.S. President Joe Biden signed Thursday an executive order to create an interagency council to coordinate the implementation of the recently signed CHIPS and Science Act. He aims to swiftly distribute $52.7 billion in subsidies to the industry and to rebuild domestic supply chains.

SMIC has faced headwinds recently as cooling demand for smartphones and appliances squeeze the chip market. Combined with lockdowns and other strict restrictions under China's zero-COVID policy, the company logged its first year-on-year decline in net profit in three years last quarter.

SMIC has received financing from government funds and investment companies to build plants in Shanghai and elsewhere. It could receive similar assistance this time around.

Riaz Haq said...

#US Orders #Nvidia to Halt Sales of Top #AI Chips to #China. Nvidea says ban on its A100 & H100 chips designed to speed up machine learning could interfere with completion of developing the H100, its flagship chip it announced this year. #geopolitics

https://www.usnews.com/news/technology/articles/2022-08-31/nvidia-says-u-s-has-imposed-new-license-requirement-for-future-exports-to-china


By Stephen Nellis and Jane Lanhee Lee

(Reuters) -Chip designer Nvidia Corp said on Wednesday that U.S. officials told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple Chinese firms' ability to carry out advanced work like image recognition and hamper Nvidia's business in the country.

The announcement signals a major escalation of the U.S. crackdown on China's technological capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured.

Nvidia shares fell 6.6% after hours. The company said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with completion of developing the H100, the flagship chip it announced this year.

Shares of rival Advanced Micro Devices Inc fell 3.7% after hours. An AMD spokesman told Reuters it had received new license requirements that will stop its MI250 artificial intelligence chips from being exported to China but it believes its MI100 chips will not be affected. AMD said it does not believe the new rules will have a material impact on its business.

Nvidia said U.S. officials told it the new rule "will address the risk that products may be used in, or diverted to, a 'military end use' or 'military end user' in China."

The U.S. Department of Commerce would not say what new criteria it has laid out for AI chips that can no longer be shipped to China but said it is reviewing its China-related policies and practices to "keep advanced technologies out of the wrong hands.

"While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests," a spokesperson told Reuters.

The Chinese foreign ministry responded on Thursday by accusing the United States of attempting to impose a "tech blockade" on China, while its commerce ministry said such actions would undermine the stability of global supply chains.

"The U.S. continues to abuse export control measures to restrict exports of semiconductor-related items to China, which China firmly opposes," commerce ministry spokesperson Shu Jieting said at a news conference.

This is not the first time the U.S. has moved to choke off Chinese firms' supply of chips. In 2020, former president Donald Trump's administration banned suppliers from selling chips made using U.S. technology to tech giant Huawei without a special license.

Without American chips from companies like Nvidia and AMD, Chinese organizations will be unable to cost-effectively carry out the kind of advanced computing used for image and speech recognition, among many other tasks.

Image recognition and natural language processing are common in consumer applications like smartphones that can answer queries and tag photos. They also have military uses such as scouring satellite imagery for weapons or bases and filtering digital communications for intelligence-gathering purposes.

Nvidia said it had booked $400 million in sales of the affected chips this quarter to China that could be lost if firms decide not to buy alternative Nvidia products. It said it plans to apply for exemptions to the rule.

Stacy Rasgon, a financial analyst with Bernstein, said the disclosure signaled that about 10% of Nvidia's data center sales were coming from China and that the hit to sales was likely "manageable" for Nvidia.

Riaz Haq said...

#Intel says it has no current plans to start #manufacturing #semiconductor #chips in #India. The comments came after India's transport minister said earlier in the day that the #chipmaker will set up a #semiconductor manufacturing plant in the country.

https://www.reuters.com/technology/intel-says-it-has-no-current-plans-start-manufacturing-india-2022-09-07/


Riaz Haq said...

Ukraine Routs Russian Forces in Northeast, Forcing a Retreat
Russia acknowledged that it had lost nearly all of the northern region of Kharkiv after a blitzkrieg thrust by Ukrainian fighters.


https://www.nytimes.com/2022/09/11/world/europe/ukraine-kharkiv-russian-retreat.html?smid=nytcore-ios-share&referringSource=articleShare

Stunned by a lightning advance by Ukrainian forces that cost it over 1,000 square miles of land and a key military hub, Russia on Sunday acknowledged that it had lost nearly all of the northern region of Kharkiv after a blitzkrieg thrust that cast doubt on a premise — widely held in Moscow and parts of the West — that Ukraine could never defeat Russia.

Russia’s pell-mell retreat from a wide section of Ukrainian territory it seized in the early summer rattled Kremlin cheerleaders and amplified voices in the West demanding that more weapons be sent to Ukraine so that it could win.

Victory for Ukraine is still far from certain, particularly with a second Ukrainian offensive in the south making far less rapid progress. Russian forces are dug into strong defensive positions near the Black Sea port city of Kherson, forcing Ukrainian troops to pay heavily for every foot of territory they retake.

But the speed of Ukraine’s advances over the weekend in the northeast — an area used by Russia as a stronghold — has muted the gung-ho bluster of Kremlin cheerleaders. It has also undermined arguments in places like Germany that providing more and better arms to Ukraine would only lead to a long and bloody stalemate against a Russian military destined to win.

Late Sunday, in a strike that Ukrainian officials condemned as a fit of pique over its losses, Moscow attacked infrastructure facilities in Kharkiv, leaving many civilians without power and water. President Volodymyr Zelensky said there was a “total blackout” in the regions of Kharkiv and Donetsk.

“No military facilities,” he wrote on Twitter. “The goal is to deprive people of light and heat.”


-----

Speaking at a news conference with his German counterpart, Ukraine’s foreign minister, Dmytro Kuleba, said, “And so I reiterate: The more weapons we receive, the faster we will win, and the faster this war will end.”


---------

For months now, administration officials have said there is no hope of a diplomatic solution to the war unless Mr. Zelensky’s forces win back enough territory to have the upper hand in any negotiated cease-fire or armistice. But the fear is that if Mr. Putin believes he is losing the war, he may deploy unconventional weapons.

Riaz Haq said...

China's dominance of manufacturing is growing, not shrinking
Country gaining market share in both low- and high-tech sectors

https://asia.nikkei.com/Opinion/China-s-dominance-of-manufacturing-is-growing-not-shrinking

William Bratton is author of "China's Rise, Asia's Decline." He was previously head of Asia-Pacific equity research at HSBC.

When it comes to discussions about China's manufacturing capabilities, there is an all-too-frequent disconnect between rhetoric and reality.

On the one hand, it is widely understood that Chinese producers are losing relative competitiveness. Higher labor costs, bitter trade frictions, rising geopolitical tensions and the domestic pursuit of zero-COVID are all encouraging exporters to leave the country.

China, it is thus argued, has passed "peak manufacturing" and its status as the world's manufacturer stands to be superseded by other countries in the region. By extension, this will materially impact China's economic trajectory and the region's evolving geopolitical balances.

On the other hand, there has been a lack of substantive evidence offered to support the above argument. Although anecdotes abound about certain companies relocating production out of China, the data suggests that such moves are not at the scale necessary to reverse the upward momentum of the country's manufacturing base, nor its international competitiveness.

The most obvious evidence of this is in trade flows.

It is not just that Chinese exports have remained remarkably robust despite COVID-related lockdowns. More than that, the latest numbers from the U.N. Conference on Trade and Development imply that Chinese producers have become more competitive in recent years, not less.

China's manufactured exports, for example, have been growing significantly faster than those of Germany, the U.S., Japan or South Korea. As a result, its share of global manufactured exports by value surged to a new high of 21% last year, compared to just 17% in 2017. The country is now a more important international supplier than Germany, the U.S. and Japan combined.

Furthermore, contrary to the view that supply chains are reducing their exposure to China, Chinese manufacturers have consolidated their primacy across the vast majority of sectors over recent years. In fact, what is particularly remarkable about China's evolving trade structure is that it has been able to simultaneously gain export share in both low- and high-technology industries, including those as eclectic as leather products, truck trailers and optical instruments.

Such gains are hardly indicative of an industrial base under stress. They instead highlight the hyper-competitiveness of China's producers, who increasingly dominate the East and Southeast Asian manufacturing landscape.

For all the chatter about companies leaving China and the changing geographies of supply chains, the reality is that it generated nearly half of the region's manufactured exports in 2021, compared to less than a third 15 years ago.

This competitiveness is derived from the complex and self-reinforcing interaction of multiple factors, many of which are a function of China's size. This allows the country to support far higher levels of domestic competition, innovation and specialization than its neighbors, and results in greater efficiencies and lower production costs, which regional rivals will always struggle to replicate. These scale benefits are subsequently magnified through aggressive industrial development policies that have no obvious precedent in terms of scope or ambition.

So China's manufacturing advantages must be viewed holistically, especially as it can be highly misleading, however tempting, to draw conclusions based on the trends of any specific factor.

Riaz Haq said...

China's dominance of manufacturing is growing, not shrinking
Country gaining market share in both low- and high-tech sectors

https://asia.nikkei.com/Opinion/China-s-dominance-of-manufacturing-is-growing-not-shrinking

William Bratton is author of "China's Rise, Asia's Decline." He was previously head of Asia-Pacific equity research at HSBC.


The country's rapidly rising wages, for example, attract much attention. But it would be a mistake to assume that this signals the loss of competitiveness in more labor-intensive industries.

Rather, it reflects dramatic improvements in productivity and a broader structural shift into higher technology sectors. Furthermore, the use of national averages masks the diversity of China's labor force, with a substantial pool still on relatively low wages.

This is seen in the irrefutable fact that the country's manufacturers are still gaining export share across low-technology and labor-intensive industries, including textiles. In other words, their innate advantages are so substantial and so overwhelming that higher labor costs by themselves have no material impact on their competitiveness.

As such, despite all the frequently cited anecdotes, there is no real evidence that the factors underpinning China's competitiveness are being reversed. Rather, Asia's manufacturing industries will continue to concentrate in China, further entrenching its status as the core of the region's economic system.

This is the challenge for the rest of the region. No matter how hard they try, few countries, if any, will be able to replicate or match China's natural advantages. And this will have profound longer-term economic and geopolitical consequences.

Against the onslaught of highly competitive Chinese products, emerging economies will struggle to develop the manufacturing sectors they need to achieve and sustain productivity-led growth over the long-term.

But even more advanced nations are not immune from the pressures created by China, with the hollowing-out of their industrial structures a very real danger. The displacement of Japanese and South Korean manufacturers from the global telecommunications equipment and shipbuilding markets demonstrates just how quickly China can engage with its neighbors at their own games -- and win.

