October 29, 2010

Chinese Internet Racketeering, Coming Soon to A Pipe Near You


Maybe for once I can get in on the China-bashing too. (But all China-bashing is really just misdirection from the crimes of our own corporate and government elites. China can’t do anything to our economy or security except in close collaboration with home-grown criminals.)
The NYT had a piece about a Chinese telecom equipment provider, Huawei Technologies, which is seeking to break into the US market through a proposed $3 billion wireless equipment deal with Sprint. US information and hardware providers have long had a close, lucrative collaboration going with the repressive Chinese regime. This deal would be a kind of cultural exchange. (We have the concept of the FIRE sector and the term: finance, insurance, real estate, as one closely synergized, malevolent complex. In light of the Google-Verizon Pact; Microsoft, Yahoo, Cisco and others partying in China; telecom immunity; and now deals like this, maybe we need a term for the surveillance/telecom/IT complex. “SITT”? “STIT”?)
The threat is that Chinese knowhow will be put to use by US telecom rackets to engage in transmission discrimination (gutting net neutrality) and content censorship. It might be able to do both of these by stealth. The real threat, in other words, is simply that the Chinese, with their more extensive practical experience, will help the US rackets do the things they already do and want to keep doing at an escalated level. 
Of course the Congressional objections, as always, aren’t to racketeering as such, but to phony “national security” concerns. None other than “cyberwar” fear-monger and architect of a bill to impose total government shutdown power over the Internet, Joe Lieberman, took the lead in sending a letter of protest to FCC chief Genachowski. (The piece, with inadvertent truth-telling, refers to Lieberman as “independent of Connecticut”. That’s supposed to refer to his nominal non-aligned status vis the parties. But the small “i” highlights how truly independent he is of any concern for the wishes or well-being of the people of Connecticut or of America. It highlights what illegitimate rogue tyrants all these officeholders are.)
Given Genachowski’s record of craven inertia ever since the Comcast court case, we could expect him to cave in upon receiving this letter. But wait:

Anticipating these hurdles, Huawei has hired a remarkable array of Washington lobbyists, lawyers, consultants and public relations firms to help it win business in the United States. It has also helped create Amerilink Telecom, an American distributor of Huawei products whose high-powered board includes former Representative Richard A. Gephardt, the former World Bank president James D. Wolfensohn and the one-time chief executive of Nortel Networks, William A. Owens.

(What happens when the easily movable object is squashed between two irresistible (for him) forces? Stay tuned.)
There’s the “American way”. It’s not “capitalism”, it’s never capitalism. It’s corporatism, racketeering. No one who has the muscle to do otherwise ever lets the idea and the product speak for itself. No one believes in “the market”. Instead, they always use their pre-existing wealth hoard in a might-makes-right manner to impose market presence by brute force. That’s the Rule of Rackets.
This is a charming bunch of businessmen:

The company has repeatedly been linked to the People’s Liberation Army of China. And over the last decade, Huawei has been sued in the United States by two of its major competitors, Cisco Systems and Motorola, over accusations that it stole software designs and infringed on patents.
Cisco settled its suit with Huawei soon after filing it. But in court documents filed in a lawsuit last summer, Motorola claimed that a group of Chinese-born Motorola engineers developed contacts with Huawei’s founder and then, between about 2003 and 2007, conspired to steal technology from Motorola by way of a dummy corporation they had set up outside the company.

It’s also funny how European corporatists are worried about Chinese government subsidies to Huawei. How’s that agricultural dumping going, Europeans?
Now THIS is funny:

“We’re an innovative company driven by the business needs of customers…”

How does that square with this again?

Anticipating these hurdles, Huawei has hired a remarkable array of Washington lobbyists, lawyers, consultants and public relations firms to help it win business in the United States. It has also helped create Amerilink Telecom, an American distributor of Huawei products whose high-powered board includes former Representative Richard A. Gephardt, the former World Bank president James D. Wolfensohn and the one-time chief executive of Nortel Networks, William A. Owens.

