Tag: China

EU lets Huawei off the hook

huawei-liveChina and the European Union have decided to bury the hatchet over subsidies made to telecoms giant Huawei and others.

The EU was worried that the government of China was subsidising Huawei and ZTE, so threatening European vendors’ ability to compete.

But, reports Reuters, EU trade commissioner Karel De Gucht said the telecoms matter has now been resolved.

De Gucht said that the EU takes every opportunity “to level out the playing field” for European vendors.

Both China and the European Union are expected to hammer out a free trade deal in the near future.

Huawei was started by a former member of the Chinese PLA.  It has come under repeated criticism in the USA because of fears by some politicians that its gear is embedded in American infrastructure.

AMD Cuts Workforce – Sea Change 101 for Sailors?…,

AMD LayoffsJust one week and a day after assuming her new roll as AMD’s CEO Dr. Lisa Su announced a reduction in force amounting to seven percent of the AMD’s current workforce of 10,149 employees.

The fallowing of ~700 people follows two rounds of layoffs under Rory Read’s three year tenure.

AMD did not provide any information about where the cuts would be made – the company recently split into two divisions “Computing and Graphics”, and “Enterprise, Embedded and Semi-Custom”. Contacts indicate that “Computing and Graphics” will receive a majority of the “hits”.

Last Thursday’s warning by Microchip Chief Executive Steve Sanghi that a correction will spread more broadly across the industry in the near future sent shares of chipmakers lower last Friday.

Microchip is a broad spectrum supplier into the Chinese and Asian marketplace, booking revenue only after it is shipped by distributors – a closely coupled supply chain that quickly indicates impending sea changes. AMD shares a similar situation in China, the company’s biggest market, substantiating Microchip’s warning. Whether this is the beginning of a prolonged downturn or is merely another “noise blip” on the radar is entwined in controversy.

Strangely enough, AMD’s arch nemesis Intel, reported rather glowing results on Tuesday indicating that AMD might be suffering from Intel’s competitive resurgence in Asia. The fact that Intel is devoting resources to system level integration at the SoC level may now be having an effect on both competitors.

AMD’s experienced a 65% drop in quarterly profits and is expecting the current quarter to be 13% lower than the period ended in September. The company’s share price fell 6% to $2.49 in after-hours trading. The share price has dropped 43% in three months as of close Thursday.

Su went on to assure analysts that the company was moving toward customized chips for applications beyond videogames hinting at two customers that had the potential of bringing in $3 Billion in additional revenue over the next three years.

TechEye Take

The first time I saw Rory Read perform in front of analysts was somewhat of an embarrassment. He became so animated on stage that an additional two flaps of his arms per minute would have gotten him airborne (I heard that he fired his stage coach soon thereafter). His resignation came as no surprise, only late by three years. Lisa Su was the only stand-up with credibility and has remained so since.

Can we expect Dr. Su to right the AMD ship? She’s very smart and well experienced in the land of semiconductors and if anyone can accomplish the miracle required to make AMD a player she’d be my pick…,

Chinese snoop on iPhone protesters

apple fanboysThe Chinese government appears to be cracking down on Hong Kong protesters who use an iPhone or iPad.

Cybersecurity researchers have uncovered a computer virus that spies on Apple Inc’s iOS operating system for the iPhone and iPad, and they believe it is targeting pro-democracy protesters in Hong Kong.

Dubbed Xsser, the software can steal text messages, photos, call logs, passwords and other data from Apple gear.

Researchers with Lacoon Mobile Security uncovered the spyware while investigating similar malware for Google Android operating system last week that also targeted Hong Kong protesters.

Lacoon Chief Executive Michael Shaulov said that Xsser is the most sophisticated malware used to date in any known cyberattack on iOS users.

It is not clear what the Chinese government hopes to learn from an Apple fanboy’s account, there is just so much you can learn from a complete Coldplay collection and an undeletable U2 album.

It is unclear how iOS devices get infected with Xsser, which is not disguised as an app particularly as Apple claims that its software is super secure.

The code used to control that server is written in Chinese. The high quality of the campaign and the fact it is being used to target protesters suggests that it is coming from a sophisticated attacker in China.

