Sanctions on North Korea Mean Little

So, according to the Wall Street Journal today, the U.S has been negotiating with China over what to do to North Korea after they exploded another nuclear bomb in September of this year.  In diplomatic terms, this agreement to restrain North Korea went at lightening speed.

If there is any question about the status of North Korea, this agreement points to it.  North Korea doesn't do anything unless China agrees, so negotiating with China to get North Korea to do anything carries that relationship in the background.  This case in point makes it clear.

The goal here is get revenue from coal down by 60%.  That is one of the few sources of foreign currency North Korea is supposed to have.  So, who buys all of North Korea's coal?  China.  So, if China wanted to cut North Korea's revenue from coal, they would not have to do very much to do it.  They could just unilaterally cut the purchase of coal and announce it to the world.  Instead, they want to "negotiate a milestone agreement" which is 17 pages long.  This is the kind of negotiation that we have to wonder about.

Since 2009, China has steadily increased its purchase of coal from North Korea from $200M to $1.2B.  Since it is one of the few sources of revenue the North has, they have effectively kept them in foreign currency by buying goods, and supplying them with oil and natural gas.  Nobody does more to keep them going than China, and nobody has more influence.  Yet, the North continues to explode bombs and build up its missile capabilities, all the while threatening the U.S and very few others.   So now, in a magnanimous jesture of good will, the Chinese have agreed to cut back on coal purchases.  That isn't good enough.

How about getting the Chinese to get together with the North and tell them to stop building bombs and missiles, and doing all that testing?  It is fairly obvious the Chinese benefit from having the North do what they do best - saber rattling- and we have accepted their role without blaming their chief benefactor.

2016 Report to Congress US-China E&SRC

I just received the new U.S. China Economic and Security Review Commission Report to Congress for 2016.  It is nice to have it in print, but researchers also need it on-line for a searchable reference.

It is not light reading, but as a researched report it is easier reading than most academic papers or theses and covers a lot more ground.  It is sourced and has references that will keep you reading all year.  Most reports to Congress are the "look what we did" variety but this one is not.  It is well worth reading.

Let me give you a little food for thought with this quote from the Executive Summary:  "China appears to be conducting a campaign of commercial espionage against U.S. companies involving a combination of cyber
espionage and human infiltration to systematically penetrate the information systems of U.S. companies to steal their intellectual property, devalue them, and acquire them at dramatically reduced prices."

Forgetting Chernobyl

It has been 30 years since Chernobyl was famous as a nuclear power plant, so a new generation has forgotten what it was, or where.  In yesterday's Financial Times is a widely reported story of a 36,000-ton "safety shield" to be put on top of the site, a human engineering feat that will not go unnoticed, since these stories say it will dramatically cut the amount of radiation being leaked into the atmosphere.  Of course, that means there was a considerable amount still leaking for that whole 30 years.  We had forgotten about that too.  Former President Gorbachev said that the Chernobyl accident was a more important factor in the fall of the Soviet Union than Perestroika.  

RT reports that for the more adventureous of people, there are tours of the city, though there will not be many people there to look at.  Animals and humans still do not live very close to this radioactive site.  An area of 30,000 Kilometers around the site was evacuated and over 116,000 people did not come back to their homes.  You can Google Map it at Chernobyl Nuclear Power Plant.  

It is odd that RT mentions it because Chernobyl was under Russian control when it dissolved into a molten mess.  The World Nuclear Association is clear that it was a faulty Russian design operated by less than competent people, that caused it to melt down.  The fact that it is under Ukraine's control now hardly passes our notice.

This radioactive area is about 500 miles south-west of Moscow.  The Russians can run tours there all they want but it is not a tourist area that very many people will want to go to.  Radiation exposure, according to my training, is cumulative- it never goes away and builds up each time you are exposed. That is a good reason to forget about Chernobyl.

China: Where to Start

If there is going to be a trade war with China, it has to start somewhere, and there are some obvious things that need to be addressed.  Steel and aluminum are being dumped, in spite of tariffs put on them, though deals with countries like Vietnam who are allowed to treat the metals with chemicals that should have been done before it left China, and reship it as if it was produced in their own country.  We can't be a stupid as we look on this totally transparent work-around the Chinese have been using.  It took a year to figure out that transshipping steel was happening, and another six months try to figure out what will be done about it.  So far, nothing.  The Commerce Department is supposed to be watching this kind of thing.

