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Tag: EASIA

  • US Navy plane flies through Taiwan Strait, China carries out more drills

    US Navy plane flies through Taiwan Strait, China carries out more drills

    TAIPEI, July 13 (Reuters) – Chinese fighter jets monitored a U.S. Navy patrol plane that flew through the sensitive Taiwan Strait on Thursday, as China carried out a third day of military exercises to the south of the island Beijing views as China’s sovereign territory.

    China has been incensed by U.S. military missions through the narrow strait, most frequently of warships but occasionally of aircraft, saying China “has sovereignty, sovereign rights and jurisdiction” over the waterway. Taiwan and the United States dispute that, saying it is an international waterway.
    The U.S. Navy’s 7th fleet said the P-8A Poseidon maritime patrol and reconnaissance plane, which is also used for anti-submarine missions, flew through the strait in international airspace.

    “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations,” it said in a statement.

    China’s military described the flight as “public hype”, adding it sent fighters to monitor and warn the U.S. plane.

    “Troops in the theatre are always on high alert and will resolutely defend national sovereignty and security as well as regional peace and stability,” the People’s Liberation Army’s Eastern Theatre Command said in a statement on its WeChat account.

    Taiwan’s defence ministry said Chinese warplanes and warships carried out a third day of exercises to the island’s south on Thursday, and that it detected 26 aircraft including advanced Chinese J-16 and Su-30 fighters flying out to sea and “responding to” the U.S. Poseidon.

    The ministry said the U.S. aircraft had stuck to the strait’s median line and flew in a southerly direction on Thursday morning, and that Taiwan’s forces kept watch.

    The median line normally serves as an unofficial barrier between Taiwan and China.

    However, since last August when China held large-scale war games around Taiwan, Chinese military aircraft have been frequently crossing the line, though generally quite briefly.

    China’s latest drills near Taiwan have involved fighters, bombers and warships, with the aircraft mainly flying to the island’s south and out into the Pacific through the Bashi Channel that separates Taiwan from the Philippines, according to maps provided by Taiwan’s defence ministry.

    China has not commented on the exercises, which have taken place less than two weeks before Taiwan stages its own annual drills and as NATO alliance leaders said China challenges its interests, security and values with its “ambitions and coercive policies”.

    Reporting by Ben Blanchard; Additional reporting by Beijing newsroom; Editing by Alex Richardson and Emma Rumney

    Our Standards: The Thomson Reuters Trust Principles.

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  • Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

    Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

    July 13 (Reuters) – The sale of struggling Silicon Valley startup zGlue’s patents in 2021 was unremarkable except for one detail: The technology it owned, designed to cut the time and cost for making chips, showed up 13 months later in the patent portfolio of Chipuller, a startup in China’s southern tech hub Shenzhen.

    Chipuller purchased what is referred to as chiplet technology, a cost efficient way to package groups of small semiconductors to form one powerful brain capable of powering everything from data centers to gadgets at home.

    The previously unreported technology transfer coincides with a push for chiplet technology in China that started about two years ago, according to a Reuters analysis of hundreds of patents in the U.S. and China and dozens of Chinese government procurement documents, research papers and grants, local and central government policy documents and interviews with Chinese chip executives.

    Industry experts say chiplet technology has become even more important to China since the U.S. barred it from accessing advanced machines and materials needed to make today’s most cutting edge chips, and now largely underpins the country’s plans for self-reliance in semiconductor manufacturing.

    “U.S.-China competition is on the same starting line,” Chipuller chairman Yang Meng said about chiplet technology in an interview with Reuters. “In other (chip technologies) there is a sizeable gap between China and the United States, Japan, South Korea, Taiwan.”

    Barely mentioned before 2021, Chinese authorities have highlighted chiplets more frequently in recent years, according to a Reuters review. At least 20 policy documents from local to central governments referred to it as part of a broader strategy to increase China’s capabilities in “key and cutting-edge technologies”.

    “Chiplets have a very special meaning for China given the restrictions on wafer fabrication equipment,” said Charles Shi, a chip analyst for brokerage Needham. “They can still develop 3D stacking or other chiplet technology to work around those restrictions. That’s the grand strategy, and I think it might even work.”

    Beijing is rapidly exploiting chiplet technology in applications as diverse as artificial intelligence to self-driving cars, with entities from tech giant Huawei Technologies to military institutions exploring its use.

    More major investments in the area are on the way, according to a review of corporate announcements.

    CHINA’S CHIPLET ADVANTAGE

    Chiplets, or small chips, can be the size of a grain of sand or bigger than a thumbnail and are brought together in a process called advanced packaging.

    It is a technology the global chip industry has increasingly embraced in recent years as chip manufacturing costs soar in the race to make transistors so small they are now measured in the number of atoms.

    Bonding chiplets tightly together can help make more powerful systems without shrinking the transistor size as the multiple chips can work like one brain.

    Apple’s high-end computer lines use chiplet technology, as do Intel and AMD’s more powerful chips.

    About a quarter of the global chip packaging and testing market sits in China, according to Dongguan Securities.

    While some say this gives China an advantage in leveraging chiplet technology, Chipuller chairman Yang cautioned the proportion of China’s packaging industry that could be considered advanced was “not very big”.

    Under the right conditions, chiplets that are personalised according to the needs of the customer can be completed quickly, in “three to four months, this is the unique advantage China holds,” according to Yang.

    Needham’s Shi said according to import data published by China’s customs agency, China’s purchase of chip packaging equipment soared to $3.3 billion in 2021 from its previous high of $1.7 billion in 2018, although last year it fell to $2.3 billion with the chip market downturn.

    Since early 2021 research papers on chiplets started surfacing by researchers of the Chinese military People’s Liberation Army and universities it runs, and state-run and PLA-affiliated laboratories are looking to use chips made using domestic chiplet technology according to six tenders published over the past three years.

    Public documents by the government also show millions of dollars worth of grants to researchers specializing in chiplet technology, while dozens of smaller companies have sprouted throughout China in recent years to meet domestic demand for advanced packaging solutions like chiplets.

    CHIPLETS ON THE TABLE

    Against the backdrop of escalating U.S.-China tension, Chinese company Chipuller acquired 28 patents either owned by zGlue or invented by people whose names are on zGlue’s patents, according to an analysis using IP management technology firm Anaqua’s Acclaim IP database.

    The acquisition was through a two-step transfer, first through British Virgin Islands-registered North Sea Investment Co Ltd, according to documents seen by Reuters and confirmed by Yang.

    The Committee on Foreign Investment in the United States (CFIUS), a powerful Treasury-led committee that reviews transactions for potential threats to U.S. security, did not respond to a Reuters request for comment about whether such sales would require their approval.

    CFIUS lawyers Laura Black at Akin’s Trade Group, Melissa Mannino at BakerHostetler and Perry Bechky at Berliner Corcoran & Rowe say patent sales alone would not necessarily give CFIUS authority over the deal, as it depends whether the assets purchased constitute a U.S. business.

    Representative Mike Gallagher, an influential lawmaker whose select committee on China has pressed the Biden administration to take tougher stances on China, told Reuters zGlue’s case highlights the “urgent need to reform CFIUS”.

    “(People’s Republic of China) entities should not be able to act with impunity to take advantage of distressed U.S. firms to transfer their IP to China,” he said in an emailed statement.

    Chipuller’s Yang said zGlue’s lawyer communicated with both CFIUS and the Department of Commerce to ensure the sale to North Sea would not fall foul of export controls.

    These discussions did not include mention of Chipuller or the possibility of a Chinese entity ending up in possession of the patents, according to a Chipuller spokesperson.

    “Everything was done very transparently and in accordance with (U.S.) law,” Yang said.

    Yang said he considered himself a founder of zGlue as he became an investor in the company in 2015, soon after its formation, and later became a director and chairman.

    CFIUS visited zGlue offices in 2018 to conduct an investigation because the company’s largest non-U.S. investor, Yang, was from China, the chairman said.

    “So we have spent a lot of time communicating with CFIUS,” Yang said, adding that Chipuller currently does not supply any Chinese military or U.S.-sanctioned entities.

    Chipuller isn’t the only firm with chiplet technology.

    Huawei, China’s tech and chip design giant that has been put on the U.S.’s most restricted list, has been actively filing chiplet patents.

    Huawei published over 900 chiplet-related patent applications and grants last year in China, up from 30 in 2017, according to Anaqua’s director of analytics solutions Shayne Phillips.

    Huawei declined to comment.

    Reuters identified over a dozen announcements over the past two years for new factories or expansions of existing ones from companies using chiplet technology in manufacturing across China’s tech sector, representing an investment totalling over 40 billion yuan.

    They include domestic giants TongFu Microelectronics (002156.SZ) and JCET Group (600584.SS), as well as fast-growing startups such as Beijing ESWIN Technology Group, which spent 5.5 billion yuan on a factory for its chiplet-focused subsidiary that began operating in April.

    One article published in May by an outlet run by China’s Ministry of Industry and Information Technology (MIIT) urged big Chinese tech firms the use of domestic packaging companies such as TongFu to help build China’s self-sufficiency in computing power.

