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FTR#1313 This program was recorded in one, 60-minute segment.
Introduction: This program updates the ongoing destabilization of China.
The program begins with a long blog essay in a very conservative publication: The National Interest.
Presenting a necessary and, frankly, refreshing analysis of the development and success of the Huawei electronics company, Chandran Nair highlights the factors behind the company’s success including: An employee friendly work structure; a democratically organized management hierarchy; a corporate culture that factors in both the good and errant features of other companies around the world; prioritization of renewable energy projects; an international developmental structure that is inclusive of progressive industrial projects in Third World countries; fiscal management that has avoided employee layoffs even during hard times; a larger share of company finances devoted to research and development than other, comparably large corporations.
By way of comparison with the first article in the program, we present an analysis from a British economist living in China who details data emphatically refuting the forecasts of impending economic collapse for the world’s second-largest economy.
It should be noted that China is still a [very quickly] developing country, and that some of the data comparing its rate-of-growth with more fully developed countries should be factored into the analysis.
Next, we present a story that highlights the negative spin put by the Western press on developments in China. The Guardian eclipses analysis of a Chinese initiative facilitating peaceful integration of China and Taiwan by stressing military maneuvering by the PLA.
We conclude the program with introduction of the topic of the next broadcast: Covid-19.
Following discussion of soaring rates of SARS Cov‑2 infection in the U.S., we reprise a 55-second clip, originally featured on Twitter, but now deleted. The speaker is Professor Jeffrey Sachs, former head of The Lancet’s commission on the origins of Covid.
He is “pretty convinced” it came from a U.S. biolab.
1.“The Side of Huawei We Don’t Know” by Chandran Nair; The National Interest; 09/11/2023.
Though often condemned and suspected by Western policymakers and experts, the company’s origins and unique governance system are poorly understood.
China’s meteoric rise in the short space of thirty years to become the second-largest economy in the world and a global power has been by far the biggest story of the twenty-first century. It has also unfortunately been accompanied by a great deal of worry by a fearful West, which together with the global mainstream media, has painted an ugly picture of the country’s remarkable pace of development.
One of the most visible manifestations of this progress is Huawei, a Chinese company and now the world’s largest maker of telecoms gear. Yet the company’s growth has been accompanied by fear and mistrust from the West—particularly from the United States, which regards the firm as a potential threat to U.S. national security.
A great part of Huawei’s supposed infamy can be boiled down to two things. The first is that the company is actually very well-run and extremely innovative—a fact that Westerners, convinced of their own technical superiority and the relationship between technological innovation and a particular set of political/cultural values, find unnerving. The second is the view that because it is a Chinese tech firm, and its founder was in the military as well as a member of the Chinese Communist Party (CCP), it must be controlled by the Chinese government. This latter view demonstrates how little is understood of modern China, especially the relationship between China’s commercial ecosystem and the state.
This lack of knowledge relating to Huawei’s origins, methodology, and relationship with the Chinese stake makes it a recurring target. It would behoove Washington to know more about the company and how it came to be first.
Huawei’s Origins
For those unaware of the struggles within China after the creation of the People’s Republic of China in 1949, it is worth remembering that even in the 1970s and 1980s there were parts of China where famine was not unusual. One such region was Jiangsu province, where people were forced to forage in the forest for berries, nuts, and anything edible they could get hold of to survive. Bear in mind that this was also a time during which neighboring Hong Kong (and Singapore, too) saw fast food like McDonald’s and KFC become ubiquitous. This period of persistent poverty and suffering in China was a result of ongoing internal struggles and ill-considered policies that failed to support the country.
One man who grew up during this period was Ren Zhengfei. His family was so poor that he would forgo some of his meager rations so that his siblings could eat, and would instead mix his meals with rice bran to sustain himself. He used to go into the forest to pick anything edible for the family to survive.
An early life of struggle motivated him as a young man to embark on a most remarkable journey. Ren joined the Chinese military after studying architecture and engineering. He eventually left the army with bigger entrepreneurial plans, driven by a desire to contribute to society. He taught himself the workings of computers and other nascent digital technologies. After several failed forays into business, and in a last roll of the dice in 1987 at age 43, he formed Huawei, meaning “committed to China and making a difference,” with the intention of selling program-controlled switches.
The company is now, in many ways, one of the most recognized brands in the world—partly due to its innovations and market capitalization, and partly for being caught in the geopolitical struggle between the West and China.
Ren’s story of deprivation and desperation stands in stark contrast to that of many of the founders of today’s tech giants. It should also provide a clue into the resilience of the company, the sense of positivity that it is imbued with, and how it plans to withstand current external pressures. The launch of a new smartphone, demonstrating that Huawei has managed to overcome U.S. sanctions and can innovate by itself, has drawn rapt attention. Similarly, although it did not make the global headlines, the company also recently announced the introduction of its own Enterprise Resource Planning software, which ends its reliance on Oracle’s software. Many more innovations are expected, proving the old adage that necessity is the mother of invention.
What makes Huawei so innovative? Understanding this requires looking at three aspects of the company and how it is run, which provide insights for observers.
Huawei’s Governance and Ownership System
It is often wrongly assumed that Huawei operates as a commercial extension of the CCP, and is run similarly, where the founder Ren Zhengfei holds absolute authority, closely overseeing a very top-down, hierarchical system.
The reality appears rather differently. The privately-held company is 100 percent, employee-owned with Ren holding 0.7 percent of the company’s shares. This governance structure is unique to Huawei and draws from extensive studies of best practices from across the world, customized to suit its needs.
