RUTHFULLY YOURS

https://www.wsj.com/articles/chinas-new-power-play-more-control-of-tech-companies-troves-of-data-11623470478?mod=hp_lead_pos7

Shortly after rising to power in late 2012, Xi Jinping made his first company visit in his new job as China’s Communist Party chief, to Tencent Holdings Ltd. There, he raised a topic that has become both an opportunity and a challenge for his rule: the vast troves of personal data being gathered by the country’s technology companies.

Mr. Xi complimented Tencent’s founder, Pony Ma, on the way the company was accumulating information from millions of users, and harnessing that data to drive innovation. He also suggested that data would be useful to Beijing.

“You have the most sufficient data, then you can make the most objective and accurate analysis,” he told Mr. Ma, according to state media accounts. “The suggestions to the government in this regard are very valuable.”

More than eight years later, those suggestions are becoming demands. The government is now calling on big tech companies like Tencent, online retailing giant Alibaba Group Holding Ltd. and TikTok owner ByteDance Ltd. to open up the data they collect from social media, e-commerce and other businesses, according to official documents and interviews with people involved in policy-making.

The complex new web of laws and regulations around sharing digital records is being driven by the huge growth in data held by China’s tech giants—and a belief that the government should be able to access it. The efforts are also part of Mr. Xi’s quest to rein in the increasingly powerful tech sector, which has pushed back on some of Beijing’s previous data-sharing efforts. The most recent law, passed Thursday, will make it harder for companies to resist such requests.

China’s leaders worry that the country’s tech giants could be using their extensive personal and corporate digital records to build alternative power centers in the one-party state. That concern led Mr. Xi to halt a planned initial public offering by Jack Ma’s financial-technology behemoth Ant Group Co. late last year.

Chinese government entities involved in the effort to regulate data, including the State Council and the Cyberspace Administration of China, didn’t respond to requests for comment.

Beijing is also intensifying the pressure on foreign firms operating in China to keep records gathered from local customers inside the country, so the government has more authority over the records. Western companies have long complained such “data-localization” requirements could stifle innovation in their global operations or enable Chinese authorities to steal their proprietary information.

https://www.gatestoneinstitute.org/17335/china-rare-earth-materials

“[I]t is as if the Middle East not only sat on most of the world’s oil but also, almost exclusively, refined it and then made products out of it,” wrote The Economist in 2019.

It is not that rare earth materials do not exist outside of China, although it sits on the largest quantity: approximately 30-40% of all known rare earth deposits. Rather, extracting the materials is a difficult and highly polluting process that China was willing to take on…. “making it practically impossible for competing companies outside China to get a foothold,” according to the Danish Institute for International Studies.

China’s de facto monopoly forms an acute problem: international reliance on them could hamper vital industries and national security at a time of maximum competition between China and the US.

In February, the Financial Times reported that China was looking into export curbs on rare earth materials that are key to the US defense industry, such as the F-35. “The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban.” — Chinese government adviser to the Financial Times.

On April 16, however, after elections that were de facto a referendum on the Chinese plans to mine not just for rare earth materials, but also for uranium, a new Greenland government came to power, which vowed that it “will do everything we can to stop the Kvanefjeld project.” Greenland’s new government may impact not only China’s hopes for mining there, but also those of other countries hoping to break free of the rare earth dependency on China.

The London-based Polar Research and Policy Initiative, recommended in March that the “Five Eyes” alliance, an intelligence-sharing group comprised of Australia, Britain, Canada, New Zealand and the United States, set its sights on Greenland’s rare earths.

Wind turbines, solar panels and electric vehicles all rely on rare earth materials and China has a head start that can be measured in decades, when it comes to producing the various products of which they form a crucial part: More than 60% of the world’s solar panels… are made in China….

There is also a human rights aspect to the issue: Polysilicon is produced in Xinjiang, where China is accused of using forced labor in the production chains, because — ironically — heat above 1,000 degrees Celsius is required to make the material, and Xinjiang has an abundance of cheap coal power.

“It will cost us more than the Chinese to produce solar cells,” said Tom Duesterberg, former Commerce Department assistant secretary under President George H.W. Bush. “We could agree to pay that price, but it will be more expensive and take a long time. If tensions get bad with China, they’ve proven in the past that they are willing to cut off supplies.”

China is also the world’s largest producer of electric vehicles. “China is projected to produce around 13 million battery electric vehicles… by 2023, more than any other nation in the world. China’s estimated production level is also anticipated to exceed the combined output of other large markets, including the United States…. Biden’s plan could therefore end up boosting China’s green energy industry even more.

“The Middle East has oil, China has rare earths”, Deng Xiaoping said in 1992. Nearly three decades later, the world is almost completely dependent on China for rare earth materials. They constitute key elements in large swaths of modern technology from consumer electronics to military equipment and green technology: Mobile phones, computers, fighter jets, guided missiles, solar panels, wind turbines and electric vehicles, among others. While demand is soaring, China is virtually their worldwide exclusive producer. “To extend Mr Deng’s comparison, it is as if the Middle East not only sat on most of the world’s oil but also, almost exclusively, refined it and then made products out of it,” wrote The Economist in 2019.