    “Use Chiplet technology to break through the United States’ siege of my country’s advanced process chips,” it said.

    MIIT did not respond to a request for comment.

    Chipuller chairman Yang puts it this way: “Chiplet technology is the core driving force for the development of the domestic semiconductor industry,” he said on the company’s official WeChat channel. “It is our mission and duty to bring it back to China.”

    ($1 = 7.2205 Chinese yuan renminbi)

    Reporting by Jane Lanhee Lee and Eduardo Baptista; Additional reporting by Echo Wang and Stephen Nellis; editing by Kenneth Li, Brenda Goh and Lincoln Feast.

    Our Standards: The Thomson Reuters Trust Principles.

    Reports on global trends in computing from covering semiconductors and tools to manufacture them to quantum computing. Has 27 years of experience reporting from South Korea, China, and the U.S. and previously worked at the Asian Wall Street Journal, Dow Jones Newswires and Reuters TV. In her free time, she studies math and physics with the goal …

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  • Hong Kong police issue arrest warrants for eight overseas activists

    Hong Kong police issue arrest warrants for eight overseas activists

    HONG KONG, July 3 (Reuters) – Hong Kong police on Monday accused eight overseas-based activists of serious national security offences including foreign collusion and incitement to secession and offered rewards for information leading to their arrest.

    The accused are activists Nathan Law, Anna Kwok and Finn Lau, former lawmakers Dennis Kwok and Ted Hui, lawyer and legal scholar Kevin Yam, unionist Mung Siu-tat, and online commentator Yuan Gong-yi, police told a press conference.

    “They have encouraged sanctions … to destroy Hong Kong and to intimidate officials,” Steve Li, an officer with the police’s national security department, told reporters.

    Issuing wanted notices and offering rewards of HK$1 million ($127,656) each, police said the assets of the accused would be frozen where possible and warned the public not to support them financially.

    The notices accused the activists of asking foreign powers to impose sanctions on Hong Kong and China.

    The activists are based in several countries, including the United States, Britain and Australia. Yam is an Australian citizen. They are wanted under a national security law that Beijing imposed on the former British colony in 2020, after the financial hub was rocked by protracted anti-China protests the previous year.

    The United States on Monday condemned the move through a U.S. State Department spokesman, who said it set “a dangerous precedent that threatens the human rights and fundamental freedoms of people all over the world.”

    British Foreign Secretary James Cleverly criticised the decision to issue the arrest warrants and said his government “will not tolerate any attempts by China to intimidate and silence individuals in the UK and overseas”.

    Australian Foreign Minister Penny Wong said her government was “deeply disappointed.” Australia, she said, has consistently expressed concern about the broad application of the national security law.

    Some countries, including the United States, say the law has been used to suppress the city’s pro-democracy movement and has undermined rights and freedoms guaranteed under a “one country, two systems” formula, agreed when Hong Kong returned to Chinese rule in 1997.

    Chinese and Hong Kong authorities say the law has restored the stability necessary for preserving Hong Kong’s economic success.

    ACTIVISTS DEFIANT

    Several of the accused activists said they would not cease their Hong Kong advocacy work.

    “It’s my duty … to continue to speak out against the crackdown that is going on right now, against the tyranny that is now reigning over the city that was once one of the freest in Asia,” Yam, a senior fellow with Georgetown University’s Center for Asian Law, told Reuters by telephone from Australia.

    “I miss Hong Kong but as things stand, no rational person would be going back,” added Yam, who police accused of meeting foreign officials to instigate sanctions against Hong Kong officials, judges and prosecutors.

    Former Democratic party lawmaker Ted Hui told Reuters the “bounty” adds to the arrest warrants already issued for him under the national security law, but “free countries will not extradite us”.

    “The bounty … makes it clearer to the western democracies that China is going towards more extreme authoritarianism,” he said in Australia, where he has lived since 2021 on a bridging visa.

    Anna Kwok, executive director of the Hong Kong Democracy Council, told Reuters from Washington she would not back down.

    “One key thing I urge President Biden to do immediately is to say a strong and firm NO to (Hong Kong chief executive) John Lee’s possible entry into the United States for November’s APEC meeting in San Francisco,” Kwok wrote.

    “He’s the man who has orchestrated the far-reaching transnational repression,” she said. “Bar John Lee.”

    Finn Lau, an activist based in London told Reuters the reward was motivated by the fact that many democratic countries had suspended extradition treaties with Hong Kong.

    Nathan Law, who obtained refugee status in the UK two years ago, said that people in Hong Kong should not cooperate. “We should not limit ourselves, self-censor, be intimidated, or live in fear,” he said on Twitter.

    Police told the press conference 260 people had been arrested under the national security law, with 79 of them convicted of offences including subversion and terrorism, but admitted that the chances of prosecution were slim if the defendants remained abroad.

    “We are definitely not putting on a political show nor disseminating fear,” Li, the police official, said.

    “If they don’t return, we won’t be able to arrest them, that’s a fact,” he said. “But we won’t stop wanting them.

    Reporting by James Pomfret and Jessie Pang; additional reporting by Kirsty Needham in Sydney and Dan Whitcomb in Los Angeles; Editing by Robert Birsel, Alison Williams and Conor Humphries

    Our Standards: The Thomson Reuters Trust Principles.

    Jessie Pang

    Thomson Reuters

    Jessie Pang joined Reuters in 2019 after an internship. She covers Hong Kong with a focus on politics and general news.

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  • As companies bring more jobs to Mexico, US wants labor rights safeguards

    As companies bring more jobs to Mexico, US wants labor rights safeguards

    MEXICO CITY, July 3 (Reuters) – The U.S. wants Mexico’s government to build strong institutions to protect worker rights as companies aiming to avoid supply chain disruptions in far-off production spots bring more jobs to the country, a top U.S. labor official told Reuters.

    Mexico has begun to benefit from “nearshoring” in which companies seek to move production closer to the U.S. market while maintaining competitive costs.

    The trend is further testing a trade deal known as the U.S.-Mexico-Canada Agreement (USMCA), in effect since July 2020.

    The pact has tougher labor rules than its 1994 predecessor and underpins new Mexican laws that empower workers to push for better wages and conditions after years of stagnant salaries and pro-business union contracts.

    Three years into the deal, experts say, some workers have begun to benefit but broad impacts are still far off.

    “Hopefully that will ensure that Mexico doesn’t become a dumping ground for companies looking for cheap labor and lax regulations,” said Thea Lee, U.S. Deputy Undersecretary for International Labor Affairs who polices USMCA compliance.

    She said in an interview that Mexico was working to fulfill its commitments, backed by leadership keen on helping workers.

    Mexico’s new regulations favor companies taking on higher ethical standards, she said.

    “Maybe 20 years ago it was okay for a multinational corporation to throw up their hands and say, ‘we have no idea what’s in our supply chain, what the labor conditions are,’” she added.

    “That doesn’t seem to be acceptable anymore.”

    Mexico has made progress improving labor courts, resolving worker complaints faster and easing union organization, but needs to do more, Lee said.

    “Our hope is that Mexico will be well-poised to take advantage of nearshoring … if they continue on the path towards really building labor institutions that work, where workers can have confidence.”

    Since 2020, several U.S. labor complaints in Mexico have paved the way for independent unions to land pay raises and even expand. Lee said such examples inspire workers who in the past may have feared threats or dismissals for trying to organize.

    Four more cases are under review: At a garment factory, an auto parts plant, a Goodyear tire plant, and a mine owned by conglomerate Grupo Mexico.

    Yet one employer that faced two USMCA complaints, U.S.-based VU Manufacturing that makes interior car parts in the northern city of Piedras Negras, recently dismissed dozens of employees just months after a new union, La Liga, pressed for better wages. VU did not respond to a request for comment.

    Lee said the company risks penalties if it does not uphold an agreement around worker rights. But La Liga members have already been laid off, and fear the company aims to discourage organizing, said union leader Cristina Ramirez, who lost her job.

    “It’s very disappointing and frustrating,” Ramirez said. “We wanted to fight for things to improve.”

    Reporting by Daina Beth Solomon; Editing by David Gregorio

    Our Standards: The Thomson Reuters Trust Principles.

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  • Vietnam bans ‘Barbie’ movie over South China Sea map

    Vietnam bans ‘Barbie’ movie over South China Sea map

    HANOI, July 3 (Reuters) – Vietnam has banned Warner Bros’ highly-anticipated film “Barbie” from domestic distribution over a scene featuring a map that shows China’s unilaterally claimed territory in the South China Sea, state media reported on Monday.

    The U-shaped “nine-dash line” is used on Chinese maps to illustrate its claims over vast areas of the South China Sea, including swathes of what Vietnam considers its continental shelf, where it has awarded oil concessions.

    “Barbie” is the latest movie to be banned in Vietnam for depicting China’s controversial nine-dash line, which was repudiated in an international arbitration ruling by a court in The Hague in 2016. China refuses to recognise the ruling.

    In 2019 the Vietnamese government pulled DreamWorks’ animated film “Abominable” and last year it banned Sony’s action movie “Unchartered” for the same reason. Netflix also removed an Australian spy drama “Pine Gap” in 2021.