The company operates under a collective leadership model with numerous checks and balances, where shareholder representatives and those sitting in decision making bodies are democratically elected. The shareholders’ meeting, the company’s premier decision making forum, decides on the company’s major matters such as capital increases, profit distribution, and election of the members of the board of directors and supervisory board. Employees are represented by the Trade Union Committee, and the Representatives’ Commission is the employee vehicle through which the Union fulfills shareholder responsibilities and exercises shareholder rights. The shareholding employees with voting rights elect the Commission on a one-vote-per-share basis, after which the Commission elects the company’s board of directors and supervisory board on a one-vote-per-person basis. These events are transparent and even live-streamed to all employees.
As the founder of Huawei, Ren’s influence and authority comes from the respect he has gained for his achievements—a particularly Chinese approach towards organizational harmony and order, rooted in a culture of respect for elders and leaders. While Ren carries veto rights on board decisions, it is a matter of record that he has exercised this right only a few times and typically on technology and business direction, as is common in most privately held firms anywhere in the world. He is depicted internally as one who prefers to share his vision and ideas through company-wide addresses that serve as guidance on direction making.
The main motivation for setting up such a governance structure is to ensure the company’s longevity and to enable it to achieve sustainable growth. Being a privately held company has allowed Huawei to design structures and set targets for the long-term, able to focus on its core vision and mission—inclusive of customers and employees.
While recent sanctions have impacted Huawei’s smartphone business and short-term profits (there was a 69 percent year-on-year decline in net profit in 2022), Huawei has continued to make strategic investments and devoted even more capital to research and development (R&D). In 2022, they invested 25 percent of their revenue in R&D, equivalent to 161.5 billion yuan, more than any company in the world outside America in absolute terms, and more than the tech giants as a percentage of revenue. For comparison, Amazon, the world’s biggest spender on R&D, and Alphabet invested around 14 percent of their revenue on R&D in the same year.
Despite not being able to launch high-end 5G phones globally, the smartphone business units have not laid off any staff. This is also a cultural difference that is often misunderstood and unappreciated, where the employee is seen as being part of the family. This is such that, when hard times arrive, everyone bears with it and goes into “survival” mode. The launch of the new Mate 60, Mate 60 Pro, Mate 60 Pro+, and Mate X5 which is a new version of its foldable phones, is a testament to the wisdom of this strategy.
Huawei’s governance structure is what allows it to reinvest in the company, its facilities, R&D, and its employees, even during times of business downturn and external pressures.
A Culture of Learning from the World and Global Openness
Huawei’s emphasis on hard work, based on the Confucious tradition of collective resilience, has enabled it to attract talent who firmly believe they can overcome obstacles and create solutions that best achieve the company’s official goal of “Staying customer-centric and creating value for customers.” Employees are not driven only by the financial rewards on offer, but also by a sense of purpose and the need to be engaged in finding solutions to problems. The company’s appeal has enabled it to attract the best talent China has to offer.
In coming up with the company’s current corporate governance model, what is noteworthy is that Huawei’s leadership spent time studying the governance models of successful, long-lasting companies from around the world, including Japanese family-owned companies and corporations from France, Germany, and the United States. They actively considered the merits and weaknesses of different models, learning from lessons of success and failure, taking these ideas and customizing them for Huawei.
The design of Huawei’s supervisory board is a good example. It drew inspiration from German corporate governance structures and the governance principles developed by Fredmund Malik. However, Huawei’s structure is different from German companies in that the representatives of shareholders sit at the top. In addition, the supervisory board does not only supervise the board of directors but plays an active role in developing the leadership pipeline at different levels of the company and setting regulations for how the company operates.
The participation of employees is also unique. All members of the supervisory board and board of directors are Huawei employees. It is also a requirement that shareholder representatives nominated to the board have contributed to the company and demonstrated the requisite leadership skills.
A similar mindset of learning from different models was applied to succession planning and the establishment of its rotating co-chair system five years ago. Huawei places an emphasis on developing leaders within the company. To achieve the system it wanted, it studied different leadership structures from established companies with similar approaches, including family-founded companies.
By retaining top talent, the company believes it can overcome the limitations of any one individual and provide checks and balances. Huawei presently has three rotating co-chairs. When co-chairs are off duty, they visit other countries, meet employees, learn about the business, and, importantly, have space and time to think, which is given a lot of emphasis.
Huawei’s open worldview and its appreciation for other cultures are most dramatically reflected in its R&D campus in the city of Dongguan, nicknamed the “European city,” where 30,000 staff work in twelve different “villages” modeled after nine different European countries. Manicured gardens surround life-size replicas of the most famous cities and architecture in Europe, including the Palace of Versailles, Heidelberg Castle, Amsterdam, and Verona. Dotted across the villages are numerous restaurants and cafes, a reflection of Ren’s advocacy of coffee culture. There is also an electric train service so that no one needs to drive within the campus. The concept for the campus was conceived as part of a design competition and was selected for its uniqueness, setting it apart from the usual tech company or Chinese-inspired designs.
The organization and its employees clearly continue to have an appreciation for promoting global culture exchanges and learning from non-Chinese models of success. Prominent observers have taken notice of this.
A Commitment to Social Obligations and Making a Difference
Many might be surprised to learn that Huawei considers sustainability to be an integral part of its business priorities. It has four sustainability strategies, all of which are aligned with its vision and mission: Digital Inclusion, Security and Trustworthiness, Environmental Protection, and Healthy and Harmonious Ecosystem. Each of these strategies is integrated with the company’s business and product development. For example, Huawei’s products and solutions are increasingly designed to help the business and their clients reduce energy consumption and CO2 emissions.