Second, there are several industries that China has developed by stealing the technology from the U.S and a few other countries.  Our businesses already know what those technologies are.  Solar panel electrical management comes to mind.  As I outlined in a long story in my first book, the Chinese stole that technology, put manufacturing of stolen goods into their own companies, then continue to drag out a court case filed by the original owner of the intellectual property.  In the meantime, they export that same technology to the rest of the world.  This is just one example.  Resins were an example I wrote about previously.  I would bring business leaders in to discuss what has been stolen and used to build competing industries - in a time period of the last 10 years - then levy tariffs on every one of those industries.

Third, counterfeits need to be confiscated and the selling of counterfeit goods curtailed.  We allow counterfeits to be sold as "generic" manufactured goods.  That needs to stop.

Fourth, stop the abuse of visa programs to bring Chinese nationals into the US to work in our Universities and tech companies.  They use these visa programs to bypass export controls on intellectual property and government secrets.  They become US nationals under some of them, and use their status to steal even more.  Why we allow these kind of arrangements is beyond comprehension.

US Gets into German Sale

I have written two other summaries of what happened in the aborted sale of Aixtron the German electronics maker to a Chinese conglomerate, but was a little surprised to see the US involved in this.  CFIUS, the Committtee on Foreign Investment in the US, usually only weighs in on concerns about the sale of US companies to foreign governments or firms.  They do have an interest since Aixtron sells chip manufacturing technology to the US government, but that generally doesn't get much notice from CFIUS.  Something got the Germans to reconsider the deal after approving it.  Maybe this interest gives us a clue as to what might have happened.  

Talk About Ousting Director of NSA

A curious story of politics showed up in the Wall Street Journal today - and it says the Director of National Intelligence and the Secretary of Defense have both pushed for removal of the Director of the National Security Agency, Admiral Mike Rogers.  This is less about doing something worthy of removal than the facts of life in politics.  Rogers' crime was going to visit Donald Trump's Transition Team, doubtlessly for the job of Director of National Intelligence.

It's likely he was invited and didn't just go up to see if he could get in.  So, what makes that a crime worthy of removal from your job?  Of course, there is nothing that says a sitting military person cannot go an do an interview for a position in business or government without telling their bosses about it.  So, it really can't be that.  Somebody in the White House apparently felt strongly enough about it that they were able to influence two of the people who supervise him to call for his removal.  There is only one person high enough to be able to pull that one off.  Of course, we also have to wonder about his motivation for wanting to do that.

James Clapper Leaves DNI

There are few people I admire more than James Clapper who had the world's most thankless job at a time when very few people wanted it.  They had good reason.

The Director of National Intelligence sits on top of a huge, splintered group of 16 agencies.  When he took over, he had already had experience with one of them, the National Geospacial Intelligence Agency which was a mishmash of assets from several other agencies.  At least he knew what he was getting into.  Multiply that problem by 16 and you get what I'm talking about.

The Director of Central Intelligence used to run things in the Intelligence Community (IC), and from my experience, that was a better idea.  But, it was Congress that decided in 2010 to add this new function to get better control of the IC.  How you get better control by adding a new office on top of everything else, was a mystery to all, but just look at Homeland Security to see why that idea fails more than it succeeds.

They put together an executor of sorts, gave billets to the office and waited for something to happen.  The Intelligence Agencies did not put the people they loved and wanted into the DNI.  They did what all bureaucratic leaders do - as a general rule, they sent people they wanted to get rid of.  Try managing an office of misfits who aren't used to working together, yet are dealing with Congress on one side, and the Intelligence Agencies on the other.  It could not have been fun, but he did it well.

Each agency has parochial interests and fights for money from the same basic pot, although DoD has two pots and uses them both for the same programs sometimes.  One of the DNI main functions is figuring out the money supply and where it actually is spent.  Not even God can do that on a good day.

Eventually, it worked out better than Congressional leaders could have guessed.  He answered their questions and gave them insight into some of the operations that would be impossible to get otherwise.  Sometimes he did not have the right answer, but he usually gave a truthful one.  He held meetings with the other leaders and got a basic understanding of what his role would be both to help them, and to function in his own role.  He managed to survive in the job when very few others wanted him to.