    [1/2]Actor Margot Robbie is photographed during a photocall for the upcoming Warner Bros. film “Barbie” in Los Angeles, California, U.S., June 25, 2023. REUTERS/Mike Blake

    “Barbie”, starring Margot Robbie and Ryan Gosling, was originally slated to open in Vietnam on July 21, the same date as in the United States, according to state-run Tuoi Tre newspaper.

    “We do not grant license for the American movie ‘Barbie’ to release in Vietnam because it contains the offending image of the nine-dash line,” the paper reported, citing Vi Kien Thanh, head of the Department of Cinema, a government body in charge of licensing and censoring foreign films.

    Warner Bros did not immediately respond to a request for comment.

    Vietnam and China have long had overlapping territorial claims to a potentially energy-rich stretch in the South China Sea. The Southeast Asian country has repeatedly accused Chinese vessels of violating its sovereignty.

    Reporting by Phuong Nguyen; Editing by Kanupriya Kapoor

    Our Standards: The Thomson Reuters Trust Principles.

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  • US combat ship to make rare port call in Vietnam amid South China Sea tensions

    US combat ship to make rare port call in Vietnam amid South China Sea tensions

    HANOI, June 23 (Reuters) – The U.S. nuclear-powered aircraft carrier Ronald Reagan will stop at Central Vietnam’s port city of Danang on Sunday in a rare visit for a U.S. warship to the southeast Asian nation, as tensions with Beijing in the South China Sea remain high.

    The ship will arrive on Sunday afternoon and stay at Danang until June 30, local media reported the spokesperson for Vietnam’s foreign affairs ministry as saying. The spokesperson did not respond to Reuters’ requests for comment.

    The visit of the USS Ronald Reagan is only the third for a U.S. aircraft carrier since the end of the Vietnam War.

    The USS Theodore Roosevelt stopped in Vietnam in 2020 to mark 25 years since the Vietnam War ended in 1975.

    This year Washington is seeking to upgrade its formal ties with Vietnam, amid Hanoi’s frequent disputes with Beijing over boundaries in the South China Sea. China claims the waters almost in their entirety, including the exclusive economic zones of Vietnam and other countries in the region.

    U.S. carriers frequently cross the energy-rich sea, which contains crucial routes for global trade. The warships are often shadowed by Chinese vessels.

    On Wednesday, the Chinese aircraft carrier Shandong and a group of escorting vessels sailed south through the sensitive Taiwan Strait, Taiwan’s defence ministry said.

    Reporting by Francesco Guarascio

    Our Standards: The Thomson Reuters Trust Principles.

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  • China rebukes US, Canadian navies for Taiwan Strait transit

    China rebukes US, Canadian navies for Taiwan Strait transit

    TAIPEI, June 3 (Reuters) – China’s military rebuked the United States and Canada for “deliberately provoking risk” after the countries’ navies staged a rare joint sailing through the sensitive Taiwan Strait.

    The U.S. Navy’s 7th Fleet said the guided-missile destroyer USS Chung-Hoon and Canada’s HMCS Montreal conducted a “routine” transit of the strait on Saturday “through waters where high-seas freedoms of navigation and overflight apply in accordance with international law”.

    “Chung-Hoon and Montreal’s bilateral transit through the Taiwan Strait demonstrates the commitment of the United States and our allies and partners to a free and open Indo-Pacific,” it said in a statement.

    The Eastern Theatre Command of China’s People’s Liberation Army said its forces monitored the ships throughout and “handled” the situation in accordance with the law and regulations.

    “The countries concerned deliberately create incidents in the Taiwan Strait region, deliberately provoke risks, maliciously undermine regional peace and stability, and send the wrong signal to ‘Taiwan independence’ forces,” it said late Saturday.

    Taiwan’s defence ministry said the two ships sailed in a northerly direction through the strait and that it had observed nothing unusual.

    While U.S. warships transit the strait around once a month, it is unusual for them to do so with those of other U.S. allies.

    The mission took place as the U.S. and Chinese defence chiefs were attending a major regional security summit in Singapore.

    At that event, U.S. Secretary of Defense Lloyd Austin rebuked China for refusing to hold military talks, leaving the superpowers deadlocked over Taiwan and territorial disputes in the South China Sea.

    There was no immediate response to the sailing from China’s military, which routinely denounces them as a U.S. effort to stir up tensions.

    The last such publicly revealed U.S.-Canadian mission in the narrow strait took place in September.

    China has been ramping up military and political pressure in an attempt to force Taiwan to accept Beijing’s sovereignty claims, which the government in Taipei strongly rejects.

    Reporting by Ben Blanchard; Editing by William Mallard and Nick Zieminski

    Our Standards: The Thomson Reuters Trust Principles.

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  • Exclusive: Chinese hackers attacked Kenyan government as debt strains grew

    Exclusive: Chinese hackers attacked Kenyan government as debt strains grew

    • Cyber spies infiltrated Kenyan networks from 2019
    • Hit finance ministry, president’s office, spy agency and others
    • Sources believe Beijing was seeking info on debt

    NAIROBI, May 24 (Reuters) – Chinese hackers targeted Kenya’s government in a widespread, years-long series of digital intrusions against key ministries and state institutions, according to three sources, cybersecurity research reports and Reuters’ own analysis of technical data related to the hackings.

    Two of the sources assessed the hacks to be aimed, at least in part, at gaining information on debt owed to Beijing by the East African nation: Kenya is a strategic link in the Belt and Road Initiative – President Xi Jinping’s plan for a global infrastructure network.

    “Further compromises may occur as the requirement for understanding upcoming repayment strategies becomes needed,” a July 2021 research report written by a defence contractor for private clients stated.

    China’s foreign ministry said it was “not aware” of any such hacking, while China’s embassy in Britain called the accusations “baseless”, adding that Beijing opposes and combats “cyberattacks and theft in all their forms.”

    China’s influence in Africa has grown rapidly over the past two decades. But, like several African nations, Kenya’s finances are being strained by the growing cost of servicing external debt – much of it owed to China.

    The hacking campaign demonstrates China’s willingness to leverage its espionage capabilities to monitor and protect economic and strategic interests abroad, two of the sources said.

    The hacks constitute a three-year campaign that targeted eight of Kenya’s ministries and government departments, including the presidential office, according to an intelligence analyst in the region. The analyst also shared with Reuters research documents that included the timeline of attacks, the targets, and provided some technical data relating to the compromise of a server used exclusively by Kenya’s main spy agency.

    A Kenyan cybersecurity expert described similar hacking activity against the foreign and finance ministries. All three of the sources asked not to be named due to the sensitive nature of their work.

    “Your allegation of hacking attempts by Chinese Government entities is not unique,” Kenya’s presidential office said, adding the government had been targeted by “frequent infiltration attempts” from Chinese, American and European hackers.

    “As far as we are concerned, none of the attempts were successful,” it said.

    It did not provide further details nor respond to follow-up questions.

    A spokesperson for the Chinese embassy in Britain said China is against “irresponsible moves that use topics like cybersecurity to sow discord in the relations between China and other developing countries”.

    “China attaches great importance to Africa’s debt issue and works intensively to help Africa cope with it,” the spokesperson added.

    THE HACKS

    Between 2000 and 2020, China committed nearly $160 billion in loans to African countries, according to a comprehensive database on Chinese lending hosted by Boston University, much of it for large-scale infrastructure projects.

    Kenya used over $9 billion in Chinese loans to fund an aggressive push to build or upgrade railways, ports and highways.

    Beijing became the country’s largest bilateral creditor and gained a firm foothold in the most important East African consumer market and a vital logistical hub on Africa’s Indian Ocean coast.

    By late 2019, however, when the Kenyan cybersecurity expert told Reuters he was brought in by Kenyan authorities to assess a hack of a government-wide network, Chinese lending was drying up. And Kenya’s financial strains were showing.

    The breach reviewed by the Kenyan cybersecurity expert and attributed to China began with a “spearphishing” attack at the end of that same year, when a Kenyan government employee unknowingly downloaded an infected document, allowing hackers to infiltrate the network and access other agencies.

    “A lot of documents from the ministry of foreign affairs were stolen and from the finance department as well. The attacks appeared focused on the debt situation,” the Kenyan cybersecurity expert said.

    Another source – the intelligence analyst working in the region – said Chinese hackers carried out a far-reaching campaign against Kenya that began in late 2019 and continued until at least 2022.

    According to documents provided by the analyst, Chinese cyber spies subjected the office of Kenya’s president, its defence, information, health, land and interior ministries, its counter-terrorism centre and other institutions to persistent and prolonged hacking activity.

    The affected government departments did not respond to requests for comment, declined to be interviewed or were unreachable.

    By 2021, global economic fallout from the COVID-19 pandemic had already helped push one major Chinese borrower – Zambia – to default on its external debt. Kenya managed to secure a temporary debt repayment moratorium from China.

    In early July 2021, the cybersecurity research reports shared by the intelligence analyst in the region detailed how the hackers secretly accessed an email server used by Kenya’s National Intelligence Service (NIS).