While the company does release annual sustainability reports, these do not adhere to the typical Western ESG (environmental, social, and corporate governance) or CSR (corporate social responsibility) reporting. Similarly, the company does not place too much of an emphasis on philanthropy and has not set up a foundation or philanthropic arm. Instead, it invests in developing cost-effective and sustainable solutions using its technology and working with local and multilateral partners to achieve its objectives in countries where the needs are most critical.
Consider TECH4ALL, the company’s long-term digital inclusion initiative, dedicated to producing innovative technologies and solutions that enable an inclusive and sustainable world. They have applied AI and cloud to learn the sound of endangered animals, rainforests, and wetlands, to remotely monitor and prevent illegal hunting and logging. This application has been used in many countries in Latin America and Europe and has the potential to be deployed in other fields.
Another example is RuralStar. As part of its commitment to rural development and bridging the digital divide to boost development in remote areas, Huawei invested in innovating simpler and smaller technology for data transmission. The RuralStar solution allows a base station to be constructed on a simple pole instead of a dedicated tower, with low-power features that can be powered using six solar panels. RuralStar is widely recognized as one of the greenest and most cost-effective solutions available for remote and rural communities. Notably, the business decision to service rural areas comes at an estimated 30 percent reduction in profit margins compared with the traditional focus on high-density urban areas only. Globally, this technology services small villages of several thousand residents at a 70 percent cost reduction compared to traditional solutions. Following its first pilot in Ghana in 2017, over sixty countries have implemented RuralStar and over 50 million people in rural areas have benefited. As an example of how such projects are funded, in 2020 in Ghana, the Ministry of Communications and the Ghana Investment for Electronic Communications signed a financing agreement with Export-Import Bank of China for Huawei to deploy more than 2,000 RuralStar sites for Ghana to provide voice and data services for over 3.4 million people.
Within its goal to drive digitalization, Huawei has also been consistently investing in green transformation. Beyond a significant increase in the use of renewable energy within their own operations (a 42.3 percent increase from 2020), an increased energy efficiency of their products is also an important metric in their innovation process. A company reports a 1.9 times increase in energy efficiency in their main products since 2019, which in turn helps their customers and industry partners reduce their carbon footprint.
More broadly, Huawei’s digital power technology is being deployed and used in many solar farms globally. The idea is to manage watts with bits to help better produce clean energy and cut emissions. By the end of 2021, Huawei Digital Power had helped customers generate 482.9 billion kWh of green power and save about 14.2 billion kWh of electricity. These efforts have resulted in a reduction of nearly 230 million tons in CO2 emissions, equivalent to planting 320 million trees.
The ability to choose to meet its social commitments and to take concrete steps towards realizing its corporate vision beyond the mission statements is relatively unique to Huawei. At a time when companies are striving to meet ESG goals and overcome the fundamental tension between short-term priorities and investments for sustainable growth, Huawei works to overcome such challenges by seeing its products and services as key enablers of sustainable development. It is committed to developing information and communications technologies for reducing carbon emissions, promoting renewable energy, and contributing to the circular economy. Huawei strives to promote energy conservation and emission reduction in its own operations and to use more renewable energy. This is possible to achieve due to internal consensus across the leadership team to make strategic choices aligned with their sustainability agenda, the desire to invest in long-term ambitions, and the capacity to innovate new products that allow them to achieve their sustainability goals.
A Company That Isn’t Going Away
Huawei’s success on the global stage, based upon excellence in delivering new innovations, demonstrates that China has much to teach the rest of the world. Yet this success came about via a strategy of openness and a willingness to learn from others. The company’s critics, scrambling to respond to recent developments, ought to take note.
Chandran Nair is the founder and CEO of the Global Institute For Tomorrow (GIFT). He is the author of Dismantling Global White Privilege: Equity for a Post-Western World.
About: John Ross was the first non-Chinese citizen to be appointed to a full time post at a leading Think Tank in China — Chongyang Institute for Financial Studies, Renmin University of China.
The appointment was based on work beginning with his 1992 study ‘Why the Economic Reform Succeeded in China and Will Fail in Russia and Eastern Europe’- which accurately predicted that China’s economic reform would produce rapid economic growth while the ‘shock therapy’ alternatives in the former USSR and Eastern Europe would be a failure in comparison.
He is a prize-winning resident columnist in private (Sina Finance Opinion Leaders), academic based (Guancha.cn) and state (China.org.cn) media in China with over 200 articles published on China and the international economy including in Sina Finance, International Finance News, China Finance, People’s Daily, Global Times, Guancha.cn, and Shanghai Daily.
His book The Great Chess Game became the no.1 best selling book on Economic Policy on Amazon China. His work has been published in English, Chinese, Spanish, French, Indonesian, Russian and Portuguese. He appears regularly on TV & radio.
John Ross has almost one million followers on Weibo — China’s equivalent of Twitter/Facebook and receives over 10 million hits on his Weibo each month.
John Ross was formerly Director of Economic and Business Policy for the Mayor of London and a consultant to FTSE 100 companies.
A complete list of his publications in English and Chinese since 2013 may be found here.
Once again, the Western media Establishment, and sadly some on the left, are talking up an impending economic disaster in China, when the truth is quite the opposite, shows John Ross
IN THE last four years, covering the period of the Covid pandemic, China’s economy has grown two-and-a-half times as fast as the US, 15 times as fast as France, 23 times as fast as Japan, 45 times as fast as Germany, and 480 times as fast as Britain.