So for all the suggestions that China's grip on manufacturing is weakening, the reality could not be more different. It is not the Chinese producers that are losing influence, but their rivals across the region.

In fact, the natural forces driving the country's competitive advantages are now both so substantial and entrenched that the rest of Asia is seemingly engaged in an unfair trade fight -- and one it is unlikely to win. The region's slide toward a clearly defined economic core-periphery structure -- with China dominating and the rest being disadvantaged -- now looks inevitable.

In turn, this is creating dependencies which will prove evermore difficult to disentangle, no matter how strong the apparent political commitment in some countries to do so.

This is seen in how recent attempts to diversify imports away from Chinese producers have been constrained by the lack of credible alternative suppliers. It is noticeable that Australia and India, countries positioning themselves as regional rivals to China, have increased -- not reduced -- their reliance on Chinese manufactured imports over the last three years.

It is true that this manufacturing mastery may not have been developed as a deliberate geopolitical tool. But in the same way the U.S. was able to use its post-World War II industrial leadership to advance its own interests, the reliance on Chinese products will naturally give Beijing unrivaled power and influence within Asia. As such, China's future economic and political dominance of the Asian regional economy is set to be underpinned by its vibrant, dynamic and hypercompetitive manufacturing industries, whatever the country's doomsayers may claim.

Riaz Haq said...

#Apple to use #TSMC’s next 3-nm #semiconductor chip #technology in iPhones, Macs next year. There is a cost increase of at least 40% for the same area of silicon when moving to 3-nm chips from the 5-nm family, which includes 4-nm chips. #computers #phones https://asia.nikkei.com/Business/Tech/Semiconductors/Apple-to-use-TSMC-s-next-3-nm-chip-tech-in-iPhones-Macs-next-year

TAIPEI -- Apple aims to be the first company to use an updated version of Taiwan Semiconductor Manufacturing Co.'s latest chipmaking technology next year, with plans to adopt it for some of its iPhones and Mac computers, sources briefed on the matter told Nikkei Asia.

The A17 mobile processor currently under development will be mass-produced using TSMC's N3E chipmaking tech, expected to be available in the second half of next year, according to three people familiar with the matter. The A17 will be used in the premium entry in the iPhone lineup slated for release in 2023, they said.

N3E is an upgraded version of TSMC's current 3-nanometer production tech, which is only starting to go into use this year. The next generation of Apple's M3 chip for its Mac offerings is also set to use the upgraded 3-nm tech, two sources added.

Nanometer size refers to the width between transistors on a chip. The smaller the number, the more transistors can be squeezed onto a chip, making them more powerful but also more challenging and costly to produce.

N3E will offer better performance and energy efficiency than the first version of the tech, TSMC said in a recent technology symposium in Hsinchu. Industry sources said the upgraded production tech is also designed to be more cost-effective than its predecessor.

As TSMC's largest customer and the biggest driver for new semiconductor technologies, Apple is still its most loyal partner when it comes to adopting the latest chip technology. The U.S. tech giant will be the first to use TSMC's first generation of 3-nm technology, using it for some of its upcoming iPads, Nikkei Asia reported earlier.

Previously, Intel told TSMC that it would like to secure 3-nm production by this year or early next year to be among the first wave of adopters like Apple, but it has since delayed its orders to at least 2024, three people told Nikkei Asia.

However, 2023 could mark the second year in a row that Apple uses TSMC's most advanced chipmaking technology for only a part of its iPhone lineup. In 2022, only the premium iPhone 14 Pro range has adopted the latest A16 core processor, which is produced by TSMC's 4-nm process technologies, the most advanced currently available. The standard iPhone 14 range uses the older A15, which was used in the iPhone 13 and iPhone 13 Pro models released in the second half of 2021.

Meanwhile, the race is on among chipmakers to roll out ever more advanced production tech. TSMC and Samsung each hopes to be the first to put 3-nm tech into mass production this year. This technology is suitable for all types of central and graphics processors for smartphones, computers and servers, as well as those used in artificial intelligence computing.

Apple, meanwhile, is likely to use the different levels of production tech to introduce greater differences between its premium and nonpremium models, according to Dylan Patel, chief analyst with Semianalysis. Previously the biggest differences have been in screens and cameras, but this could be expanded to include processors and memory chips, he said.

According to the analyst's estimate, there is a cost increase of at least 40% for the same area of silicon when moving to 3-nm chips from the 5-nm family, which includes 4-nm chips.

TSMC, Intel and Apple declined to comment.

Riaz Haq said...

Foxconn and Vedanta to build $19bn India chip factory

https://www.bbc.com/news/62873520


Foxconn and Vedanta have announced $19.5bn (£16.9) to build one of the first chipmaking factories in India.

The Taiwanese firm and the Indian mining giant are tying up as the government pushes to boost chip manufacturing in the country.

Prime Minister Narendra Modi's government announced a $10bn package last year to attract investors.

The facility, which will be built in Mr Modi's home state of Gujarat, has been promised incentives.

Vedanta's chairman Anil Agarwal said they were still on the lookout for a site - about 400 acres of land - close to Gujarat's capital, Ahmedabad.

But both Indian and foreign firms have struggled in the past to acquire large tracts of land for projects. And experts say that despite Mr Modi's signature 'Make in India' policy - designed to attract global manufacturers - challenges remain when it comes to navigating the country's red tape.

Gujarat Chief Minister Bhupendrabhai Patel, however, said the project "will be met with red carpet... instead of any red tapism".

The project is expected to create 100,000 jobs in the state, which is headed for elections in December, where the BJP is facing stiff competition from oppositions parties.

According to the Memorandum of Understanding, the facility is expected to start manufacturing chips within two years.

"India's own Silicon Valley is a step closer now," Mr Agarwal said in a tweet.

India has vowed to spend $30bn to overhaul its tech industry. The government said it will also expand incentives beyond the initial $10 billion for chipmakers in order to become less reliant on chip producers in places like Taiwan, the US and China.

"Gujarat has been recognized for its industrial development, green energy, and smart cities. The improving infrastructure and the government's active and strong support increases confidence in setting up a semiconductor factory," according to Brian Ho, a vice president of Foxconn Semiconductor Group.

Foxconn is the technical partner. Vedanta is financing the project as it looks to diversify its investments into the tech sector.

Vedanta is the third company to announce plans to build a chip plant in India. A partnership between ISMC and Singapore-based IGSS Ventures also said it had signed deals to build semiconductor plants in the country over the next five years.

Riaz Haq said...

#Japan's #Toyota to stop #automobile #production in #Russia due to #supplychain disruption amid #UkraineWar & western #sanctions. "After 6 months, we have not been able to resume normal activities and see no indication that we can restart in the future". https://asia.nikkei.com/Politics/Ukraine-war/Toyota-to-terminate-auto-production-in-Russia

NAGOYA, Japan -- Toyota Motor said Friday it will exit from automobile production in Russia, citing difficulties supplying key materials and parts in the country amid the war in Ukraine.

The automaker suspended operations at its plant in St. Petersburg on March 4, after the Russian invasion began.

"After six months, we have not been able to resume normal activities and see no indication that we can restart in the future," Japan's top automaker said.

A protracted disruption would hurt Toyota's ability to support its employees, leaving it no choice but to end production in the country, it said. Mounting geopolitical risks in the region are believed to have contributed to the decision as well.

Toyota had continued to pay its factory workers after suspending production, reassigning them to maintenance and other tasks instead. Details regarding the termination process and treatment of employees at the St. Petersburg plant will be ironed out at a later time.

Toyota holds a larger market share in Russia than any other Japanese automaker. It produced 80,000 vehicles and sold 110,000 in the country in 2021.

It began locally producing vehicles in 2007 at St. Petersburg. The plant's lineup included the RAV4 sport utility vehicle and the Camry sedan in 2021.

Nissan Motor, another Japanese automaker, has extended its production freeze at its St. Petersburg plant to the end of December from the end of September.

Riaz Haq said...

A White House official said Tuesday Russia’s sanctions-struck defense industry is creating an “opportunity” for U.S. and western defense firms to take a bite of Moscow’s share of the market.

https://www.defensenews.com/pentagon/2022/09/27/wh-aims-to-ease-arms-sales-as-sanctions-hit-russian-defense-sector/

“As a practical matter, countries that have had to rely on Russian equipment are going to find it very difficult to get even basic supplies from Russia’s defense industrial base,” said the NSC's Cara Abercrombie.


The remarks come weeks after the Biden administration notified Congress it would make $2.2 billion in new Foreign Military Financing grants available for Ukraine and former Warsaw Pact countries whose Soviet-made gear has been part of international aid to Ukraine.

“In NATO, that could be to transition our eastern flank partners to NATO-standard, western equipment. But certainly as we look to other countries in the Pacific, this is an opportunity as well, not just for the United States, but for western industry as well,” Abercrombie said.

The Pentagon’s chief weapons buyer, Bill LaPlante, said more “interchangeability by interoperability” among allies presents an opportunity, not just economically, but geostrategically. Linking industrial bases, or “friendshoring,” would mitigate supply chain shocks and be essential to the common defense of the U.S. and its allies, he said.

“As we have seen in Ukraine, the weapons and equipment provided by the U.S. and its allies are the best in the world,” LaPlante said in pre-recorded remarks at the ComDef conference. “Continuing to more closely integrate these capabilities with increasingly common standards for munitions, software and other components will provide even greater advantages moving forward.”

Though western sanctions have targeted Russia’s defense industry, Russia was in 2021 the second-largest arms exporter after the United States, according to the Stockholm International Peace Research Institute. Its chief clients are India, China and Egypt.

The head of Russia’s weapons export branch said earlier this year that Moscow’s arms export revenue in 2022 is likely to total about $10.8 billion, roughly 26% lower than reported for 2021.

This week, LaPlante is in Brussels convening a meeting of weapons buyers from more than 50 countries to better coordinate defense industrial efforts as they replenish weapons sent to Ukraine from their own stockpiles. The meeting is taking place under the auspices of the 50-nation Ukraine Defense Contact Group.

Dovetailing with Pentagon-led efforts to boost western and allied defense capabilities, the White House will continue the work of a Department of Defense “tiger team” seeking to streamline the U.S. process of selling arms around the globe, Abercrombie said.

