Playing With Fire: China Fuels Middle East Arms Race

James M. Dorsey

Unfettered Chinese support for Saudi Arabia’s so far peaceful nuclear energy program risks fueling a burgeoning Middle East arms race amid concerns that the 2015 Iranian nuclear agreement is all but dead, Turkey suggesting it has the right to develop nuclear weapons, and Israel certain to not remain idle if nuclear proliferation becomes the name of the game.

Aided and abetted by China, the Middle East risks barreling towards a nuclear and ballistic missiles arms race.

A disclosure in the last week that Saudi Arabia has constructed, with the help of China, a facility for extracting uranium yellowcake from uranium is the latest in a series of Chinese moves that advance the kingdom’s drive to acquire nuclear technology.

Saudi Arabia has denied building a yellowcake facility but insisted that mining its uranium reserves was part of its economic diversification strategy. The Saudi energy ministry said it was cooperating with China in unspecified aspects of uranium exploration.

The Saudi nuclear drive is likely to stiffen Iranian resolve, fuel Turkish ambitions, and heighten Israeli worries that its regional military superiority could be jeopardized.

For the past year, Iran has progressively walked away from commitments it made as part of a 2015 international agreement that curbed the Islamic Republic’s nuclear ambitions after the Trump administration withdrew from the deal in 2018 and re-imposed harsh economic sanctions.

Saudi Arabia, despite denials, like Israel, fears that the United States will renegotiate the deal in ways that would fall short of providing iron clad guarantees that Iran will not  develop nuclear weapons or enhanced ballistic missile capability or curb its support for militant proxies in Lebanon, Iraq, and Yemen.

The fear is irrespective of whether Donald J. Trump or presumptive Democratic presidential candidate Joe Biden wins the November election in the United States.

Saudi Crown Prince Mohammed bin Salman warned in 2018 that “Saudi Arabia does not want to acquire any nuclear bomb, but without a doubt, if Iran developed a nuclear bomb, we will follow suit as soon as possible.”

Faced with the prospect of a Saudi-Iranian nuclear arms race, Turkish President Recep Tayyip Erdogan last year insisted that it was unacceptable that nuclear-armed countries were preventing his nation from developing nuclear weapons.

Ironically, Chinese support for a peaceful Saudi nuclear program that inevitably would provide the kingdom with building blocks that could contribute to the development of nuclear weapons risks driving a wedge between Saudi Arabia and Israel.

The two countries have, in the absence of formal diplomatic relations, forged close informal ties based on their shared animosity towards Iran and the kingdom’s effort to capitalize in Washington and elsewhere on being seen to engage with Israel as well as Jewish groups.

“For Israel, a Saudi nuclear military capability is a red line that it will be willing to enforce,” said Sigurd Neubauer, author of a just published book on Israeli-Gulf relations.

Saudi Arabia’s nuclear focus serves various goals: diversification of its economy, reduction of its dependence on fossil fuels, countering a potential future Iranian nuclear capability, and enhancing efforts to ensure that Saudi Arabia rather than Iran emerges as the Middle East’s long-term, dominant power.

Cooperation on nuclear energy was one of 14 agreements worth US$65 billion signed during Saudi King Salman’s 2017 visit to China.

The nuclear-related deals involved a feasibility study for the construction of high-temperature gas-cooled (HTGR) nuclear power plants in Saudi Arabia as well as cooperation in intellectual property and the development of a domestic industrial supply chain for HTGRs to be built in the kingdom.

The agreement was one of a number of nuclear-related understandings concluded with China, including a uranium-related memorandum of understanding with China National Nuclear Corp., an agreement with China Nuclear Engineering Group Corp., and a 2012 accord to cooperate on peaceful uses of nuclear energy.

Saudi Arabia has signed similar agreements with France, the United States, Pakistan, Russia, South Korea, and Argentina.

To advance its pre-pandemic goal of constructing 16 nuclear reactors by 2030 at a cost of US$100 billion, Saudi Arabia established the King Abdullah Atomic and Renewable Energy City devoted to research and application of nuclear technology.

Concern about Saudi intentions was fueled in the last 18 months by Saudi hesitancy to agree to US safeguards viewed as the nuclear industry’s gold standard that would require it among other things to sign the Additional Protocol of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). Saudi Arabia has not ruled out signing the protocol.

The unease was further heightened by evidence that the kingdom was building a ballistic missile production site in a remote desert region. Satellite pictures suggested that the facility resembled a similar site of nuclear power in Pakistan.

Saudi cooperation with Pakistan has long been a source of speculation about the kingdom’s ambition and the implications of its involvement in Pakistan’s nuclear program.

Retired Pakistani Major General Feroz Hassan Khan, the author of a semi-official history of Pakistan’s nuclear program, said in an interview that he had no doubt about the kingdom’s interest.

“Saudi Arabia provided generous financial support to Pakistan that enabled the nuclear program to continue, especially when the country was under sanctions,” Mr. Khan said, referring to US sanctions imposed in 1998 because of Pakistan’s development of a nuclear weapons capability.

The Washington-based Institute for Science and International Security (ISIS) suggested in a report published three years ago that “Pakistan may assist [Saudi Arabia] in . . . important ways, such as supplying sensitive equipment, materials, and know-how used in enrichment or reprocessing.”

The report, referring to the Iran nuclear agreement, warned that “there is little reason to doubt that Saudi Arabia will more actively seek nuclear weapons capabilities, motivated by its concerns . . . if the deal fails.”

Rather than embarking on a covert program, the report predicted that Saudi Arabia would initially focus on building up its civilian nuclear infrastructure as well as a robust nuclear engineering and scientific workforce.

This would allow the kingdom to take command of all aspects of the nuclear fuel cycle at some point in the future. Saudi Arabia has in recent years significantly expanded graduate programs at its five nuclear research centers.

Saudi officials have repeatedly insisted that the kingdom is developing nuclear capabilities for peaceful purposes such as medicine, electricity generation, and desalination of sea water.