To add in smaller G7 countries, China has grown four times as fast as Canada, and 11 times as fast as Italy.
China’s outperformance of advanced capitalist countries is even greater in per capita terms — a still better measure of productivity changes and potential for increasing living standards.
China’s per capita GDP grew three times as fast as the US, five times as fast as Italy, 44 times as fast as Japan or France, and 260 times as fast as Britain — while per capita GDP fell in Germany and Canada.
China’s outperformance of developing capitalist countries shows the same pattern — China’s per capita 4.4 per cent GDP annual average growth compares to 2.6 per cent in India, 1.3 per cent in Brazil, or 0.9 per cent in South Africa.
What is important about such economic growth, of course, is not abstract statistics but its meaning for the real lives of ordinary people.
The International Labour Organisation data on real, inflation-adjusted, wages shows that up to the latest available data — for most countries to 2022, and for India to 2021 — China’s annual real wage growth was 4.7 per cent.
For Britain it was 0.1 per cent, for the US it was 0.3 per cent, in France it was minus 0.4 per cent, in Germany minus 0.7 per cent and in India minus 1.3 per cent.
Given this enormous economic outperformance by China of capitalist countries, any rational discussion that should be taking place in Western mainstream media about the international economic situation would be, “why is China’s economy hugely outperforming the US and the rest of the capitalist West?” and, “what lessons are to be learned from China’s socialist economy that is so outperforming the West?”
For the left, the issue that needs to be assessed and publicised is, “Why are real wages rising 18 times as fast in China as in the US, 44 times as fast as in Britain, while in France, Germany or India real wages are falling?”
Indeed, the present author would argue that much greater stress should be placed on the latter point. The international left has begun to absorb that China has lifted more than 850 million people out of World Bank-defined poverty in 40 years — by far the greatest poverty reduction achievement in human history.
But it has not yet internalised how rapidly not only the poorest but average living standards are rising in China — far faster than in any Western country.
But, of course, this real economic situation can’t be discussed in the mainstream media, because its conclusions would be too damaging for the capitalist West.
Instead, a type of mad discussion is unfolding, with US claims about China’s economy becoming increasingly bizarre — one might say deranged — as they get further and further out of touch with reality.
President Joe Biden, for example, recently made a speech claiming China’s economic growth rate is “around 2 per cent,” when it was 5.5 per cent in the first half of this year and, as already noted, China’s economy is growing two-and-a-half times as fast as the US.
Biden bizarrely claimed that in China “the number of people who are of retirement age is larger than the number of people of working age” — entirely false, and inaccurate by a figure of many hundreds of millions of people.
Discussion in the US financial media equally refuses to face real facts. Because I am an economist, every morning, after the overall news, I switch on Bloomberg TV to catch up on the latest economic data. Discussion there is like Alice Through the Looking Glass — the book the principle of which is that everything is reversed compared to the real world.
Apparently, according to Bloomberg’s analysis, China’s annual average of 4.5 per cent a year growth in the last four years is an economy in severe crisis, whereas the US’s 1.8 per cent is allegedly strong growth — not to speak of Britain’s 0.1 per cent. Similar rhetoric, out of all contact with factual reality, pervades the Financial Times, The Economist, or the Wall Street Journal.
The left is well used to such US political lying — the completely fake claim that North Vietnamese ships attacked US naval vessels on August 4 1964 in the Gulf of Tonkin, used to launch the Vietnam war, or the equally untrue claim that Iraq had weapons of mass destruction to justify the US invasion, were classic examples.
Today, the US systematically lies about the state of China and its own economy because it is crucial for US capitalism to prevent its own citizens, and close allies, from understanding the real economic trends.
It is further proof, if one were needed, of the truth that if the real world and a theory do not coincide only one of two things can be done. One is to abandon the theory, the other is to abandon the real world.
In this case, the theory is that the US, because it is capitalist, should outperform socialist China. The real world is actual economic performance — in which China continues to outperform the US and other capitalist countries by an enormous margin.
Unable to abandon its theory the US is therefore forced to abandon the real world — hence the demented denial of comparative economic performance noted at the beginning of this article.
While the left should expect lies from capitalism what is rather shameful is that some sections of the left repeat such nonsense — apparently believing that if they put in a few left phrases into an analysis taken from the Western press this constitutes “socialist” commentary.
For example, an article in the New Left Review’s Sidecar called China a “zombie economy.” Some “zombie” when China’s economy is growing anywhere between two-and-a-half times and 480 times as fast as any major capitalist economy.
The real data shows the reality is simple. China has far outgrown any Western capitalist economy for more than 40 years. It continues to do so.
The result in China is by far the world’s most rapid rise in living standards — not only for the poorest but for the whole average population. It is known as the practical advantage of socialism. It is fact. We know why the US has to make up big lies about it. There is no justification for sections of the left echoing them.
This article was originally published by the Morning Star.
John Ross Senior Fellow at Chongyang Institute at Renmin University of China and the winner of China’s top book award for foreign writers on China.
China’s government has unveiled a “new path towards integrated development” with Taiwan, including proposals to make it easier for Taiwanese people to live, study and work in China.
At the same time, it sent the largest number of warships to gather in years to the waters on Taiwan’s east, in what analysts said signalled a choice between peaceful “reunification” and military violence, just months out from Taiwan’s presidential election.
The new measures, released by the ruling Communist party’s Central Committee and the State Council on Tuesday said the coastal province of Fujian would become a “demonstration zone” for integrated development.
The 21 measures include facilitating Taiwanese people to live in Fujian and access social services, expanding enrolment of Taiwanese students in Fujian schools, and deepening industrial cooperation.
