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Security Scanners Across Europe Tied to China Government, Military

At some of the world’s most sensitive spots, authorities have installed security screening devices made by a single Chinese company with deep ties to China’s military and the highest levels of the ruling Communist Party.

The World Economic Forum in Davos. Europe’s largest ports. Airports from Amsterdam to Athens. NATO’s borders with Russia. All depend on equipment manufactured by Nuctech, which has quickly become the world’s leading company, by revenue, for cargo and vehicle scanners.

Nuctech has been frozen out of the U.S. for years due to national security concerns, but it has made deep inroads across Europe, installing its devices in 26 of 27 EU member states, according to public procurement, government and corporate records reviewed by The Associated Press.

The complexity of Nuctech’s ownership structure and its expanding global footprint have raised alarms on both sides of the Atlantic.

A growing number of Western security officials and policymakers fear that China could exploit Nuctech equipment to sabotage key transit points or get illicit access to government, industrial or personal data from the items that pass through its devices.

Nuctech’s critics allege the Chinese government has effectively subsidized the company so it can undercut competitors and give Beijing potential sway over critical infrastructure in the West as China seeks to establish itself as a global technology superpower.

“The data being processed by these devices is very sensitive. It’s personal data, military data, cargo data. It might be trade secrets at stake. You want to make sure it’s in right hands,” said Bart Groothuis, director of cybersecurity at the Dutch Ministry of Defense before becoming a member of the European Parliament. “You’re dependent on a foreign actor which is a geopolitical adversary and strategic rival.”

He and others say Europe doesn’t have tools in place to monitor and resist such potential encroachment. Different member states have taken opposing views on Nuctech’s security risks. No one has even been able to make a comprehensive public tally of where and how many Nuctech devices have been installed across the continent.

Nuctech dismisses those concerns, countering that Nuctech’s European operations comply with local laws, including strict security checks and data privacy rules.

“It’s our equipment, but it’s your data. Our customer decides what happens with the data,” said Robert Bos, deputy general manager of Nuctech in the Netherlands, where the company has a research and development center.

He said Nuctech is a victim of unfounded allegations that have cut its market share in Europe nearly in half since 2019.

“It’s quite frustrating to be honest,” Bos told AP. “In the 20 years we delivered this equipment we never had issues of breaches or data leaks. Till today we never had any proof of it.”

‘It’s not really a company’

As security screening becomes increasingly interconnected and data-driven, Nuctech has found itself on the front lines of the U.S.-China battle for technology dominance now playing out across Europe.

In addition to scanning systems for people, baggage and cargo, the company makes explosives detectors and interconnected devices capable of facial recognition, body temperature measurement and ID card or ticket identification.

On its website, Nuctech’s parent company explains that Nuctech does more than just provide hardware, integrating “cloud computing, big data and Internet of Things with safety inspection technologies and products to supply the clients with hi-tech safety inspection solution.”

Critics fear that under China’s national intelligence laws, which require Chinese companies to surrender data requested by state security agencies, Nuctech would be unable to resist calls from Beijing to hand over sensitive data about the cargo, people and devices that pass through its scanners. They say there is a risk Beijing could use Nuctech’s presence across Europe to gather big data about cross-border trade flows, pull information from local networks, like shipping manifests or passenger information, or sabotage trade flows in a conflict.

A July 2020 Canadian government security review of Nuctech found that X-ray security scanners could potentially be used to covertly collect and transmit information, compromise portable electronic devices as they pass through the scanner or alter results to allow transit of “nefarious” devices.

The European Union put measures in place in late 2020 that can be used to vet Chinese foreign direct investment. But policymakers in Brussels say there are currently no EU-wide systems in place to evaluate Chinese procurement, despite growing concerns about unfair state subsidies, lack of reciprocity, national security and human rights.

“This is becoming more and more dangerous. I wouldn’t mind if one or two airports had Nuctech systems, but with dumping prices a lot of regions are taking it,” said Axel Voss, a German member of the European Parliament who works on data protection. “This is becoming more and more a security question. You might think it’s a strategic investment of the Chinese government.”

The U.S. — home to OSI Systems, one of Nuctech’s most important commercial rivals — has come down hard against Nuctech. The U.S. Senate Committee on Foreign Relations, the U.S. National Security Council, the U.S. Transportation Security Administration, and the U.S. Commerce Department’s Bureau of Industry and Security all have raised concerns about Nuctech.