    Reuters was able to confirm that the victim’s IP address belonged to the NIS. The incident was also covered in a report from the private defence contractor reviewed by Reuters.

    Reuters could not determine what information was taken during the hacks or conclusively establish the motive for the attacks. But the defence contractor’s report said the NIS breach was possibly aimed at gleaning information on how Kenya planned to manage its debt payments.

    “Kenya is currently feeling the pressure of these debt burdens…as many of the projects financed by Chinese loans are not generating enough income to pay for themselves yet,” the report stated.

    A Reuters review of internet logs delineating the Chinese digital espionage activity showed that a server controlled by the Chinese hackers also accessed a shared Kenyan government webmail service more recently from December 2022 until February this year.

    Chinese officials declined to comment on this recent breach, and the Kenyan authorities did not respond to a question about it.

    ‘BACKDOOR DIPLOMACY’

    The defence contractor, pointing to identical tools and techniques used in other hacking campaigns, identified a Chinese state-linked hacking team as having carried out the attack on Kenya’s intelligence agency.

    The group is known as “BackdoorDiplomacy” in the cybersecurity research community, because of its record of trying to further the objectives of Chinese diplomatic strategy.

    According to Slovakia-based cybersecurity firm ESET, BackdoorDiplomacy re-uses malicious software against its victims to gain access to their networks, making it possible to track their activities.

    Provided by Reuters with the IP address of the NIS hackers, Palo Alto Networks, a U.S. cybersecurity firm that tracks BackdoorDiplomacy’s activities, confirmed that it belongs to the group, adding that its prior analysis shows the group is sponsored by the Chinese state.

    Cybersecurity researchers have documented BackdoorDiplomacy hacks targeting governments and institutions in a number of countries in Asia and Europe.

    Incursions into the Middle East and Africa appear less common, making the focus and scale of its hacking activities in Kenya particularly noteworthy, the defence contractor’s report said.

    “This angle is clearly a priority for the group.”

    China’s embassy in Britain rejected any involvement in the Kenya hackings, and did not directly address questions about the government’s relationship with BackdoorDiplomacy.

    “China is a main victim of cyber theft and attacks and a staunch defender of cybersecurity,” a spokesperson said.

    Reporting by Aaron Ross in Nairobi, James Pearson in London and Christopher Bing in Washington
    Additional reporting by Eduardo Baptista in Beijing
    Editing by Chris Sanders and Joe Bavier

    Our Standards: The Thomson Reuters Trust Principles.

    Aaron Ross

    Thomson Reuters

    West & Central Africa correspondent investigating human rights abuses, conflict and corruption as well as regional commodities production, epidemic diseases and the environment, previously based in Kinshasa, Abidjan and Cairo.

    James Pearson

    Thomson Reuters

    Reports on hacks, leaks and digital espionage in Europe. Ten years at Reuters with previous postings in Hanoi as Bureau Chief and Seoul as Korea Correspondent. Author of ‘North Korea Confidential’, a book about daily life in North Korea. Contact: 447927347451

    Christopher Bing

    Thomson Reuters

    Award-winning reporter covering the intersection between technology and national security with a focus on how the evolving cybersecurity landscape affects government and business.

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  • EU and US to pledge joint action over China

    EU and US to pledge joint action over China

    BRUSSELS, May 13 (Reuters) – Washington and the EU will pledge joint action to tackle concerns focused on China about non-market practices and coordinate their export controls on semiconductors and other goods at a meeting this month, a draft statement showed.

    U.S. Secretary of State Antony Blinken, European Commission Vice-President Margrethe Vestager and other senior officials are due to meet for the fourth edition of the EU-U.S. Trade and Technology Council (TTC) in Lulea, Sweden, on May 30-31.

    The draft statement seen by Reuters said the two sides would address non-market practices and economic coercion, and aim to hold regular talks on efforts to stop their companies’ knowledge linked to outbound investment supporting technologies of strategic rivals – an oblique reference to China.

    They will also coordinate on their export controls on “sensitive items” – including goods that have a military use – and semiconductors, said the statement, which only mentions China twice and could still be changed before the meeting.

    Brussels says it considers China a partner in some fields, an economic competitor and a strategic rival. The European Union plans to recalibrate its China policy, recognising coordination with a more hawkish United States is essential.

    Highlighting the medical devices sector in China, the document said the transatlantic partners are “exploring possible actions” over the threat posed by non-market policies and practices.

    They also aim to cooperate on efforts to counter foreign manipulation of information, including “China’s amplification of Russian disinformation narratives about the war” in Ukraine.

    The two sides also said they were committed to working with the G7 to coordinate action to counteract acts of economic coercion, such as the trade restrictions the EU says China has imposed on EU member Lithuania.

    Reporting by Philip Blenkinsop
    Editing by Helen Popper

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  • Italy unlikely to renew China deal, but needs time, official says

    Italy unlikely to renew China deal, but needs time, official says

    ROME, May 4 (Reuters) – Italy is highly unlikely to renew its Belt and Road Initiative (BRI) deal with China, which expires early next year, but needs time to discuss the issue with Beijing, a senior government official said.

    The official, who has knowledge of internal discussions over the matter, said a formal decision would not be made ahead of this month’s Group of Seven summit in Japan, adding that it was a highly sensitive topic.

    Prime Minister Giorgia Meloni’s office declined to comment.

    Italy in 2019 became the first and so far only G7 nation to join the hugely ambitious BRI programme, which critics said would enable China to gain get control of sensitive technologies and vital infrastructure.

    The then prime minister, Giuseppe Conte, hoped the deal would give a lift to Italy’s underperforming economy, but over the past four years it has seen little benefit, with exports to China totalling 16.4 billion euros ($18.1 billion) last year from 13 billion euros in 2019.

    By contrast, Chinese exports to Italy rose to 57.5 billion from 31.7 billion over the same period, according to Italian data.

    Italy’s main euro zone trading partners France and Germany exported significantly more to China last year, despite not being part of the BRI.

    The government official said Rome would use this lack of economic development as an argument for not renewing the deal.

    The pact expires in March 2024 and will be automatically renewed unless either side informs the other that they are pulling out, giving at least three months’ written warning.

    In an interview with Reuters last year, before she won power in a September election, Meloni made clear she disapproved of Conte’s decision. “There is no political will on my part to favour Chinese expansion into Italy or Europe,” she said.

    Meloni, who heads a conservative, nationalist coalition, has been keen to burnish her credentials as a committed pro-NATO, pro-Atlantic leader, catching the eyes of Western allies with robust, vocal support for Ukraine.

    But she has been careful not to give offence to China, and government officials said Rome did not want to cause a diplomatic rupture.

    China had to remain a partner, but Italy could not get into a situation where it was over-reliant on Beijing in any key sector, as had happened with Russia and its energy supplies, a second official said.

    Meloni met Chinese President Xi Jinping in Bali last November and accepted an invitation to visit China, but a date has not yet been fixed.

    Meloni has also not yet visited Washington and the government official said she did not want to travel to Beijing without having first been received by U.S. President Joe Biden.

    (This story has been corrected to show that data refers to Chinese exports to Italy, not Chinese imports from Italy, in paragraph 6)

    ($1 = 0.9037 euros)

    Reporting by Crispian Balmer; editing by John Stonestreet

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  • S.Korea’s Yoon to meet Biden as doubts grow over nuclear umbrella

    S.Korea’s Yoon to meet Biden as doubts grow over nuclear umbrella

    SEOUL, April 24 (Reuters) – South Korean President Yoon Suk Yeol set off on Monday for the United States and a summit with President Joe Biden at a time of rare questioning in South Korea of an alliance that has guaranteed its security for decades.

    Yoon’s April 24-29 trip is the first state visit to the U.S. by a South Korean leader in 12 years and will mark the 70th anniversary of a partnership that has helped anchor U.S. strategy in Asia and provided a foundation for South Korea’s emergence as an economic powerhouse.

    But as North Korea races ahead with the development of nuclear weapons and missiles to carry them, there are growing questions in South Korea about the relying on “extended deterrence”, in essence the American nuclear umbrella, and calls, even from some senior members of Yoon’s party, for South Korea to develop its own nuclear weapons.

    A recent poll by the Asan Institute for Policy Studies showed that more than 54% of respondents believed the U.S. would not risk its safety to protect its Asian ally.

    More than 64% supported South Korea developing its own nuclear weapons, with about 33% opposed.

    Yoon has been pushing to boost South Korea’s say in operating the U.S. extended deterrence but exactly what that might entail has not been spelt out.

    Yoon’s deputy national security adviser said both sides had been working on measures to operate the extended deterrence in a more concrete manner, hopefully with progress to be a revealed in a joint statement after the summit.

    “What I can tell you now is that people’s interest in and expectations for extended deterrence have been great, and there are several things that have been carried out over the past year in terms of information sharing, planning and execution,” the adviser, Kim Tae-hyo, told reporters.

    “We need to take steps to organise these things so that it can be easily understood to anyone in one big picture, how this is implemented and developed.”

    A senior U.S. official said on Friday that Biden, during the summit with Yoon, would pledge “substantial” steps to underscore U.S. commitments to deter a North Korean nuclear attack.