The move is aimed at deepening cross-strait integrated development in all fields and advancing the peaceful reunification of the motherland,” said official state media outlet, China Daily.
The Global Times, a hawkish state-backed news outlet, described the document as “equivalent to outlining the future development blueprint of Taiwan island”.
China Daily said that “pair cities” of Xiamen and Kinmen, and Fuzhou and Matsu would play “an even more prominent role”. The islands of Kinmen and Matsu sit just a few kilometres from the Chinese mainland and have some cultural and economic ties, but are governed by Taiwan.
Taiwan’s media extensively covered the announcement, with a particular focus on measures encouraging Taiwanese to buy homes and invest in Fujian. Responses were sceptical, with many pointing to the property market crisis in China.
“The Chinese government has cut leeks among its own people, now they turn to the Taiwanese,” said one commenter, using an idiom that refers to financial industries taking advantage of gullible investors.
In central Taipei on Wednesday, several residents told the Guardian they were not attracted by the proposal. Terry Hung, a 37-year-old pharmaceutical industry worker, said it looked “very risky”.
“I do not want to invest in property in a communist nation, sharing my properties with that government. I do not want to work in an autocratic country because human rights and labour rights are all controlled by the government,” he said. “If one day your opinion does not align with the government’s stance, you will be at risk of arrest or detention.”
Ms Hsieh, a retired teacher, said young people could make their own decisions but “the political environment, the surroundings, etc, in China are so different from Taiwan that the Taiwanese may not adapt”.
Not all were opposed. A young TV production assistant, Shin, said she was interested in the proposals to broaden exchanges for students and for the TV and radio industry.
“I believe that any opportunity to promote cross-strait exchanges and mutual benefits is excellent,” she said. “If there is an opportunity I would be interested in going to China.”
Xi Jinping wants “reunification” with Taiwan without war, although he has said he is prepared to use force. The integration plan coincided with the massing of Chinese warships in the western Pacific for what appeared to be major military exercises.
On Monday the People’s Liberation Army (PLA) sent a carrier strike group past Taiwan’s southern tip into the western Pacific Ocean, led by the aircraft carrier Shandong. Dozens of warplanes were also detected by Taiwan flying new and longer patterns over the median line of the Taiwan Strait, and to the islands south as they accompanied the strike group.
On Tuesday, Japan’s defence ministry detected two flotillas of eight warships sailing through the Miyako Strait south of Okinawa, on a course that analysts said could converge with the Shandong-led group. Another 36 war plane sorties were detected on Wednesday morning, Taiwan’s defence ministry said. Should the groups converge, it would form the largest ever manoeuvres seen involving a Chinese aircraft carrier, Su Tzu-yun, an analyst at the Institute for National Defense and Security Research, told the Financial Times.
In Taiwan a senior military official, General Huang Wen-chi, told media on Tuesday the Shandong “undoubtedly poses a new threat”.
Chinese authorities have made no announcement about the exercises, and as of publication there were no navigational warnings issued for the area. The PLA last held major exercises with the Shandong to Taiwan’s east in reaction to a meeting between Taiwan president Tsai Ing-wen and US House speaker Kevin McCarthy. Analysts have told the Guardian they suspect this week’s activity is in response to recent transits of the Taiwan Strait and joint exercises involving the US and allies, and a continuation of military threats to Taiwan.
In January, Taiwan will have its next presidential election, and it is widely expected that Beijing will seek to influence voters during the campaign, as it has done in previous years. It is most opposed to a victory by the ruling Democratic Progressive party (DPP), which is the most strident in asserting Taiwan’s status as a sovereign nation. Vice-president Lai Ching-te, the DPP’s presidential candidate, is the present frontrunner.
However opposition parties – and a growing majority of Taiwan’s people – also reject the prospect of Chinese rule. After Tsai came to power in 2016, Beijing cut off formal communications with Taipei.
Rorry Daniels, managing director of the Asia Society Policy Institute, said Wednesday’s dual signals of a peaceful integration plan, while simultaneously staging intensive military exercises were a sign of the confused messaging.
“How are the Taiwanese people supposed to interpret this? Go to the mainland for great economic opportunity, but fly over the warships we’ve surrounded your island with?”
3. “COVID levels are so high, they’re hovering near 2020’s initial peak, as the WHO urges those at high risk to take any booster they can get their hands on” by Erin Prater; Fortune; 09/16/2023.
U.S. COVID infections are hovering near levels of the pandemic’s first peak in 2020, and approaching the Delta peak of late 2021, according to wastewater surveillance and modeling by forecasters.
It’s yet another sign that while the official pandemic state may be over, the days of COVID are far from it.
Viral wastewater levels are not far behind all of the pandemic’s 2020 peaks except for one—the initial peak of March 2020, which they’ve already surpassed. And they lag just slightly levels seen during the deadly Delta peak of late 2021, according to Biobot Analytics, which monitors such data for the federal government.
A forecast issued this week by Jay Weiland, a leading COVID modeler, came to the same conclusions. On Thursday, Weiland estimated that 650,000 Americans are becoming infected daily, with 1 in 51 Americans currently infected with COVID.
An additional 7% to 10% of the U.S. population will be infected over the next month and a half, Weiland predicted.
Both Biobot data and Wieland’s modeling show U.S. cases beginning to recede. But they may not fall much more, if any, before the anticipated fall and winter surge.
WHO flags concerning trend
Infections aside, COVID hospitalizations and deaths are continuing to rise, according to the latest data available from the U.S. Centers for Disease Control and Prevention. Hospitalizations rose nearly 9% from Aug. 27 through Sept. 2, the most recent period for which the federal health agency made data available. And deaths rose nearly 5% from Sept. 3–9.
