China, US open trade talks as Beijing says exports rebound
By JOE McDONALD
AP Business Writer
Thursday, February 14
BEIJING (AP) — U.S. and Chinese negotiators opened talks Thursday on a sprawling trade dispute as Beijing reported its January exports rebounded despite President Donald Trump’s tariff hikes.
Trump said earlier the talks could help decide whether he escalates the fight over China’s technology ambitions by going ahead with more penalty duties March 2 on $200 billion of Chinese goods.
The battle between the two biggest economies has fueled fears it will drag on weakening global growth. China’s economy grew at its slowest pace in three-decades last year, adding to pressure on communist leaders to reach a settlement.
Both sides have expressed optimism but released no details. U.S. Trade Representative Robert Lighthizer and his Chinese counterpart, Vice Premier Liu He, shook hands at the start of the meeting at a government guesthouse but said nothing to reporters.
The U.S. delegation also includes Treasury Secretary Steven Mnuchin and David Malpass, a Treasury undersecretary who is Trump’s nominee for World Bank president.
On Tuesday, Trump said that while he is not inclined to extend the deadline, he might let it “slide for a little while” if talks go well. Earlier, the White House called March 2 a “hard deadline.”
Economists and business groups say the planned two days of negotiations allow too little time to reach a final settlement, but Beijing hopes to persuade Trump enough progress is being made to forestall the new tariff hikes.
There was no indication whether negotiators are making progress on the thorniest dispute: U.S. pressure on Beijing to scale back plans for government-led creation of Chinese global leaders in robotics and other technologies.
A Ministry of Commerce spokesman, Gao Feng, told reporters at a regular weekly briefing that he had no details on the status of the talks.
Meanwhile, customs data released Thursday showed Chinese exports in January rose 9.1 percent from a year earlier, recovering from December’s 3.5 percent decline.
Exports to the United States sank 2.4 percent, squeezed by Trump’s tariff hikes on billions of dollars of Chinese products. Imports of American goods plunged 41.2 percent, reflecting retaliatory Chinese duties and orders to importers to find other suppliers.
The fight reflects growing frustration among Beijing’s trading partners over official plans to subsidize and promote fledgling Chinese technology industries. Washington, Europe, Japan and other governments say those violate Beijing’s market-opening obligations. Some American officials worry they might erode U.S. industrial leadership.
Trump raised tariffs in July over complaints Beijing steals or pressures companies to hand over technology. The dispute includes cyber-spying traced to China, the country’s multibillion-dollar trade surplus with the United States and support for state industry.
Beijing has offered to narrow its trade surplus by purchasing more American soybeans, natural gas and other exports. But the government has resisted pressure to cut back development plans it sees as a path to prosperity and global influence.
A deal on changes in Chinese industrial and market regulations might be possible in three months, said Yu Miaojie, a Peking University economist. But he said Beijing likely will insist it is entitled as a developing country to retain protection for its industries.
“It is hard to reach an agreement within a short time on structural reforms if the United States demands too much,” Yu said. He said his own view is that China “already has offered too much,” given its relatively low state of development.
“It is equivalent to the U.S. demanding China define itself as a very advanced and perfect economy, which is not true,” he said. “China is a developing country and its reforms need to take place step by step.”
While the January trade data were stronger than expected, Julian Evans-Pritchard of Capital Economics said global demand for Chinese exports is weakening.
“The broad trend in shipments still appears to be pointing down,” he said in a report.
Chinese officials reject complaints that foreign companies are required to hand over technology. But business groups and foreign governments point to rules they say compel companies to disclose trade secrets or share technology with state-owned partners.
Chinese officials also balk at U.S. pressure to accept an enforcement mechanism to monitor whether Beijing carries out its promises.
Beijing has tried to deflect pressure by emphasizing China’s growth as an export market. It has announced changes over the past year to open finance and other fields, including allowing full foreign ownership in its auto industry for the first time.
AP researcher Yu Bing contributed.