    HELP FOR UKRAINE

    Russia’s invasion of Ukraine, which some in South Korea feel is distracting the United States from dangers in Asia, has also led to some rare friction between Seoul and Washington.

    Leaked U.S. documents recently highlighted South Korean difficulties in dealing with pressure from its ally to help with the supply of military aid to Ukraine.

    South Korea, a major producer of artillery shells, says it has not provided lethal weapons to Ukraine, citing its relations with Russia. It has limited its support to humanitarian aid.

    South Korea tries to avoid antagonising Russia, due chiefly to business interests and Russian influence over North Korea.

    Suggestions reported in media that the United States had been spying on South Korean deliberations about its support to Ukraine have raised hackles in South Korea, though both sides have played the down the issue.

    Yoon, in an interview with Reuters last week, Yoon signalled for the first time a softening in his position on arming Ukraine, saying his government might not “insist only on humanitarian or financial support” if Ukraine comes under a large-scale attack on civilians or a “situation the international community cannot condone”.

    A South Korean official said the government’s position against arms support for Ukraine “raised eyebrows” in some countries at a time when South Korean defence firms have won big deals in Europe, including a $5.8 billion contract to supply howitzers and tanks to Poland.

    Another South Korean official said the government had been “treading a fine line” as it tried to maintain ties with Russia but Yoon’s remarks could give South Korea greater flexibility.

    Yoon is due to meet Biden for their summit on Wednesday. He will address the U.S. Congress on Thursday.

    Yoon is bringing business leaders to boost partnerships on supply chains and high-tech areas including chips and batteries. He will also discuss space cooperation at NASA’s Goddard Space Flight Center.

    Reporting by Hyonhee Shin; Additional reporting by Soo-hyang Choi; Editing by Robert Birsel

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  • Philippines’ Marcos to seek specifics from Biden on US defence commitment

    Philippines’ Marcos to seek specifics from Biden on US defence commitment

    MANILA, April 24 (Reuters) – Philippine President Ferdinand Marcos Jr on Monday said he will press U.S. counterpart Joe Biden to make clear the extent of Washington’s commitment to protect his country under a 1951 security pact, citing growing regional tension.

    The past two Philippine administrations have urged former colonial power United States to be specific on the circumstances under which it would defend its ally under the Mutual Defence Treaty, amid fears of an increased risk of confrontation in the South China Sea.

    Marcos will hold talks with Biden in Washington on May 1, a meeting the White House said would reaffirm its “ironclad commitments to the defence of the Philippines”.

    “It (the treaty) needs to adjust because of the changes in the situation we are facing in the South China Sea, Taiwan, North Korea,” Marcos said in a radio interview.

    “The situation is heating up,” he added.

    The push for clarity comes amid a steady buildup of military and coast guard assets by Beijing in the South China Sea, including artificial islands in the Spratly archipelago that are equipped with missile systems within range of the Philippines.

    It also comes as the Biden and Marcos administrations seek to boost their military alliance, demonstrated this year by the largest-ever U.S. troop presence at annual war games and the Philippines almost doubling the number of its military bases that Washington can access.

    The Philippines has said the agreement in bases was for its self-defence purposes.

    China, however, says the pact with the United States is stoking the fire of regional tensions.

    Marcos on Monday said he and Biden should discuss what exactly their alliance entails and how to manage tension with China.

    “What is our partnership? What can be done to tone down or reduce rhetoric? Because there have been an exchange of heated words,” he said.

    (This story has been corrected to change the date of talks with Biden to May 1, not weekend, in paragraph 3)

    Reporting by Neil Jerome Morales; Writing by Martin Petty; Editing by Kanupriya Kapoor

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  • Taiwan or China? Paraguay’s dilemma puts election race in the spotlight

    Taiwan or China? Paraguay’s dilemma puts election race in the spotlight

    ASUNCION, April 24 (Reuters) – From Paraguayan capital Asuncion to Taipei and Washington, diplomats, officials – and farmers – are closely watching a tight election race that could determine Paraguay’s future ties with Taiwan.

    Paraguay will vote for its next president on April 30, choosing between a ruling party candidate pledging to extend decades-long diplomatic relations with Taiwan and an opposition rival who favors switching ties to China to boost the landlocked country’s farm-driven economy.

    Pressure inside the South American nation has been rising, especially from its powerful agricultural lobby, to flip ties to China and open up the Asian country’s lucrative markets to Paraguay’s soybeans and beef, its main exports.

    “We’re a food-producing nation that is not selling to the world’s biggest buyer of food,” Pedro Galli, the head of the Paraguayan Rural Association (ARP), told Reuters. His organization represents some 3,000 local farmers.

    Were Paraguay to recognize China it would be a blow to Taiwan, which is facing an uphill battle against Beijing’s economic muscle to keep its remaining 13 allies worldwide, and a fresh sign of China’s growing clout in an area Washington has long regarded as its backyard.

    Galli cited the recognition of China by other countries in the region, which in recent years have included Panama, the Dominican Republic, El Salvador and Nicaragua. Honduras was the latest to switch sides in March.

    “We’re watching the party from the balcony,” Galli said, referring to the loss the farming sector felt in terms of exports. “It’s just us and the Guatemalans left.” 

    Opposition candidate Efrain Alegre, who represents a center-left coalition, told Reuters in January and again in April that he would favor relations with China, the world’s largest beef and soybean importer, if elected president.

    “We are going to be where it is convenient, otherwise it would be a betrayal of the country,” Alegre told Reuters in the April 17 interview. “How can I deny a relationship that is beneficial for all Paraguayans, a people that need development, need investment, need industry?”

    The ruling conservative Colorado Party candidate, Santiago Peña, has vowed to stick with Taiwan. A cross-party delegation visited the island in February, seeking to calm Taiwanese jitters.

    Taipei, which argues that it provides economic support to its allies, said last week it was “perplexed” by the position taken by Paraguay’s opposition and it would do its utmost to maintain its diplomatic ties with the country.

    China has long argued that democratically-ruled Taiwan is part of its own territory with no right to state-to-state ties, a position Taipei strongly rejects. China demands that countries with which it has ties recognize its position.

    ‘WHEN, NOT IF’

    Among diplomatic circles in Asuncion there is a sense a switch is inevitable – regardless of the election outcome.

    “With Paraguay it is a matter of when, not if,” a senior European diplomat told Reuters, adding that given the pressures from the local business community and the fragile global economy, Paraguay could switch “within the next two years.”

    Even if the ruling Colorado party were to win the election, its leaders may not have the same staunch support for Taiwan as incumbent President Mario Abdo, whose father helped forge relations with Taiwan as a political aide over six decades ago.

    “We are brotherly peoples, and we have a destiny together,” Abdo said during February’s visit.

    “Current president Abdo had a strong personal commitment to Taiwan that goes back to his father,” said Evan Ellis, who specializes in China-Latin America relations at the U.S. Army War College Institute.

    “It is not clear that the same personal depth of ties is there with whoever takes over.”

    Opinion polls in April differed widely, with Atlas ranking pro-China Alegre narrowly ahead of Peña and Grau & Associated predicting a 16-point lead for Peña.

    Paraguayan rancher Fernando Serrati, who farms corn, soybeans and cattle, said the country was “trapped” in a diplomatic conflict hurting producers and exports, while the closed door to China meant it often lost a price premium.

    A severe drought that has hit regional farm production, poorer economic prospects globally, and war in Ukraine that has affected shipments of beef to sanctioned Russia have all further dented local sentiment, spurring more Paraguayans to favor new ties with China.

    “We need to consider the real interests of our country and open up to the world,” Serrati said.

    Reporting by Lucinda Elliott and Daniela Desantis; Editing by Adam Jourdan and Rosalba O’Brien

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  • China says it respects sovereignty of ex-Soviet states after EU uproar

    China says it respects sovereignty of ex-Soviet states after EU uproar

    • Chinese ambassador to Paris caused uproar in EU
    • Comments focused on Ukraine, ex-Soviet states
    • Beijing says he was expressing personal views
    • EU welcomes ‘clarification’

    LUXEMBOURG, April 24 (Reuters) – China respects the status of former Soviet member states as sovereign nations, its foreign ministry said on Monday, distancing itself from comments by its envoy to Paris that triggered an uproar among European capitals.

    Several European Union foreign ministers had said comments by ambassador Lu Shaye – in which he questioned the sovereignty of Ukraine and other former Soviet states – were unacceptable and had asked Beijing to clarify its stance.

    Asked if Lu’s comments represented China’s official position, foreign ministry spokesperson Mao Ning said that Beijing respected the status of the former Soviet member states as sovereign nations following the collapse of the Soviet Union.

    Mao told a regular news briefing that it was her remarks on sovereignty that represented China’s official government stance.

    The Chinese embassy in Paris issued a statement later on Monday to say that Lu’s comments on Ukraine “were not a political declaration but an expression of his personal views”.

    Both statements, following the backlash, appeared to be an effort to ease the tension with the EU while Washington also cited growing closeness between Beijing and Moscow.