The U.S. Transportation Security Administration told AP in an email that Nuctech was found ineligible to receive sensitive security information. Nuctech products, TSA said, “are not authorized to be used for the screening of passengers, baggage, accessible property or air cargo in the United States.”

In December 2020, the U.S. added Nuctech to the Bureau of Industry and Security Entity List, restricting exports to them on national security grounds.

“It’s not just commercial,” said a U.S. government official who was not authorized to speak on the record. “It’s using state-backed companies, with state subsidies, low-ball bids to get into European critical infrastructure, which is civil airports, passenger screening, seaport and cargo screening.”

 

In Europe, Nuctech’s bids can be 30-50% below their rivals’, according to the company’s competitors, U.S. and European officials and researchers who study China. Sometimes they include other sweeteners like extended maintenance contracts and favorable loans.

In 2009, Nuctech’s main European competitor, Smiths Detection, complained that it was being squeezed out of the market by such practices, and the EU imposed an anti-dumping duty of 36.6% on Nuctech cargo scanners.

“Nuctech comes in with below market bids no one can match. It’s not a normal price, it’s an economic statecraft price,” said Didi Kirsten Tatlow, and co-editor of the book, China’s Quest for Foreign Technology. “It’s not really a company. They are more like a wing of a state development drive.”

Nuctech’s Bos said the company keeps prices low by manufacturing in Europe. “We don’t have to import goods from the U.S. or other countries,” he said. “Our supply chain is very efficient with local suppliers, that’s the main reason we can be very competitive.”

Nuctech’s successes abound. The company, which is opening offices in Brussels, Madrid and Rome, says it has supplied customers in more than 170 countries and regions. Nuctech said in 2019 that it had installed more than 1,000 security check devices in Europe for customs, civil aviation, ports and government organizations.

In November 2020, Norwegian Customs put out a call to buy a new cargo scanner for the Svinesund checkpoint, a complex of squat, grey buildings at the Swedish border. An American rival and two other companies complained that the terms as written gave Nuctech a leg up.

The specifications were rewritten, but Nuctech won the deal anyway. The Chinese company beat its rivals on both price and quality, said Jostein Engen, the customs agency’s director of procurement, and none of Norway’s government ministries raised red flags that would have disqualified Nuctech.

“We in Norwegian Customs must treat Nuctech like everybody else in our competition,” Engen said. “We can’t do anything else following EU rules on public tenders.”

Four of five NATO member states that border Russia — Estonia, Latvia, Lithuania, Poland — have purchased Nuctech equipment for their border crossings with Russia. So has Finland.

Europe’s two largest ports — Rotterdam and Antwerp, which together handled more than a third of goods, by weight, entering and leaving the EU’s main ports in 2020 — use Nuctech devices, according to parliamentary testimony.

Other key states at the edges of the EU, including the U.K., Turkey, Ukraine, Albania, Belarus and Serbia have also purchased Nuctech scanners, some of which were donated or financed with low-interest loans from Chinese state banks, according to public procurement documents and government announcements.

Airports in London, Amsterdam, Brussels, Athens, Florence, Pisa, Venice, Zurich, Geneva and more than a dozen across Spain have all signed deals for Nuctech equipment, procurement and government documents, and corporate announcements show.

Nuctech says it provided security equipment for the Olympics in Brazil in 2016, then President Donald Trump’s visit to China in 2017 and the World Economic Forum in 2020. It has also provided equipment to some U.N. organizations, procurement records show.

Rising concerns

As Nuctech’s market share has grown, so too has skepticism about the company.

Canadian authorities dropped a standing offer from Nuctech to provide X-ray scanning equipment at more than 170 Canadian diplomatic missions around the world after a government assessment found an “elevated threat” of espionage.

Lithuania, which is involved in a diplomatic feud with China over Taiwan, blocked Nuctech from providing airport scanners earlier this year after a national security review found that it wasn’t possible for the equipment to operate in isolation and there was a risk information could leak back to China, according to Margiris Abukevicius, vice minister for international cooperation and cybersecurity at Lithuania’s Ministry of National Defense.

