A question of passports

Canadian passport

Christopher Balding (“Not China Naive Balding”) explains why it matters, a lot, whether the arrested Huawei CFO Wanzhou Meng entered Canada on a Canadian passport, as has been rumored:

@BaldingsWorld

Here is what people don’t know about the dual passport situation with regards to Chinese citizens. You may ask, why would the CFO of Huawei enter Canada under a Canadian passport? There are very clear reasons and I absolute no doubt about it guarantee every Chinese 1/n

citizen with two passports knows what I am about to tell you. The simplest answer is that if you enter another country using a non-Chinese passport it is a lot easier, typically you don’t need a visa. That may be part of it but that isn’t the primary reason. 2/n

The primary reason, and let me reiterate, every Chinese I have ever met with two passports knows this, when you enter a country, which ever country passport you enter the country is what nationality the accepting country recognizes. In other words, when she entered Canada 3/n

with a Canadian passport, if that is in fact what she did, she is recognized as a Canadian citizen. If she enters France/Japan/China with a Canadian passport, she is recognized as a Canadian citizen by international law. Why does that matter you ask? If you ever get 4/n

into trouble, the only country the host country allows you to get consular or other access to is your country of citizenship. Most “Chinese” with second passports enter China using Canadian/US/Australian passports even if they have Chinese passports for this exact reason. 5/n

When Chinese with second passports travel abroad, they use the second passport not just because of the visa ease issue, but because they prefer being represented by actual humane governments. So when she entered Canada on a Canadian passport, if she did, 6/n

She was telling you, and I absolutely guarantee she knew what I’m telling you, she would rather be represented by Canada than by China. She could get a visa no problem and enter with her Chinese passport. Let me put it another way, Chinese with means are making clear 7/n

And conscious choice who they want representing them if they get jammed up, and it is rarely China. In her case, that may not be the best choice. However, I absolutely guarantee you every Chinese with two passports knows this and chooses this way. Done

1:32 AM – 7 Dec 2018

And a BBC reporter comments:

@StephenMcDonell

to @BaldingsWorld

We did ask the #China Foreign Ministry yesterday if Meng Wanzhou had entered #Canada on a Chinese or Canadian passport but no response.

1:30 AM – 7 Dec 2018

Balding again:

@BaldingsWorld

High probability: Huawei CFO not arrested directly for Huawei activities but for running transactions through closely held separate independent Cayman SPV which she runs that channeled FX transactions and profits through NYC. If that is the case, she is screwed

3:19 AM – 7 Dec 2018

This is also interesting:

China has said it will immediately implement measures agreed under a trade war “truce” with the US.

The commerce ministry’s remarks came days after Donald Trump and his Chinese counterpart, Xi Jinping, agreed to give negotiators 90 days to resolve their trade spat.

Few details have been made public about what the two sides will negotiate, a lack of clarity that has unsettled stock markets.

“China will immediately implement the consensus both sides already reached on agricultural products, energy, autos and other specific items,” a commerce ministry spokesman, Gao Feng, said at a regular press briefing. […]

Gao’s briefing came hours after the trade detente risked being rattled by the arrest in Canada of a top executive from the Chinese telecom giant Huawei at the request of the US.

Hmmm. Clearly, there is a *lot* more going on here than meets the eye. As usual, it’s stupid to rush to judgment before the facts are revealed (a thing I am definitely guilty of).

The plot thickens!

Huawei CEO Meng Wanzhou

The internet is abuzz with more news and speculation related to the stunning arrest of Huawei CFO Wanzhou Meng:

• I previously noted that “This is about as dumb as the US trying to arrest Julian Assange, but with far nastier geopolitical implications.” For what it’s worth, here’s Wikileaks weighing in:

@wikileaks

Editorial comment: The U.S. extradition of Huawei CFO Meng Wanzhou from Canada, for actions performed in China, is the same extra-territorial invasion through lawfare, that the U.S. government is applying to the UK, by extraditing Assange from the UK, for publishing in the UK.

4:26 PM – 6 Dec 2018

• Comrade Balding, an academic formerly based in Shenzhen, has some very interesting thoughts, among them:

@BaldingsWorld

There’s more coming on Huawei. I just don’t know when it’s going public

8:58 AM – 6 Dec 2018

===

Fact: timing of Huawei arrest is a great big political F+*#?!U

Fact: everyone in China knew she broke the US laws. Obama admin knew Huawei broke the law. Trump admin knew Huawei broke the law.