Swedish foreign ministry investigates ambassador to China
By YANAN WANG
Thursday, February 14
BEIJING (AP) — Sweden’s ambassador to China is under internal investigation, the embassy said Thursday, after she set up meetings between the daughter of a detained Swedish publisher and two businessmen that appeared to have gone awry.
Ambassador Anna Lindstedt returned to Stockholm on Wednesday to meet with officials from the foreign affairs ministry, the Swedish Embassy in Beijing said by phone. Lindstedt is not under criminal investigation.
The embassy declined to give further details, but the ministry confirmed that Lindstedt’s departure was related to meetings she arranged between Angela Gui, the daughter of detained Swedish book publisher Gui Minhai, and the two businessmen.
“The ambassador has acted incorrectly in the sense that the foreign ministry had no knowledge that the meetings took place,” spokeswoman Catherine Johnsson told The Associated Press. She said the internal investigation was aimed at getting “an overall picture of what has happened,” and that “as far as the action of the ambassador is concerned, we must wait for what the inquiry will come up with.”
Angela Gui published an account Wednesday in which she described the meetings as “strange.” She wrote on Medium, an online publishing platform, that the businessmen threatened her after initially offering to help secure her father’s release from prison in China.
Gui Minhai, a naturalized Swedish citizen, co-owned a Hong Kong store which sold gossipy books about Chinese leaders.
Gui, 53, went missing in 2015 from his seaside home in Thailand, turning up months later on Chinese television saying he had turned himself in for an alleged 2003 drunk driving accident in which a female college student was killed.
Several of Gui’s colleagues from his Hong Kong publishing house also went missing in quick succession, sparking suspicions that mainland security forces were seeking to snuff out independent voices in the semi-autonomous city.
Gui was released in October after completing a two-year sentence, but committed to remaining in Ningbo, where he was born, until an investigation was completed into charges of running a business illegally.
In January 2018, he was taken off a train by Chinese police while in the presence of two Swedish diplomats with whom he was traveling to Beijing. Sweden said its officials were taking him to seek medical treatment. China said Gui was being investigated for leaking state secrets.
Gui later told pro-Beijing media outlets that he never wished to leave China and that Sweden was using his case to “create trouble” for China’s government. The statement from Gui, who spoke in a detention facility flanked by police, was immediately denounced by rights activists as coerced.
Gui’s daughter, Angela, is a Ph.D. candidate at the University of Cambridge who has become a self-described “accidental activist” for her father. She wrote in her Wednesday post that the role has landed her in a “fair number of bizarre situations,” but few of the same magnitude as her encounter with Lindstedt and the businessmen.
She said Lindstedt convinced her to fly to Stockholm on Jan. 24 to explore a “new approach” to her father’s case. During a two-day meeting with the businessmen and Lindstedt, she said, the businessmen told her they could arrange a Chinese visa and job for her and that they had connections within China’s ruling Communist Party.
They then told her they had already started to negotiate over her father’s case without her prior knowledge, according to Angela Gui. One businessman said it was possible that Gui Minhai would be released, but only if Angela Gui promised to stop publicizing her father’s case for a month.
Gui wrote that one of the men told her, “You have to trust me, or you will never see your father again.”
She later learned that no one at the Swedish foreign ministry had been informed of the meeting.
“I’m not going to be quiet in exchange for a visa and an arbitrary promise that my father ‘might’ be released,” she wrote. “Threats, verbal abuse, bribes, or flattery won’t change that.”
In Sweden, Jonas Sjostedt, a lawmaker for the pro-government Left Party, accused the ambassador of “trying to silence the daughter of a Swede who is a political prisoner in China.”
“Someone who is representing Sweden has instead been running errands for a foreign power,” he said Wednesday on Swedish broadcaster SVT TV.
Sweden announced last month — prior to the incident described by Gui — that Lindstedt was to take on a new role as ambassador to the U.N. 2030 Agenda for Sustainable Development. She was slated to assume the position in March.
Associated Press writer Jan M. Olsen in Copenhagen, Denmark, contributed to this report.
Germany barely avoids recession with zero growth
By DAVID McHUGH
AP Business Writer
Thursday, February 14
FRANKFURT, Germany (AP) — Germany recorded zero growth in the fourth quarter, only narrowly avoiding a recession and adding to downbeat signs piling up about the 19-country eurozone economy.
