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Xi Jinping is a True Believer
What’s New: Lingling Wei at the Wall Street Journal offers some insightful reporting on how and why the Chinese Communist Party (CCP) is cracking down on many of the country’s most prosperous companies — including its tech champions.
Why This Matters: “In Mr. Xi’s opinion, private capital now has been allowed to run amok, menacing the party’s legitimacy,” says the story. “…He is trying forcefully to get China back to the vision of Mao Zedong, who saw capitalism as a transitory phase on the road to socialism.”
In the last several months, Xi’s government has taken more than 100 significant regulatory actions aimed at, among other things, slowing and rolling back the economic dominance of Alibaba, Tencent, and ride-sharing company Didi Global — resulting in more than $1 trillion in lost stock values and over $100 billion in lost entrepreneurial wealth.
Other efforts to calm housing prices are exacerbating cash-flow issues at China’s Evergrande Group. In fact, Beijing is now warning local officials across China to prepare for a “possible storm” as the heavily indebted property developer continues to flail, with little hope of government assistance.
Underlying these and similar actions appears to be a sincere belief by Mr. Xi that China can and should pioneer a modernized, socialist system that continues to produce wealth while steering that wealth towards state priorities.
“At internal meetings, some [attendees] say, Mr. Xi has talked about the need to differentiate China’s economic system. Western capitalism, in his view, focuses too heavily on the single-minded pursuit of profit and individual wealth, while letting big companies grow too powerful, leading to inequality, social injustice and other threats to social stability.”
What I’m Thinking:
The man knows what he believes. A central tenant of Xi Jinping’s philosophy of governing is the idea of dialectical materialism — the idea that history unfolds through the “friction” between existing forms of power (“thesis”) and contravening reactions to these forms (“antithesis”), which ultimately produce improved hybrid forms of power (“synthesis”). Economically, dialectical materialism maintains this process should result in a nation progressively moving from capitalism, to socialism, and finally to communism. This seems to be an explanatory lens through which we can interpret Xi actions.
“China has entered a new stage of development,” Mr. Xi declared in a speech in January. The goal, he said, is to build China into a “modern socialist power.”
This could be the break we’ve been hoping for. Dialectical materialism is a failed model for governance and has been at the heart of every communist government that has been attempted and is the core reason these experiments have failed. But that isn’t stopping Xi and I’m here for it. If China’s president wants to kill the golden goose, we should get out of his way (while preparing for the economic implications).
We’ll see which is stronger, Xi’s ideology or his pragmatism. If unabated, the CCP’s crushing control over its industry will kill the very companies that have fueled China’s rise over the last six decades. This will greatly diminish Beijing’s ability to grow and to satisfy its middle-class, which will in turn, erode the government’s political support and legitimacy. This loss of wealth and legitimacy doesn’t guarantee the CCP will be removed, but it will decisively constrain the government’s plans for internal stability and external influence. It will be interesting to see how Xi and his government respond when these failures emerge: Will he double-down in blind faith to the “revolution?” Or, will he see the error of his ways — and the risks this introduces to his own power — and adopt a new way forward?
There are still very real concerns. Even if Xi manages to scuttle his country’s long-term ascendence and ability to threaten American interests, there are still near-term dangers. Specifically, authoritarian regimes often become desperate and dangerous when they perceive their power or opportunities to be waning. China’s president has already proven himself to be a ruthless and cunning autocrat, and it is therefore reasonable to suspect these characteristics would be given full vent if Xi believed he faced existential failure.
What’s New: Israel is suspected of using an AI-enabled, remotely operated robot to assassinate a top Iranian nuclear scientist, according to the New York Times.
Why This Matters: While not entirely new or novel, this is another illustration of how AI and autonomy can be combined for lethal effect.
Iran’s Mohsen Fakhrizadeh — a leading figure in Iran’s military nuclear research — was killed last November while driving in a car with his wife.
According to the reporting, an Israeli sniper killed Fakhrizadeh remotely by using a robotic gun hidden in the back of a truck that appeared to be broken-down on the roadside.
It is believed that the sniper was assisted by AI in identifying and targeting his prey because the man’s wife was unharmed in the hail of gunfire.
After the killing, the truck was blown-up; however, the robot was not completely destroyed by the explosion and was discovered by Iranian forces.
Several nations, including the United States, are developing AI-enabled, semi-autonomous and remotely-operated weapon systems (ROWs) like the one described by the Times.
What I’m Thinking:
Live by the sword, die by the sword. Anytime a person is killed, it’s sad. Even more so when their spouse is there and witnesses it firsthand. But we can’t lose sight of the fact that Fakhrizadeh was the chief nuclear scientist for a government that regularly threatens to annihilate an entire nation. He made his bed and now he’s not getting out of it.
Want to learn More? If you’d like to learn more about the history of Israel’s targeted assassinations, I highly recommend Ronen Bergman’s book, Rise and Kill First.
Quick, Throw Away Your Phone!
What’s New: Lithuania’s National Cyber Security Center (NCSC) has issued a report asserting that it found built-in vulnerabilities and censorship tools in Chinese-made mobile phones, according to the BBC.
Why This Matters: The nation’s Defense Ministry is now encouraging Lithuanians to get rid of Chinese handsets and to purchase new ones as soon as possible.
The NCSC tested 5G phones from multiple Chinese companies and found that those from Huawei and Xiaomi — two of the globe’s largest providers — had significant security flaws and the ability to censor more than 449 terms in search and text, like “Taiwan independence,” “Democracy,” and “Free Tibet.”
The Center said these capabilities were not active on phones in Europe, but that these features could be turned on at any time with a simple software update.
"Our recommendation is to not buy new Chinese phones, and to get rid of those already purchased as fast as reasonably possible," said Defence Deputy Minister Margiris Abukevicius.
What I’m Thinking:
Vilnius and Beijing are already in a dust-up. China is pulling its ambassador out of Lithuania and demanding Lithuania do the same with its representative to China, after Taiwan announced its diplomatic office in the European nation would be named the Taiwanese Representative Office. The CCP finds this offensive because it gives credence to the idea of Taiwan as an independent state. Which it is.
Huawei and Xiaomi say, “Nuh-uh.” Xiaomi responded to the report by saying it has “never and will never restrict or block any personal behaviors of our smartphone users, such as searching, calling, web browsing or the use of third-party communication software." Huawei replied with the cryptic head-fake, “Data is never processed outside the Huawei device.” Both companies are lying. If you’d like to better understand how Chinese companies abuse language while attempting to defend themselves, you can read this previous post below.
Let’s Get Visual
That’s it for this Friday Brief. Thanks for reading, and if you think someone else would like this newsletter, please share it with your friends and followers. Have a great weekend!