“Within the National Security Council, I am looking at basically a baton pass,” Abercrombie said. “As DoD wraps up its initial analysis, we’ll be doing an interagency process to look at the collective [effort and] how can we make U.S. foreign military sales work better for our partners, or at least be a little faster.”

U.S. Defense Secretary Lloyd Austin in August established the task force to address the U.S. foreign military sales process, which spans the Pentagon and State Department. Abercrombie said the streamlining is meant to make the process more nimble without cutting corners.

Riaz Haq said...

A White House official said Tuesday Russia’s sanctions-struck defense industry is creating an “opportunity” for U.S. and western defense firms to take a bite of Moscow’s share of the market.

https://www.defensenews.com/pentagon/2022/09/27/wh-aims-to-ease-arms-sales-as-sanctions-hit-russian-defense-sector/


Asked about trade restrictions by the European Union that could hinder U.S. defense exports, Abercrombie said the administration is seeking to reduce those barriers. Supply chain challenges make clear it’s “time to be looking for opportunities to work together to reduce the barriers,” she said.

The U.S.-led meeting of armaments directors in Brussels also highlights some of the headwinds for allied efforts to arm up. The gathering is aimed at addressing supply chain chokepoints for gun barrels, ball bearings and steel casings ― as well as how to sustain equipment for Ukraine on a long-term basis.

“Ultimately, more closely integrating with our allies and friends around the world will make us all more secure and resilient,” LaPlante said.

Riaz Haq said...

American Executives in Limbo at Chinese Chip Companies After U.S. Ban
At least 43 senior executives working with 16 listed Chinese semiconductor companies hold roles from CEO to vice president

https://www.wsj.com/articles/american-executives-in-limbo-at-chinese-chip-companies-after-u-s-ban-11665912757


American workers hold key positions throughout China’s domestic chip industry, helping manufacturers develop new chips to catch up with foreign rivals. Now, those workers are in limbo under new U.S. export control rules that prohibit U.S. citizens from supporting China’s advanced chip development.

At least 43 senior executives working with 16 publicly listed Chinese semiconductor companies are American citizens, according to an examination of company filings and official websites by The Wall Street Journal. Many of them hold C-suite titles, from chief executive to vice president and chairman.

Almost all of the executives moved to China’s chip industry after spending years working in Silicon Valley for U.S. chip makers or semiconductor equipment firms, according to the companies’ filings. Their work histories reflect the free flow of talent across companies and borders over the years. Some were drawn to China through initiatives including the country’s “Thousand Talents” program, which was introduced in 2008 by the Chinese government to boost research standards.


The Commerce Department this month imposed export controls over an array of chips and chip-making technology, marking the U.S.’s biggest salvo against China’s tech industry so far.

In a rare move that caught the industry off guard, it also sought to restrict the use of American know-how by barring U.S. persons from supporting China’s advanced chip development or production without a license. The department defines U.S. persons to include U.S. citizens, permanent residents, people who live in the U.S., and American companies.

Several companies, including Beijing-based Naura Technology Group Co. 002371 1.39%▲ and Dutch equipment maker ASML Holding NV, have suspended their American employees from continuing work that could now be restricted while they seek clarity on the rules, the companies have said.

Restricting Chinese companies’ access to U.S. talent delivers a direct blow to the heart of China’s attempt to move up the technology chain, said Dane Chamorro, a Washington, D.C.-based head of global risk and intelligence at business consulting firm Control Risks.

“The technology is nothing without the people there to make it work,” he said.

For many senior executives at Chinese companies, the rule will likely force them to decide between their jobs and their U.S. citizenship or permanent resident status, Mr. Chamorro said. The rules require all U.S. persons to apply for a license to continue working in Chinese advanced chip development.

Among prominent U.S. executives in China is Gerald Yin, founder and chairman of Advanced Micro-Fabrication Equipment Inc., or AMEC, one of China’s largest chip-making equipment vendors. He and six current senior managers and core researchers at AMEC are American citizens, according to the company’s website and its latest annual report.

Mr. Yin, whose company is listed on the Shanghai Stock Exchange, spent almost 20 years working at Silicon Valley companies including Intel Corp. and Applied Materials Inc., where he was chief technology officer of its Asian unit before he left to found AMEC.

The Shanghai-based company, which makes etching machines key to turning silicon wafers into semiconductors, is viewed as a rising national champion in the sector, though it still lags behind global leaders such as Lam Research Corp. and Applied Materials. In its latest annual report, the company said it received more than $50 million in subsidies from the Chinese government in 2021.

AMEC and Mr. Yin didn’t respond to requests for comment.

Riaz Haq said...

https://www.wsj.com/articles/american-executives-in-limbo-at-chinese-chip-companies-after-u-s-ban-11

Other companies that face being affected include Chinese flash memory chip designer GigaDevice Semiconductor Inc., an up-and-coming designer of flash chips used in automobiles and personal computers. GigaDevice’s deputy chairman, Shu Qingming, and a director, Cheng Taiyi, hold U.S. passports, the company’s latest annual report says.

GigaDevice didn’t respond to requests for comment.

KingSemi Co., 688037 -0.79%▼ which produces the most advanced coating and development equipment in China and supplies giants including Taiwan Semiconductor Manufacturing Co., TSM -4.05%▼ told investors that it is assessing the impact of the new directives. An executive director, Chen Xinglong, holds a U.S. green card, the company’s latest annual report says.

While the withholding of talent—along with all the other restrictions—could significantly slow the Chinese chip sector’s advancement, it won’t be enough to kill it, said Anne Hoecker, a partner at management consulting firm Bain & Co. in its semiconductor group.

“There’s one thing China has been very consistent about—their need to build up an indigenous source of semiconductors,” she said. “They will continue to put a lot of money in it, and they will continue to progress.”

Many companies, including KLA Corp. and Lam Research, have already suspended the work of engineers and other less-senior staffers in China while they seek clarity on the rules, or licenses to continue their work, The Wall Street Journal previously reported.

Naura Technology Group, which has a unit making semiconductor equipment, issued warnings to its American employees within mainland China to suspend work with clients that it believes fall under the new restrictions while it awaits more clarity, a spokesman said. Those employees have continued to perform other tasks at the company, he said.

ASML, the Dutch chip equipment maker, confirmed it sent an internal email to its U.S. employees on Wednesday, asking U.S. staff—both U.S. citizens and foreign nationals living in America—to refrain from servicing, shipping or providing support to any of its customers in China until further notice.

The new rules also could affect employees of Chinese companies that have operations in the U.S. Yangtze Memory Technologies Co., China’s leading memory chip maker, maintains a Santa Clara, Calif., office, with more than a dozen employees in the U.S., according to LinkedIn. They include a director of engineering, the head of U.S. NAND design, and the head of North American sales.

Riaz Haq said...

State Department Urges Silicon Valley to Aid National Security Effort
New cyber ambassador notes private sector has strengthened Ukrainian defense

https://www.wsj.com/articles/state-department-urges-silicon-valley-to-aid-national-security-effort-11665835204

WASHINGTON—The State Department is expanding its outreach to U.S. technology firms to get them more involved in some of the world’s top national security challenges, from the war in Ukraine to growing competition with China, U.S. officials said.

Secretary of State Antony Blinken will travel to Silicon Valley starting Sunday as part of the push to make cybersecurity among the State Department’s leading priorities. He will meet with corporate leaders “to highlight the key role for technology diplomacy in advancing U.S. economic and national security,” according to the State Department.

Presidential administrations of both parties have long sought to forge strong ties with Big Tech, urging the companies to share cyber-threat intelligence, secure agreements on the production of advanced technologies or quietly cooperate on surveillance programs.

At the State Department, cybersecurity has in years past often been seen as a second-tier priority ceded to other federal agencies, a perception a new dedicated cyber office is trying to change, current and former officials have said.

“We have a profound stake in shaping our technological future, and American diplomacy has a key role to play in bolstering and drawing on our country’s unique strengths—one of which is our industrial and innovation base,” Mr. Blinken said in a statement to The Wall Street Journal ahead of his trip.

Last year, the State Department established a new bureau of cyberspace and digital policy, and Mr. Blinken named former technology executive and former Marine Corps officer Nathaniel Fick to lead it. The bureau’s budget in the 2022 fiscal year was $41.2 million, including a diplomatic engagement budget of $18.2 million.

Mr. Fick, the nation’s first ambassador-at-large for cyber, said the war in Ukraine underscored the need for greater alignment of cyber defensive capabilities among countries in the North Atlantic Treaty Organization. The government must be a better intermediary between U.S. tech firms and foreign governments in need of their services, he said.

“There’s a lot of capability out there in the private sector that is being deployed to strengthen Ukraine’s digital defenses,” said Mr. Fick, who was confirmed by the Senate in September.

Since the start of the war in Ukraine, large U.S. tech firms like Microsoft Corp. and Alphabet Inc.’s Google unit have been sharing cyber insights with Kyiv and the public about the activities of suspected Russian hackers. Major Western tech companies have suspended operations or withdrawn from the country. Twitter, Inc., Meta Platforms Inc.,’s Facebook, and Alphabet’s YouTube and Google have cracked down on fake feeds and hackers, while Elon Musk’s Space Exploration Technologies Corp., also has been providing satellite internet access.

The Biden administration has treated the cyber threats—especially ransomware—as a top-tier national security issue, with waning global digital freedom, and disinformation sponsored or deployed by adversary nations among other concerns.

U.S. officials also have sought to faster declassify and disseminate intelligence on cyber threats to tech companies and operators of infrastructure such as hospitals, election systems and energy providers. The administration also has created minimum cybersecurity requirements on natural gas and oil pipelines following the Colonial Pipeline ransomware attack last year, and has implemented or is working on similar rules for other business sectors.

Riaz Haq said...

China’s Military Is Catching Up to the U.S. Is It Ready to Fight?
The People’s Liberation Army is emerging as a true competitor but Beijing worries about the ability of its troops
A Chinese soldier held a flag during joint military exercises in Kyrgyzstan in 2016.

https://www.wsj.com/articles/china-military-us-taiwan-xi-11666268994

China’s military is emerging as a true competitor to the U.S. under Xi Jinping.

The People’s Liberation Army now has hypersonic missiles that evade most defenses, a technology the U.S. is still developing. Its attack drones can swarm to paralyze communications networks. China’s naval ships outnumber America’s, and it launched its third aircraft carrier this summer, the first to be designed and built in the country. Its defense budget is second only to the U.S.’s. China’s military has more serving members, at around 2 million, compared with just under 1.4 million in the U.S.

The question for Mr. Xi, which he has raised in public, is whether those forces are ready for battle.