But the NYT then goes into stenographer mode, reproducing some boilerplate from the company’s flackery pamphlet. I especially like the adjectives and adverbs.

Industry analysts say Huawei, based in Shenzhen, has quickly matured into a fierce competitor in one of the most important and hotly contested technology arenas: sophisticated equipment that enhances the delivery of voice and video over the Internet and through wireless devices.

They say Huawei is gaining, in part, because of heavy spending on research and development. Chinese companies are generally weak in R.&D., but Huawei has 17 research centers around the world, including in Dallas, Moscow and Bangalore, India, and most recently in Santa Clara.

Indeed, of the company’s 96,000 employees, nearly half are engaged in research and development. In May, Huawei opened a stunning $340 million research center in Shanghai that it says will eventually house 8,000 engineers.

That’s reportage. Yup, John Burns, you’re right – the NYT doesn’t engage in “hagiography”.
They also perform their usual routine of attributing their own bias and lies to anonymous sources, in this case phantom “industry analysts.”
I’ll conclude by highlighting a good example of media corporatist bias. Here’s two excerpts from the piece:

Despite those successes, Huawei has struggled to break into the United States market, largely because of the security concerns and accusations of intellectual property theft and corporate espionage….

In 2008, worries about national security and China’s weak protection of intellectual property forced Huawei to drop its $2.2 billion joint bid with the American firm Bain Capital to acquire 3Com, the American networking company.

They just assume, probably unconsciously, that:
1. There’s such a thing as corporate IP;
2. That “protecting it”, i.e. using it as a weapon, should be a priority for government policy.
But the communications infrastructure was built by the public in the first place, and only continues to exist at all as a project of the society. So all intellectual property relating to it is already public property in principle. (The same is true in all other rackets.) All that happens when government privatizes things is that it illegitimately and unconstitutionally alienates public property. This is a crime, not a legitimate action. So it cannot create a private property right.
On the other hand, if we accept privatization’s premise, if we’re to disregard the social context for all industrial ideas, then we also have to disregard the corporate context. A corporation is, after all, just a different kind of “social structure”, right? So anyone who rejects the proposition that society creates all ideas can’t coherently turn around and say a corporation does create them. In that case we’d have to revert to the superman inventor theory, and we’d have to repose all patents in individuals only. So either way corporations can never legitimately own ideas.
(If someone wanted to say, “OK, I accept the social ownership concept, but the corporation is the proper kind of society”, the response is that society itself legitimately exists for the well-being of the people. Any society which fails in that practice is a failure, period. Corporations go even further in their failure, however, since they not only fail to bring weal to the people, but bring only woe; but even in principle they renounce any social responsibility. The institutional sociopathy of the corporation whose only responsibility is to the shareholders places it outside civilization and in the state of nature. It declares itself, in principle, the enemy of the people and of any human society.
So that disposes of any theoretical legitimacy of corporations as societies.
And of course we’re familiar with their record in practice – eroded wages, gutted amenities, destroyed jobs, stolen and destroyed public property, environmental devastation, socioeconomic devastation, global repression and mass murder, mass fear and hatred, a genocidal assault on democracy itself.
Yes, on the practical level as well the corporate “society” has to be called a failed society.)
But from reading the NYT or the MSM in general you’d think there wasn’t even a question here. That’s just one of the characteristic Status Quo Lies, most of them implicit, of the corporate media. That’s why not a single word they say can ever be trusted in itself, but has to be distilled through an anti-corporate filter.
The people need a completely new media. 


  1. This essay makes it sound as though Western companies have anything to learn from China about Internet censorship. Far from the case. Internet censorship presents no great technical difficulties even on a national level and is a routine part of the American workplace. The fact that filtering does not take occur on a larger scale in the U.S. is a historical artifact of the First Amendment (ruled out Congress’ attempts at censorship in 1996 and 1998) and the Internet’s commercial roots in adult content (private ISPs who filtered would be at competitive disadvantage). Now that industry consolidation has taken place, however, it will be much easier to institute censorship on the grounds of CP, piracy, terrorism, or whatever else elites decide to abjure. All that has to happen is for the big ISP monopolies to agree amongst themselves that certain things will be censored — it’s that easy. Net Neutrality is the only thing that stands in the way.