    “Beijing has distanced itself from the unacceptable remarks by its ambassador,” Josep Borrell told a news conference, saying it was “good news”.

    The French foreign ministry said it was “taking note” of Beijing’s “clarifications” and that the minister’s chief of staff had met with Lu on Monday, told him his comments were unacceptable and urged him to speak in a way “that is in line with his country’s official stance.”

    Lu has earned himself a reputation as one of China’s “wolf warrior” diplomats, so-called for their hawkish and abrasive style.

    Asked about his position on whether Crimea was part of Ukraine or not, Lu had said in an interview aired on French TV on Friday that historically it was part of Russia and had been offered to Ukraine by former Soviet leader Nikita Khrushchev.

    “These ex-USSR countries don’t have actual status in international law because there is no international agreement to materialize their sovereign status,” Lu added.

    Czech Foreign Minister Jan Lipavsky speaks during a news conference, in Riga, Latvia April 21, 2023. REUTERS/Ints Kalnins

    ‘TOTALLY UNACCEPTABLE’

    Monday’s statements from the Chinese foreign ministry and embassy in Paris came after criticism from across the EU.

    Speaking ahead of a Luxembourg meeting of EU foreign ministers earlier in the day, Czech Foreign Minister Jan Lipavsky said Lu’s comments were “totally unacceptable”.

    “I hope the bosses of this ambassador will make these things straight,” he told reporters.

    A spokesperson for Germany’s foreign ministry said it had taken note of Lu’s comments “with great astonishment, especially as the statements are not in line with the Chinese position we have known so far.”

    Lithuanian Foreign Minister Gabrielius Landsbergis said the three Baltic countries would summon Chinese representatives to officially ask for clarification.

    He said Beijing was “sending the same message” as Moscow on questioning the sovereignty of former Soviet countries, which he described as “dangerous”.

    Lithuania and its Baltic neighbours Latvia and Estonia were incorporated into the Soviet Union in 1940, but regained independence after its break-up in 1991.

    EU leaders would discuss the bloc’s stance towards China and its future relations with Beijing during their next summit in June, EU Council President Charles Michel said.

    Lu has been summoned to France’s foreign ministry several times in the past, including for suggesting France was abandoning old people in nursing homes during the COVID-19 pandemic and for calling a respected China scholar at a French think-tank a “mad hyena”.

    Asked about Chinese officials’ comments, White House spokesperson John Kirby told MSNBC broadcaster that China and Russia are clearly aligning, adding: “These are two countries that want to challenge outright the international rules-based order … that respects sovereignty around the world.”

    “They want to undermine it. They want to reduce and diminish not only the United States and our influence around the world but also our allies and partners.”

    Reporting by Bart Meijer

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  • China respects ex-Soviet states as sovereign nations – foreign ministry

    China respects ex-Soviet states as sovereign nations – foreign ministry

    BEIJING, April 24 (Reuters) – China respects the status of the independent sovereign nations that emerged from the collapse of the Soviet Union, the Chinese foreign ministry said on Monday, after Beijing’s envoy to Paris sparked a diplomatic storm by questioning their sovereignty.

    Ambassador Lu Shaye said in an interview aired on French television on Friday that former Soviet countries like Ukraine lacked “actual status in international law”, prompting foreign ministers from several EU member states to label his comments as totally unacceptable.

    China’s foreign ministry spokesperson Mao Ning set out the official stance of the government during a regular news conference in Beijing, when asked if China stood behind the envoy’s remarks.

    “The Chinese side respects the status of the member states as sovereign states after the collapse of the Soviet Union,” Mao said, adding that China was one of the first countries to establish diplomatic relations with those countries.

    On the issue of territorial sovereignty, China’s position is consistent and clear, she said.

    China respects the sovereignty, independence and territorial integrity of all countries and upholds the purposes and principles of the United Nations Charter, Mao said.

    Asked if China recognises Ukraine as a sovereign state, Mao said China’s position on this issue is objective and fair.

    “The Soviet Union was a federal state, and externally as a whole, it had the status of being a subject of international law, so conversely, after the dissolution of the Soviet Union, the various republics have the status of sovereign states,” she said.

    And only sovereign states can become official members of the United Nations, she said.

    “The country you mentioned is a full member of the United Nations.”

    Reporting by Beijing newsroom; Editing by Toby Chopra

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  • Exclusive: Chinese firm imported copper from Russian-controlled part of Ukraine

    Exclusive: Chinese firm imported copper from Russian-controlled part of Ukraine

    • Data shows Quzhou Nova bought $7.4 mln of ingots
    • Copper plant is in Russian-annexed part of Ukraine
    • Area is subject to U.S. sanctions against Moscow
    • Russian ally China does not abide by U.S. measures

    April 14 (Reuters) – A Chinese company bought at least $7.4 million worth of copper alloy ingots from a plant in a Russian-annexed region of Ukraine that is subject to Western sanctions, according to Russian customs data reviewed by Reuters.

    China has not imposed any restrictions on trade with Russia, but the United States has threatened to blacklist companies round the world for violating its sanctions and warned Beijing against supplying Moscow with goods banned by U.S. export rules.

    The customs information, drawn from one commercial trade data provider and cross-checked with two others, show some of the first evidence of Chinese trades with Russian-annexed regions of Ukraine since the war began on Feb. 24, 2022.

    The Chinese firm, Quzhou Nova, bought at least 3,220 tons of copper alloy in ingots worth a total of $7.4 million from the Debaltsevsky Plant of Metallurgical Engineering between Oct. 8, 2022 and March 24, 2023, according to the data.

    The plant is located in the Donetsk region of eastern Ukraine, close to the border with Luhansk. Both Donetsk and Luhansk were among four Ukrainian regions that President Vladimir Putin claimed last September as part of Russia.

    Quzhou Nova, a trading and manufacturing company based in the city of Quzhou in the eastern province of Zhejiang, told Reuters it does not have any import and export business related to the trade of copper alloy in ingots.

    When Reuters showed details of the exports in the customs data to Quzhou Nova, the company said on March 23 that it “finds hard to understand the document, because this document is not stamped and signed”, and suggested contacting customs about the issue.

    The database, which collects information on all shipments worldwide, does not display stamps or signatures on its information.

    The Chinese customs service did not provide detailed information on imports. It said that “company trade data are not disclosed in our public information”.

    China imported copper and copper alloys worth $852 million from Russia between October and February, according to public customs statistics.

    A source at the Debaltsevsky plant, who spoke on condition of anonymity, said there was a non-ferrous metallurgy workshop on the territory of the factory. The source declined to comment on the issue of copper alloy shipments to China, saying the information was a “trade secret”.

    Contacted for comment, the Russian Federal customs service told Reuters that information on companies is confidential and is not disclosed by the service.

    When asked about the matter on Friday, the Kremlin said it did not know whether the Reuters news story about the transaction was true or what proof was available. The Kremlin said it had no information about the subject itself.

    The Debaltsevsky Plant did not respond to Reuters requests for comments by phone and in writing.

    Ukraine, its Western allies and an overwhelming majority of countries at the U.N. General Assembly have condemned Russia’s declared annexation of the four regions as illegal.

    SANCTIONS

    U.S. sanctions imposed on Feb. 21, 2022, three days before Russia invaded Ukraine, prohibit U.S imports from or exports to the so-called Donetsk and Luhansk People’s Republics.

    Two days later, the European Union announced measures including an import ban on goods from the two regions.

    While Chinese companies are free as far as their authorities are concerned to trade with firms in Russian-controlled regions of Ukraine, they do risk being added to Western blacklists.

    Asked about the copper shipments data, the U.S. State Department said it was concerned about China’s alignment with the Kremlin.

    “We have warned the PRC (People’s Republic of China) that assistance to Russia’s war effort would have serious consequences. We will not hesitate to move against entities, including PRC firms, that help Russia wage war against Ukraine or help Russia circumvent sanctions,” it added in a statement to Reuters, listing some Chinese companies already sanctioned.

    The European Commision did not respond to Reuters’ questions as to whether Chinese companies cooperated with the Russian-annexed Ukrainian territories and what risks such activity posed.

    China’s Ministry of Commerce did not respond to Reuters’ requests for comment about the shipments of copper alloys from the Debaltsevsky Plant or cooperation with businesses in the Donetsk region.

    The data seen by Reuters is based on shipping and customs documents like bill of lading and shipping bills and collected from several customs departments, government bodies and other partners.

    Quzhou Nova says it specialises in the export of wrapping paper. According to its website, it manufactures and trades goods for the tobacco industry, including paper, aluminium foil and polypropylene film.

    Reuters could not establish what use the copper alloy was intended for.

    The Ukrainian plant, located in the city of Debaltseve 70 km (45 miles) from the Russian-controlled Ukrainian city of Donetsk, specializes in making equipment and spare parts for ferrous metallurgy, the mining industry and cement plants, and has steelmaking and metal casting workshops, according to its website.

    Reuters was not able to find any data about the financial state of the company. It was added to the Russian state tax register in December 2022 and has yet to report financial data.

    According to a Ukrainian register, the legal status of the plant in Debaltseve has been suspended by the Ukrainian authorities. The register does not indicate when or why this happened.

