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Comac C919 Aircraft Development Benefited from Secrets Hacked from Western Companies

Crowdstrike, a U.S. cybersecurity research and consulting firm, recently released a report that examined China’s series of aggressive and frequent hacking operations that occurred during the years when Commercial Aircraft Corporation of China Ltd. (Comac) was developing its C919 commercial aircraft. Officials from China’s Ministry of State Security (MSS), underground hacking groups and personnel, cyber security researchers, and employees (moles) of multiple companies in many countries were involved in the operations. The purpose of these hacking operations was to assist Comac’s development of the C919 commercial aircraft, obtain a large number of intellectual property rights from foreign companies, narrow the gap between China’s aviation industry and foreign manufacturers capable of making large passenger aircraft, and eventually to be able to compete with industry giants Boeing and Airbus.

Crowdstrike’s report revealed that MSS designated the Jiangsu provincial State Security division to carry out hacking attacks, while the Jiangsu division appointed two coordinators. One coordinator led the hacking team and the other was responsible for recruiting people from aerospace companies in different countries. Between 2010-2015, the hackers attacked a list of companies including U.S. electronic instruments and electromechanical devices manufacturer Ametek, U.S. multinational conglomerate Honeywell that produces engineering services and aerospace systems, French multinational aircraft engine, rocket engine, aerospace-component and defense company Safran, U.S. gas turbine manufacturer Capstone, and General Electric.

These hacking operations are different from similar actions in the past. They attempted to recruit and utilize China’s underground hacking gangs whose mission is to gain access to the target company’s network and install malware such as Sakula, PlugX, and Winnti, use these software to find the proprietary intellectual property and trade secrets of the target company, and send the information to the remote servers. If these practices were unsuccessful, another MSS team would try to recruit Chinese employees in the target company and have them install malware on the company’s computer network.

Source: Radio Free Asia, October 15, 2019

China Built Another Railway in Kenya

On October 16th, a new railway was put into operation in Kenya. China built another railway at a cost of US$1.5 billion. The track connected the capital city Nairobi with Naivasha, a small town in the Great Rift Valley in East Africa. The Kenyan President Uhuru Kenyatta hosted the opening ceremony of the railway.

The railway is an extension of a rail line built earlier to connect Nairobi and Mombasa, the second-largest city in the country. The Nairobi-Mombasa railway, which cost US$3.2 billion, started operating in 2017. China funded and built that as well.

Kenya’s railway development has been part of China’s “Belt and Road” initiative. It includes multi-billion dollar infrastructure projects designed to enhance overland and maritime trade between China and Europe, Asia and Africa.

Kenyatta was re-elected in 2017 for anther five-year term. He pledged to develop infrastructure in Kenya, and railway construction has always been his favorite project. The Kenyan government has been borrowing in order to fund infrastructure projects. The national total public debt is currently about 55 percent of GDP. It was at 42 percent when Kenyatta took office in 2013.

Source: Voice of America, October 16, 2019

LTN: Kazakhstan President Ordered Investigation of One Belt One Road Project

Major Taiwanese news network Liberty Times Network (LTN) recently reported that Kazakhstan President Kassym-Jomart Tokayev ordered an investigation into the US$1.5 billion light rail project under China’s One Belt One Road initiative. The project was supposed to be completed in 2017. Not only is it still not completed; it is financially dead. The Tokayev administration said that the project “should never even have been established.” Also, it was financially “suspicious.” Tokayev asked for an anti-corruption investigation that would carefully examine the officials in the previous administration. The previous CEO of the light rail company has already fled overseas due to corruption charges. Kazakhstan is the first country on the west side of China to have joined the One Belt One Road initiative. Observers have widely expressed the belief that Tokayev’s public position may damage the image of China’s One Belt One Road grand plan.

Source: LTN, October 8, 2019

As Subsidy Ebbs, China’s Electric Vehicle Sales Down by 34 Percent

According to the China Association of Automobile Manufacturers, China’s auto sales in September were 2.271 million. This represents the continuation of a decline stream that has lasted 15 months in a row and is down 5.2 percent from the same period last year. The sales for the first nine months of the year were 18.371 million, down 10.3 percent year-over-year. In September, the national sales volume of passenger vehicles was 1.933 million, down 6.3 percent year-over-year. As the Chinese government scaled down its car subsidies, the electric vehicle sales for September was 80,000, down 34.2 percent from the same period last year, seeing a third consecutive month of decline.

In March of this year, China announced it would reform its subsidy system and limit the scope of subsidies to a few top brands. Back in 2017, the Chinese government provided a total subsidy of 22 billion yuan (US$3.1 billion) to electric vehicle manufacturers.

Contributing to the decline is the slowdown in the overall economy and the plummet in consumer confidence amid the US-China trade war. The market once expected that large cities would relax their traffic restrictions or the government would provide new subsidies to new car buyers. However, those expectations failed to materialize and the industry suffered a blow.

Source: Central News Agency, October 15, 2019

DW Chinese: US Competitiveness Rank Fell to Second Place

Deutsche Welle Chinese Edition recently reported that The World Economic Forum (WEF) just released its annual Global Competitiveness Report. The United States fell from number one to number two this year. The top five globally are Singapore, the United States, Hong Kong, the Netherlands, and Switzerland. China ranked number 28 globally and number 8 in the Asia-Pacific region. Compared to last year, Germany’s rank suffered a very big decline globally, from the third to the seventh place. This was mainly due to the low implementation rate of fiber network deployment (number 72) and mobile bandwidth (number 58). The slide in the U.S. rank was primarily the result of trade tariffs and the worry about their long-term investment impact. However, Singapore’s move to the top was largely due to the increased port benefits at the time of a trade war between the two largest economies. The WEF report is based on data in categories of infrastructure, health, the labor market, the financial system, market openness, and the ecosystem for innovation.

Source: DW Chinese, October 9, 2019

One-third of Arrested Hong Kong Democracy Activists Are under 18

According to the Hong Kong government, nearly one-third of the Hong Kong pro-democracy demonstrators who  the police have arrested are young people under the age of 18.

Young people want to protect their civil liberties from the increasing erosion and suppression of the mainland Chinese government. Many high-schoolers have also participated in the movement.

A high school student told VOA, “The future belongs to us. We must fight for it because this is our own future, the future of the next generation, and the future of the people of Hong Kong. If we do not fight, there will be no one to fight for it.”

Since June, 750 young people under the age of 18 have been arrested for participating in anti-government demonstrations. Among the 2,000 plus arrested, young people account for nearly one-third.

The Hong Kong government also requires universities and schools to report any students who wear masks to participate in anti-government demonstrations.

Source: Voice of America, October 14, 2019