It’s only political if you think she should get away with it

8:48 AM – 6 Dec 2018

===

FWIW, I’ve know for a few months that there is more coming down the road with Huawei. Have confirmation from multiple unrelated people

2:08 AM – 6 Dec 2018

• The Alibaba-owned South China Morning Post ran this piece Thursday on how Meng told Huawei employees “in an internal talk on compliance that there are scenarios where the company can weigh the costs and accept the risks of not adhering to the rules.” Is China planning to throw Meng under the bus?

• Reuters correspondent “SJ” writes:

@SijiaJ

What happened on December 1? Xi & Trump met, Huawei founders’ daughter got arrested, Danhua Capital founder committed suicide

10:11 PM – 5 Dec 2018

• Wait, who committed suicide? From SCMP reporter Zheping Huang:

@pingroma

Prominent Stanford physics professor and blockchain venture capitalist Zhang Shoucheng died at age 55 on Dec 1 in the US after fighting depression, according to a family statement. Story TK

“Danhua lists 113 U.S. companies in its portfolio, and most of those companies fall within emerging sectors and technologies (such as biotechnology and AI) that the Chinese government has identified as strategic priorities,” the USTR name-checked Zhang’s VC in its Nov. 20 report

10:48 PM – 5 Dec 2018

Odd timing on that. “The family of Stanford professor Zhang Shoucheng, a world-renowned physicist and venture capitalist, denied speculation on Chinese social media that his death was connected to tensions in US-China relations or the arrest of Huawei’s CFO in Canada on Saturday.” (SCMP)

• An intriguing piece of gossip:

@maggiexiao

Replying to @BaldingsWorld

Rumor says Meng entered Canada with a Canadian passport. China recently strengthened its no-dual citizenships policy . So that means she voluntarily gave up her Chinese citizenship. If true, does China still have the rights to claim her back?

6:24 PM – 5 Dec 2018

• David Goldman comments:

First, never before has the United States attempted the extraterritorial rendition of a foreign citizen – Meng is a Chinese national – in connection with sanctions violations. It has imposed travel and banking restrictions, but seeking an arrest warrant for this is entirely without precedent. […]

The question is: Who ordered the arrest, and why?

It is possible that President Trump knew about it and sanctioned the arrest, to be sure. But it is unlikely that the president would escalate the conflict with China with the arrest of a senior executive of China’s flagship high-tech manufacturer on the same day that he sought to de-escalate the trade war.

If Trump did not initiate the arrest, who did? There are two alternative possibilities.

The first is that the order came from administration officials who believe that the United States must provoke a confrontation with Beijing now, before China becomes too powerful to intimidate. Some parts of the permanent bureaucracy and the intelligence community believe that China’s economy is fragile and that an economic war would produce an economic crisis and political instability, perhaps even toppling Xi Jinping.

That view may seem fanciful, but it is argued seriously, for example by some former senior officials of the Trump administration.

The second possibility is that Trump’s enemies in the permanent bureaucracy simply want to prevent the president from negotiating a deal with China that would enhance his image and remove risks to economic growth.

Goldman notes that the only American politician to comment publicly on the matter has been Senator Marco Rubio, who earlier this year tried to torpedo Trump’s agreement with Xi regarding ZTE. He “celebrated the arrest” in an email to Axios. Hmm.

• Huawei is in deep trouble and not only in the US. From Reuters: “Japan plans to ban government purchases of equipment from China’s Huawei Technologies Co Ltd and ZTE Corp to beef up its defenses against intelligence leaks and cyber attacks, sources told Reuters.”

• …And: “Australia and New Zealand have already blocked Huawei from building 5G networks.”

• …And: “Britain’s BT Group said on Wednesday it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations and would not use the company in central parts of the next network.”