“The current situation suggests that Saudi Arabia now has both a high disincentive to pursue nuclear weapons in the short term and a high motivation to pursue them over the long term,” the Institute said.

The report’s analysis suggests that China, by failing to impose restraints on its nuclear dealings similar to those maintained by the United States, may be contributing to a regional downward spiral that would be detrimental to Chinese interests in the longer term.

Google’s Open Letter: Fighting Australia’s News Media Bargaining Code

Binoy Kampmark

Tech giants tend to cast thin veils over threats regarding government regulations.  They are also particularly concerned by those more public spirited ones, the sort supposedly made for the broader interest.  Google has given us an example of this in an open letter published on August 17 to all Australians – the generosity that comes with transparency – that does not shy away from a degree of menace.  Penned by the company’s Australasian managing director Mel Silva, it starts with a note of warning on accessing the Google website, a white exclamation mark framed by a pyramid of yellow. “The way Aussies search every day on Google is at risk from new Government regulation.”

Google’s terse and syntax-challenged response was directed at the draft News Media Bargaining Code developed by the Australian Competition and Consumer Commission and released on July 31.  Digital platforms have made all the running of late, extinguishing media outlets in an exercise of withering effectiveness, while subjugating others.  Along the way, a myth has been created: the idea of small news producers and users, treasured and promoted.

The code seeks to grant news media businesses the power to individually or collectively bargain with Google and Facebook over revenue for news that is included on their platforms.  As the ACCC explains, the imbalance between digital platforms and conventional media outlets has arisen because of the “less favourable terms for the inclusion of news on digital platform services”.  The ACCC would have responsibility to administer and police the code, while the Australian Communications and Media Authority would be the gatekeeper over which media news businesses would qualify to use the scheme.

To qualify, such outlets must, for instance, “predominantly produce ‘core news’, and publish this online”.  They must “adhere to appropriate professional editorial standards” and “maintain editorial independence from the subjects of their news coverage.”  A local ingredient is also added: that they “operate primarily in Australia for the purpose of serving Australian audiences,” with annual revenue exceeding A$150,000 for the most recent financial year or three out of five most recent financial years.

Google regards the Code as nothing less than a satanic imposition on the free flow of information by a state authority. But more to the point, it is a challenge to the way it has sought to cultivate its own licensing arrangements with publishers, known as the Publisher Curated News initiative.  Brad Bender (where to they find them?), Vice President of Product Management News, discussed the plan in a company statement on June 25, 2020.  “The program will help participating publishers monetize their content through an enhanced storytelling experience that lets people go deeper into more complex stories, stay informed and be exposed to a world of different issues and interests.”

Bender, in gibbering like this, shows little understanding of his material.  The quality of news should be shorn of storytelling of an enhanced nature.  Dull facts do not necessarily make for poor reading.  But we do live in the age of Donald Trump and Silicon Valley oligopolies, where, like hormone pumped meat, the taste often matters more than the health of the content.  And complexity is not exactly high on that list of preferences.

The PCN initiative has already yielded various deals with outlets that have done their bit in improving the Australian media stable: The Saturday Paper’s publisher Schwartz Media, Crikey publisher Private Media and InDaily publisher Solstice Media.  Unsurprisingly, Google is using them as paragons of how the negotiated model, free of regulator meddling, works.

According to Silva, permitting the Australian authorities to go ahead with the measure would dramatically worsen Google Search and YouTube and “could lead to your data being handed over to big news businesses, and would put the free service to use at risk in Australia.”  This is markedly amusing, given that Google and that other behemoth, Facebook, is very much into the business handing over the details of consumers to third parties, a practice often excused by complex consent agreements.

The company contends that hefty news media businesses will be unduly advantaged.  All others who have a website, small business or YouTube channel will suffer.  The big entities would “artificially inflate their ranking over everybody else, even when someone else provides a better result.”  Silva suggests that Google is more than generous to news sites as it is, paying them millions of dollars and sending “them billions of free clicks every year.”  To give news site providers a leg-up via government regulation would “put our free services at risk.”

The head of YouTube APAC, Gautam Anand, has also used talk that sits oddly with the Silicon Valley monsters: fairness.  The Code, he argues, would “create an uneven playing field when it comes to who makes money on YouTube.”  The ones to benefit from it will be those “big news businesses who can demand large amounts of money over and above what they earn on the platform” thereby leaving less for “you, our creators, and the programmes to help you develop your audience in Australia and around the globe.”

This has been dismissed as disinformation and piffle by the ACCC.  In a statement released on the same day of Google’s letter it attempted to put to bed claims that the company would find itself having to charge for gratis services.  “Google will not be required to charge Australians for the use of its free services such as Google Search and YouTube, unless it chooses to do so.”  Nor will Google “be required to share any additional user data with Australian news businesses unless it chooses to do so.”

The ACCC has its ardent supporters.  The appropriately named Bridget Fair of Free TV Australia called Google’s letter the product of “a monopolist flexing its considerable muscle” in its attempt to retain “excessive profits.”  The note was “straight out of the monopoly 101 playbook trying to mislead and frighten Australians to protect their position as the gateway to the internet.”  She defends the proposed ACCC code as “ensuring a free and vibrant Australian news media sector into the future.”  Any data Google agreed to supply “would have to be under existing Australian privacy laws.”

While there is much to encourage in terms of having a vibrant media sector of boisterous and inquiring voices, anyone vaguely familiar with the Australian news scape will be aware that it tends towards the yawningly monochrome.  Google’s disingenuous point is that such big leaguers are bound to run off with the revenue loot ahead of smaller news providers, making the situation worse.

The ACCC is accepting public submissions regarding the Code till August 28.  Google has already made its view clear: a shot of threatening fury that government regulations of this sort will unduly hinder the “experience” it provides its users and benefit big fish news outlets.  But the ACCC, this small, relatively miniscule entity in the global regulatory landscape, is spoiling for a fight.