I worked with a guy who worked directly for him years ago and he said he had to be on top of his game every day to keep up.  He was smart and quick and got quickly to the point.  You had better make sure you had your act together or he would know.  And, he rarely forgot what you told him.  In bureaucracy, everyone assumes you will not remember the last briefing or the last report you made.  You can use the same slides from year to year and just update the numbers.  Those days are gone now.

We should appreciate a man who does his job well when others would like to see him fail.  Not one among those who wished for his failure ever wanted his job.

Chinese Spying is Big

Brian Krebs reported yesterday on software made by Shanghai ADUPS Technology that was sending back call records and text messages to China.  The University of Toronto has done extensive reporting from its Citizen Lab that shows browsers from Baidu, and a host of others, are sending back much more from anything using those browsers.  It seems apparent the Chinese government is influencing what is being sent back and requiring vendors to put hooks into software to collect data for them.  In that instance, it was more than just text messages.  Some software sends information on the hard drive, WIFI connections used, location data, cell phone unique identifiers, and numerous things like those to China.  Why they need to know my hard drive serial number is a mystery only to those not hacking individual systems in the countries they are getting this information from.  So, while the Chinese mock us for what Edward Snowden said the US does, they try to equal, or exceed that capability without anyone raising a fuss.      

This fits with an even bigger problem that I described earlier and repeat here:

It isn't hard to figure out why China is stealing source code and then signing it with certificates that look like they are legitimate.  Symantec has published an interesting report on something called Suckfly [a better name might be nice] which uses compromised signing certificates to make the code look valid by someone thinking the certificate was valid and therefore from someone who made the software.

Symantec's report [http://www.symantec.com/connect/blogs/suckfly-revealing-secret-life-your-code-signing-certificates]  began to be written when they discovered a code signing cert from a mobile software developer on something that wasn't for mobile devices.  One thing led to another, and eventually to Chengdu, China where other certs were traced.

The Chinese are stealing us blind and undermining the Internet infrastructure with bogus domains and bogus software.  Sometimes they are doing this to resell software they have stolen and sometimes just to control their own people and keep them from using the real Internet.  If they stuck to their own people and not populated certs across the Internet, we might conclude they were doing it for internal security.  They aren't.

When Google stopped accepting certs from the China NIC, the world should have been paying attention to what they were doing.  They are spreading their own software on the Internet that can monitor anyone they choose.  They are not content to monitor just their own.

Peace on Our Terms

I have not counted Angela Merkel in the Left camp, so found it hard to believe she would have peace with the President elect of the United States only on her own terms.  There seems to be variations on the theme of peace with conditions that she imposed on Donald Trump last week.  We are glad to get along well with you but you must honor a commitment to people of different religions, sexual preferences and nationalities.  This is exactly the rhetoric of the Left in the U.S.

We don't need foreign leaders staking out conditions for a chance to be good partners on the world stage.  We have had several mayors of large cities say they will be sanctuary cities allowing illegal immigrants to live there whether the rest of the country wants it or not.  The leader of New York said yesterday, in what was the most pious speech ever given, that he had expressed the concerns of people everywhere in New York when he said that he would not allow certain types of behavior by this new upcoming administration and would watch it closely for deviations from his standards.  Not even the Pope uses this kind of language and the Pope has more reason for doing it.

In President Obama's first week in office he said to a group of Republican opposition members there to discuss issues, "I won."  These are the terms of this office, whether you disagree or not.

World leaders and mayors of large cities do not get to decide the conditions under which they will cooperate with the United States government.  What Obama was describing was a political reality that some seem to think is optional:  The Winner Makes the Rules.  I won;  I set the rules.  Let me add to that:  Get over it.

The arrogance of some of these so-called leaders is beyond imagination.  We had too much of that and elected another party to do things differently.  Brexit happened for the same kinds of reasons.  The French national election will see more of the same.  Austria may lead them to the same result.  Immigration influenced both of those and will be a driving force in politics for quite a while.  For those who say enough of letting these people into our countries, supporting them with tax dollars, and tolerating their lack of assimilation into our culture, consider the votes that are coming up.  The winner makes the rules.

The Seed Corn Saga

In the press release from the Justice Department about the conviction of Mo Hailong, a citizen of China granted U.S. Resident status by a government that seems to allow this kind of thing all the time, is an interesting topic of forfeiture.  Mo was convicted of stealing trade secrets from DuPont Pioneer and Monsanto, mostly seed corn, and sending it back to China where he was also employed.  He was a Director of International Business of the Beijing Dabeinong Technology Group Company.  Part of the forfeiture was two farms, one in Iowa and one in Illinois.  Where better to get seed corn than on a farm where it can be grown? 