The World Health Organization continues to receive reports on concerning COVID trends, including a growing number of countries reporting an increase in infections, hospitalizations, and ICU admissions, Maria Van Kerkhove, technical lead for COVID-19 response, said at a Thursday news conference.
Vaccination, in addition to early diagnosis and access to care, can prevent severe disease and death, she said. WHO officials encouraged those at high risk for poor outcomes from the virus, like the elderly and immunocompromised, to obtain a booster ASAP—even if it’s not the latest XBB formula being rolled out in some parts of the world.
Vaccinating and boosting with any available version “remains vitally important to saving people’s lives now,” officials said.
U.S. approves updated XBB boosters
All Americans ages 6 months and older are eligible to receive an updated COVID booster tailored to the XBB Omicron strain, the CDC announced this week.
The agency’s Advisory Committee on Immunization Practices voted 13–1 Tuesday to approve updated jabs from Moderna, Pfizer, and Novavax for the vast majority of U.S. residents. Shortly thereafter, the federal health agency announced that it had accepted the committee’s recommendation, and that vaccines would be available later in the week.
The U.S. Food and Drug Administration has yet to approve Novavax’s updated formula. But the agency authorized such boosters from Moderna and Pfizer on Monday.
The CDC anticipates having adequate booster supply and shouldn’t need to prioritize certain groups—like the elderly or immunocompromised—for first doses, federal health officials said at the Tuesday committee meeting.
All eligible should get the new booster when possible, Dr. Georges Benjamin, executive director of the American Public Health Association, told Fortune on Tuesday.
“It is clear that the vaccine remains safe and effective at all ages,” he said. “People at high risk will especially benefit from the vaccine.”
In a statement provided to Fortune, the American Medical Association on Tuesday said it welcomed the committee’s recommendations, contending that the updated jabs would prevent about 400,000 hospitalizations and 40,000 deaths over the next couple of years.
“We continue to strongly urge everyone to stay up to date on their COVID-19, influenza, and RSV vaccines to protect themselves and their loved ones from severe complications, hospitalization, and death,” the organization said, adding that it expected an increase in infections this fall and winter.
New booster, dying strain
Last year’s updated Omicron boosters, released around Labor Day, were bivalent, tailored to both Omicron and the initial strain of COVID. This year’s boosters are monovalent, meaning they’re tailored to just one strain of the virus: XBB.1.5 “Kraken,” which dominated in the U.S. and elsewhere late last year into early this year.
The strain is now nearly extinct. XBB.1.5 was estimated to be responsible for just 2.2% of U.S. infections Friday, according to the latest variant data the CDC has made available.
While the newest jabs are tailored to a dying strain of Omicron, they’re still expected to protect against severe disease and death from currently circulating strains, the vast majority of which are members of the XBB viral family.
The formula for the new vaccines “is highly similar to the EG.5‑related variants circulating now,” Dr. Stuart Ray, vice chair of medicine for data integrity and analytics at Johns Hopkins’ Department of Medicine, told Fortune on Tuesday.
Recently released preliminary data shows that refreshed boosters should also offer decent protection against new, highly mutated Omicron spawn “Pirola” BA.2.86. It’s not a member of the XBB family, and is instead thought to have evolved from so-called “stealth Omicron” BA.2.
The updated vaccine’s protection against Pirola won’t be as good as the protection it offers against EG.5 and other XBB variants, Ray said. Still, there is more to immunity than antibodies, produced by B cells in response to infection and vaccination. The other, oft-forgotten half of the immune system, T cells, provides protection against severe disease. While T cells can’t prevent infection like B cells can, they still help soften the blow—of a BA.2.86 infection, EG.5 infection, or otherwise.
Rising concern for troublesome ‘flip’ mutations
While the United States’ “variant soup” remained largely unchanged Friday, according to new data released by the CDC, experts continued to sound alarm bells about a rising proportion of variants that share the same concerning mutations.
Around 93% of U.S. COVID sequences over the past month contain the mutation F486P, Raj Rajnarayanan—assistant dean of research and associate professor at the New York Institute of Technology campus in Jonesboro, Ark., and a top COVID-variant tracker—told Fortune on Friday. The mutation, located on the spike protein, increases the virus’s ability to effectively infect by binding more tightly with human cells. Rajnarayanan refers to it as this season’s signature mutation.
About half of U.S. sequences in over the same period picked up the F456L mutation, also in the spike protein, he said. The mutation makes the virus better at evading immunity from vaccination and prior infection. All top U.S. lineages have this mutation, he added.
What’s more, top lineages are also beginning to pick up the spike mutation L455F, which proffers further ease of infecting cells, Rajnarayanan added.
Variant trackers refer to the F456L and L455F mutations as “flip” mutations, for complex scientific reasons involving amino acid changes. The duo is becoming one of the most concerning trends of the season, experts say, with nearly 20% of wastewater samples tracked by Biobot containing such mutations.
Once again this fall and winter, no one variant may gain a major advantage over others, experts say. But variants with the “flip combo” likely to become dominant and pose this season’s largest issue.
What’s more, it’s likely that highly mutated variant “Pirola” BA.2.86 picks up “flip” at some point, Rajnarayanan said, making it more of an issue—and potentially granting it the ability to spread more effectively.
So long TikTok and hello PatrioTok! That’s kind of news we got following the passage of a new US law that either forces the sale of TikTok’s parent company out of Chinese hands or bans the app entirely in the US. The law isn’t in effect yet, and extensive court challenges are expected that could delay its implementation.
