After several years, the U.S. has finally decided to crack down on aluminum subsidies by China. China has been selling aluminum and raw steel at subsidized prices for years, playing all kinds of games to pretend it is not selling the goods directly to the US. You will remember the 2016 hoopla surrounding the discovery of large quantities of aluminum staged in Mexico. That was done by China Zhongwang Holdings Ltd. and was said to be 6% of the world’s total inventory - sent to avoid tariffs imposed by the U.S. Transshipping has been around for a long time, but rarely on that scale. It was an in-your-face kind of deal that must have been forgiven by the Obama Administration.
Surprisingly, the Chinese press states the case for this issue very much the same as the world’s press. Although they cite it in the context of avoiding a “trade war” the substance of the presentation is much the same. They must know that is not just a simple case of a few metric tons being offloaded to another country to make a few $ on a single transaction. This was wholesale manipulation on a large scale, and more than Mexico was involved.
Wednesday, February 28, 2018
Microsoft Cloud Case Forever
In what seems like the longest running criminal case in history, drug runners are waiting for an outcome in Microsoft’s cloud email case. Two stories in the Wall Street Journal (one an editorial and one a news report ) show the interest in this case. We don’t get two stories on anything in a single issue very often.
The editorial says that Microsoft is right on the law on the issue of territoriality, i.e. a U.S. warrant doesn’t apply outside the U.S. but is wrong on the law in all the other issues. It cites a limitation expressed this way: “Google cuts up emails into “shards,” which can move between countries within seconds without human intervention. U.S. internet users aren’t entitled to know where in the cloud their records are stored, let alone to recourse under U.S. law if a company moves them.”. That may be true of Internet users, but may not be true of clouds per se. I have always said that public cloud services were devised as a way to avoid any liability for services provided by a vendor, and it seems like this case is doing just that. Drug runners know that too. Microsoft says it has no idea where some things are stored, but can point to the fact that emails in this case were stored in Ireland, a dichotomy the courts can’t help but notice. They can’t have it both ways.
Microsoft is more than happy to help China with the most intrusive environment in the world, but won’t help their country of origin. That part is not just about profits in China. It is about law. China forces coooperation by making laws that require businesses to turn over all control the Central government. It gets source code and other proprietary information that way, all in the name of national security, providing a version of their own operating system which China can modify as it sees fit. Apple has found itself in the same quandary this week with the keys to its own Apple accounts in China. China wanted the keys and got them, something they have not done for the U.S. government. China then uses that to get its intelligence services into the world’s networks. Not just those of the United States. I hope the courts take some of that into account.
The editorial says that Microsoft is right on the law on the issue of territoriality, i.e. a U.S. warrant doesn’t apply outside the U.S. but is wrong on the law in all the other issues. It cites a limitation expressed this way: “Google cuts up emails into “shards,” which can move between countries within seconds without human intervention. U.S. internet users aren’t entitled to know where in the cloud their records are stored, let alone to recourse under U.S. law if a company moves them.”. That may be true of Internet users, but may not be true of clouds per se. I have always said that public cloud services were devised as a way to avoid any liability for services provided by a vendor, and it seems like this case is doing just that. Drug runners know that too. Microsoft says it has no idea where some things are stored, but can point to the fact that emails in this case were stored in Ireland, a dichotomy the courts can’t help but notice. They can’t have it both ways.
Microsoft is more than happy to help China with the most intrusive environment in the world, but won’t help their country of origin. That part is not just about profits in China. It is about law. China forces coooperation by making laws that require businesses to turn over all control the Central government. It gets source code and other proprietary information that way, all in the name of national security, providing a version of their own operating system which China can modify as it sees fit. Apple has found itself in the same quandary this week with the keys to its own Apple accounts in China. China wanted the keys and got them, something they have not done for the U.S. government. China then uses that to get its intelligence services into the world’s networks. Not just those of the United States. I hope the courts take some of that into account.
Monday, February 26, 2018
China’s Own Business
We have a press that thinks it has a say in every issue that comes up in the world, so when the Party Chairman in China wants to change the rules and become Emporer for Life, the press gives reasons why it should not be so. This is really China’s business and no others. They have done pretty well by President Xi, and thinking about holding onto him past his two terms is probably not out of line. The one thing about it is - it is none of our business.
We recognize a lot of differences between ourselves and the Chinese, not the least of which is a difference in governance. Most countries could not live in a society like the one China has created for itself, but it does what it is supposed to do: it gives opportunities for business, provides for a national defense, and creates harmony within its borders. In the last few years, most of the credit for that goes to Xi. If they really want to keep him in power, it is their decision to make.
Let me amend that remark and say that it is not their decision in a the plural context, i.e. they are not having a referendum calling for the extension of Xi’s tenure. The people don’t get to make that kind of decision. If they did a poll and asked what the feeling would be about keeping him on for life, the results would favor such a decision. Where information is controlled like it is in China, polls show what they are supposed to show. Sina Weibo, the knock-off Twitter, has already started to filter out (censor) the words “two term limit”. That is a clear indication the people will have no say in whether the term is extended, and will not be discussing it on-line. When the government wants no discussion, it has the power to limit that discussion, and that is one of the major contributions the Party has made to governance. The ability to censor, both internally and externally, is one of Xi’s great achievements.
So, whether the Chinese people favor such a move is not of concern to the government. Xi is not the first Chinese leader to become Emperor for Life, and with the controls on thought, he won’t be the last.
We recognize a lot of differences between ourselves and the Chinese, not the least of which is a difference in governance. Most countries could not live in a society like the one China has created for itself, but it does what it is supposed to do: it gives opportunities for business, provides for a national defense, and creates harmony within its borders. In the last few years, most of the credit for that goes to Xi. If they really want to keep him in power, it is their decision to make.
Let me amend that remark and say that it is not their decision in a the plural context, i.e. they are not having a referendum calling for the extension of Xi’s tenure. The people don’t get to make that kind of decision. If they did a poll and asked what the feeling would be about keeping him on for life, the results would favor such a decision. Where information is controlled like it is in China, polls show what they are supposed to show. Sina Weibo, the knock-off Twitter, has already started to filter out (censor) the words “two term limit”. That is a clear indication the people will have no say in whether the term is extended, and will not be discussing it on-line. When the government wants no discussion, it has the power to limit that discussion, and that is one of the major contributions the Party has made to governance. The ability to censor, both internally and externally, is one of Xi’s great achievements.
So, whether the Chinese people favor such a move is not of concern to the government. Xi is not the first Chinese leader to become Emperor for Life, and with the controls on thought, he won’t be the last.
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