China hasn’t fought a war since a brief border clash with Vietnam in 1979. Unlike American forces, who have fought for most of the past two decades in Iraq and Afghanistan, China’s service members have virtually no combat experience—which some Chinese leaders have referred to as a “peace disease.” Finding a solution short of actual war has been a priority for Mr. Xi, especially as he seeks to prepare the country for a potential showdown with the U.S.

“We must comprehensively strengthen military training and preparation, and improve the army’s ability to win,” Mr. Xi said on Sunday at the opening of the Communist Party’s twice-a-decade congress.

The issue has become more pressing for Beijing as tensions build with Taiwan, which China sees as part of its territory. On Sunday, Mr. Xi reiterated that Beijing wouldn’t renounce the use of force in China’s effort to take control of the island.

“The complete unification of the motherland must be realized, and it will be realized,” he said, drawing loud applause.

-------

An effort to make China’s different military branches work more closely together—so-called “jointness,” which is considered crucial to modern warfare—remains untested.

“At present, there are not many commanders in the PLA who are truly proficient in joint combat,” one serving officer at the Zhengzhou Joint Logistics Support Center wrote earlier this year in a commentary in the PLA Daily, the military’s newspaper. “If this situation does not change, once there is a war, it will be very dangerous.”

Outside analysts say the PLA appears to be making progress in bringing forces together for more complex joint exercises, helped by interaction with other militaries, especially Russia’s. Since Mr. Xi took power, China has increased drills with Russia to as many as 10 a year from one or two previously.

Riaz Haq said...

How the algorithm tipped the balance in Ukraine

https://www.washingtonpost.com/opinions/2022/12/19/palantir-algorithm-data-ukraine-war/

by David Ignatius

KYIV — Two Ukrainian military officers peer at a laptop computer operated by a Ukrainian technician using software provided by the American technology company Palantir. On the screen are detailed digital maps of the battlefield at Bakhmut in eastern Ukraine, overlaid with other targeting intelligence — most of it obtained from commercial satellites.

As we lean closer, we see can jagged trenches on the Bakhmut front, where Russian and Ukrainian forces are separated by a few hundred yards in one of the bloodiest battles of the war. A click of the computer mouse displays thermal images of Russian and Ukrainian artillery fire; another click shows a Russian tank marked with a “Z,” seen through a picket fence, an image uploaded by a Ukrainian spy on the ground.

If this were a working combat operations center, rather than a demonstration for a visiting journalist, the Ukrainian officers could use a targeting program to select a missile, artillery piece or armed drone to attack the Russian positions displayed on the screen. Then drones could confirm the strike, and a damage assessment would be fed back into the system.

This is the “wizard war” in the Ukraine conflict — a secret digital campaign that has never been reported before in detail — and it’s a big reason David is beating Goliath here. The Ukrainians are fusing their courageous fighting spirit with the most advanced intelligence and battle-management software ever seen in combat.

“Tenacity, will and harnessing the latest technology give the Ukrainians a decisive advantage,” Gen. Mark A. Milley, chairman of the Joint Chiefs of Staff, told me last week. “We are witnessing the ways wars will be fought, and won, for years to come.”

I think Milley is right about the transformational effect of technology on the Ukraine battlefield. And for me, here’s the bottom line: With these systems aiding brave Ukrainian troops, the Russians probably cannot win this war.

“The power of advanced algorithmic warfare systems is now so great that it equates to having tactical nuclear weapons against an adversary with only conventional ones,” explains Alex Karp, chief executive of Palantir, in an email message. “The general public tends to underestimate this. Our adversaries no longer do.”

“For us, it’s a matter of survival,” argues “Stepan,” the senior Ukrainian officer in the Kyiv demonstration, who before the war designed software for a retail company. Now, he tells me bluntly, “Our goal is to maximize target acquisitions.” To protect his identity, he stripped his unit insignia and other markings from his camouflage uniform before he demonstrated the technology. (The names he and his colleague used were not their real ones; I agreed to their request to protect their security.)

“Lesya,” the other officer, was also a computer specialist in peacetime. As she looks at the imagery of the Russian invaders, on a day when their drones are savaging civilian targets in Odessa on Ukraine’s southern coast, she mutters a wish for revenge — and a hope that Ukraine will emerge from the war as a tech power. Although the Ukrainians now depend on technology help from America, she says, “by the end of the war, we will be selling software to Palantir.”

Riaz Haq said...

How the algorithm tipped the balance in Ukraine

https://www.washingtonpost.com/opinions/2022/12/19/palantir-algorithm-data-ukraine-war/


A final essential link in this system is the mesh of broadband connectivity provided from overhead by Starlink’s array of roughly 2,500 satellites in low-earth orbit. The system, owned by Elon Musk’s SpaceX company, allows Ukrainian soldiers who want to upload intelligence or download targeting information to do so quickly.

In this wizard war, Ukraine has the upper hand. The Russians have tried to create their own electronic battlefield tools, too, but with little success. They have sought to use commercial satellite data, for example, and streaming videos from inexpensive Chinese drones. But they have had difficulty coordinating and sharing this data among units. And they lack the ability to connect with the Starlink array.

“The Russian army is not flexible,” Lesya, the Ukrainian officer, told me. She noted proudly that every Ukrainian battalion travels with its own software developer. Ukraine’s core advantage isn’t just the army’s will to fight, but also its technical prowess.

Fedorov, Ukraine’s digital minister, listed some of the military tech systems that Ukraine has created on its own, in a response to my written questions. These include a secure chat system, called “eVorog,” that has allowed civilians to provide 453,000 reports since the war started; a 200-strong “Army of Drones” purchased from commercial vendors for use in air reconnaissance; and a battlefield mapping system called Delta that “contains the actual data in real time, so the military can plan their actions accordingly.”


The “X factor” in this war, if you will, is this Ukrainian high-tech edge and the ability of its forces to adapt rapidly. “This is the most technologically advanced war in human history,” argues Fedorov. “It’s quite different from everything that has been seen before.”

And that’s the central fact of the extraordinary drama the world has been watching since Russia invaded so recklessly last February. This is a triumph of man and machine, together.

Next: How “algorithmic warfare” evolved over the past decade — and some very human worries.

Riaz Haq said...

Opinion A ‘good’ war gave the algorithm its opening, but dangers lurk

By David Ignatius


https://www.washingtonpost.com/opinions/2022/12/20/ukraine-war-russia-tech-battlefield/

NORTHEASTERN ENGLAND — To see the human face of the “algorithm war” being fought in Ukraine, visit a company of raw recruits during their five rushed weeks at a training camp here in Britain before they’re sent to the front in Ukraine.

They will soon have a battery of high-tech systems to aid them, but they must face the squalor of the trenches and the roar of unrelenting artillery fire alone. The digital battlefield has not supplanted the real one.

At the British camp, instructors have dug 300 yards of trenches across a frigid hillside. The trenches are 4 feet deep, girded with sandbags and planks, and slick with mud and water at the bottom. The Ukrainian recruits, who’ve never been in battle before, have to spend 48 hours in these hellholes. Sometimes, there’s simulated artillery fire overhead and rotting animal flesh nearby to prepare the trainees for the smell of death.

The recruits practice attacking the trenches and defending them. But mostly they learn to stay alive and as warm as they can, protecting their wet, freezing feet from rot and disease. “Nobody likes the trenches,” says Oleh, the Ukrainian officer who oversees the training with his British colleagues. (I’m not using his full name to respect concerns about his security.) “We tell them it will be easier in battle. If it’s hard now, that’s the goal.”

The paradox of the Ukraine conflict is that it combines the World War I nightmare of trench warfare with the most modern weapons of the 21st century.

“It’s hard to understand the brutality of contact in that front line. It’s Passchendaele in Donetsk,” explains Brigadier Justin Stenhouse, referring to one of the bloodiest battles of World War I. He oversees training for the British Ministry of Defense in Whitehall and arranged my visit to the training camp.

Silicon Valley Pentagon
The Ukraine war has fused the flesh-and-blood bravery of these Ukrainian troops on the ground with the stunning high-tech arsenal that I described in Part 1 of this report. The result is a revolution in warfare. This transformation, rarely discussed in the media, has been evolving for more than a decade. It shows the lethal ability of the United States and its allies to project power — and it also raises some vexing questions about how this power will be used.

One of the leading actors in this underreported revolution has been Palantir, which developed its software platform after the Sept. 11, 2001, attacks to help the CIA integrate data that was often in different compartments and difficult to share. News reports have frequently said that Palantir software helped track al-Qaeda leader Osama bin Laden, but the company won’t confirm that.

The Pentagon’s use of these ultramodern tools was encouraged by a very old-fashioned commander, Gen. Mark A. Milley, the gruff and often profane chairman of the Joint Chiefs of Staff. When he was Army chief of staff in 2018, the service began working with Palantir and other tech companies to integrate data through a program called Army Vantage. Milley was frustrated by an antiquated data system that made it hard to gather details about what units were ready for battle. The Army, like so many government institutions, had too many separate repositories for information.

Palantir technicians showed me an unclassified version of the Army database they helped create to address that problem. You can see in an instant what units are ready, what skills and experience the soldiers in these units have, and what weapons and ammunition are available. Logistics problems like this once took weeks to solve; now there are answers in seconds.

“The U.S. military is focused on readiness today and readiness in the future,” Milley told me in an email last week. “In defense of our country, we’re pulling together a wide variety of technologies to remain number one, the most effective fighting force in the world.”

Riaz Haq said...

Opinion A ‘good’ war gave the algorithm its opening, but dangers lurk

By David Ignatius


https://www.washingtonpost.com/opinions/2022/12/20/ukraine-war-russia-tech-battlefield/


The Army began testing ideas about algorithmic warfare with individual units around that time as well. The first choice was the elite 82nd Airborne, commanded in 2020 by Maj. Gen. Christopher Donahue; it was part of the XVIII Airborne Corps, then headed by Lt. Gen. Michael “Erik” Kurilla. These two worked with Palantir and other companies to understand how the Army could use data more effectively.

Simultaneously, the Pentagon was exploring the use of artificial intelligence to analyze sensor data and identify targets. This effort was known as Project Maven, and it initially spawned a huge controversy when it was launched in 2017. The idea was to write algorithms that could recognize, say, a Russian T-72 tank in drone surveillance images in the same way that facial recognition scans can discern a human face.

The military’s AI partnership with Silicon Valley got off to a bad start. In 2018, engineers at Google, initially the leading contractor for Maven, protested so angrily about writing targeting algorithms that the company had to withdraw from the program.