The lackluster figure released Thursday was lower than the 0.1 percent expected by market analysts and followed a 0.2 percent fall in output during the preceding third quarter.
Business spending on machinery and equipment as well as construction supported the economy in the fourth quarter and prevented Germany from suffering two straight quarters of negative growth, one definition of a recession. Exports and imports increased at nearly the same rate, meaning no positive contribution to fourth-quarter growth statistics.
Slowing global trade amid U.S.-China trade tensions has been holding back Germany’s export-focused economy. Growth last year was also hit by troubles in the auto industry when automakers had difficulty getting new cars certified under new emissions tests, and by low water on the Rhine River that interrupted commerce. The slowdown led the European Commission last week to cut its growth forecast for Germany for this year to 1.1 percent from 1.8 percent.
The weak second half followed stronger performance in the first six months, leaving growth for all of 2018 at 1.5 percent. For the fourth quarter, the year-on-year growth rate slumped to 0.6 percent, tracing a steady decline from 1.2 percent year-on-year in the third quarter and 2.0 percent in the second.
Germany’s sluggishness has held back the economy across the countries that use the euro. The eurozone grew by just 0.2 percent in the fourth quarter, the same as in the previous three-month period.
Recent economic indicators have been weak, leading to speculation that the European Central Bank may hold off raising interest rates longer than originally expected. The bank has said it will hold rates at record lows at least until “through the summer” of this year. Analysts say it may push back that earliest possible date in its policy statement if signs of weakness continue.
Andrew Kenningham, chief Europe economist at Capital Economics, said the fourth-quarter weakness “bodes ill for economic growth this year too.” He said the fourth-quarter weakness could no longer be attributed to the auto sector problems since vehicle production edged up in the last three months of the year. He forecast 1.0 percent growth this year but added “there are significant downside risks to this forecast.”
Economist Carsten Brzeski at ING Germany said that “the German economy escaped a technical recession with the smallest margin possible. The black eye just got blacker.” He said, however, that many economic fundamentals remain strong. A low unemployment rate of 3.3 percent is helping support domestic demand.
“The upside from today’s data is that it can hardly get worse,” Brzeski said. “Economic fundamentals remain solid and from here on, chances of a gradual rebound are still much higher than chances of yet another disappointment.”
How far should organizations be able to go to defend against cyberattacks?
February 15, 2019
Author: Scott Shackelford, Associate Professor of Business Law and Ethics; Director, Ostrom Workshop Program on Cybersecurity and Internet Governance; Cybersecurity Program Chair, IU-Bloomington, Indiana University
Disclosure statement: Scott Shackelford does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Partners: Indiana University provides funding as a member of The Conversation US.
The deluge of cyberattacks sweeping across the world has governments and companies thinking about new ways to protect their digital systems, and the corporate and state secrets stored within. For a long time, cybersecurity experts have erected firewalls to keep out unwanted traffic and set up decoy targets on their networks to distract hackers who do get in. They have also scoured the internet for hints about what cybercriminals might be up to next to better protect themselves and their clients.
Now, though, many leaders and officials are starting to think about stepping up their defensive activities, by taking more active measures. An extreme option within this field of active defense is sometimes called “hacking back” into an adversary’s systems to get clues about what they’re doing, shut down the attack or even delete data or otherwise damage an attacker’s computers.
I have been researching the benefits and drawbacks of various active defense options with Danuvasin Charoen of the Thai National Institute of Development Administration and Kalea Miao, an undergraduate Cox scholar at the Indiana University Kelley School of Business. We have found a surprising number and variety of firms – and countries – exploring various ways to be more proactive in their cybersecurity practices, often with little fanfare.
On the surface, it might seem like the proverb is right: “The best defense is a good offense.” The damage from cyberattacks can be enormous: In May 2017, a single incident, the WannaCry cyber attack, affected hundreds of thousands of systems around the world and caused more than US$4 billion in lost productivity and data recovery costs. One month later, another attack, called NotPetya, cost global shipping giant Maersk $300 million and reduced the company to relying on the Facebook-owned WhatsApp messaging system for official corporate communications.