Then, in August, Lithuania approved a deal for a Nuctech scanner on its border with Belarus. There were only two bidders, Nuctech and a Russian company — both of which presented national security concerns — and there wasn’t time to reissue the tender, two Lithuanian officials told AP.

“It’s just an ad hoc decision choosing between bad and worse options,” Abukevicius said. He added that the government is developing a road map to replace all Nuctech scanners currently in use in Lithuania as well as a legal framework to ban purchases of untrusted equipment by government institutions and in critical sectors.

Human rights concerns are also generating headwinds for Nuctech. The company does business with police and other authorities in Western China’s Xinjiang region, where Beijing stands accused of genocide for mass incarceration and abuse of minority Uyghur Muslims.

Despite pressure from U.S. and European policymakers on companies to stop doing business in Xinjiang, European governments have continued to award tens of millions of dollars in contracts — sometimes backed by European Union funds — to Nuctech.

Nuctech says on its Chinese website that China’s western regions, including Xinjiang, are “are important business areas” for the company. It has signed multiple contracts to provide X-ray equipment to Xinjiang’s Department of Transportation and Public Security Department.

It has provided license plate recognition devices for a police checkpoint in Xinjiang, Chinese government records show, and an integrated security system for the subway in Urumqi, the region’s capital city. It regularly showcases its security equipment at trade fairs in Xinjiang.

“Companies like Nuctech directly enable Xinjiang’s high-tech police state and its intrusive ways of suppressing ethnic minorities. This should be taken into account when Western governments and corporations interface with Nuctech,” said Adrian Zenz, a researcher who has documented abuses in Xinjiang and compiled evidence of the company’s activities in the region.

Nuctech’s Bos said he can understand those views, but that the company tries to steer clear of politics. “Our daily goal is to have equipment to secure the world more and better,” he said. “We don’t interfere with politics.”

Complex web of ownership

Nuctech opened a factory in Poland in 2018 with the tagline “Designed in China and manufactured in Europe.” But ultimate responsibility for the company lies far from Warsaw, with the state-owned Assets Supervision and Administration Commission of the State Council in Beijing, China’s top governing body.

Nuctech’s ownership structure is so complex that it can be difficult for outsiders to understand the true lines of influence and accountability.

Scott Kennedy, a Chinese economic policy expert at the Center for Strategic and International Studies in Washington, said that the ambiguous boundaries between the Communist Party, state companies and financial institutions in China — which have only grown murkier under China’s leader, Xi Jinping — can make it difficult to grasp how companies like Nuctech are structured and operate.

“Consider if the roles were reversed. If the Chinese were acquiring this equipment for their airports they’d want a whole variety of assurances,” Kennedy said. “China has launched a high-tech self-sufficiency drive because they don’t feel safe with foreign technology in their supply chain.”

What is clear is that Nuctech, from its very origins, has been tied to Chinese government, academic and military interests.

Nuctech was founded as an offshoot of Tsinghua University, an elite public research university in Beijing. It grew with backing from the Chinese government and for years was run by the son of China’s former leader, Hu Jintao.

Datenna, a Dutch economic intelligence company focused on China, mapped the ownership structure of Nuctech and found a dozen major entities across four layers of shareholding, including four state-owned enterprises and three government entities.

Today the majority shareholder in Nuctech is Tongfang Co., which has a 71% stake. The largest shareholder in Tongfang, in turn, is the investment arm of the China National Nuclear Corp. (CNNC), a state-run energy and defense conglomerate controlled by China’s State Council. The U.S. Defense Department classifies CNNC as a Chinese military company because it shares advanced technologies and expertise with the People’s Liberation Army.

Xi has further blurred the lines between China’s civilian and military activities and deepened the power of the ruling Communist Party within private enterprises. One way: the creation of dozens of government-backed financing vehicles designed to speed the development of technologies that have both military and commercial applications.

In fact, one of those vehicles, the National Military-Civil Fusion Industry Investment Fund, announced in June 2020 that it wanted to take a 4.4% stake in Nuctech’s majority shareholder, along with the right to appoint a director to the Tongfang board. It never happened — “changes in the market environment,” Tongfeng explained in a Chinese stock exchange filing.

But there are other links between Nuctech’s ownership structure and the fusion fund.