“It is the first time in history that you actually see an operationalized iOS Trojan that is attributed to some kind of Chinese entity,” Shaulov said.

Lacoon said on its blog that it is possible the attackers might have deployed the Trojan in other places, in addition to spying on pro-democracy protesters in Hong Kong.

“It can cross borders easily, and is possibly being operated by a Chinese-speaking entity to spy on individuals, foreign companies, or even entire governments,” they said in their bog.


Hong Kong protestors use Mesh

hong kong protestHong Kong’s activists are relying on a free app that can send messages without any mobile phone connection.

The move comes about because of fears that the Chinese government would block local phone networks to stop protestors organising.

However activists have turned to the FireChat app to send supportive messages and share the latest news. The app was downloaded more than 100,000 times in Hong Kong, its developers said.

FireChat uses “mesh networking,” that allows data to zip directly from one phone to another via Wi-Fi or Bluetooth. Ordinarily, if two people want to communicate this way, they need to be close together. However, as more people join in, the network grows and messages can travel further.

Mesh networks were designed for people who are caught in natural disasters or, like those in Hong Kong, protesting under tricky conditions. FireChat came in handy for protesters in Taiwan and Iraq this year.

However Hans-Christoph Steiner at The Guardian Project, which helps activists circumvent censorship, warns that Firechat has no built-in encryption, so messages can be read by anyone within range.

FireChat has said it aims to add encryption in the future. Bluetooth communications come with an identifier called a MAC address, which could also be used to track down protest ringleaders.

Chinese authorities could also use radio jamming to shut down mesh networks in a local area, or prevent more people from joining by cutting off access to app stores.

China clamps down on iPhone smugglers

gala_appleApple is not set to launch its iPhone 6 family in mainland China for a while, but that’s just created a smuggling racket as crooks try to cash in on demand for the devices.

According to the Taipei Times, crooks are selling imported iPhone 6s for as much as $3,000 – but authorities have made several seizures of the machines in the last week.

Some have tried to import the iPhones by using speedboats into mangrove swamps while others have taken the more direct route of stuffing their suitcases with contraband Apple phones.

The same report said that “hundreds” of devices had been taken from passengers who sought to import a phone without declaring them.

Greed for Apple iPhones is apparently so high that authorities are suggesting that people despise rather than envy those who have one of the overpriced devices.  The Taipei Times report is here.

US more likely to hack you than the Chinese

1220aTwo security experts, Jordan Robertson and Greg Martin set up an online honey pot to see which country was more  like to attack it and was surprised to discover that the US was more likely to be an aggressor than the Chinese.

Writing for Bloomberg, the pair  wanted to find a way to show the global nature of attacks against industrial-control systems used in electrical grids, water systems and manufacturing plants. For obvious reasons, attacks against critical infrastructure are among the biggest concerns in cyber-security.

Martin and Robertson  configured the honeypot to look like an enticing industrial-control computer to hackers and traced who attacked it.

The fake control systems were made to look like they were located in the U.S., the U.K., Amsterdam, Brazil, Tokyo and Singapore. The pair wanted a variety of locations to show that systems everywhere are under attack.

Over a three month period, the US was by far the biggest source of attack traffic, trying to hit the honeypot more than 6,000 times, nearly double China with 3,500, Russia, more than 2,500.

The Dutch and France were also carrying out statistically significant amounts of attacks on the honeypot.

The attacks were mostly reconnaissance missions, in which hackers often use less obfuscation, Martin said. However, it does mean that the idea of China being the leading hacking country is a myth and that crown belongs to the United States, which appears to have a policy of hacking everyone.

US confirms Chinese government behind hacks

1220aA US Senate panel has ruled that hackers associated with the Chinese government have repeatedly infiltrated the computer systems of US airlines, technology companies and other contractors involved in the movement of US troops and military equipment.

The Senate Armed Services Committee’s year-long probe found the military’s US Transportation Command, or Transcom, was aware of only two out of at 20 such cyber intrusions within a single year.

It found gaps in reporting requirements and a lack of information sharing among US government bodies which left the US military oblivious to the computer compromises of its contractors.