Faced with this scale of loss, some companies want to step up their defenses. Firms with sophisticated technology systems know what’s needed to protect their customers, networks and valuable trade secrets. They also likely have employees with the skills to track down hackers and penetrate the attackers’ own systems. But the ethics and implications of justifying a cyberattack as defensive get very complicated very quickly.
It’s often unclear, for example, exactly who is behind an attack – uncertainty that can last for days, months or even years. So who should the hack-back target? What if a privately owned U.S. company believed that it was under attack from a firm owned by the Chinese government? If it hacked back, would that be an act of war between the countries? What should happen to repair corporate and international relations if the company was wrong and its attacker was somewhere else? Companies shouldn’t be empowered to start global cyber conflicts that could have dire consequences, but online and offline.
Of course, it’s also important to think about what might happen if other countries allow their companies to hack back against U.S. government or corporate efforts. More U.S. firms could fall victim to cyberattacks as a result, and might find little legal recourse.
Engaging with the law
At the moment, hacking back is illegal, in the U.S. and in many nations around the world. In the U.S., the Computer Fraud and Abuse Act makes it a crime to access another computer without authorization. Every member of the G-7, including the U.S., as well as Thailand and Australia, has banned hacking back. In 2018, more than 50 countries – but not the U.S. – signed an agreement that private firms based in their nations are not allowed to hack back.
However, supporters of active defensive tactics are pushing their message hard. The Republican Party’s 2016 presidential platform promised to ensure “users have a self-defense right to deal with hackers as they see fit.” In March 2018, the Georgia state legislature passed a bill to permit “active defense measures that are designed to prevent or detect unauthorized computer access.” Two months later, then-Gov. Nathan Deal vetoed it, at the urging of technology firms concerned about its “national security implications and other potential ramifications.”
Had it become law, Georgia’s bill would still likely have run afoul of federal law. However, lawmakers in Washington have also proposed letting companies engage in certain types of active defense. In 2017, U.S. Rep. Tom Graves, a Georgia Republican, proposed the Active Cyber Defense Certainty Act, which would let companies engage in certain active defense measures, including conducting surveillance on prospective attackers, provided that the firm informed the FBI first and that the action did not threaten “public health or safety.” The bill died and has not yet been reintroduced; it’s not likely to get far in the new Democratic House.
Active defense remains illegal in the U.S. and much of the world. But the bans are not being enforced at home or abroad.
Not every country has banned hacking back. Singapore, for example, has been permitting local firms to engage in active defense measures in an effort to prevent, detect, or counter specific threats to its critical infrastructure, including the financial industry. Other nations, such as France, do not wish to see the private sector out front, but are still keen to keep active defense as an option for governments.
Electronic voting machines may be even more vulnerable if global cyber conflicts escalate. AP Photo/John Minchillo
The more countries allow active defense, the more likely everyone – in the U.S. and around the world – is to become a cyberattack victim. Instead of deterring attacks, aggressive active defense increases the possibility of the lights going out, or American voting machines returning inaccurate results.
Organizations can and should be encouraged to take passive defense measures, like gathering intelligence on potential attackers and reporting intrusions. But in my view they should be discouraged – if not prevented – from acting aggressively, because of the risk of destabilizing corporate and international relations. If the quest for cyber peace degenerates into a tit-for-tat battle of digital vigilantism, global insecurity will be greater, not less.
Public school strikes revive clash with Teach for America
By SALLY HO
Thursday, February 14
Young teachers are caught up in a possible strike in Oakland, California, that’s giving new life to the long-simmering tension between traditional public schools and the education reform program Teach for America.
The push by career educators for better pay and conditions in the classroom is clashing with the influx of temporary teachers who lack formal training but promise new energy and innovation. While supporters tout Teach for America for infusing new ideas in struggling U.S. schools, veteran teachers say their experience is indispensable.