• I’ll close with Professor Balding again – somewhat off-topic, but it caught my eye:

I think what most people who haven’t spent a lot of time in China don’t get is how abnormal the business, economic, financial, and negotiation climate is. People see the shiny tall glass office buildings and the Ritz and they make the assumption they get it. That’s wrong 1/n

The stories that get out in public are wild. The stories that never make it into the public are at least 10x crazier. The IP theft and theft stories you hear about in public are low hanging fruit where someone falls out of favor in Beijing. I know first hand accounts of 2/n

Flat out 10 ten digit USD thefts. Companies who have valid contracts telling a foreign partner they’re ignoring a contract and they will have them abducted or jailed if they even think about trying to enforce a contract with again 10 digit USD values. You DC/NYC debutantes 3/n

simply do not understand what you are dealing with.The rules are different. You think fentanyl doesn’t get various levels of state protection? Get real. You think this IP theft and gangsterism isn’t quasi official policy? Get real. You need to be realistic about your counterparty

6:14 AM – 6 Dec 2018

US kidnaps daughter of Huawei founder

Wanzhou-Meng

Ok, I don’t think this is the trade war people signed up for:

Canada has arrested the chief financial officer of China’s Huawei Technologies who is facing extradition to the United States on suspicion she violated U.S. trade sanctions against Iran.

Wanzhou Meng, who is also the deputy chair of Huawei’s board and the daughter of company founder Ren Zhengfei, was arrested in Vancouver at the request of U.S. authorities.

“Wanzhou Meng was arrested in Vancouver on December 1. She is sought for extradition by the United States, and a bail hearing has been set for Friday,” Justice department spokesperson Ian McLeod said in a statement to The Globe and Mail. “As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms. Meng.

A Canadian source with knowledge of the arrest said U.S. law enforcement authorities are alleging that Ms. Meng tried to evade the U.S. trade embargo against Iran but provided no further details.

She is being sought by federal prosecutors based in New York:

Huawei released a statement saying its CFO was arrested while changing planes in Vancouver and is facing charges in “the Eastern District of New York.”

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng. The company believes the Canadian and U.S. legal systems will ultimately reach a just conclusion,” the statement said.

How is this even remotely legit? Has Meng even been to the US? I don’t see how the US has jurisdiction here.

We’ll find out more soon, but at first glance this strikes me as extremely dubious, both legally and politically. This is about as dumb as the US trying to arrest Julian Assange, but with far nastier geopolitical implications.

UPDATE: China responds:

Remarks of the Spokesperson of the Chinese Embassy in Canada on the issue of a Chinese citizen arrested by the Canadian side

2018/12/06

At the request of the US side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law. The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim. The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou. We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.

UPDATE: Bloomberg has a good rundown of the situation.

Analysts said it’s more likely the case proceeded separately from the trade talks as part of Trump’s efforts to step up prosecutions against Chinese companies that conduct economic espionage and violate sanctions. In October, the U.S. said Belgium extradited a Chinese intelligence official accused of stealing trade secrets from U.S. companies — an unprecedented development.

Either way, China is almost certain to view Meng’s arrest as a major escalation in the trade war that will foment fears of a wider Cold War between the world’s biggest economies. As part of trade talks, Trump has insisted that China stop providing government support to strategic sectors including artificial intelligence and robotics as part of its “Made in China 2025” policy.

This is misguided. Why would China stop providing government support for strategic sectors? Those sectors are key to China’s future competitiveness in manufacturing and technology. In effect, the US is badgering China to radically change its growth plans out of deference to its chief global rival. China will never do that, even if it agrees to do so on paper. The smart play for US would be to drop its free-trade fantasies and pursue its own industrial policy.

Prevent

The home of the Magna Carta continues its transition into Airstrip One, as the University of Reading warns students reading a Marxist essay on political violence that the authorities might be watching:

Part of a larger anti-terrorism strategy, Prevent was designed to prevent radicalization and seeks to monitor supposedly vulnerable people for evidence of extremism in the materials they peruse and the ideology they express. The idea is that, once identified, these individuals can be steered by authorities away from negative outcomes. […]

Primarily targeted at potential recruits to Islamist terrorist groups, but also at Northern Ireland-style sectarian violence and extreme right-wing terrorism, Prevent suffered mission-creep pretty much right out of the gate. In 2015, a politics student at the University of East Anglia was interrogated by police after reading assigned material in an ISIS-related publication.

The kid clicked a problematic link, which was thereafter removed from the course materials.