Our Race Against the Clock to Affirm Water as a Human Right

Maude Barlow

Ten years ago today, the United Nations General Assembly adopted a resolution affirming that water and sanitation are fundamental human rights “essential for the full enjoyment of the right to life.” Two months later, the UN Human Rights Council clarified that governments have the primary responsibility to deliver these new rights but called upon member states and international organizations to assist countries of the global South who might struggle to fulfill their new obligations.

This was an historic development in the long search for water justice. Water was not included in the 1948 Universal Declaration of Human Rights as it seemed to be a limitless resource available to all. But a perfect storm of global water depletion and destruction, growing poverty and inequality, and rising water rates for residents – often the result of the privatization of water services – led to a full blown human rights crisis by the turn of the 21st century. With billions living without access to clean water and sanitation, the call for water justice was born.

The fight to recognize the human right to water was surprisingly fierce and bitter. It was opposed by the private water utilities and the bottled water industry, the World Bank that was promoting water privatization in developing countries, the World Water Council, and many wealthy countries of the North, including Great Britain, Canada and the United States.

Food & Water Watch played an important role in achieving this pivotal mandate. Wenonah Hauter (Executive Director)  and I attended many conferences around the world promoting the human right to water and stood up to the “Lords of Water,” as I called them. I was in the balcony of the General Assembly on July 28, 2010, when it overwhelmingly adopted this historic resolution and I remember feeling that, in defining water and sanitation as an issue of justice rather than charity, the human family had just taken an evolutionary step forward.

There have been real and tangible results. Over four dozen countries have either amended their constitutions or introduced new laws to guarantee the human right to water. Communities in the global South have used the UN resolution to fight foreign companies destroying their water sources and gone to court to gain access to local water supplies.

The right to water has been used to fight water shut offs around the world and is a pivotal argument that Food & Water Watch has made to stop water shutoffs in U.S. cities during the time of COVID-19 and beyond. The human right to water is also the foundation of the WATER Act, which would ensure that every person has access to safe clean water in the United States.

To fight water privatization, many towns and cities have become “Blue Communities,” a Canadian initiative that is spreading around the world. Almost 25 million people now live in official Blue Communities that have pledged to protect water as a human right, a public trust and public service and to phase out bottled water on municipal premises and at municipal events. These cities include Montreal, Vancouver, Los Angeles, Paris, Berlin and Brussels.

However, we are in a race against time as industries like fracking and bottled water divert, pollute, over-extract and mismanage the world’s dwindling water supplies. Massive drought is threatening lives and livelihoods around the world. The UN warns that two-thirds of the global population could be living in water-stressed countries in just five short years. Here in the U.S., drought is on the rise, as are water rates.At least 2 million Americans do not have access to running water and basic sanitation.

The COVID-19 pandemic has thrown a huge spotlight on the water crisis as half the population of the world has no place to wash their hands with soap and warm water. As a result, some of the aid money coming from northern countries and the UN will provide clean water and sanitation to those most in peril. Perhaps this will lead to real change. Last year, almost 2 million children died from dirty water and poor sanitation. This is a travesty.

Let us vow to fulfill the pledge taken by the nations of the world ten years ago. Water is a human right.

Donald Trump Is Losing His Tech War with Xi Jinping

Dilip Hiro

For the Trump administration’s senior officials, it’s been open season on bashing China. If you need an example, think of the president’s blame game about “the invisible Chinese virus” as it spreads wildly across the U.S.

When it comes to China, in fact, the ever more virulent criticism never seems to stop.

Between the end of June and the end of July, four members of his cabinet vied with each other in spewing anti-Chinese rhetoric. That particular spate of China bashing started when FBI Director Christopher Wray described Chinese President Xi Jinping as the successor to Soviet dictator Joseph Stalin. It was capped by Secretary of State Mike Pompeo’s clarion call to U.S. allies to note the “bankrupt” Marxist-Leninist ideology of China’s leader and the urge to “global hegemony” that goes with it, insisting that they would have to choose “between freedom and tyranny.” (Forget which country on this planet actually claims global hegemony as its right.)

At the same time, the Pentagon deployed its aircraft carriers and other weaponry ever more threateningly in the South China Sea and elsewhere in the Pacific. The question is: What lies behind this upsurge in Trump administration China baiting? A likely answer can be found in the president’s blunt statement in a July interview with Chris Wallace of Fox News that “I’m not a good loser. I don’t like to lose.”

The reality is that, under Donald Trump, the United States is indeed losing to China in two important spheres. As the FBI’s Wray put it, “In economic and technical terms [China] is already a peer competitor of the United States… in a very different kind of [globalized] world.” In other words, China is rising and the U.S. is falling. Don’t just blame Trump and his cronies for that, however, as this moment has been a long time coming.

Facts speak for themselves. Nearly unscathed by the 2008-2009 global recession, China displaced Japan as the world’s second largest economy in August 2010. In 2012, with $3.87 trillion worth of imports and exports, it overtook the U.S. total of $3.82 trillion, elbowing it out of a position it had held for 60 years as the number one cross-border trading nation worldwide. By the end of 2014, China’s gross domestic product, as measured by purchasing power parity, was $17.6 trillion, slightly exceeding the $17.4 trillion of the United States, which had been the globe’s largest economy since 1872.

In May 2015, the Chinese government released a Made in China 2025 plan aimed at rapidly developing 10 high-tech industries, including electric cars, next-generation information technology, telecommunications, advanced robotics, and artificial intelligence. Other major sectors covered in the plan included agricultural technology, aerospace engineering, the development of new synthetic materials, the emerging field of biomedicine, and high-speed rail infrastructure. The plan was aimed at achieving 70% self-sufficiency in high-tech industries and a dominant position in such global markets by 2049, a century after the founding of the People’s Republic of China 

Semiconductors are crucial to all electronic products and, in 2014, the government’s national integrated circuit industry development guidelines set a target: China was to become a global leader in semiconductors by 2030. In 2018, the local chip industry moved up from basic silicon packing and testing to higher value chip design and manufacturing. The following year, the U.S. Semiconductor Industry Association noted that, while America led the world with nearly half of global market share, China was the main threat to its position because of huge state investments in commercial manufacturing and scientific research.