The tensions came to a head this week when hundreds of Teach for America alumni criticized the educator placement program for suggesting corps members who strike in Oakland would lose thousands of dollars promised to them at the end of their two-year service commitment.
Teach for America said there was a misunderstanding on the guidance it provided about the strike that could start next week. It said it gave the same message to other members facing recent strikes, including in Los Angeles.
“There’s a lot of skepticism about Teach for America and their role in supporting public education as opposed to dismantling public education and being disruptive,” said veteran Oakland teacher Payton Carter, who is a 1999 Teach for America alumnus. “A lot of people have said TFA explicitly is a union-busting organization, and this proves that.”
Teach for America launched nearly three decades ago as a radical teacher recruitment and preparation model, placing high-achieving college graduates without formal education training into short-term jobs in low-income communities. The nonprofit vets its recruits, but they’re employed by school districts, and many join unions.
The program has been credited with alleviating teacher shortages in difficult-to-hire schools and building a dedicated force of education policy and school leaders.
But the nonprofit has faced skepticism, both for its design and its perceived alliance with charter schools — another reform effort competing with the public school model for funding.
Teach for America has billed itself as a leadership program, rather than just a teaching organization. It says 34 percent of its alumni remain teachers, with a significant number working in charter schools.
Critics say its existence contradicts the teaching establishment, which values experience and longevity. Bob Bruno, a professor of labor and employment at University of Illinois who closely follows teacher issues, said skipping the typical developmental steps shows that Teach for America isn’t dedicated to the profession.
“It was designed, frankly, in a way that immediately made it hostile to teachers,” Bruno said. “Teachers who’ve gone through teacher colleges, who did apprentice programs and student teaching programs, the TFA model thumbs its nose at all of that.”
Many education reform leaders are Teach for America disciples who have championed school choice to transform major public school systems, from Louisiana Superintendent John White to former District of Columbia Public Schools Chancellor Michelle Rhee. She has been a leader in pushing to end teacher tenure, arguing that unions protect ineffective educators that plague perpetually failing schools.
But the program also has produced a number of “traditionalist” career teachers who have become its chief critics as well as union leaders. They have led some of the teacher uprisings that started in West Virginia last year.
The Los Angeles union leader who led a six-day teacher strike last month for pay raises and more support staff in the nation’s second-largest school district was part of Teach for America’s inaugural class in 1990.
The program’s guidance against picketing didn’t deter Teach for America members, and the union would defend teachers facing retaliation, United Teachers Los Angeles President Alex Caputo-Pearl said.
The Denver union this week is leading the first teacher strike in 25 years, but more than 40 percent of educators have showed up for work. The district has a reform-friendly reputation and robust Teach for America contingent.
Also this week, more than 450 alumni urged Teach for America to stop “pressuring” its 58 corps members in the Oakland Unified School District with threats of losing their ties to AmeriCorps, which offers award money at the end of their service and bans striking. District administrators have been silent on the issue.
Teach for America spokesman Jack Hardy said it was considering supplementing the AmeriCorps award at stake but said there was a misunderstanding on the guidance it sent about the rules of the federal service program.
AmeriCorps said in such circumstances, it’s up to Teach for America to decide how to handle picket lines. Hardy said the nonprofit doesn’t take a position on union activity.
“We cannot hinder or prohibit them from participating in a strike,” he said. “And what we’re trying to do is find the best options for them. We recognize that it’s a personal decision for them.”
Will Corvin, who is in the second year of his Teach for America stint, said he and all the corps members at his Oakland high school see the value of the union as an avenue for change given that the district has a teacher turnover crisis. The history teacher said crossing the picket line would feel like betraying his colleagues and the profession he hopes to stay in.
Corvin said he considered traditional teacher training as a student at Northwestern University but saw Teach for America as an easier way to get into the classroom. He laments how the program underprepared him for teaching and the dynamics of a school system. Now, he’s also upset with its leadership for forcing a decision on him that could ultimately undermine the profession itself.
“I’m frustrated they say they are politically neutral, when not participating in the strike is a political decision,” Corvin said.
Ho reported from Seattle. Follow her on Twitter: https://twitter.com/_SallyHo .