Younger students are being scooped up for alleged radicalization, too. In 2016-17, 272 children under 15 years of age and 328 youngsters between ages 15 and 20 were flagged under the Prevent program “over suspected right-wing terrorist beliefs.” The proportion of individuals referred to government officials “as a result of far-right concerns has risen from a quarter in 2015 to 2016 to over a third in 2016 to 2017,” according to Britain’s Home Office, so that likely represents only a fraction of young people questioned and “mentored” for their suspected ideological deviance.

Under 15 years of age? Guess you have to nip these things in the bud.

Where do these referrals come from? Well, anybody can contact the authorities, but the situation is complicated by the duty the law imposes on both public and private institutions to report people seen as being at risk of radicalization, with very little guidance as to what that means beyond cover-your-ass. The imposition of the duty resulted in a surge in referrals by schools to the authorities.

Informing on your fellow citizens for potential thoughtcrimes is just part and parcel of living in a country full of extremists. Comrade Pavlik would have approved.

“Laws such as this restrict the core democratic right to freedom of expression,” a legal analysis published last year in the Utrecht Journal of International and European Law charges. It “indicates a concerning trend of liberal States embracing opportunities to impose severe restrictions on ‘extreme’ speech.” […]

Parliament is currently considering a Counter Terrorism and Border Security Bill that would go beyond monitoring people for extremist ideology and hauling them in for questioning. The proposed legislation would criminalize voicing support for banned organizations, and even make it illegal to view or otherwise access information “likely to be useful to a person committing or preparing acts of terrorism.”

I would say this defies belief, but sadly, it all fits a familiar pattern. Outlawing speech in defense of an organization is the sort of thing one would normally associate with, say, Cuba or North Korea, but it seems the British have met Big Brother and he is them. Seriously, what is happening in Britain is almost as bad as the garden-variety repression seen in certain dictatorships. Not quite as bad, but moving in that direction fast.

If hauling students in for questioning because they clicked a link to “extremist” material sounds like something out of Orwell, Facebook’s AI monitoring system could have been ripped out of a Philip K Dick story:

A year ago, Facebook started using artificial intelligence to scan people’s accounts for danger signs of imminent self-harm.

Facebook Global Head of Safety Antigone Davis is pleased with the results so far.

“In the very first month when we started it, we had about 100 imminent-response cases,” which resulted in Facebook contacting local emergency responders to check on someone. But that rate quickly increased.

“To just give you a sense of how well the technology is working and rapidly improving … in the last year we’ve had 3,500 reports,” she says. That means AI monitoring is causing Facebook to contact emergency responders an average of about 10 times a day to check on someone — and that doesn’t include Europe, where the system hasn’t been deployed. (That number also doesn’t include wellness checks that originate from people who report suspected suicidal behavior online.) […]

In the U.S., Facebook’s call usually goes to a local 911 center, as illustrated in its promotional video.

I don’t see how the quantity of emergency calls proves that the system is working well. It could just as easily indicate rampant false positives.

More importantly, is this a technology that we really want to work “well”? As the article points out, “There may soon be a temptation to use this kind of AI to analyze social media chatter for signs of imminent crimes — especially retaliatory violence.”

There is a well-known story and movie that explores the concept of pre-crime. Do we really want to go there? And just as AIs patrol Facebook for signs of suicidal tendencies and Community Standards-violating speech, will AIs also be used to augment the growing efforts by governments in Britain and elsewhere to flag, investigate and prosecute people who read the wrong materials and think the wrong thoughts?

Facebook Zuckerberg VR dystopia

SEC catches up to Elon Musk

On July 27, I wrote that Elon Musk’s “increasingly bizarre and out-of-control behavior of late certainly raises doubts about his qualities as a business leader. The outlook for Tesla does not look good either.”

That was before Musk pulled a little stunt on Twitter that caught the attention of the SEC, and now the tycoon is in serious trouble:

The Securities and Exchange Commission sued Tesla’s CEO on Thursday for making “false and misleading” statements to investors. It’s asking a federal judge to prevent Musk from serving as an officer or a director of a public company, among other penalties.

The complaint hinges on a tweet Musk sent on August 7 about taking Tesla private.

“Am considering taking Tesla private at $420,” Musk said. “Funding secured.”

The SEC said he had not actually secured the funding.