    And of course Western companies queued in droves to sell the Chinese the technology that operates the Great Firewall. For Cisco it was a cancel to sell more routers.

    American elites who oppose Huawei (because they’ve been bribed) will squawk about nationalism and the military, and American elites who favor Huawei (because they’ve been bribed) will squawk about the free market and competition. But the Huawei effort is obviously intended to facilitate Chinese corporate and government espionage. Lest someone accuse me of nationalism or China bashing let me say that the US is the O.G. heavyweight titleholder of telecom spying, that it’s perfectly obvious China will pursue its interests, and that squabbling amongst elites disgusts me no matter their nationality. In the West we’re more accustomed to seeing the iron fist cloaked in a glove — China’s muscle flexing always seems a bit gauche to us, but that’s the only difference.

    Comment by reslez — October 29, 2010 @ 10:42 pm

    • Sorry, I thought my little joke about China-bashing was obvious. But yes, I know all the stuff you’re saying, and I thought I touched on it. I said the Western companies have long been operating in China, that they collaborate in repression, and that the objections of American elites are trumped up.

      And we also agree that the full extent of the censorship doesn’t yet exist in the US, but that it’s technnlogically ready to go the moment they decide it’s politically viable. I’ve written plenty on this, e.g. in these pieces:



      And most recently in my piece on Odious Secrecy I mentioned how the kind of discrimination Comcast was caught engaging in can be done secretively.


      My point in this post was to give another example of the repressive corporate practice overseas “coming home”, as I used to extensively write about. I thought the example of a well-connected Chinese crony who runs a surveillance thuggery outfit getting contracts in the US itself with established telecom rackets might put the phenomenon in a more stark relief.

      And yes, since the China-bashing impulse is so rife, I figured maybe for once it might be worth trying to enlist it toward a worthy goal, in this case net neutrality enshrinement.

      (Chinese corporatism doesn’t seem any more gauche to me than all corporatism, but then I’ve never differentiated the US and Chinese elites under globalization. On the contrary I’ve consistently said they’re the same elite, whose respective branches are the respective enemies of the Chinese and American people, and each of these peoples has the need and responsibility to relinquish its elite and redeem control of its own country.)

      Comment by Russ — October 30, 2010 @ 3:37 am

      • My point in this post was to give another example of the repressive corporate practice overseas “coming home”

        Thanks for the clarification, I misunderstood. I agree this could be a useful frame. “Chinese technocrats come to America to impose Chinese censorship”; of course we know the attempt is homegrown.

        There was a commenter in the FDL interview with Rattner about the auto bailout who said the following:

        We’re not going to have an honest discussion of the ‘Bail-out’ of GM until the first pictures of Chevrolets built in China, arriving at our ports, start showing up in newspapers and on TV. (link)

        Domestic discourse is so poisoned that opposition to the auto bailout is expressed in terms of anti-union jealousy. The Wall Street gastropods who actually benefited are silently ignored as usual. Like Taibbi writes the peasant rabble are sicced on “deadbeats” and “unions”: “[A]ctual rich people can’t ever be the target.” It’s only when you introduce the element of xenophobia that we can actually begin to have these kinds of discussions.

        Comment by reslez — November 1, 2010 @ 6:59 am

      • Thanks reslez, that’s a good example.

        I despise all the misdirection, but especially that which gets us fighting among ourselves: debtor-bashing, union-bashing.

        China-bashing is also in principle misdirection away from the real criminals, but I wanted to try out the idea of saying in effect: “Look at how Chinese autocrats will get control over our American internet. And it’s the American government and corporations who want to help them do it!”

        The reason your comments went into moderation was because they have more than one link. That’s the recommended antispam default setting, which I left in place. It seems to help. I approve those as soon as I see them.

        Comment by Russ — November 1, 2010 @ 8:27 am

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