The ability to come to the U.S and get resident alien status allows a foreign national to act as a US Person, where in this case, he really represents a foreign company.  We have already seen this used to give money to political parties, illegal had they been treated as Chinese citizens.  They can also buy into businesses that prohibit foreign nationals owning interests.  This whole set up is a farce.  We can't have people employed in China - even people who are on the equivalent of our Congress - and then granting them U.S status.  Somebody in our government should be held accountable for this kind of thing and removed.  This is a case where party politics have replaced national security.  

Chinese Student Visas

I have never been one to say that student visas are bad things, but I heard a story over the weekend that made me wonder if they are as good as I thought.  I ran into a student from Florida who went to one of their majors schools.  He said he was tired of having Chinese students get "a free ride" and he has to work to pay his tuition.  I was naturally curious.

He said the graduate students he was competing with were getting scholarships from his school that required them to pay no tuition or board on campus and he could barely make it by working two jobs and going to school.  He said the rationale by the school was Chinese students make a school better because they are going to be the leaders of the future.

So, I looked up student visas and found that 331,000 were Chinese students, and they were the largest single group from any country.  There are over a million students in this country from countries I am not too sure about, and China is one of them.

Do we really want Chinese students getting to come to school free of charge while we make our own students pay full fare?  I wondered who is making these kinds of decisions until he said the faculty and administrators were mostly Chinese.  What are we thinking here?  Maybe it might be better to think about this a little and start looking at why we would do such a thing.

What Didn't Happen at the End

Well, some of us were surprised that nothing happened to disrupt the election process in the United States.  That will lead some to say that the Russians must have realized something none of us knew until very late, that Donald Trump would win.  Credit them with being clairvoyant and way ahead of our analysts in this country.  The Russians even released a video of celebrations in Moscow when Trump won, acting like they had something to do with it.  

They couldn't have known who would win because we didn't know either until almost 2 AM this morning.  They may have influenced some voters, but turned off many more.  Meddling in elections has not been very successful for them in the past, and there is a good indication that this one wasn't much better.  That does not mean that anyone here will forget the hacking of the political candidates, any more than we forgot the Chinese did it before them.  Remember the curses that come with this kind of behavior:  May you live in interesting times.  May all your wishes come true.  

First Aluminum, Now Steel

Well, the Chinese are finally being investigated for something they have been doing for over a year - dumping cheap metals in the U.S by going through other countries to mask the source.  Several news sources like Nasdaq and the Wall Street Journal had articles on the latest with Vietnamese steel being dumped into the US to avoid sanctions and tariffs put on for doing previous dumping.  [both of these articles are by John Miller but they cover different aspects]. The amazing part of this is the length of time between the dumping and the action by the Commerce Department, over a year.  They only did something when it became obvious that Vietnam had increased its exports from 36,000 to 556,000 tons.  Somewhere along the way you would think that kind of  would stand out enough for someone to notice long before the year was up.

There is a complication to this that made then hesitate, since Vietnam was actually treating the steel to make it more corrosion resistant, something normally done when it is made.  Totally transparent.  The Vietnam Steel Associasion says they are cutting back on steel igot sales because boron and chromium have been found in some of them.  They claim to not be importing that much cold-rolled steel but the numbers are there for everyone to see.  And, of course, Vietnam is now our friend and we have to be nice to them since President Obama made his visit there this year.

Now, think about this a little.  China produces steel so cheaply that it can afford to ship it to Vietnam, treat it and transship it to the U.S and still make money....  that is cheap steel.  Of course, Vietnam is cooperating in this ruse, and knows the deal with China is good for them too.  Our Commerce Department needs to move faster for our own protection.  While they are doing it, let's do some checking for boron and chromium in our ingot steel imports.  That could be a health risk we don't need.

The Rght to an Opinion

One thing the U.S election has shown us is a reluctance on the part of segments of the electorate to accept any opinion other than their own.  You do not have a right to disagree with them, even if you provide reasons for doing so.