“In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the SEC said in its complaint.

That tweet, and subsequent tweets from Musk over the next three hours, caused “significant confusion and disruption in the market for Tesla’s stock,” as well as harm to investors, the SEC said. On the day of Musk’s tweet, Tesla’s stock shot up nearly 9%. It has declined substantially since then.

Tesla’s (TSLA) stock dropped more than 11% in after-hours trading Thursday.

The best part:

The complaint alleged that Musk rounded up the go-private price to $420 per share “because he had recently learned about the number’s significance in marijuana culture” and thought his girlfriend would find it funny. He was dating the musician Grimes.

Just LOL.

Greg’s foreign media doctrine

The US is getting tough on Chinese state-owned media. But is it enough?

The Justice Department ordered two leading Chinese state-run media organizations to register as foreign agents, according to people familiar with the matter, as U.S. officials ramp up efforts to combat foreign influence operations and toughen their stance on a variety of China policies.

The DOJ in recent weeks told Xinhua News Agency and China Global Television Network—known as CGTN now and earlier as CCTV—to register under a previously obscure foreign lobbying law that gained prominence when it was used in the past year against associates of President Donald Trump, including Mr. Trump’s former campaign manager, Paul Manafort, the people said.

The DOJ order comes as Washington and Beijing are involved in an escalating trade conflict, with China announcing on Tuesday it would retaliate for the U.S. tariffs unveiled Monday on $200 billion in Chinese goods. […]

The Justice Department told the senators it couldn’t comment on any potential continuing investigations and wrote that not all state-controlled media would necessarily be required to register as foreign agents, such as those that run news bureaus in the U.S. to report on events for an audience in their home countries.

“Unless there is an effort by the state-controlled media organization to use its reporting in the United States to target an audience here for purposes of perception management or to influence U.S. policy, there would probably be no obligation for it to register under FARA,” a DOJ official wrote in a letter dated Feb. 20 that was reviewed by The Wall Street Journal.

It’s unclear whether Chinese media organizations like Xinhua and CGTN have significant audiences in America (although some of their messaging is clearly aimed at Americans). It’s also unclear what (if anything) separates normal “journalism” from “perception management,” and it’s unclear why media outlets such as Xinhua and Korea’s KBS America should be registered as foreign agents but not, say, the BBC.

The guidelines for FARA registration seem very vague. Another issue is that FARA-registered media entities are not required to stop producing content, including for American audiences (although they are required to disclose their funding and activities and pay a fee). Some laud this as a positive transparency measure, while others denounce it as a troubling assault on journalistic freedom, and yet others wish FARA had more teeth.

The whole situation is complex, murky, and unsatisfactory to a lot of people. I propose cutting through all the complexity by applying the principle of reciprocity. Quite simply, the US should treat foreign media outlets the way their respective countries treat US media outlets. For example, since China bans the publication and printing of foreign newspapers and magazines for sale in the mainland, the US should not allow China Daily to be sold from newspaper boxes on the streets of America’s major cities:

China Daily New York

(Benjamin Chasteen/The Epoch Times)

And since China would never allow CNN, for example, to broadcast US foreign policy propaganda on Beijing’s giant Sky Screen, neither should Xinhua be allowed to broadcast Chinese foreign policy propaganda on a huge LED screen in Times Square:

Xinhua Times Square

(The Nanfang)

The same principle would apply to Russia, in whose capital city you allegedly can’t find a major foreign newspaper. (It should be pointed out that Russia’s attempts to control and limit foreign media predate the Kremlin’s recent move to label foreign media outlets as foreign agents, ostensibly in retaliation for the US doing the same to RT and Sputnik Radio.)

Besides being irreproachably fair, this policy would also expose the severe hypocrisy of any authoritarian governments that complain that their media outlets are being muzzled in the US, since the US would simply be mirroring the restrictive policies of those governments. Optimistically, this could even prompt some authoritarian governments to relax their controls on US media to regain their American footprint.

Now, this policy would do little to curb the Russian information warfare and influence operations that so terrify America’s political and media elites, as social media is the main battlefield for those alleged activities, carried out by armies of invisible trolls and bots. The rule of reciprocity hardly makes sense in the context of Twitter and Facebook. But that’s another story for another day.