By then, the U.S. had already fallen behind China in just such scientific and technological research. A study by Nanjing University’s Qingnan Xie and Harvard University’s Richard Freeman noted that between 2000 and 2016, China’s share of global publications in the physical sciences, engineering, and math quadrupled, exceeding that of the U.S.

In 2019, for the first time since figures for patents were compiled in 1978, the U.S. failed to file for the largest number of them. According to the World Intellectual Property Organization, China filed applications for 58,990 patents and the United States 57,840. In addition, for the third year in a row, the Chinese high-tech corporation Huawei Technologies Company, with 4,144 patents, was well ahead of U.S.-based Qualcomm (2,127). Among educational institutions, the University of California maintained its top rank with 470 published applications, but Tsinghua University ranked second with 265. Of the top five universities in the world, three were Chinese.

The Neck-and-Neck Race in Consumer Electronics

By 2019, the leaders in consumer technology in America included Google, Apple, Amazon, and Microsoft; in China, the leaders were Alibaba (founded by Jack Ma), Tencent (Tengxun in Chinese), Xiaomi, and Baidu. All had been launched by private citizens. Among the US companies, Microsoft was established in 1975, Apple in 1976, Amazon in 1994, and Google in September 1998. The earliest Chinese tech giant, Tencent, was established two months after Google, followed by Alibaba in 1999, Baidu in 2000, and Xiaomi, a hardware producer, in 2010. When China first entered cyberspace in 1994, its government left intact its policy of controlling information through censorship by the Ministry of Public Security.

In 1996, the country established a high-tech industrial development zone in Shenzhen, just across the Pearl River from Hong Kong, the first of what would be a number of special economic zones. From 2002 on, they would begin attracting Western multinational corporations keen to take advantage of their tax-free provisions and low-wage skilled workers. By 2008, such foreign companies accounted for 85% of China’s high-tech exports.

Shaken by an official 2005 report that found serious flaws in the country’s innovation system, the government issued a policy paper the following year listing 20 mega-projects in nanotechnology, high-end generic microchips, aircraft, biotechnology, and new drugs. It then focused on a bottom-up approach to innovation, involving small start-ups, venture capital, and cooperation between industry and universities, a strategy that would take a few years to yield positive results.

In January 2000, less than 2% of Chinese used the Internet. To cater to that market, Robin Li and Eric Xu set up Baidu in Beijing as a Chinese search engine. By 2009, in its competition with Google China, a subsidiary of Google operating under government censorship, Baidu garnered twice the market share of its American rival as Internet penetration leapt to 29%.

In the aftermath of the 2008-2009 global financial meltdown, significant numbers of Chinese engineers and entrepreneurs returned from Silicon Valley to play an important role in the mushrooming of high-tech firms in a vast Chinese market increasingly walled off from U.S. and other Western corporations because of their unwillingness to operate under government censorship.

Soon after Xi Jinping became president in March 2013, his government launched a campaign to promote “mass entrepreneurship and mass innovation” using state-backed venture capital. That was when Tencent came up with its super app WeChat, a multi-purpose platform for socializing, playing games, paying bills, booking train tickets, and so on.

Jack Ma’s e-commerce behemoth Alibaba went public on the New York Stock Exchange in September 2014, raising a record $25 billion with its initial public offering. By the end of the decade, Baidu had diversified into the field of artificial intelligence, while expanding its multiple Internet-related services and products. As the search engine of choice for 90% of Chinese Internet users, more than 700 million people, the company became the fifth most visited website in cyberspace, its mobile users exceeding 1.1 billion.

Xiaomi Corporation would release its first smartphone in August 2011. By 2014, it had forged ahead of its Chinese rivals in the domestic market and developed its own mobile phone chip capabilities. In 2019, it sold 125 million mobile phones, ranking fourth globally. By the middle of 2019, China had 206 privately held start-ups valued at more than $1 billion, besting the U.S. with 203.

Among the country’s many successful entrepreneurs, the one who particularly stood out was Jack Ma, born Ma Yun in 1964. Though he failed to get a job at a newly opened Kentucky Fried Chicken outlet in his home city of Hangzhou, he did finally gain entry to a local college after his third attempt, buying his first computer at the age of 31. In 1999, he founded Alibaba with a group of friends. It would become one of the most valuable tech companies in the world. On his 55th birthday, he was the second richest man in China with a net worth of $42.1 billion.

Born in the same year as Ma, his American counterpart, Jeff Bezos, gained a degree in electrical engineering and computer science from Princeton University. He would found Amazon.com in 1994 to sell books online, before entering e-commerce and other fields. Amazon Web Services, a cloud computing company, would become the globe’s largest. In 2007, Amazon released a handheld reading device called the Kindle. Three years later, it ventured into making its own television shows and movies. In 2014, it launched Amazon Echo, a smart speaker with a voice assistant named Alexa that let its owner instantly play music, control a Smart home, get information, news, weather, and more. With a net worth of $145.4 billion in 2019, Bezos became the richest person on the planet.

Deploying an artificial intelligence inference chip to power features on its e-commerce sites, Alibaba categorized a billion product images uploaded by vendors to its e-commerce platform daily and prepared them for search and personalized recommendations to its customer base of 500 million. By allowing outside vendors to use its platform for a fee, Amazon increased its items for sale to 350 million — with 197 million people accessing Amazon.com each month.

China also led the world in mobile payments with America in sixth place. In 2019, such transactions in China amounted to $80.5 trillion. Because of the Covid-19 pandemic, the authorities encouraged customers to use mobile payment, online payment, and barcode payment to avoid the risk of infection. The projected total for mobile payments: $111.1 trillion. The corresponding figures for the United States at $130 billion look puny by comparison.

In August 2012, the founder of the Beijing-based ByteDance, 29-year-old Zhang Yiming, broke new ground in aggregating news for its users. His product, Toutiao (Today’s Headlines) tracked users’ behavior across thousands of sites to form an opinion of what would interest them most, and then recommended stories.

By 2016, it had already acquired 78 million users, 90% of them under 30.