Maven has evolved. It’s now supervised by the National Geospatial-Intelligence Agency, and it generates AI models on a fast, one-month cycle. A tech executive explained to me that companies now compete to develop the most accurate models for detecting weapons — tuning their algorithms to see that hypothetical T-72 under a snowy grove of fir trees, let’s say, rather than a swampy field of brush — and each month the government selects a new digital array.

For a Pentagon that usually buys weapons that have a 30-year life span, this monthly rollover of targeting software is a revolution in itself.

When Russia invaded Ukraine on Feb. 24, the U.S. Army had these tools in hand — and commanders with experience using them. Donahue had moved up to become head of the XVIII Airborne Corps, which transferred its forward headquarters to Wiesbaden, Germany, just after the Russian invasion. The 82nd Airborne moved to forward quarters near Rzeszow, Poland, near the Ukraine border.

Kurilla, meanwhile, became head of Central Command and began using that key theater as a test bed for new technologies. In October, Kurilla appointed Schuyler Moore, a former director of science and technology for the Defense Innovation Board, as Centcom’s first “chief technology officer.”

For the Army and other services, the impetus for this technology push isn’t just the Russian invasion of Ukraine, but the looming challenge from China — America’s only real peer competitor in technology.

A tool for good and ill
In the age of algorithm warfare, when thinking machines will be so powerful, human judgment will become all the more important. Free societies have created potent technologies that, in the hands of good governments, can enable just outcomes, and not only in war. Ukrainian officials tell me they want to use Palantir software not just to repel the Russian invasion but also to repair Ukraine’s battered electrical grid, identify hidden corruption and manage the vast tasks of reconstruction.

Mykhailo Fedorov, Ukraine’s minister for digital transformation and vice prime minister, explained in written answers to my questions how he plans to use technology not just to beat Russia but also to become a high-tech superpower in the future.

Riaz Haq said...

Opinion A ‘good’ war gave the algorithm its opening, but dangers lurk

By David Ignatius


https://www.washingtonpost.com/opinions/2022/12/20/ukraine-war-russia-tech-battlefield/

Fedorov said Ukraine is “massively” using software platforms “to deal with power shortages and in order to ensure telecom connection.” To repair electricity cutoffs and damaged energy infrastructure, the country uses Starlink terminals, Tesla Powerwall systems, and advanced generators and lithium batteries. It backs up all its important data on cloud servers.

“For sure, I’m convinced that technologies will also allow us to build a bright and safe future,” Fedorov said. “Only the newest technologies could give us such an advantage to run and create the country we deserve as fast as possible.”

But these technologies can also create 21st-century dystopias, in the wrong hands. The targeting algorithms that allow Ukraine to spot and destroy invading Russians aren’t all that different from the facial-recognition algorithms that help China repress its citizens. We’re lucky, in a sense, that these technologies are mostly developed in the West by private companies rather than state-owned ones.

But what if an entrepreneur decides to wage a private war? What if authoritarian movements gain control of democratic societies and use technology to advance control rather than freedom? What if AI advances eventually allow the algorithms themselves to take control, making decisions for reasons they can’t explain, at speeds that humans can’t match? Democratic societies need to be constantly vigilant about this technology.

The importance of the human factor is clear with Silicon Valley entrepreneurs such as Elon Musk, who illustrates the strength — and potential weakness — of America’s new way of war. If Musk decides he isn’t being paid enough for his services, or if he thinks it’s time for Ukraine to compromise, he can simply cut the line to his satellites, as he briefly threatened this fall.

Riaz Haq said...

Opinion A ‘good’ war gave the algorithm its opening, but dangers lurk

By David Ignatius


https://www.washingtonpost.com/opinions/2022/12/20/ukraine-war-russia-tech-battlefield/

Looking at the Ukraine war, we can see that our freewheeling entrepreneurial culture gives the West a big advantage over state-run autocracies such as China and Russia — so long as companies and CEOs share the same democratic values as Western governments. That’s why we need a broader public debate about the power of the technologies that are being put to noble use in Ukraine but could easily be turned to ignoble purposes in the wrong hands.

Ukraine, which has suffered so much in this war, wants to be a techno-superpower when the conflict finally ends. Fedorov, who’s overseeing Kyiv’s digital transformation, explains it this way: “Let’s plan to turn Ukraine into the world’s ‘mil-tech valley,’ to develop the most innovative security solutions, so the world will become a safer and more digital place.”


But first, the Ukrainians freezing in the filthy trenches will need to prevail.

Lt. Col. Harris, the commander of the camp in northeastern England, says he’s humbled amid the recruits there. Through five combat tours in Afghanistan and one in Iraq, though, he knows he has never faced anything as horrifying as many of them will see in a month or two.

On the firing range, 10 Ukrainian recruits squeeze off shots from their AK-47s. They’re on the second day of live-fire exercises, with eight more to come. They’re accountants, cooks and college students; some unsteady with their weapons, others newly bold. As they take aim at targets 50 feet away, a British sergeant commanding the range barks at them through an interpreter: “You need to kill the enemy before he kills you.”

And it’s as simple as that. This is a war of survival for Ukraine. But it should comfort the recruits that whatever their misery in coming months, they will have a level of technological support beyond anything the world has seen.

Riaz Haq said...

Putin to Xi: Russia seeks to strengthen military ties with China

https://www.aljazeera.com/news/2022/12/30/russia-now-one-of-chinas-leading-suppliers-of-oil-and-gas-putin


The US has expressed concern over Beijing’s alignment with Moscow amid the ongoing invasion of Ukraine.


Russia’s ties with China are the “best in history”, President Vladimir Putin told his Chinese counterpart Xi Jinping, as he said Moscow would seek to strengthen military cooperation with Beijing.

The two leaders spoke via video link on Friday, and Putin said he was expecting Xi to make a state visit to Moscow in 2023. If it were to take place, it would be a public show of solidarity by Beijing amid Moscow’s flailing military campaign in Ukraine.


In introductory remarks from the video conference broadcast on state television, Putin said: “We are expecting you, dear Mr chairman, dear friend, we are expecting you next spring on a state visit to Moscow.”

He said the visit would “demonstrate to the world the closeness of Russian-Chinese relations”.

Speaking for about eight minutes, Putin said Russia-China relations were growing in importance as a stabilising factor, and that he aimed to deepen military cooperation between the two countries.

In a response that lasted about a quarter as long, Xi said China was ready to increase strategic cooperation with Russia against the backdrop of what he called a “difficult” situation in the world at large.

Earlier this month, Russia and China conducted joint naval drills, which Russia’s army chief described as a response to the “aggressive” US military posturing in the Asia-Pacific region.

Xi “emphasized that China has noted that Russia has never refused to resolve the conflict through diplomatic negotiations, for which it [China] expresses its appreciation,” Chinese state broadcaster CCTV reported of the call.

The Chinese leader told Putin that the road to peace talks on Ukraine would not be smooth and that China would continue to uphold its “objective and fair stance” on the issue, according to CCTV.

“The Chinese side has noted that the Russian side has said it has never refused to resolve the conflict through diplomatic negotiations, and expressed its appreciation for this,” he was quoted as saying.

Xi, however, made clear the ideological affinity between Beijing and Moscow when it came to opposing what both view as the hegemonic US-led West.

“Facts have repeatedly proved that containment and suppression are unpopular, and sanctions and interference are doomed to failure,” Xi told Putin.

“China is ready to work with Russia and all progressive forces around the world that oppose hegemonism and power politics…and firmly defend the sovereignty, security and development interests of both countries and international justice.”

In February, China promised a “no limits” partnership with Russia, which set off alarm bells in the West. Beijing has refused to criticise Moscow’s actions in Ukraine, blaming the United States and NATO for provoking the Kremlin. It has also blasted the sanctions imposed on Russia.

The US State Department on Friday expressed concern over China’s alignment with Russia. “Beijing claims to be neutral, but its behaviour makes clear it is still investing in close ties to Russia,” a spokesperson said, adding Washington was “monitoring Beijing’s activity closely.”

Russia leading supplier of oil to China
Putin also said Russia has become one of China’s leading suppliers of oil and gas.

“Russia has become one of the leaders in oil exports to China”, with 13.8 billion cubic metres of gas shipped via the Power of Siberia pipeline in the first 11 months of 2022.

Russia overtook Saudi Arabia as China’s top crude supplier last month.

Putin added that Russia was China’s second-largest supplier of pipeline gas and fourth-largest of liquefied natural gas (LNG). He said in December, shipments had been 18 percent above daily contractual obligations.

Riaz Haq said...

Derek J. Grossman
@DerekJGrossman
The US and India are putting pedal to the metal on decoupling from China. Doubt it will work, but I'd like to be pleasantly surprised.

https://twitter.com/DerekJGrossman/status/1620557287671869440?s=20&t=YeHyHyNZMB-9W9srZQN0eQ

------------------

U.S. Pursues India as a Supply-Chain Alternative to China
Biden administration turns to New Delhi as it seeks to steer critical technologies away from Beijing


https://www.wsj.com/articles/u-s-pursues-india-as-a-supply-chain-alternative-to-china-11675201893

India’s national security adviser, Ajit Doval, led New Delhi’s delegation this week in meetings with Mr. Sullivan and Commerce Secretary Gina Raimondo and other officials.

The meetings underscore a broader U.S. effort to meet challenges from China through alliances with other countries. The Biden administration has given priority to Washington’s relationship with what is known as the Quad—an alliance between India, Australia, Japan and the U.S. that has focused on countering Beijing.

“President Biden really believes that no successful and enduring effort to address any of the major challenges in the world today…is going to be effective without a close U.S.-India partnership at its heart,” a senior administration official said.

Riaz Haq said...

U.S., China Plunge Further Into a Spiral of Hostility


https://www.wsj.com/articles/u-s-china-plunge-further-into-a-spiral-of-hostilities-b9e539c0

After tiptoeing toward a rapprochement, any fence-mending now has been postponed


Harsh new verbal attacks on the U.S. by Beijing’s top leadership demonstrate just how unsteady relations have become between the world’s two major powers.

Just a few weeks ago, China and the U.S. were tiptoeing toward something akin to a diplomatic cease-fire. President Biden’s envoy was due in Beijing to craft a possible framework for high-level government-to-government dialogues and stabilize ties after years of bitterness.

Then, a suspected Chinese surveillance balloon was detected crossing North America, casting a new shadow over relations. The fence-mending trip was postponed and relations between the two powers have plunged further into a spiral of recrimination and tension.