The problem with this is the similarity between Russia, China and the United States, which should not go unnoticed.  In none of these places is it acceptable to have a contrary opinion.  The media is managed to filter out views that differ from the government's own.  An elite at the top of the central government manages their power to preserve a single view.  Local political figures apply "rules" that discourage dissent.  Social media is watched and political parties contribute pieces to keep their views in channels used by the population.  The people are managed; they know it, and the resentment spills out on occasion.

A single party rules the political elite.  All three claim to be democracies of a type, yet they have elements of something less.  We have always believed our country was better than these others because of its tolerance for different views and different religions.  Stand on a soapbox in a local park and proclaim that just to see how it is received.

A Question of Attribution

There was an interesting story by James Bamford that was carried yesterday by Reuters.  In it, he speculated that the Russians might not be behind the data thefts in either the Democratic National Committee or other things they get blamed for.  It is something to think about because attribution is so speculative these days.  If you like Bamford's writing, you can search on it and read it.

Our Intelligence Community has allowed our government to speak about this and those comments say it is the Russians.  I don't like this very much and have said so a number of times.  The Intelligence Community is often not allowed to speak for itself, granting that to Congressmen and Administration officials at various levels.  All those people can say is what they heard in closed-door briefings that are classified.  What makes them classified is what the Director of National Intelligence said in open session about attribution:  to be sure, we want to know where the event really came from, who ordered it, and where they were located when the attack was launched.

For specific events, these are not the kind of things we should be talking about in public since it raises the "How did you know that?" Question and discloses sources and methods that others would love to know.  The people who do the attacks want to know how we know who they are, and would be glad to hear that news.

So, for sure, there is some "trust me" in this but we don't need to find out that there is an informant in the place where this group launched its attack, that they were being monitored by some fancy new black box, or that a satellite picked them up when they came home from the school they were attending.   All we really need to know is the real source, and even that is not very specific to what was being done.  But, usually, if the Intelligence Community of any country says it knows who is responsible, they usually know a lot more than they are saying.  They could be wrong, but the odds are the US is not making the statement to fit any political agenda.  It really was Russia.

China's J-20 and the Press Reports

I read several stories today about the J-20, China's new stealth fighter, and was shocked.  Not that the fighter was not a nice airplane, but that it was news.  The fighter appeared on the tarmac and in the air during a visit by our Defense Secretary almost 5 years ago.  Pictures of it were almost everywhere, and that time, I said I was surprised to see it in the Wall Street Joiurnal which is not well known for its coverage of new airplanes.  The airplane seems to be used for show whenever there is a need.

The Daily Mail of London says the plane was built from stolen secrets of the F-22, something every vendor says when they are competing in world markets where the secrecy of a plane can make a difference now and again.  The Chinese must think people will buy this plane if they talk about it enough.  Saying it is built from stolen technology is not a good selling point, in case you hadn't noticed.  Now everyone in the world knows you stole the technology instead of developing it yourself.  If we bought cell phones the way we buy airplanes, we might say the fight between Samsung and Apple shows us something about whether we should buy an iPhone or a Galaxy.

Germans Say "Reciprocity"

The Wall Street Journal has an article on the increasing tensions between Germany and China over trade, quoting as follows:

"German Chancellor Angela Merkel’s spokesman, Steffen Seibert, said Monday that Germany was 'right in being open toward investments from abroad and, of course, from China,” but stressed a need for “fair investment and competition conditions in an international context.'

'The key here is reciprocity,' Mr. Seibert said. Germany 'must be protected effectively against unfair competition,' he said."

Finally, somebody is saying the right word about trade with China.  China has done every kind of international deal favoring only their own country and expects the rest of the world to live with it.  The U.S would do well to view what they are doing in the same light.  

New Report on Chinese Censorship

You can read the executive summary of a new report from Citizen Lab that characterizes censorship over live-streaming services, one of the most difficult challenges any government can try to tackle.  It is virtually impossible to real-time censor any content by running it through a central monitoring activity - though the Chinese certainly try.  What this report shows is that the Chinese decentralize live streaming censorship and embed key words in the filtering censorship software.  They leave actual censorship to the local entity - called self-censorship - and hold those entities accountable if they don't.  One example cited is the downloading of a VPN, which would give the user some security from this type of oversight.  I guess they don't need a policy that bans VPNs if they have thousands of service providers enforcing what they think that keyword might mean.

This is typical of the policies used by China on companies operating there.  The policies are vague, "draft", and enforced differently by different localities.  This creates doubt in the minds of those operating there and leads to over enforcement by self-regulators.