But the fact that the law passed at all is still a very big deal, with implications that could be playing out for years to come. Implications that extend beyond US/Chinese relations. After all, as many are asking, why just target China? Aren’t there plenty of other governments with far worse human rights track records? What about, for example, the extensive presence of Saudi or UAE money in the US technology space?
Well, as we’re going to see, China isn’t the only country getting some form of ‘special treatment’ when it comes to access to US technology markets. In fact, Saudi Arabia and the UAE are already getting special treatment, albeit special coddling. And it’s being done in the name of countering China’s rising tech prowess. Yep, Saudi and UAE money is pouring into Silicon Valley...in the name of countering China.
And there’s one particular UAE technology that has corporate America all aflutter: Aiden Insight, the persona of a tool called BoardNavigator that was created by UAE AI firm G42. The idea appears to be to allow this AI tool to not only engage of oversight of the board by also assist in strategic decision-making. We are told this kind of tool will apparently made possible because of continuous data analysis and ethical and compliance monitoring.
But G42 isn’t developing this technology on its own. BoardNavigator was built with Microsoft’s Azure OpenAI service, in cooperation with Microsoft. And in what we are told was a “first of its kind agreement”, Microsoft recently announced a $1.5 billion investment in the firm, but with various conditions intended to place US government security concerns. Concerns that appear to primarily have to do with whether or not G42 was using Chinese technology. As part of the agreement, G42 removed all Chinese technology and also agreed to use Microsoft’s Azure cloud computing platform for its AI services.
Adding to the absurdity of situation is the fact that the G42 chairman, Sheikh Tahnoon bin Zayed Al Nahyan, happens to be the brother of UAE president Mohammed bin Zayed Al Nahyan (MBZ). This is a good time to recall the significant, and still largely underappreciated, role MBZ played in the 2016 US election on behalf of the Trump campaign. For example, there the August 3, 2016, meeting in Trump Tower with Erik Prince and George Nader and Psy Group founder Joel Zamel offering the Trump campaign Psy Group’s election influencing services, they reportedly told the Trump team that this offer was on behalf of both MBZ and Saudi Prince Mohammed bin Salman bin Abdulaziz al-Saud (MBS). Also recall how MBZ personally broke diplomatic protocol when he made a secret visit to Trump Tower in December of 2016 without informing the Obama administration of this visit. And then there’s the whole Darkmatter affair, where the UAE not only hired three former NSA hackers but deployed them in a global hacking campaign that included the targeted of US citizens and US-based computers. So as we see all these efforts seemingly taken due to concerns about China’s ability to technologically meddle in the internal affairs of the US, keep in mind that the chairman of G42 is the brother of someone who not only meddled in the 2016 election but got away with it. It’s not like the US government didn’t have this evidence. But there was no impulse to act on that evidence. Instead, the impulse was to ignore it and continue to direct all blame towards Russia. What kind of fears should MBZ have about abusing the incredible intelligence made available through G42 given that the US government was apparently unwilling to act on that widely reported 2016 meddling?
So at the same time the US is seemingly trying to divorce itself of Chinese built technology, Silicon Valley is steadily being turned into Saudicon Valley and UAE-built AI technology is being co-developed with Microsoft to sit in on corporate board meetings. And part of the rationale for the embrace of Gulf tech investments is countering the threat of China. That demented state of affairs is a big part of the context of the newly passed TikTok ban:
“But a court challenge’s success is not is not guaranteed. The law’s opponents, which include advocacy organizations like the American Civil Liberties Union, maintain that the government hasn’t come close to justifying banning TikTok, while others say national-security claims could still prevail.”
A court challenge is assured at this point. What is far from assured is the outcome of that challenge. Some see First Amendment free speech arguments as powerful enough to prevail, but it’s hard to assume national-security arguments won’t ultimately win the day. Especially with this case likely to make it to the conservative-dominated Supreme Court:
But as experts warn, should the national-security arguments prevail, and ByteDance is forced to sell or pull out of the US market, the issue will be far from settled. Instead, the question will implicitly be raised as to why target ByteDance but not the myriad of other foreign firms freely operating in the US and gathering all sorts of potentially sensitive data about US citizens. Why just Chinese firms?
Also note how the bill that contained the ByteDance ban also has a provision about banning the sale of “personally identifiable sensitive data” by data brokers to North Korea, China, Russia, Iran or entities in those countries. In other words, those countries will just have to buy this information from the secondary marketplace. But, again, why just those countries and not all sorts of other undemocratic regimes like the government of Saudi Arabia?
And that question about, ‘why just China?’ brings us to the following Vox report from May of last year about the flood of Saudi money into Silicon Valley over the last decade. A flood that’s only expected to explode in coming years. And while part of the reason this flood has been so welcomed by the US investor community and government has to do with the relative drop in venture capital (VC) funding as a result of the pandemic, we’re increasingly hearing another reason for the embrace of Saudi tech funding: as a means of countering China:
“But American venture capitalists might not care as much about optics these days. Capital markets are tightening in the US and Europe, which means there’s less money to go around in general. Meanwhile, the Biden administration is softening its stance on Saudi Arabia and even partnering with the kingdom on the Middle East broadly as well as energy policy and economic initiatives. There’s also a sense of urgency as China’s prowess as a tech competitor heightens. The convergence of these factors means that many new companies and established investing groups have turned to Saudi Arabia.”