In September 2016, ByteDance launched a short-video app in China called Douyin that gained 100 million users within a year. It would soon enter a few Asian markets as TikTok. In November 2017, for $1 billion, ByteDance would purchase Musical.ly, a Shanghai-based Chinese social network app for video creation, messaging, and live broadcasting, and set up an office in California.

Zhang merged it into TikTok in August 2018 to give his company a larger footprint in the U.S. and then spent nearly $1 billion to promote TikTok as the platform for sharing short-dance, lip-sync, comedy, and talent videos. It has been downloaded by 165 million Americans and driven the Trump administration to distraction. A Generation Z craze, in April 2020 it surpassed two billion downloads globally, eclipsing U.S. tech giants. That led President Trump (no loser he!) and his top officials to attack it and he would sign executive orders attempting to ban both TikTok and WeChat from operating in the U.S. or being used by Americans (unless sold to a U.S. tech giant). Stay tuned.

Huawei’s Octane-Powered Rise

But the biggest Chinese winner in consumer electronics and telecommunications has been Shenzhen-based Huawei Technologies Company, the country’s first global multinational. It has become a pivot point in the geopolitical battle between Beijing and Washington.

Huawei (in Chinese, it means “splendid achievement”) makes phones and the routers that facilitate communications around the world. Established in 1987, its current workforce of 194,000 operates in 170 countries. In 2019, its annual turn-over was $122.5 billion. In 2012, it outstripped its nearest rival, the 136-year-old Ericsson Telephone Corporation of Sweden, to become the world’s largest supplier of telecommunications equipment with 28% of market share globally. In 2019, it forged ahead of Apple to become the second largest phone maker after Samsung.

Several factors have contributed to Huawei’s stratospheric rise: its business model, the personality and decision-making mode of its founder Ren Zhengfei, state policies on high-tech industry, and the firm’s exclusive ownership by its employees.

Born in 1944 in Guizhou Province, Ren Zhengfei went to Chongqing University and then joined a military research institute during Mao Zedong’s chaotic Cultural Revolution (1966-1976). He was demobilized in 1983 when China cut back on its engineering corps. But the army’s slogan, “fight and survive,” stayed with him. He moved to the city of Shenzhen and worked in the country’s infant electronics sector for four years, saving enough to co-found what would become the tech giant Huawei. He focused on research and development, adapting technologies from Western firms, while his new company received small orders from the military and later substantial R&D (research and development) grants from the state to develop GSM (Global System for Mobile Communication) phones and other products. Over the years, the company produced telecommunications infrastructure and commercial products for third generation (3G) and fourth generation (4G) smartphones.

As China’s high-tech industry surged, Huawei’s fortunes rose. In 2010, it hired IBM and Accenture PLC to design the means of managing networks for telecom providers. In 2011, the company hired the Boston Consulting Group to advise it on foreign acquisitions and investments.

Like many successful American entrepreneurs, Ren has given top priority to the customer and, in the absence of the usual near-term pressure to raise income and profits, his management team has invested $15 to 20 billion annually in research and development work. That helps explain how Huawei became one of the globe’s five companies in the fifth generation (5G) smartphone business, topping the list by shipping out 6.9 million phones in 2019 and capturing 36.9% of the market. On the eve of the release of 5G phones, Ren revealed that Huawei had a staggering 2,570 5G patents.

So it was unsurprising that in the global race for 5G, Huawei was the first to roll out commercial products in February 2019. One hundred times faster than its 4G predecessors, 5G tops out at 10 gigabits per second and future 5G networks are expected to link a huge array of devices from cars to washing machines to door bells.

Huawei’s exponential success has increasingly alarmed a Trump administration edging ever closer to conflict with China. Last month, Secretary of State Pompeo described Huawei as “an arm of the Chinese Communist Party’s surveillance state that censors political dissidents and enables mass internment camps in Xinjiang.”

In May 2019, the U.S. Commerce Department banned American firms from supplying components and software to Huawei on national security grounds. A year later, it imposed a ban on Huawei buying microchips from American companies or using U.S.-designed software. The White House also launched a global campaign against the installation of the company’s 5G systems in allied nations, with mixed success.

Ren continued to deny such charges and to oppose Washington’s moves, which have so far failed to slow his company’s commercial advance. Its revenue for the first half of 2020, $65 billion, was up by 13.1% over the previous year.

From tariffs on Chinese products and that recent TikTok ban to slurs about the “kung flu” as the Covid-19 pandemic swept America, President Trump and his team have been expressing their mounting frustration over China and ramping up attacks on an inexorably rising power on the global stage. Whether they know it or not, the American century is over, which doesn’t mean that nothing can be done to improve the U.S. position in the years to come.

Setting aside Washington’s belief in the inherent superiority of America, a future administration could stop hurling insults or trying to ban enviably successful Chinese tech firms and instead emulate the Chinese example by formulating and implementing a well-planned, long-term high-tech strategy. But as the Covid-19 pandemic has made abundantly clear, the very idea of planning is not a concept available to the “very stable genius” presently in the White House.

Johnson government forced to retreat on A-level exam results

Thomas Scripps

UK Prime Minister Boris Johnson’s government executed a dramatic U-turn yesterday, retreating on its social class-based downgrading of A-level results.

The retreat comes less than three weeks before the Conservatives intend to force schools to reopen, and just over a month before universities resume.

With final year exams cancelled by the COVID-19 pandemic, the government had teachers submit estimated grades for their students, most of which were then centrally moderated by an algorithm. Almost a quarter of Scottish results and around 40 percent of English, Welsh, and Northern Irish were originally lowered by at least a grade—over 3 percent in England were docked by two grades or more.

Yesterday afternoon, however, Education Secretary Gavin Williamson announced with an apology that A-levels results for students in England will now be based solely on teacher-awarded grades, as will GCSE results, awarded later this week. The same retreat had earlier been carried out by the Scottish, Northern Irish, and Welsh governments. Last-ditch attempts by the Tories to offer a few unfeasible token concessions—including allowing students to use some mock exam grades in an unspecified process—fell to pieces.