This week, China’s leader, Xi Jinping, and his foreign minister accused Washington of suppressing China’s development and driving the two countries toward conflict.

“Everything the other side does is seen as negative and done with evil intention,” said Suisheng Zhao, a China foreign-policy specialist at the University of Denver. “That is the Cold War mentality.”

China’s leader, Mr. Xi, elevated the rhetorical tension with an accusation straight out of that bygone era, a breakdown both sides insist they don’t want. China, Mr. Xi charged, faces “all-around containment, encirclement and suppression” at the hands of Western nations in league with the U.S.

On Tuesday, his new foreign minister, Qin Gang, followed up with a warning that unless the U.S. changes course “there will surely be conflict and confrontation.”


A spokesman for the National Security Council, John Kirby, when asked about the rhetoric from Beijing, said the Biden administration policy is unchanged: It seeks competition with China, not conflict.

“There is nothing about our approach to this most consequential of bilateral relationships that should lead anybody to think that we want conflict,” he told reporters Tuesday. “We absolutely want to keep it at that level.”

The breadth of discord in U.S.-China ties, however, shows the difficulties in constraining tensions. The Biden administration has continued Trump-era trade tariffs, sharpened controls on exports of advanced semiconductors and rallied allies and other countries to counter China’s influence around the world.

Beijing has drawn closer to Moscow, including during its war on Ukraine, and stepped up military provocations against Taiwan, while last summer cutting off more of the few channels for U.S. dialogue that had existed, including military-to-military exchanges.

Congress has added to the strains. House Speaker Kevin McCarthy (R., Calif.) said Tuesday he will meet with Taiwan President Tsai Ing-wen when she travels to the U.S. this year. Beijing wants to isolate Taiwan and Ms. Tsai to force the island to unify with China. Mr. McCarthy’s predecessor, California Democrat Nancy Pelosi, infuriated Beijing last summer by visiting Taiwan.

For years, Mr. Xi has sounded ever-darker in his assessments of international relations, though until this week he usually avoided criticizing the U.S. by name. In the past, he has also warned fellow officials to be ready for unpredictable events with dire consequences, known as black swans.

Riaz Haq said...

Why Chinese Apps Are the Favorites of Young Americans
It isn’t just the algorithms, but lessons from a cutthroat culture


https://www.wsj.com/articles/why-chinese-apps-are-the-favorites-of-young-americans-a9a5064a

The concern around TikTok in Washington is drawing fresh attention to how Chinese apps have woven themselves into the fabric of young Americans’ lives—and what makes them so popular.

Four of the five hottest apps in the U.S. in March were forged in China. Algorithms are often cited as their secret sauce. An often overlooked facet is how cutthroat competition for users at home has given Chinese firms a leg up over Western rivals.

Much like during China’s rise to manufacturing dominance a few decades ago, Chinese tech companies have harnessed a labor pool of affordable talent to constantly fine-tune product features.

The nonstop drive to get better even has a term in China’s tech industry: “embroidery.”

“Everybody works on improving their craft, stitch by stitch,” said Fan Lu, a venture-capital investor who invested in TikTok’s predecessor Musical.ly.

Seven-month-old Temu was the most downloaded app across U.S. app stores during the first three weeks of March, according to market-insights firm Sensor Tower. It was followed by TikTok’s video-editing partner app CapCut and TikTok itself. Fast-fashion retailer Shein came in fourth. Then came Facebook, the only non-Chinese app among the top five.

One illustration of how immersed American consumers are in an app ecosystem created by Chinese companies: Under the hashtags #temuhaul or #sheinhaul, Gen-Z shoppers have taken to display the result of their shopping sprees in TikTok videos with captions such as “$50 worth of very RANDOM items on TEMU.”


-----------

The popularity of the apps has gotten them caught in the crossfire of U.S.-China geopolitical tension—TikTok in particular. The Biden administration has threatened a possible ban on the app if ByteDance doesn’t sell its stakes in TikTok, citing national-security concerns. On Thursday, U.S. lawmakers pummeled TikTok’s Chief Executive Shou Zi Chew about Beijing’s potential influence over the app.

Beijing has opposed a TikTok sale and said it would never require companies to illegally gather data from overseas. Meanwhile, a bill gaining momentum in Washington would result in a blanket ban of broad categories of Chinese technology, including American teenagers’ favorite apps, if it is passed.

Riaz Haq said...

Opinion U.S. Central Command finally gets a taste of disruption

https://www.washingtonpost.com/opinions/2023/03/30/ignatius-central-command-military-technology-ai/

By David Ignatius

If you’re wondering how a hidebound U.S. military is going to compete against smart, aggressive adversaries in the future, consider the example of Schuyler C. Moore, the recently appointed, 30-year-old chief technology officer of U.S. Central Command.

Moore told me bluntly that in her new job of managing innovation at Centcom, 70 percent of the challenge is overcoming “bureaucratic processes, old ways of thinking and legacy systems.” She’s absolutely right. Those obstacles have frustrated would-be defense modernizers for decades. Now, it seems, Centcom may be empowering people to begin fixing them.

Moore’s rĂ©sumĂ© is a reminder of what makes America exceptional. She’s an Asian American from California who studied at Harvard and was a champion platform diver there. But following an injury, she took a leave and taught school in Afghanistan. After Harvard, she got a master’s in strategic studies at Georgetown, worked for a fancy defense consulting group, advised the Defense Innovation Board and worked for Rep. Seth Moulton (D-Mass.), an Iraq vet and defense reform advocate.

Then Moore did something even more interesting. She joined the U.S. Navy Reserve as an intelligence officer. She was deployed to Bahrain last year as part of a new Centcom Navy unit called Task Force 59 that was experimenting with unmanned systems and artificial intelligence. After she served eight months there, Gen. Michael Erik Kurilla, the Centcom commander, named her his chief technology officer.

This process of fusing high-tech brainpower with the military (and other parts of the U.S. government) is among the most important challenges facing the country. Imagine the impact if Moore’s story was replicated widely — and a generation of smart, creative women and men from diverse backgrounds decided it was cool to work on complex national security and social problems.

Kurilla was the first regional combatant commander to name a CTO. He wanted to make Centcom a laboratory for innovation, after its frustrating decades of overseeing America’s “endless wars” in the Middle East. Necessity was the mother of invention at Centcom: As the United States reduced its footprint in the Middle East, Kurilla needed technology to replace some of the tens of thousands of troops and billions of dollars in weapons that had been part of America’s agonizing effort to police the region.

The Pentagon needs speed and agility as it moves to embrace new technology. Our existing military-industrial-congressional complex, as Sen. John McCain (R-Ariz.) used to call it, excels at producing the aircraft carriers, fighter jets and submarines that are built by giant defense contractors. Smaller tech companies have some brilliant defense ideas, but often they can’t cross what’s known as the “valley of death” between innovation and production.

The challenge for Moore and other modernizers is to advance that transition. She gave me some practical examples. Task Force 59 had acquired an unmanned surface vessel that could race across the seas at 80 knots. Unfortunately, it used a kind of fuel that wasn’t available in the Centcom area of operations. The task force pressed the vessel’s manufacturer, and in 90 days it had switched to a different fuel system. “In the Defense Department, that speed of change is unheard of,” Moore rightly says.

Often, the military needs to exploit off-the-shelf technology from commercial companies. Moore says that’s what’s happening with a network of smart ocean sensors that were developed for the tuna-fishing industry by a Spanish company called Marine Instruments. These long-lived buoys can detect fish (or, with different programming, ships and subs) and using AI, can analyze the data and feed it back to a control center. The key, says Moore, is that commanders “have given us freedom to think outside the box.”


Riaz Haq said...

Kissinger: Beijing “expects…to be the dominant power in Asia…The ideal solution…is a China so visibly strong that that will occur through the logic of events.”

https://www.wsj.com/articles/the-great-strategist-henry-kissinger-turns-100-china-ukraine-realpolitik-81b6f3bb?st=8fjy2pvd3a8izr5&reflink=article_copyURL_share

What Mr. Kissinger sees when he looks at the world today is “disorder.” Almost all “major countries,” he says, “are asking themselves about their basic orientation. Most of them have no internal orientation, and are in the process of changing or adapting to the new circumstances”—by which he means a world riven by competition between the U.S. and China. Big countries such as India, and also a lot of “subordinate” ones, “do not have a dominant view of what they want to achieve in the world.” They wonder if they should “modify” the actions of the superpowers (a word Mr. Kissinger says he hates), or strive for “a degree of autonomy.”

Some major nations have wrestled with these choices ever since the “debacle of the Suez intervention” in 1956. While Britain chose close cooperation with the U.S. thereafter, France opted for strategic autonomy, but of a kind “that was closely linked to the U.S. on matters that affected the global equilibrium.”

The French desire to determine its own global policy gave rise to awkwardness with President Emmanuel Macron’s recent visit to Beijing. While critics say he pandered to the Chinese, Mr. Kissinger sees an example of French strategic autonomy at work: “In principle, if you have to conduct Western policy, you would like allies that only ask you about what contribution they can make to your direction. But that is not how nations have been formed, and so I’m sympathetic to the Macron approach.”

It doesn’t bother him that Mr. Macron, on his return from Beijing, called on his fellow Europeans to be more than “just America’s followers.” Mr. Kissinger doesn’t “take it literally.” Besides, “I’m not here as a defender of French policy,” and he appears to attribute Mr. Macron’s words to cultural factors. “The French approach to discussion is to convince their adversary or their opposite number of his stupidity.” The British “try to draw you into their intellectual framework and to persuade you. The French try to convince you of the inadequacy of your thinking.”

And what is the American way? “The American view of itself is righteousness,” says the man famed for his realpolitik. “We believe we are unselfish, that we have no purely national objectives, and also that our national objectives are achieved in foreign policy with such difficulty that when we expose them to modification through discussion, we get resentful of opponents.” And so “we expect that our views will carry the day, not because we think we are intellectually superior, but because we think the views in themselves should be dominant. It’s an expression of strong moral feelings coupled with great power. But it’s usually not put forward as a power position.”

Asked whether this American assertion of inherent unselfishness strikes a chord with other countries, Mr. Kissinger is quick to say: “No, of course not.” Does Xi Jinping buy it? “No, absolutely not. That is the inherent difference between us.” Mr. Xi is stronger globally than any previous Chinese leader, and he has “confronted, in the last two U.S. presidents,” men who “want to exact concessions from China and announce them as concessions.” This is quite the wrong approach, in Mr. Kissinger’s view: “I think the art is to present relations with China as a mutual concern in which agreements are made because both parties think it is best for themselves. That’s the technique of diplomacy that I favor.”