Democratic Senator Carl Levin of Michigan, the committee’s chairman was keen to focus on the Chinese hackers rather that the big defence industry’s cock-ups.

He said that the peacetime intrusions into the networks of key defence contractors are more evidence of China’s aggressive actions in cyberspace.

But cybersecurity expert Dmitri Alperovitch, chief technology officer with the security firm Crowdstrike, said that China had for years shown a keen interest in the logistical patterns of the U.S. military.

While its military uses secret or top-secret networks that are not on the Internet, but the US private companies hired by the US do not.

In the year beginning June 1, 2012, there were about 50 intrusions or other cyber events into the computer networks of Transcom contractors, the 52-page report stated.

At least 20 of those were successful intrusions attributed to an “advanced persistent threat,” a term used to designate sophisticated threats commonly associated with attacks against governments. All of those intrusions were attributed to China.

Senator Jim Inhofe of Oklahoma, the committee’s top Republican, called for a “central clearinghouse” that makes it easy for contractors to report suspicious cyber activity.


Corruption uncovered at Huawei

Chinese_YuanChina’s largest telecom equipment maker, Huawei, has found four employees in violation of the company’s policies on corruption.

The four were discovered during an internal inspection and the case has lead the company to conduct training sessions on how to avoid bribery.

Huawei had not provided any details about the case. News outlet Caixin, which first reported the inspection last week, said a total of 116 employees were implicated in soliciting and accepting bribes from outside sales agents in exchange for rebates.

In a statement Huawei said firmly implementing an open, transparent and stable channel policy, in order to pursue fairness and justice in the market, and to “fight firmly against any form of employee practice that fails to meet the standards we set for ourselves.”

This is probably a bad time for something like this to happen. The Chinese government is carrying out a crackdown on corporate misbehaviour within both foreign and domestic firms. This is seen as more popular and less tricky that controlling corrupt Communist Party officials at a local level.

Chief Executive Ken Hu told the Financial Times  that graft inspections were done every year and “nothing new,” adding that it only attracted media attention this year.


Chinese give Qualcomm a novel suggestion

Tchinaflaghe Chinese government, which is currently about to release its antitrust watch-dogs onto US chipmaker, Qualcomm has come up with a novel way for the outfit to avoid trouble.

Qualcomm has been told that if it helps Chinese companies become so competitive that they can give the company a good kicking, then the watchdogs will be sent back to their cages.

Lu Wei, the head of China’s State Internet Information Office, was speaking at a panel http://www.weforum.org/ during a World Economic Forum event in Tianjin, China, where Qualcomm’s executive chairman Paul Jacobs was also among the speakers.

Lu told Jacobs that Qualcomm made $24 billion in revenue during the company’s last fiscal year, with nearly half of it from China.

“This means China is a good place to make money… we should make money together. You should work alongside Chinese companies to make money.”

China’s National Reform and Development Commission has been investigating Qualcomm since last November, on industry complaints that the company has been overcharging Chinese clients to use its patents.

Qualcomm said the company had 70 Chinese vendors using its 4G LTE patents, and another 120 vendors for its 3G CDMA patents.

Jacobs replied that his company had been helping Chinese companies to deliver new products to the market. This includes working with over 90 Chinese companies to build devices.

“I feel like it has been a win-win between Qualcomm and Chinese companies, Chinese customers and I hope that continues far into the future,” Jacobs said.

US tech companies rally against China

55_Days_at_Peking-633098393-largeUS companies are moaning that Chinese regulators are ganging up on Western tech outfits in a bid to shut them out.

The American Chamber of Commerce in China is fuming about a series of investigations scrutinising at least 30 foreign firms, as China enforces its 2008 anti-monopoly law.

According to the Chamber, multinational firms are under “selective and subjective enforcement” using “legal and extra-legal approaches,” the Chamber said in a report.

A survey of 164 members showed 49 percent of respondents felt foreign companies were being singled out in recent pricing and anti-corruption campaigns, compared to 40 percent in a late 2013 survey of 365 members. Twenty-five percent said they were uncertain, or did not know, and 26 percent said no.