The precise impact of the government’s reversal will take time to come out—some students are already reporting that university courses they have now qualified for have since become full.

The exam results fiasco is a case study in the fundamentally opposed interests of millions of working people, and the capitalist class and all its political representatives.

For the initial assigning of grades, the defining influence on the government’s results “moderation” algorithm was social class. In Scotland, the most deprived areas saw the proportion of students receiving A-C grades reduced by 15.2 percent, while the percentage for the most affluent areas was only 6.9 percent. The same pattern played out in England. More than 10 percent of students in the lowest third for socioeconomic status had a teacher-awarded C grade lowered, compared to 8 percent in the highest third.

This obscured more fine-grained inequalities. Research by social mobility charity UpReach found that subjects taken overwhelmingly by private school students were significantly more highly graded as a result of this process than those taken by the working-class majority. The number of students receiving an A* in Latin increased 10.4 percent, and the number receiving an A*/A in Classics by 10.4 percent.

Private schools increased their number of A and A* grades by 4.7 percent this year, more than double the 2 percent registered by comprehensive secondary schools, and almost 16 times the 0.3 percent increase for Sixth Form and Further Education colleges, catering mainly for working class youth. The Sixth Form Colleges Association (SFCA) looked at 65,000 exam entries across 41 subjects in its member colleges and found that grades were 20 percent lower than past performances.

Overall, the gap between pupils receiving free school meals—an indicator of severe economic hardship—and those who do not widened significantly, alongside the gap between those with disabilities and special educational needs and those without.

There could be few clearer demonstrations of the class-riven nature of contemporary society. The government desperately needed to get results issued to proceed with its criminal business-as-usual reopening of schools, universities, and the economy. But even when their overriding goal was to move towards reopening as smoothly as possible, to give as little opportunity as possible for the working class to intervene, and amid endless propaganda of how “we are all in this together”, government ministers and officials could not abandon their vicious class bias for a second.

Their actions unleashed a wave of opposition, setting working class children, families, and schools directly against the government. Protests of young people which began in Scotland spread to England, with its much larger population and student body, greatly expanding the scope of the crisis. The catastrophe was set to be compounded later this week as millions of GCSE results are released for around 700,000 16-year-old pupils. Whereas 82 percent of A-level results were affected by the government’s algorithm, the Observer reported that the figure would have been 97 percent for GCSEs.

It is significant that after the liberal media and pseudo-left groups have spent months working to channel multiracial protests against police violence into racialist politics, young protestors took to the streets with signs that read, “Classism at its finest,” “It’s blatant classism,” “It’s the classism for me,” “Judge my school work, not my income,” “No Etonians were harmed in the making of this algorithm,” and “Working class does not equal stupid.”

Under these circumstances, the ruling class political machine went into action to prevent this sentiment triggering opposition to the reopening of schools and universities—without having brought the coronavirus pandemic under control.

By Monday, several leading Tory MPs were calling for a delay and a “rethink” in issuing GCSE grades. However, by far the most significant piece of advice was delivered by Labour Party leader, Sir Keir Starmer. Within days of criticising the Tory government’s handling of A-level results, Starmer took to the pages of the right-wing Daily Mail to back Johnson’s “reopen schools” policy.

In the same breath as he invoked the results crisis, which exposed the government’s “improving students’ life chances” justification for reopening as a rotten fraud, Starmer exhorted the elitist, social Darwinist Tory leader, “Let me send a very clear message to the Prime Minister: I don’t just want all children back at school next month, I expect them back at school. No ifs, no buts, no equivocation.”

Echoing Johnson’s own words, Starmer continued, “The Prime Minister wrote in this paper last weekend that we have a moral duty to reopen schools. I agree. What he does not seem to understand is that he has a moral responsibility to make sure it happens.”

For Starmer, the only real problem with the A-level results crisis was that it threatened to undermine the pro-business back-to-work agenda that Labour shares with the Tories.

Not a single fundamental issue confronting society can be left in the hands of the ruling class and its political parties. Class society produces catastrophe after catastrophe, destroying thousands of lives and the future of millions at every new turn. The rational and humane solution to social problems—most urgently of all, the global COVID-19 pandemic—demands the independent intervention of the working class, organised in rank-and-file committees in every school, workplace, and neighbourhood in the fight for socialism.

Australia’s rising COVID-19 death toll: A ruling class crime

Oscar Grenfell

Victoria, which remains the epicentre of Australia’s coronavirus surge, recorded the highest single tally of COVID-19 deaths yesterday, with 25 fatalities announced. Another 17 lives were lost over the past 24 hours. Medical experts have warned that the death toll will rise further over the coming days, as the virus continues to circulate throughout aged care facilities, especially in the state capital, Melbourne.

An intensive care unit bed in a Melbourne hospital last month. (Credit: ABC ”7:30” program (Screenshot))

Yesterday, the Age revealed that the rate of fatalities per infections in Victoria has more than tripled over the past month. In the middle of July, as the current wave of cases escalated, 0.6 percent of the 5,165 Victorian residents who had tested positive for COVID-19 succumbed to the virus. Now, with over 17,000 infections recorded, that figure stands at almost two percent and is continuing to rise.

With this morning’s announcement, a total of 351 Victorians have died as a result of the coronavirus, a dramatic increase from fewer than 20 fatalities at the beginning of July.

The rising toll indicates the human tragedy resulting from the surge of coronavirus infections, which is being downplayed and covered-up by the corporate media.

News publications and current affairs programs, which routinely engage in ambulance-chasing “journalism” and feature exploitative and sensationalistic reports of everything from car accidents to individual acts of violence, have remained remarkably silent about the tragic consequences of the COVID-19 deaths for thousands of people.

The muted response serves definite political ends. It dovetails with a tendency in the press to present various government “failures” in isolation and as the result of “bureaucratic bungles,” poor decisions on the part of individual officials and policy “errors.”

This has been the manner in which the Victorian decision to place low-paid private security guards on the frontlines of hotel quarantines, the disembarkation of hundreds of infected passengers from the Ruby Princess in New South Wales and the catastrophe in aged-care homes have been presented.