In his reckoning, Joe Biden’s China policy is no better than Donald Trump’s: “It’s been very much the same. The policy is to declare China as an adversary, and then to exact from the adversary concessions that we think will prevent it from carrying out its domineering desires.”

Riaz Haq said...

The facts cannot be disputed. The United States has recovered from the coronavirus pandemic faster than any major economy in the world. As Bloomberg’s Matthew A. Winkler recently pointed out, unemployment is stunningly low. Gross domestic product growth has grown at three times the average pace as under President Donald Trump, real incomes are rising, manufacturing is booming, and inflation has eased for 10 straight months. Even the budget deficit, which was at 15.6 percent of GDP at the end of the Trump presidency, has dropped to 5.5 percent of GDP at the end of last year.

https://www.washingtonpost.com/opinions/2023/05/26/america-supremacy-irresponsible-politics/

The picture is even better when viewed more broadly. The United States remains the world’s leader in business, especially in cutting-edge technology. Scholars Sean Starrs and Stephen G. Brooks found that, looking at the globe’s top 2,000 companies, Chinese firms come first in shares of global profits in only 11 percent of sectors, but U.S. firms are ranked first in 74 percent of sectors.


Or look at artificial intelligence, which most agree is the bold new frontier of technology, likely to shape every industry. U.S. companies such as OpenAI, Microsoft and Google produce the best applications on the market, and a host of other new start-ups are surging forward. As Paul Scharre points out in a Foreign Affairs essay, “Of the top 15 institutions publishing deep learning research, 13 are American universities or corporate labs. Only one, Tsinghua University, is Chinese.” He notes that while China publishes much more AI research than the United States, American papers are cited 70 percent more often. These U.S. advantages are likely to grow dramatically now that China has been blocked from the advanced chips that are absolutely essential to developing and using AI.


Follow Fareed Zakaria's opinions
Follow
Or consider finance. Despite the recent banking crisis, the biggest U.S. banks are now more dominant than they have ever been worldwide. They have passed rigorous stress tests and built up their capital reserves, and as a result they are now better positioned than their European and Japanese counterparts. China’s state-owned banks are saddled with huge government debt and cannot operate in the open global financial system because that would almost certainly trigger massive outflows of funds, as the Chinese people seek to move their money to safer locales. And despite many challenges and efforts to unseat it, the dollar remains the global reserve currency (as the International Monetary Fund’s managing director said recently), which gives the United States a financial superpower. (It is one that I worry we are misusing, which will trigger even more efforts to replace it. But there is no denying that the dollar, for now, reigns supreme.)

Riaz Haq said...

The facts cannot be disputed. The United States has recovered from the coronavirus pandemic faster than any major economy in the world. As Bloomberg’s Matthew A. Winkler recently pointed out, unemployment is stunningly low. Gross domestic product growth has grown at three times the average pace as under President Donald Trump, real incomes are rising, manufacturing is booming, and inflation has eased for 10 straight months. Even the budget deficit, which was at 15.6 percent of GDP at the end of the Trump presidency, has dropped to 5.5 percent of GDP at the end of last year.

https://www.washingtonpost.com/opinions/2023/05/26/america-supremacy-irresponsible-politics/


-------------

A somewhat under-noticed development in recent years has been the United States’ rise as an energy powerhouse. Because of fracking and natural gas, the United States is now the world’s largest producer of liquid hydrocarbons. And as Columbia University’s Jason Bordoff has noted, America’s ability to ship liquefied natural gas has made it an energy superpower, able to provide or cut off energy to countries around the world. Add to these traditional energy sources the dramatic ramp-up of green energy, thanks to the vast tax credits and incentives in the Inflation Reduction Act, and you have a picture of truly astonishing, comprehensive energy capacity.


The U.S. military remains in a league of its own, far superior to those of its rivals in Russia or China. China is catching up to the United States, but the lead remains vast across many dimensions of warfare. And in Ukraine, as the Republican foreign policy adviser Kori Schake has noted, the United States, at minimal cost and with no American troops, is inflicting ruinous damage on Russia’s army. Washington is also transforming the Ukrainian army into the most powerful fighting force in Europe — giving it another potent ally. The great force multiplier of U.S. power remains its alliances. The United States has more than 50 treaty allies; China has one (North Korea). And it has about 750 military bases of some kind around the world; China has one (in Djibouti).

Riaz Haq said...

India poised to deny funding for Vedanta-Foxconn chip venture - Bloomberg News | Reuters


https://www.reuters.com/world/india/india-poised-deny-funding-vedanta-foxconn-chip-venture-bloomberg-news-2023-05-31/

May 31 (Reuters) - The Indian government is poised to deny crucial funding for Anil Agarwal's chip venture, Bloomberg News reported on Tuesday, a setback to the billionaire's ambition to build India's 'own Silicon Valley.'

The authorities are likely to inform the venture between Vedanta (VDAN.NS) and Taiwan's Foxconn (2317.TW) that it won't get incentives to make 28-nanometer chips, the report said, citing people familiar with the matter.

The venture's application seeking billions in government assistance hasn't met the criteria set by the government, the report said. The project is still in search of a technology partner and a manufacturing-grade technology license for the construction of 28nm chips, it added.

Foxconn declined to comment on the report, while India's technology ministry and Vedanta did not immediately respond to Reuters requests for comment.

The setback comes at a time when Agarwal's metals and mining conglomerate is already grappling with reducing its significant debt load.



Last year in September, Vedanta and Foxconn – formally called Hon Hai Precision Industry Co Ltd – announced they would invest $19.5 billion to set up semiconductor and display production plants in the state of Gujarat, creating more than 100,000 jobs.

"India's own Silicon Valley is a step closer now," Agarwal had said last year after the announcement.

Riaz Haq said...

#Modi's #semiconductor #manufacturing plan flounders as firms struggle to find #tech partners. Modi has made it top priority for #India's economic strategy to "usher in new era in electronics manufacturing" by luring global companies. #MakeInIndia
https://www.reuters.com/world/india/india-chip-plan-stalls-after-tower-intel-deal-setback-modi-2023-05-31/https://www.reuters.com/world/india/india-chip-plan-stalls-after-tower-intel-deal-setback-modi-2023-05-31/

NEW DELHI/OAKLAND, California, June 1 (Reuters) - Big companies including a Foxconn joint venture that bid for India's $10 billion semiconductor incentives are struggling due to the lack of a technology partner, a major setback for Prime Minister Narendra Modi's chipmaking ambitions.

A planned $3 billion semiconductor facility in India by chip consortium ISMC that counted Israeli chipmaker Tower as a tech partner has been stalled due to the company's ongoing takeover by Intel, three people with direct knowledge of the strategy said.

A second mega $19.5 billion plan to build chips locally by a joint venture between India's Vedanta and Taiwan's Foxconn is also proceeding slowly as their talks to rope in European chipmaker STMicroelectronics (STMPA.PA) as a partner are deadlocked, a fourth source with direct knowledge said.

Modi has made chipmaking a top priority for India's economic strategy as he wants to "usher in a new era in electronics manufacturing" by luring global companies.

India, which expects its semiconductor market to be worth $63 billion by 2026, last year received three applications to set up plants under the incentive scheme. They were from the Vedanta-Foxconn JV; a global consortium ISMC which counts Tower Semiconductor (TSEM.TA) as a tech partner; and from Singapore-based IGSS Ventures.

The Vedanta JV plant is to come up in Modi's home state of Gujarat, while ISMC and IGSS each committed $3 billion for plants in two separate southern states.

The three sources said ISMC's $3 billion chipmaking facility plans are currently on hold as Tower could not proceed to sign binding agreements as things remain under review after Intel acquired it for $5.4 billion last year. The deal is pending regulatory approvals.

Talking about India's semiconductor ambitions, India's deputy IT minister Rajeev Chandrasekhar told Reuters in a May 19 interview ISMC "could not proceed" due to Intel acquiring Tower, and IGSS "wanted to re-submit (the application)" for incentives. The "two of them had to drop out," he said, without elaborating.

Tower is likely to reevaluate taking part in the venture based on how its deal talks with Intel pan out, two of the sources said.

Riaz Haq said...

India can aim lower in its chip dreams

https://www.reuters.com/breakingviews/india-can-aim-lower-its-chip-dreams-2023-07-05/


BENGALURU, July 5 (Reuters Breakingviews) - India’s semiconductor dreams are facing a harsh reality. After struggling to woo cutting-edge chipmakers like Taiwan Semiconductor Manufacturing (2330.TW) to set up operations in the country, the government may now have to settle for producing less-advanced chips instead. Yet that’s no mere consolation prize: the opportunity to grab share from China in this commoditised but vital part of the tech supply chain could pay off.

Prime Minister Narendra Modi wants to “usher in a new era of electronics manufacturing” by turning India into a chipmaking powerhouse. So far, the government has dangled $10 billion in subsidies but with little to show for it. Mining conglomerate Vedanta’s $19.5 billion joint venture with iPhone supplier Foxconn (2317.TW) has stalled; plans for a separate $3 billion manufacturing facility appear to be in limbo, Reuters reported in May. In a small win for the government, U.S.-based Micron Technology (MU.O) last week announced it will invest $825 million to build its first factory in India in Modi’s home state of Gujarat, though the facility will be used to test and package chips, rather than to manufacture them.

Even so, the Micron investment could pave the way for the country to move into the assembly, packaging and testing market for semiconductors, currently dominated by firms like Taiwan’s ASE Technology (3711.TW) and China's JCET (600584.SS). It’s not as lucrative as making or designing them but global sales are forecast to hit $50.9 billion by 2028, according to Zion Market Research.

An even bigger opportunity awaits in manufacturing what are known as trailing-edge semiconductors. Recently, New Delhi expanded fiscal incentives for companies to make these lower-end products in the country. It’s a far more commoditised part of the market but there’s much to play for. Analog chips, for example, are vital for electric cars and smartphones. Last year, sales grew by a fifth to $89 billion, per estimates from the Semiconductor Industry Association, outpacing growth for memory, logic and other types of chips.

The majority of the world’s trailing-edge semiconductors are currently made in Taiwan and China. So rising geopolitical tensions between Washington and Beijing, as well as worries of military conflict in Taiwan, will make India an attractive alternative for companies like U.S.-based GlobalFoundries (GFS.O) that specialise in this segment. Booming domestic demand is another factor: the Indian market is forecast to hit $64 billion by 2026, from just $23 billion in 2019.