Lester Ross, vice chairman of the chamber’s policy committee, said the expansion of the enforcement was welcome in principle, but regulators were using “extra-legal” means to conduct investigations.

“They have taken what are, in many instances, vague or unspecified provisions in the law and moved to enforce them, and sought to enforce those means through processes that do not respect the notion of due process or fairness,” Ross said.

The Chamber wrote to Secretary of State John Kerry and Treasury Secretary Jacob Lew and asked them to get tough with Beijing on its use of anti-competition rules.

China is using competition law to advance industrial policies that nurture domestic companies, the U.S. Chamber, based in Washington, said in the letter.

It is not just the Americans who are concerned. The European Union Chamber of Commerce in China in August expressed its concern over the antitrust investigations, saying China was using strong-arm tactics and appeared to be unfairly targeting foreign firms.

The Chinese argue that some business operators in China have not adjusted their practices in accordance with the anti-monopoly law.  Others have a clear understanding of the laws, but they take the chance that they may escape punishment.

Anti-trust watchdogs have bitten Qualcomm’s local subsidiary after it said in February the company was suspected of overcharging and abusing its market position in wireless communication standards.  Yesterday Microsoft was given 20 days to reply to queries on the compatibility of its Windows operating system and Office software suite.

Microsoft. Explain yourself!

bad-dogThe Chinese government has told Microsoft to explain to its finest antitrust watchdogs why it is an imperialist software outfit hell bent on playing monopoly behind the bamboo curtain.

It is giving Microsoft 20 days to come up with an answer which does not involve a dog eating its homework, the monopoly was being played when Microsoft got there, or the Chinese antitrust laws were chewed by Steve Ballmer who thought they were food.

A Chinese antitrust regulator is apparently concerned that Windows operating system and Office software suite is not compatible with other forms of software, which is a surprising new thing that no one appeared to have noticed given that the nation has run on pirated Windows XP for decades.

The State Administration for Industry and Commerce (SAIC) repeated that it suspected the company has not fully disclosed matters relating to the compatibility of the software and the operating system.

In a statement, Microsoft said it was “serious about complying with China’s laws and committed to addressing SAIC’s questions and concerns”.

Microsoft is one of at least 30 foreign companies which have been put under the Chinese water torture as the government seeks to enforce its six-year old antitrust law. Critics say the law is being use to kick foreign businesses out of the country, while it builds its own homegrown IT industry.

Last month, a delegation from chipmaker Qualcomm Inc (QCOM.O), led by company President Derek Aberle, met officials at the National Development and Reform Commission (NDRC).

NDRC claimed the US chipmaker is suspected of overcharging and abusing its market position in wireless communication standards.

Microsoft’s Satya Nadella is expected to make his first visit to China as chief executive later this month and will probably tell the Chinese what is going on.

Nadella kowtows to China

kowtowMicrosoft CEO Satya Nadella appears to be packing his suitcase to visit China in late September in a move which might be an attempt to sort out the government’s rejection of his company’s software.

Although China runs on pirated versions of Windows XP, the government has forbidden its civil servants from using anything more modern than Windows 7.  The idea being that it will be releasing a homegrown version of Linux which it will expect everyone to use.

At the same time, the Chinese are investigating Redmond for playing monopoly behind the bamboo curtain.

Nadella has a lot to talk about with the government, although it is not clear if he will meet with any Chinese government representatives as part of his visit, or try to resolve problems with the State Administration for Industry and Commerce (SAIC), one of China’s antitrust regulators.

Foreign CEOs often pay calls on the world’s second-largest economy to strengthen business and political ties and Nadella is following Qualcomm’s President Derek Aberle who also looked to end his company’s woes in China.

The shy and retiring Steve Ballmer, did occasionally go to China in his 14 years as CEO, but that was mostly to speak loudly and carry a soft stick about piracy. Ballmer sulked in 2011 that Microsoft got more revenue in the Netherlands than China.

Microsoft faces China crisis

china-syndrome-one-sheet1Things are not shaping up well between Microsoft and the Chinese government.