The narrative is aimed at obscuring the fact that hundreds of people have died over the past month as the direct and foreseeable outcome of the program of the entire ruling elite, including state and federal governments and the corporate media, for a premature “reopening of the economy” dictated solely by corporate profit interests.

In Victoria, the state Labor government of Daniel Andrews, in line with the national policy overseen by Prime Minister Scott Morrison, began lifting limited COVID-19 restrictions in May. When Victorian infections started to increase in June, nothing was done to contain the spread. Throughout most of July and into early August, the Andrews government rejected calls from medical experts for workplace and school closures, because of the impact these would have on the bottom line of the largest businesses.

The current “stage four” restrictions, involving the shutdown of most Melbourne retail outlets, schools and some places of employment, were only introduced when the state’s hospital system was on the precipice of being overwhelmed.

Over the past days, further evidence has emerged of state and federal government culpability for the catastrophe.

The COVID-19 deaths of a man in his 20s over the weekend, and the earlier fatality of another in his 30s, have further underscored the fraudulent character of claims that young people are largely immune from the worst consequences of the virus. Some 60 percent of deaths, however, have been in aged-care homes.

The widespread fatalities are the consequences of the corporatisation of the sector over the past four decades by federal Labor and Liberal-National governments. All of the major outbreaks have occurred in privately-owned facilities, staffed by low-paid casual workers and operated solely to extract maximum profits from elderly residents and their families.

It is now clear, though, that the longstanding government responsibility has been supplemented by conscious decisions over the past weeks to allow elderly residents infected with COVID-19 to die.

The Australian Broadcasting Corporation’s “Four Corners” program has revealed that urgent appeals from the management of Melbourne’s Epping Gardens Aged Care home to federal and state authorities for assistance in maintaining safe staffing levels were rebuffed.

On July 24, management allegedly sent a note to state and federal aged-care authorities, informing them that “Staff is a key issue. We have exhausted all avenues accessing agency and our own people.” Staffing levels, set normally at 110, were now “50 down” as a result of infections among workers. Nothing, however, was done to remedy the situation, compounded by delays of up to six days in receiving test results. At least 162 residents and staff have now been infected.

The damning new information has emerged as the Australian reported this morning that only $20 million of a $43 million federal government package, which was supposed to address the staffing crisis, has been spent.

This follows articles last week, revealing that the Victorian Department of Health and Human Services had been blocking the admission of COVID-19 aged care patients to public hospitals, despite their extreme vulnerability. Instead of receiving expert treatment, many have been heavily sedated, in what amounts to palliative care.

Taken together, the staffing crisis and the denial of hospital admissions have created a catastrophe.

Courageous nurses and staff have begun to blow the whistle. Yesterday, the Guardian cited a letter from a staff member at a Melbourne home to Leading Aged Services Australia, the national peak body representing all providers of age services. It declared: “There are NO staff available—we are begging for help with regard to staffing, and no one wants to place themselves in the ‘hot zone.’ Therefore, it is all up to our depleted staff to help, feed, bathe, medicate and attend to residents who are basically dying.”

On Friday, the same publication presented shocking footage of a 95-year-old at Kalyna Care, a private residential home in Melbourne’s north-west. It showed ants crawling from an open wound on the leg of the woman. She passed away days after the video was taken.

The article revealed appalling conditions at the facility: “Care staff brought into the home this week have told Guardian Australia that some residents went without food or water for 18 hours. Faeces were found on the floor.”

Deaths in aged care will continue, with more than 2,000 active infections across the sector. A further 87 cases have been confirmed in residential centres for the disabled.

Victorian Premier Andrews has confirmed that the “state of disaster” he declared early this month will be extended for an additional four weeks. The announcement underlines the fact that the discussion within ruling circles is when it will be politically possible for them to lift the restrictions to permit further business reopenings. Any strategy aimed at eliminating community transmission of COVID-19 remains off the table, because of the “cost” that it would entail.

The corporate media, which has functioned as the chief promoter of the ruling elite’s “back-to-work” campaign, has highlighted the apparent stabilisation of new infections in Victoria, which fell to 222 today, the lowest figure in a month. As has happened previously, they are beginning to agitate for the overturning of the limited restrictions that are responsible for the reduction, thereby creating the conditions for further surges.

There are some 3,500 Victorian infections of unknown origin, moreover, meaning that transmission is likely occurring far more widely than is recorded in the official statistics. Testing rates have fallen sharply. In the week to July 14, more than 191,000 tests were conducted. The figure for the past week is just 138,000, a reduction of more than 25 percent.

Meanwhile, new clusters and hotspots are being reported in the neighbouring state of New South Wales. Transmission remains low, but experts continue to warn of the dangers of a major outbreak.

Sydney bus drivers have threatened to take 48-hour strike action, beginning next Monday, as they demand mandated social distancing and mask wearing on their services. Their stand is the latest indication of growing opposition within the working class to the criminally-negligent official response to the pandemic.

United Arab Emirates-Israel agreement cements US-led alliance against Iran

Jean Shaoul

US President Donald Trump announced Thursday that the United Arab Emirates (UAE) is to “normalise” relations with Israel in a deal to be known as the “Abraham Accords.”

The agreement makes the UAE the first Gulf state and the third Arab nation to reach such a deal, after Egypt in 1979 and Jordan in 1994. The UAE, along with most other Arab nations, has until now not recognised Israel and has no formal economic relations with it.

Lauded by Trump as a “historic peace agreement between our two GREAT friends,” the agreement is another sordid betrayal of the Palestinians by an Arab regime. It is a death certificate for the Arab Initiative, launched by Saudi Arabia in 2002 and endorsed by the Arab League, offering a normalization of relations with Israel in exchange for a full withdrawal from the occupied territories, a “just settlement” of the Palestinian refugee problem based on UN Resolution 194, and the establishment of a Palestinian state with East Jerusalem as its capital.