Aiming lower could be just what India’s chip ambitions need.

Follow @PranavKiranBV on Twitter

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Refiles to add link.)

U.S. memory chip firm Micron Technology on June 28 signed a memorandum of understanding with the Indian government to build a semiconductor assembly and testing plant, its first factory in the country.

Construction for the $2.75 billion project, which includes government support, will start in August, according to Ashwini Vaishnaw, India’s minister of electronics and information technology in an interview with the Financial Times published on July 5, with production expected by the end of 2024.

Riaz Haq said...

The future of war: A special report


https://www.economist.com/weeklyedition/2023-07-08

Big wars are tragedies for the people and countries that fight them. They also transform how the world prepares for conflict, with momentous consequences for global security. Britain, France and Germany sent observers to the American civil war to study battles like Gettysburg. The tank duels of the Yom Kippur war in 1973 accelerated the shift of America’s army from the force that lost in Vietnam to the one that thumped Iraq in 1991. That campaign, in turn, led China’s leaders to rebuild the People’s Liberation Army into the formidable force it is today.

The war in Ukraine is the largest in Europe since 1945. It will shape the understanding of combat for decades to come. It has shattered any illusions that modern conflict might be limited to counterinsurgency campaigns or evolve towards low-casualty struggles in cyberspace. Instead it points to a new kind of high-intensity war that combines cutting-edge tech with industrial-scale killing and munitions consumption, even as it draws in civilians, allies and private firms. You can be sure that autocratic regimes are studying how to get an edge in any coming conflict. Rather than recoiling from the death and destruction, liberal societies must recognise that wars between industrialised economies are an all-too-real prospect—and start to prepare.



As our special report explains, Ukraine’s killing fields hold three big lessons. The first is that the battlefield is becoming transparent. Forget binoculars or maps; think of all-seeing sensors on satellites and fleets of drones. Cheap and ubiquitous, they yield data for processing by ever-improving algorithms that can pick out needles from haystacks: the mobile signal of a Russian general, say, or the outline of a camouflaged tank. This information can then be relayed by satellites to the lowliest soldier at the front, or used to aim artillery and rockets with unprecedented precision and range.

This quality of hyper-transparency means that future wars will hinge on reconnaissance. The priorities will be to detect the enemy first, before they spot you; to blind their sensors, whether drones or satellites; and to disrupt their means of sending data across the battlefield, whether through cyber-attacks, electronic warfare or old-fashioned explosives. Troops will have to develop new ways of fighting, relying on mobility, dispersal, concealment and deception. Big armies that fail to invest in new technologies or to develop new doctrines will be overwhelmed by smaller ones that do.

Even in the age of artificial intelligence, the second lesson is that war may still involve an immense physical mass of hundreds of thousands of humans, and millions of machines and munitions. Casualties in Ukraine have been severe: the ability to see targets and hit them precisely sends the body-count soaring. To adapt, troops have shifted mountains of mud to dig trenches worthy of Verdun or Passchendaele. The consumption of munitions and equipment is staggering: Russia has fired 10m shells in a year. Ukraine loses 10,000 drones per month. It is asking its allies for old-school cluster munitions to help its counter-offensive.



Eventually, technology may change how this requirement for physical “mass” is met and maintained. On June 30th General Mark Milley, America’s most senior soldier, predicted that a third of advanced armed forces would be robotic in 10-15 years’ time: think of pilotless air forces and crewless tanks. Yet armies need to be able to fight in this decade as well as the next one. That means replenishing stockpiles to prepare for high attrition rates, creating the industrial capacity to manufacture hardware at far greater scale and ensuring that armies have reserves of manpower. A nato summit on July 11th and 12th will be a test of whether Western countries can continue to reinvigorate their alliance to these ends.

Riaz Haq said...

The future of war: A special report


https://www.economist.com/weeklyedition/2023-07-08


The third lesson—one that also applied for much of the 20th century—is that the boundary of a big war is wide and indistinct. The West’s conflicts in Afghanistan and Iraq were fought by small professional armies and imposed a light burden on civilians at home (but often lots of misery on local people). In Ukraine civilians have been sucked into the war as victims—over 9,000 have died—but also participants: a provincial grandmother can help guide artillery fire through a smartphone app. And beyond the old defence-industrial complex, a new cohort of private firms has proved crucial. Ukraine’s battlefield software is hosted on big tech’s cloud servers abroad; Finnish firms provide targeting data and American ones satellite comms. A network of allies, with different levels of commitment, has helped supply Ukraine and enforce sanctions and an embargo on Russian trade.

New boundaries create fresh problems. The growing participation of civilians raises legal and ethical questions. Private companies located outside the physical conflict zone may be subject to virtual or armed attack. As new firms become involved, governments need to ensure that no company is a single point of failure.

No two wars are the same. A fight between India and China may take place on the rooftop of the world. A Sino-American clash over Taiwan would feature more air and naval power, long-range missiles and disruptions to trade. The mutual threat of nuclear use has probably acted to limit escalation in Ukraine: nato has not directly engaged a nuclear-armed enemy and Russia’s threats have been bluster so far. But in a fight over Taiwan, America and China would be tempted to attack each other in space, which could lead to nuclear escalation, especially if early-warning and command-and-control satellites were disabled.

Silicon Valley and the Somme
For liberal societies the temptation is to step back from the horrors of Ukraine, and from the vast cost and effort of modernising their armed forces. Yet they cannot assume that such a conflict, between large industrialised economies, will be a one-off event. An autocratic and unstable Russia may pose a threat to the West for decades to come. China’s rising military clout is a destabilising factor in Asia, and a global resurgence of autocracy could make conflicts more likely. Armies that do not learn the lessons of the new kind of industrial war on display in Ukraine risk losing to those that do. ■


Riaz Haq said...

A new Huawei phone has defeated US chip sanctions against China


https://qz.com/a-new-huawei-phone-has-defeated-us-chip-sanctions-again-1850803360

The new Kirin 9000s chip in Huawei’s latest phone uses an advanced 7-nanometer processor fabricated in China by the country’s top chipmaker, Semiconductor Manufacturing International Corp. (SMIC), according to a teardown of the phone that TechInsights conducted for Bloomberg.

Huawei’s latest smartphone, the Mate 60 Pro, offers proof that China’s homegrown semiconductor industry is advancing despite the US ban on chips and chipmaking technology.


The new Kirin 9000s chip in Huawei’s latest phone uses an advanced 7-nanometer processor fabricated in China by the country’s top chipmaker, Semiconductor Manufacturing International Corp. (SMIC), according to a teardown of the phone that TechInsightsconducted for Bloomberg

A brief recent timeline of US chip sanctions against China
August 2022: The US Congress passes the CHIPS and Science Act, a law that approves subsidies and tax breaks to help jumpstart the production of advanced semiconductors on American soil.



September 2022: The Biden administration bans federally funded US tech firms from building advanced facilities in China for a decade.

October 2022: The US commerce department bars companies from supplying advanced chips and chipmaking equipment to China, calling it an effort to curb China’s ability to produce cutting-edge chips for weapons and other defense technology, rather than a bid to cripple the country’s consumer electronics industry.



November 2022: The US bans the approval of communications equipment from Chinese companies like Huawei Technologies and ZTE, claiming that they pose “an unacceptable risk” to the country’s national security.

May 2023: Beijing bans its “operators of critical information infrastructure” from doing business with Micron Tech, an Idaho-based chipmaker.



“In the AI garden, the seeds are the AI software frameworks—which China already has access to. The plants in the garden are the AI models in use, which again are already available to Chinese AI companies. Nvidia provides the best shovels and pruning shears to tend the garden, but not the only means to tend it. So it doesn’t make sense to try to build a high wall around it...[T]o over-regulate these chips creates the risk that the US could fumble away its technology leadership. Would you rather have Chinese AI customers continue to fuel Nvidia’s growth and success? Or would you rather they spend their yuan to fuel the growth and success of Chinese suppliers?”

—Patrick Moorhead, a tech analyst, writing in Forbes in July 2023

One big number: China’s hoard of Nvidia chips
$5 billion: The value of orders that China’s tech giants have placed with Nvidia for its A800 and A100 chips, to be delivered this year, according to an August report by the Financial Times. The biggest internet giants—Baidu, ByteDance, Tencent, and Alibaba—have placed orders totalling $1 billion to buy around 100,000 A800 processors. Given that the US is mulling new export controls, Chinese companies are rushing to hoard the best chips on the market to train their AI models and run their data centers.

Riaz Haq said...

Arnaud Bertrand
@RnaudBertrand
Incredible, Gina Raimondo implores US industry to respect her sanctions because: "America leads the world in AI… America leads the world in advanced semiconductor design. That’s because of our private sector. No way are we going to let [China] catch up."
https://scmp.com/news/world/united-states-canada/article/3243657/us-commerce-chief-warns-against-china-threat

This is an incredible admission because the Biden administration's messaging - or shall I say propaganda - on their semiconductors sanctions has so far always been that it isn't to gain or maintain a competitive advantage over China, but solely to prevent China's military from accessing to certain technologies. See for instance what Janet Yellen said on exactly this: "[the sanctions are] tailored toward the specific national security objective of preventing the advancement of highly sensitive technologies that are critical to the next generation of military innovation and [are] not designed for us to gain a competitive economic advantage over any other country." (Src: https://washingtonpost.com/opinions/2023/11/06/china-relationship-good-american-economy/ )

Our Anthony Blinken: "One of the important things for me to do on this trip [to China] was to disabuse our Chinese hosts of the notion that we are seeking to economically contain them... However, what is clearly in our interest is making sure that certain specific technologies that China may be using to, for example: advance its very opaque nuclear weapons program, to build hypersonic missiles, to use technology that may have repressive purposes – it’s not in our interest to provide that technology to China. And I also made that very clear. So, the actions that we’re taking, that we’ve already taken, and as necessary that we’ll continue to take are narrowly focused, carefully tailored to advance and protect our national security. And I think that’s a very important distinction." (src: https://china.usembassy-china.org.cn/secretary-of-state-antony-j-blinkens-press-availability/ )

Pretty much everyone knew this was 100% bullshit and all done for the purpose of America maintaining a competitive advantage in the technologies of the future, like AI. But now we have the Secretary of Commerce, who implemented these sanctions, say exactly that.

https://x.com/RnaudBertrand/status/1731126664661459367?s=20