    As of early 2023, its only owner was the Ukrainian Donetsk regional state administration.

    The Ukrainian government, as well as the Russian-appointed Donetsk People’s Republic administration, did not immediately comment to Reuters about cooperation with Chinese companies and shipments of goods to China.

    The copper alloy shipments from the plant were carried out via the port of Novorossiysk in southern Russia, according to the customs data.

    Reporting by Filipp Lebedev and Gleb Stolyarov in Tbilisi; Editing by Mark Trevelyan and Andrew Cawthorne

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  • Explainer: What is solid-fuel technology, and why is North Korea eager to develop it?

    Explainer: What is solid-fuel technology, and why is North Korea eager to develop it?

    SEOUL, April 14 (Reuters) – North Korea says it has tested a new solid-fuel intercontinental ballistic missile (ICBM), its first known use of the propellant in a longer-range projectile, as it seeks the capability to launch with little preparation.

    Here are some characteristics of solid-fuel technology, and how it can help the North improve its missile systems.

    WHAT IS SOLID-FUEL TECHNOLOGY?

    Solid propellants are a mixture of fuel and oxidiser. Metallic powders such as aluminium often serve as the fuel, and ammonium perchlorate, which is the salt of perchloric acid and ammonia, is the most common oxidiser.

    The fuel and oxidiser are bound together by a hard rubbery material and packed into a metal casing.

    When solid propellant burns, oxygen from the ammonium perchlorate combines with aluminium to generate enormous amounts of energy and temperatures of more than 5,000 degrees Fahrenheit (2,760 degrees Celsius), creating thrust and lifting the missile from the launch pad.

    North Korea claims to have tested a new solid-fuel intercontinental ballistic missile (ICBM), the Hwasong-18

    WHO HAS THAT TECHNOLOGY?

    Solid fuel dates back to fireworks developed by the Chinese centuries ago, but made dramatic progress in the mid-20th century, when the U.S. developed more powerful propellants.

    The Soviet Union fielded its first solid-fuel ICBM, the RT-2, in the early 1970s, followed by France’s development of its S3, also known as SSBS, a medium-range ballistic missile.

    China started testing solid-fuel ICBMs in the late 1990s.

    South Korea said on Friday it had already secured “efficient and advanced” solid-propellant ballistic missile technology.

    SOLID VS. LIQUID

    Liquid propellants provide greater propulsive thrust and power, but require more complex technology and extra weight.

    Solid fuel is dense and burns quite quickly, generating thrust over a short time. Solid fuel can remain in storage for an extended period without degrading or breaking down – a common issue with liquid fuel.

    Vann Van Diepen, a former U.S. government weapons expert who now works with the 38 North project, said solid-fuel missiles are easier and safer to operate, and require less logistical support, making them harder to detect and more survivable than liquid-fuel weapons.

    Ankit Panda, a senior fellow at the U.S.-based Carnegie Endowment for International Peace, said any country that operates large scale, missile-based nuclear forces would seek solid-propellant missiles, which do not need to be fuelled immediately ahead of launch.

    “These capabilities are much more responsive in a time of crisis,” Panda said.

    WHAT NEXT?

    North Korea said the development of its new solid-fuel ICBM, the Hwasong-18, would “radically promote” its nuclear counterattack capability.

    South Korea’s defence ministry sought to downplay the testing, saying the North would need “extra time and effort” to master the technology.

    Panda said the North could face difficulties ensuring such a large missile does not break apart when the diameter of the booster becomes larger.

    Although the Hwasong-18 might not be a “game changer”, he said, it will most likely complicate the calculations of the United States and its allies during a conflict.

    “The most important interest the United States and its allies have is to reduce the risks of nuclear use and escalation stemming from North Korea’s possession of these weapons,” Panda said.

    Reporting by Hyonhee Shin; Additional reporting by Ju-min Park; Editing by Gerry Doyle

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  • Airman suspected of leaking secret US documents hit with federal charges

    Airman suspected of leaking secret US documents hit with federal charges

    BOSTON, April 14 (Reuters) – A 21-year-old member of the U.S. Air National Guard accused of leaking top secret military intelligence records online was charged on Friday with unlawfully copying and transmitting classified material.

    Jack Douglas Teixeira of North Dighton, Massachusetts, who was arrested by heavily armed FBI agents at his home on Thursday, made his initial appearance in a crowded federal court wearing a brown khaki jumpsuit.

    At the hearing, Boston’s top federal national security prosecutor, Nadine Pellegrini, requested that Teixeira be detained pending trial, and a detention hearing was set for Wednesday.

    During the brief proceeding, Teixeira said little, answering “yes” when asked whether he understood his right to remain silent.

    The judge said Teixeira’s financial affidavit showed he qualified to be represented by a federal public defender, and he appointed one.

    After the hearing, three of Teixeira’s family members left the courthouse, with a group of reporters trailing them for several blocks. They entered a car without making any comments.

    The leaked documents were believed to be the most serious U.S. security breach since more than 700,000 documents, videos and diplomatic cables appeared on the WikiLeaks website in 2010. The Pentagon has called the leak a “deliberate, criminal act.”

    This leak did not come to light until it was reported by the New York Times last week even though the documents were posted on a social media website weeks earlier.

    U.S. President Joe Biden said on Friday he ordered investigators to determine why the alleged leaker had access to the sensitive information, which included records showing purported details of Ukrainian military vulnerabilities and embarrassed Washington by revealing its spying on allies.

    Fallout from the case has roiled Washington. Senate Democratic leader Chuck Schumer has requested a briefing for all 100 senators next week while Republican House of Representatives Speaker Kevin McCarthy vowed to investigate.

    “The Biden administration has failed to secure classified information,” McCarthy said on Twitter. “Through our committees, Congress will get answers as to why they were asleep at the switch.”

    FBI agents arrest Jack Teixeira, an employee of the U.S. Air Force National Guard, in connection with an investigation into the leaks online of classified U.S. documents, outside a residence in this still image taken from video in North Dighton, Massachusetts, U.S., April 13, 2023. WCVB-TV via ABC via REUTERS

    Biden said he was taking steps to tighten security. “While we are still determining the validity of those documents, I have directed our military and intelligence community to take steps to further secure and limit distribution of sensitive information,” he said in a statement.

    MORE CHARGES EXPECTED

    A criminal complaint made public on Friday charges Teixeira with one count of violating the Espionage Act related to the unlawful copying and transmitting of sensitive defense material, and a second charge related to the unlawful removal of defense material to an unauthorized location.

    A conviction on the Espionage Act charge carries up to 10 years in prison.

    The charges are connected to just one leaked document so far, a classified record that described the status of the Russia-Ukraine conflict and included details about troop movements on a particular date.

    Experts expect more charges as investigators examine each leaked document. Teixeira could also face more counts depending on the number of times he separately uploaded and transmitted each document.

    “They are going to pick the ones (documents), I would imagine, that foreign governments have already seen,” said Stephanie Siegmann, the former national security chief for the U.S. Attorney’s office in Boston and now a partner with the Hinckley Allen law firm.

    In a sworn statement, an FBI agent said Teixeira had held a top secret security clearance since 2021 and also had sensitive compartmented access to other highly classified programs.

    Since May 2022, the FBI said, Teixeira has been serving as an E-3/airman first class in the Air National Guard and has been stationed at Otis Air National Guard Base in Massachusetts.

    Siegmann said one lingering question is why a 21-year-old National Guardsman held such a top-level security clearance.

    “That’s an issue that Department of Defense needs to now deal with,” she said. “Why would he be entitled to these documents about the Russia-Ukrainian conflict?”

    Reuters has reviewed more than 50 of the documents, labeled “Secret” and “Top Secret,” but has not independently verified their authenticity. The number of documents leaked is likely to be over 100.

    Reporting by Sarah N. Lynch in Washington and Tim McLaughlin in Boston
    Editing by Don Durfee and Alistair Bell

    Our Standards: The Thomson Reuters Trust Principles.

    Sarah N. Lynch

    Thomson Reuters

    Sarah N. Lynch is the lead reporter for Reuters covering the U.S. Justice Department out of Washington, D.C. During her time on the beat, she has covered everything from the Mueller report and the use of federal agents to quell protesters in the wake of George Floyd’s murder, to the rampant spread of COVID-19 in prisons and the department’s prosecutions following the Jan. 6 attack on the U.S. Capitol.

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  • No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up

    No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up

    LONDON, April 13 (Reuters) – The latest bid by the world’s leading institutions and creditors to speed up debt restructurings and get bankrupt countries back on their feet has been greeted by a mix of cautious optimism and weary scepticism by veteran crisis watchers.

    Standoffs between major Western-backed lenders like the International Monetary Fund (IMF) and the world’s top bilateral creditor, China, have been blamed for keeping countries such as Zambia mired in default for nearly three years.

    The somewhat loose framework around sovereign restructurings has seen Beijing seek to influence the traditional rules of engagement in these processes.

    The renewed push to overcome the logjams came after a “roundtable” at the IMF Spring Meetings and included pledges from the Fund and World Bank to share assessments of countries’ troubles more quickly, provide more low-interest and grant funding and stricter timeframes on restructurings overall.