A Chinese antitrust watchdog growled that Redmond had not been fully transparent with its sales data on the software it distributes in China.  It is particularly interested in the information regarding the sales of its media player and Internet explorer.

Zhang Mao, the head of the State Administration for Industry and Commerce (SAIC), told reporters at a briefing in Beijing that after multiple meetings including at high levels, Redmond had “expressed a willingness” to respect Chinese law and collaborate with investigating officials.

Western companies operating in China must be finding the whole thing fishy. The Microsoft investigation comes amid a spate of anti-trust probes against foreign firms in China, including Qualcomm and Mercedes-Benz.  Word on the street is that the Chinese are looking to damage foreign companies.

Earlier this month the Chinese claimed that Microsoft was suspected of violating China’s anti-monopoly law since June last year in relation to problems with compatibility, bundling and document authentication for its Windows and Microsoft Office.

The SAIC is one of China’s three anti-monopoly regulators and raided Microsoft offices in several major cities. It had a quiet world with Microsoft Deputy General Counsel Mary Snapp.



Chinese hackers steal 4.5 million hospital data

snap dragonA top US hospital operator has admitted that Chinese hackers broke into its computer systems and stole data on 4.5 million patients.

Community Health Systems sheepishly said that the attack occurred in April and June of this year, but it was not until July that it was finally spotted.

It told the US Securities and Exchange Commission that the attack was carried out by a group based in China that used “highly sophisticated malware” to attack its systems.

The attacker was able to bypass the company’s security measures and successfully copy and transfer certain data outside the company.

The group is apparently known to US federal law enforcement authorities, which are now investigating.

Stolen were patient names, addresses, birthdates, telephone numbers and Social Security numbers of the 4.5 million people who were referred to or received services from doctors affiliated with the company in the last five years.

However the stolen data did not include patient credit card, medical or clinical information, but still ranks as the second largest disclosed attack to hit the US medical industry in the last few years.

What is still not clear is why the Chinese government would want the medical details of 4.5 million, it is not really as if it could benefit from any ID fraud. However it might be a Chinese criminal gang.

Lantern leaps over the Great Wall

great wall A bunch of activists has developed a piece of software which is giving the Chinese censors a run for their money.

The program was created late last year by Adam Fisk, a former engineer at the pioneering file sharing service Limewire, which was shut down by a federal judge in 2010. However Fisk used his background in developing peer-to-peer technology to create a decentralised system of combatting censorship that governments are cannot block effectively.

Fisk told the Daily Dot  that until now censors have had the upper hand in being able to block these tools.

But peer-to-peer to get around that because it allows individuals in uncensored regions can download and install it really easily and become these instant access points.

Lantern has around 25,000 users mostly in China, but with a few thousand in Iran. Fisk expects that number to grow significantly as the company makes its first big push to increase the number of users in the “uncensored” world.

Downloading Lantern in an uncensored region connects you with someone in a censored region, who can then access whatever content he or she wants through you. It operates on trust.

To use Lantern, you have to sign in with Google, and then information about your computer trickles through your network of real-world friends who are also using Lantern.

A censor who wanted to shut down your IP address would have to convince you that you are their friend.

A government censor who downloads the software  can’t bring down the whole system because the network detects attempts to block information from passing through and seamlessly route around them.

Through a process called consistent routing, the amount of information any single Lantern user can learn about other users is limited to a small subset, making infiltration significantly more difficult.

Fisk said that the Chinese government is clearly worried about the software. Direct downloads of the program are already blocked and most Chinese users have obtained the program through virtual private networks.

The outfit disguises Lantern’s traffic to look like unassuming types of traffic that censoring governments do not block is actually a key part of its strategy. Lantern partners with other companies sympathetic to its mission to hide its traffic inside theirs.

The downside of the project is that Lantern is largely funded by the U.S. State Department. This funding arrangement has led to some fears that the NSA may have inserted backdoors into the system.

Fisk said that the people he worked with at the State Department are very different than the people across the river at the NSA in their agendas and their beliefs.

The project’s government backers have been very hands-off and, since the project is open source, anyone could go in and inspect the code themselves to see how it works and check for any backdoors that may have been put in place by government spooks.