The torrent of Saudi money flowing into Silicon Valley isn’t just driven by the sector’s rapacious appetite for VC money. There’s a national security angle justifying it all: China’s emergence as a major technological competitor. Saudi money is being cast as a kind of financial bulwark against a rising China. At least that’s the spin deployed in recent years to brush off criticism about making the Saudi government — which has one of the worst human rights records on the planet — the biggest Silicon Valley investor over the last decade, with all indications of those investments dramatically increasing in coming years. As one anonymous tech CEO bluntly put it, “There’s no way you could found a startup in this VC community and not be beholden to MBS or someone one step away from him.” Silicon Valley transformation into a Saudi subsidiary is just fine because all that Gulf money will help the US fend off China, according to this ‘national security’ narrative:
Also note the individual who is explicitly making the case that the US doesn’t have the ‘moral luxury’ of turning down Saudi investment money because countering China is more important: Jake Chapman, managing directory of the Army Venture Capital Corporation. So in case it wasn’t clear, yes, the US army formally endorses this flood of Saudi VC money into the US tech space:
And note how Silicon Valley luminaries like Sam Altman and Marc Andreessen were more than happy to join the board of Neom, the bizarre high-tech planned Saudi city that doubles as a template for a dystopian surveillance state. It sure is an interest project for Silicon Valley to be all aboard on, given all the alarms over apps like TikTok fueling Chinese surveillance:
Finally, note how the list prominent US investors hyping Saudi investments as events organized by the MBS think-tank, Future Investment Initiative Institute, includes Jared Kushner and former Trump Treasury Secretary Steve Mnuchin. Keep in mind that in the final months of the Trump administration, Mnuchin tried, as Treasuryt Secretary, to force the sale of ByteDance. Four year later, he’s putting together investors to acquire ByteDance should the US ultimately force the sale, which is a reminder that this emerging ‘no Chinese tech allowed’ doubles as a great shakedown opportunity for the well-connected:
As we can see, a growing portion of the tech wonders generated by Silicon Valley are going to be Saudi-fueled tech wonders in coming years.
But Saudi Arabia is far from the only US ally with a highly questionable human rights record and lots of cash to invest. For example, check out the latest AI tech poised to shake up not just corporate oversight but corporate strategic decision-making: AI bots built by G42, a new UAE AI firm recently infused with $1.5 billion in investments from Microsoft:
“The bottom line: Executives and their boards will need to work in tandem to spot and seize AI opportunities — and some of those conversations will be with AI agents.”
Corporate boards need to learn how to incorporate AI into their oversight and decision-making processes and, conveniently, they’ll do so via conversations with AI agents. That’s the paradigm shift apparently being embraced by corporate America. AI is at the future of corporate oversight and strategic decision-making. That didn’t take long. And now we get to find out what happens when corporate boards are just kind of following the lead of their strategic AIs. Who will ultimately be liable for AI-led disasters? We’ll find out:
And note the particular AI agent that is being seen as a prominent example of this trend: The UAE’s International Holding Company appointed Aiden Insight to its board as an “AI observer”. Aiden Insight just happens to be the persona of a tool called BoardNavigator, which was created by G42, a Gulf region AI company that received a $1.5 billion investment from Microsoft. So the cutting edge example of a corporate AI board member is an AI being developed by a UAE company in partnership with a Silicon Valley giant:
It’s quite a remarkable develop in corporate affairs. And only a matter of time before we start hearing about how the AI bots are the most influential voices in the boardroom. And as the following Reuters report points out, Microsoft’s $15 billion investment in G42 didn’t happen in vacuum. Steps were taken to placate US government concerns. Of course, those concerns appear to have largely been over whether or not G42 was using any Chinese technology in their operations:
“Microsoft and G42, in separate statements on Tuesday, described their assurances to the U.S. and UAE governments as a first of its kind agreement to ensure the secure, trusted and responsible development and deployment of AI. Microsoft said it was binding. The size of the stake Microsoft was taking was not disclosed.”
A first of its kind binding agreement. That’s how Microsoft and G42 are touting their newly announced assurances made to the US and UAE governments to address security concerns over their joint development of AI agents. Assurances that seemingly had hysteria over China as a primary consideration. G42 had to not only agree to use Microsoft’s Azure cloud servers for the AI infrastructure but also remove any Chinese hardware from its operations:
And, again, note the pedigree of G42 chairman Sheikh Tahnoon bin Zayed Al Nahyan: he’s the brother of UAE president/crown prince MBZ. Recall the role MBZ played in the 2016 US election on behalf of the Trump campaign. For example, there the August 3, 2016, meeting in Trump Tower with Erik Prince and George Nader and Psy Group founder Joel Zamel offering the Trump campaign Psy Group’s election influencing services, they reportedly told the Trump team that this offer was on behalf of both MBS and MBZ. Also recall how MBZ himself broke diplomatic protocol when he personally made a secret visit to Trump Tower in December of 2016 without informing the Obama administration of this visit. And then there’s the whole Darkmatter affair, where the UAE not only hired three former NSA hackers but deployed them in a global hacking campaign that included the targeted of US citizens and US-based computers. So the chairman of G42 is the brother of someone who not only meddled in the 2016 election but got away with it:
Well, at least the US won’t have to worry about too many more UAE-sponsored hacking campaigns. Or at least US corporations using G42’s AI in their boardrooms and given access to all of the details of how the company is operating won’t have to worry. They’re going to be handing the data over anyway. Not that such worries were there in the first place. Instead, all the worries are dedicated to the threat of China. A threat so great that the US had to turn to Saudi Arabia and the UAE to counter it. All as part of a global existential struggle to uphold the ideals of democracy and human rights, of course.