The Abraham Accords supposedly makes recognition of Israel dependent upon Israeli Prime Minister Benjamin Netanyahu halting plans to annex swathes of Palestinian land in the West Bank occupied since the June 1967 war. The aim is to side-line the fate of the Palestinians, which for decades defined the Arab states’ attitude towards the Zionist state, in order to cement an alliance between the Sunni petro-monarchies and Israel against Iran.

The UAE claimed publicly that its decision was a way of encouraging peace efforts and taking Israel’s planned annexation of parts of the West Bank off the table, arguing that relations with Israel should be tempered with “realism.” Netanyahu rejected this, insisting that he had only agreed to “delay” the annexation, with the plan remaining “on the table.”

The agreement is in reality bound up with the Trump administration’s “maximum pressure” sanctions regime targeting Iran, tantamount to a state of war, aimed at overturning its government and installing a client regime that would reinforce US hegemony over the resource-rich Middle East and strengthen Washington’s position against China.

The announcement is the result of years of backroom talks on issues ranging from trade and security to intelligence-sharing that included Israel’s opening of an office in 2015 in Abu Dhabi. Its timing meets the needs of all three parties. It comes as Israel’s economy is unraveling in the wake of the COVID-19 pandemic and as Netanyahu’s trial proceedings on charges of bribery, corruption, and breach of trust in three separate cases move to the evidence hearings set for January. It gives the beleaguered Netanyahu, who heads a fractious coalition and faces increasing opposition from his support base among far-right forces, the chance to pose as Israel’s master statesman.

It likewise enables Trump, who is trailing in the polls against Joe Biden, the Democrats presidential candidate, to claim a diplomatic “triumph” after his administration’s draft Security Council resolution extending a UN ban on arms sales to Iran, due to expire in October, was defeated, paving the way for Iran to purchase arms from other major powers.

The UAE is seeking Washington’s approval for its request to purchase the US F-35 advanced combat aircraft and armed unmanned aerial vehicles, reversing its previous reliance on French fighter jets and Chinese drones. It is also seeking US support for major concessions from Qatar—in exchange for lifting the UAE’s, Saudi Arabia’s and Bahrain’s three-year long blockade of Qatari airspace and land crossings.

The UAE-Israel agreement comes in the wake of Netanyahu’s proposal to annex the settlements and the Jordan Valley, the most fertile part of the West Bank, equal to 30 percent its territory and encircling what remains of the Palestinian areas, making even a mini-statelet unviable.

Trump had originally indicated his consent to Netanyahu’s annexation plans, which play well with his evangelical Christian base as November’s presidential elections approach. But facing opposition within his administration, including from his son-in-law and advisor Jared Kushner, who is close to Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman, he pulled back.

Bin Salman, along with the European and regional powers, had opposed the move for exposing the mirage of a Palestinian state. Allowing the annexation to go ahead would have created a furor, jeopardising the plans to build an anti-Iran alliance that included Israel.

Kushner has indicated that other states would follow the UAE, with Oman and Bahrain, which hosts the US Sixth fleet, in line to do so, and even suggested that Saudi Arabia would follow suit in the not too distant future. Riyadh has so far remained silent on the agreement but has steadily built covert links with Israel in recent years.

Israeli Intelligence Minister Eli Cohen, in an interview with Army Radio, said he anticipated “additional agreements, both with more Gulf countries and with Muslim countries in Africa,” a reference to a likely peace deal with Sudan. The UAE, along with Saudi Arabia, was instrumental in instigating last year’s pre-emptive military coup in Sudan that ousted long-time ruler Omar al-Bashir, who was close to Qatar and Turkey.

While the details of what “normalisation” of relations means in practice are unclear, the UAE has opened a direct phone line to Israel and unblocked Israeli news websites. This follows a deal between an Abu Dhabi-based firm to conduct research and development related to COVID-19 and two Israeli firms. Other deals including travel, trade, embassies and security cooperation are expected in the coming weeks.

The European powers, Egypt and Jordan, have all welcomed Israel’s pullback from annexing the settlements and the Jordan Valley.

Mahmoud Abbas, the President of the Palestinian Authority (PA) that controls the West Bank, said in a statement, “The Palestinian leadership rejects and denounces the UAE, Israeli and US trilateral, surprising announcement,” which was a “betrayal of Jerusalem, Al-Aqsa and the Palestinian cause.”

The Islamist Hamas movement, which controls Gaza, likewise rejected the US-brokered deal, saying it did not serve the cause of the Palestinians.

Turkey’s foreign ministry called the UAE’s behaviour hypocritical and said that the Palestinian people and the PA were right to react strongly against the agreement. President Recep Tayyip Erdogan said that Turkey might suspend diplomatic relations with the UAE, already strained over Libya and the Horn of Africa.

Iran’s President Hassan Rouhani denounced the deal as a “betrayal of the Palestinian cause” and warned that by lining up with Israel the Emirates now faced “a dangerous future.” He said, “[The UAE] better be mindful. They have committed a huge mistake, a treacherous act. We hope they will realize this and abandon this wrong path.”

In a further indication of the political course of the Arab states, on Sunday, the Gulf Cooperation Council, representing Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, issued a statement condemning Rouhani’s “threats” against Abu Dhabi. Secretary-General Nayef Falah M. Al-Hajraf warned, “Iran must adhere to the UN Charter and refrain from interfering in the domestic affairs of other nations,” while the UAE gave Iran’s charge d’affaires in Abu Dhabi a “strongly worded memo” over the president’s remarks.

The sordid deal between Israel and the UAE deepens the treacherous role of the Arab bourgeoisie, which has now formally buried its own “two state” solution, and confirms that the nationalist agenda championed by all sections of the Palestinian bourgeoisie provides no way forward for the decades-long struggle of the Palestinian workers and oppressed masses.

A resolution of the terrible situation of increasing poverty and imminent war confronting Palestinian and Israeli workers, as well as workers throughout the Middle East, cannot be left in the hands of the region’s ruling classes and the imperialist powers. Workers must unite with their class brothers and sisters across the region and internationally in a struggle to put an end to capitalism and war and re-organise society on a socialist basis.