    The idea is that Beijing would then drop its insistence that the multilateral lenders take losses, or “haircuts”, on the loans they have provided or underwritten in crisis-hit countries.

    Beijing has not commented directly on the demand for multilateral lender haircuts, but in remarks published on Friday People’s Bank of China Governor Yi Gang reiterated China’s willingness to implement debt talks under the Common Framework, the platform introduced by leading G20 nations in 2020 to streamline talks with all creditors.

    “If the multilateral development banks are now making real commitments to provide fresh grants to distressed countries this is a breakthrough,” said Kevin Gallagher, director of the Boston University Global Development Policy Center.

    But he added that as the new plans lacked specific mention of China’s intentions it suggested the “lack of a strong and clear consensus” in Washington.

    The IMF’s managing director Kristalina Georgieva has stressed that with around 15% of low income countries already in debt distress and dozens more in danger of falling into it, far more urgency is needed.

    Besides members of the Paris Club of creditor nations such as the United States, France and Japan, cash-strapped nations now have to rework loans with lenders such as India, Saudi Arabia, South Africa and Kuwait – but first and foremost China.

    Beijing is now the largest bilateral creditor to developing nations, extending $138 billion in new loans between 2010 and 2021, according to World Bank data, and some estimates put total lending at almost $850 billion.

    Reuters Graphics

    HEADWINDS

    Global headwinds are about to get stronger too.

    Financially weaker countries with “junk”-grade sovereign credit ratings need to repay or refinance $30 billion worth of government bonds next year between them, compared to just $8.4 billion for the remainder of this one.

    The rise in global borrowing costs, though, means that many countries under the greatest stress are now unable to borrow in the international capital markets or, if they can, only at unsustainably high interest rates.

    The Chinese debt, meanwhile, is often opaque and muddied by arguments about whether the loans have been given by “official” entities – i.e by the government – or by “private” entities.

    Authorities in Beijing also prefer to roll over debt payments rather than write them off, and given it is an increasingly dominant creditor, it has little incentive to follow co-operative Paris Club-like principles.

    “It would be great to have China on board (with the push to speed up restructurings) but I don’t really have high hopes because there is a lot of geopolitics involved,” said Viktor Szabo, an emerging market debt manager at Abrdn in London.

    Select IMF loans to low and middle income countries by date of Board approval

    COMMON PROBLEMS

    Recent research by Boston University estimated that up to $520 billion in debt needs to be written off to help developing nations at greatest risk of default return to a sounder fiscal footing.

    But lengthy delays in Zambia, and more recently in Sri Lanka, have elicited widespread criticism of the Common Framework.

    Wednesday’s promises by the IMF to provide its assessments more quickly was an admission that the Common Framework was currently failing, Szabo added.

    “You have to make it functional. The fact that it’s been in place for three years and there is nothing to really show for it, that is really appalling.”

    Anna Ashton, director of China research at Eurasia Group, said this week’s developments underscored the benefits for China to give some ground on some of its concerns.

    “Being willing to compromise and facilitate debt restructuring right now is likely crucial to China’s continued credibility with the developing world writ large,” Ashton said.

    Patrick Curran, senior economist with Tellimer, added that China dropping demands for the big multilateral development banks (MDBs) to swallow losses on their loans could also be “a major breakthrough”.

    “There is likely to be broad support for the alternative proposal that MDBs mobilize their resources more aggressively, especially at a time when most low-income countries are locked out of the market,” Curran said.

    Germany’s finance minister Christian Lindner on Thursday too said all the talk now needed to be converted into action.

    The group that took part in Wednesday’s roundtable plans to meet again in coming weeks to address remaining issues, including how various creditors are treated, principles for cut-off dates and suspending debt payments.

    Ultimately, whether the new terms help Zambia, and countries like Sri Lanka, Ghana and Ethiopia that are also in the midst of bailout talks, finalise deals will be the only proof of whether the new terms work.

    “China is a difficult partner to talk to but we need China at the table for the solution of debt problems, because otherwise we won’t see any progress,” Lindner said.

    Reuters Graphics

    Additional reporting by Rodrigo Campos in New York and Joe Cash in Beijing
    Editing by Mark Potter

    Our Standards: The Thomson Reuters Trust Principles.

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  • North Korea says it tested new solid-fuel ICBM, warns of ‘extreme’ horror

    North Korea says it tested new solid-fuel ICBM, warns of ‘extreme’ horror

    • Leader Kim Jong Un and family watch missile test
    • Test key to deploying missiles faster in war
    • South Korea, U.S. and Japan stage military drills

    SEOUL, April 14 (Reuters) – North Korea announced on Friday it had tested a new solid-fuel intercontinental ballistic missile (ICBM), a development set to “radically promote” its forces, which experts said would facilitate missile launches with little warning.

    Leader Kim Jong Un guided Thursday’s test, and warned it would make enemies “experience a clearer security crisis, and constantly strike extreme uneasiness and horror into them by taking fatal and offensive counter-actions until they abandon their senseless thinking and reckless acts”, North Korean state media said.

    Analysts said it was the North’s first use of solid propellants in an intermediate-range or intercontinental ballistic missile, a key task to deploying missiles faster during a war.

    South Korea’s defence ministry said North Korea was still developing the weapon, and that it needed more time and effort to master the technology, indicating that Pyongyang might carry out more tests.

    North Korean state media outlet KCNA released photos of Kim watching the launch, accompanied by his wife, sister and daughter, and the missile covered in camouflage nets on a mobile launcher. A state media video showed the Hwasong-18 missile blasting off from a launch tube, creating a cloud of smoke.

    The development of the Hwasong-18 will “extensively reform the strategic deterrence components of the DPRK, radically promote the effectiveness of its nuclear counterattack posture and bring about a change in the practicality of its offensive military strategy,” KCNA said, using the initials of the country’s official name.

    South Korea and the U.S. air forces staged drills hours after the report, involving American B-52H bombers that joined F-35A, F-15 and F-16 fighter jets, Seoul’s defence ministry said.

    “By deploying U.S. strategic assets with increased frequency and intensity, the two countries will continue demonstrating our strong alliance’s will that we will never tolerate any nuclear attack from North Korea,” the ministry said in a statement.

    North Korea has criticised recent U.S.-South Korean joint military exercises as escalating tensions, and has stepped up weapons tests in the past months.

    Japan also conducted separate air drills with two U.S. B-52 bomber jets on Friday, accompanied by four U.S. F-35 fighters and four Japanese F-15 fighters, Tokyo’s defence ministry said. It marked a second consecutive day of a Japan-U.S. joint air mission over the Sea of Japan.

    Japan asked the United Nations Security Council to convene an emergency meeting on North Korea’s ballistic missile launches, top government spokesperson Hirokazu Matsuno told a Friday press conference.

    [1/6] A view of a test launch of a new solid-fuel intercontinental ballistic missile (ICBM) Hwasong-18 at an undisclosed location in this still image of a photo used in a video released by North Korea’s Korean Central News Agency (KCNA) April 14, 2023. KCNA via REUTERS TV/via REUTERS

    Reuters Graphics Reuters Graphics

    MORE TESTS?

    Most of North Korea’s largest ballistic missiles use liquid fuel, which requires them to be loaded with propellant at their launch site – a time-consuming and dangerous process.

    “For any country that operates large-scale, missile based nuclear forces, solid-propellant missiles are an incredibly desirable capability because they don’t need to be fuelled immediately prior to use,” said Ankit Panda, a senior fellow at the U.S.-based Carnegie Endowment for International Peace. “These capabilities are much more responsive in a time of crisis.”

    North Korea will most likely keep some liquid-fuel systems, complicating the calculations of the U.S. and its allies during a conflict, Panda said.

    Vann Van Diepen, a former U.S. government weapons expert who now works with the 38 North project, said solid-fuel missiles are easier and safer to operate, and require less logistical support – making them harder to detect and more survivable than liquids.

    North Korea first displayed what could be a new solid-fuel ICBM during a military parade in February after testing a high-thrust solid-fuel engine in December.

    Analysts said the U.S. could determine between a solid- or liquid-fuelled launch with early warning satellites that can detect differences in the infrared data produced by various missile types.

    The latest launch came days after Kim called for strengthening war deterrence in a “more practical and offensive” manner to counter what North Korea called moves of aggression by the United States.

    The missile, fired from near Pyongyang, flew about 1,000 km (620 miles) before landing in waters east of North Korea, officials said. North Korea said the test posed no threats to its neighbouring countries.

    A South Korean military official said the missile’s maximum altitude was lower than 6,000 km, the apogee of some of last year’s record-breaking tests.

    “North Korea could have opted to focus on collecting data necessary to check its features at different stages than going full speed at the first launch,” said Kim Dong-yup, a professor at the University of North Korean Studies. “As it was a test that did not demonstrate its normal flight pattern, North Korea will likely conduct some more tests.”

    Reporting by Soo-hyang Choi; Editing by Leslie Adler

    Our Standards: The Thomson Reuters Trust Principles.

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