CNNC, which has a 21% interest in Nuctech, holds a stake of more than 7% in the fund, according to Qichacha, a Chinese corporate information platform. They also share personnel: Chen Shutang, a member of CNNC’s Party Leadership Group and the company’s chief accountant serves as a director of the fund, records show.

“The question here is whether or not we want to allow Nuctech, which is controlled by the Chinese state and linked to the Chinese military, to be involved in crucial parts of our border security and infrastructure,” said Jaap van Etten, a former Dutch diplomat and CEO of Datenna.

Nuctech maintains that its operations are shaped by market forces, not politics, and says CNNC doesn’t control its corporate management or decision-making.

“We are a normal commercial operator here in Europe which has to obey the laws,” said Nuctech’s Bos. “We work here with local staff members, we pay tax, contribute to the social community and have local suppliers.”

But experts say these touchpoints are further evidence of the government and military interests encircling the company and show its strategic interest to Beijing.

“Under Xi Jinping, the national security elements of the state are being fused with the technological and innovation dimensions of the state,” said Tai Ming Cheung, a professor at UC San Diego’s School of Global Policy and Strategy.

“Military-civil fusion is one of the key battlegrounds between the U.S. and China. The Europeans will have to figure out where they stand.” 

 

 

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CDC: Prior Infection Plus Vaccines Provide Best COVID Protection

A new study in two states that compares coronavirus protection from a prior infection and vaccination concludes that getting the shots is still the safest way to prevent COVID-19. 

The study examined infections in New York and California last summer and fall and found people who were both vaccinated and had survived a prior bout of COVID-19 had the most protection.

But unvaccinated people with a past infection were a close second. By fall, when the more contagious delta variant had taken over but boosters weren’t yet widespread, that group had a lower case rate than vaccinated people who had no past infection. 

The Centers for Disease Control and Prevention, which released the study Wednesday, noted several caveats to the research. And some outside experts were cautious of the findings and wary of how they might be interpreted. 

“The bottom-line message is that from symptomatic COVID infection you do generate some immunity,” said immunologist E. John Wherry of the University of Pennsylvania. “But it’s still much safer to get your immunity from vaccination than from infection.”

Vaccination has long been urged even after a case of COVID-19 because both kinds of protection eventually wane — and there are too many unknowns to rely only on a past infection, especially a long-ago one, added immunologist Ali Ellebedy at Washington University in St. Louis. 

“There are so many variables you cannot control that you just cannot use it as a way to say, ‘Oh, I’m infected, then I am protected,’ ” Ellebedy said.

Other studies

The research does fall in line with a small cluster of studies that found unvaccinated people with a previous infection had lower risks of COVID-19 diagnosis or illness than vaccinated people who were never before infected. 

The new study’s findings do make sense, said Christine Petersen, a University of Iowa epidemiologist. She said a vaccine developed against an earlier form of the coronavirus is likely to become less and less effective against newer, mutated versions. 

However, experts said, there are a number of possible other factors at play, including whether the vaccine’s effectiveness simply faded over time in many people and to what extent mask wearing and other behaviors played a part in what happened. 

Another thing to consider: The “staunchly unvaccinated” aren’t likely to get tested and the study only included lab-confirmed cases, Wherry said. 

“It may be that we’re not picking up as many reinfections in the unvaccinated group,” he said. 

CDC officials noted other limitations. The study was done before the omicron variant took over and before many Americans received booster doses, which have been shown to dramatically amplify protection by raising levels of virus-fighting antibodies. The analysis also did not include information on the severity of past infections or address the risk of severe illness or death from COVID-19. 

‘Safest strategy’

The study authors concluded vaccination “remains the safest strategy” to prevent infections and “all eligible persons should be up to date with COVID-19 vaccination.” 

The researchers looked at infections in California and New York, which together account for about 18% of the U.S. population. They also looked at COVID-19 hospitalizations in California. 

Overall, about 70% of the adults in each state were vaccinated; another 5% were vaccinated and had a previous infection. A little less than 20% weren’t vaccinated; and roughly 5% were unvaccinated but had a past infection. 

The researchers looked at COVID-19 cases from the end of last May until mid-November and calculated how often new infections happened in each group. As time went on, vaccine-only protection looked less and less impressive. 

By early October, compared with unvaccinated people who didn’t have a prior infection, case rates were: 

— Sixfold lower in California and 4.5-fold lower in New York in those who were vaccinated but not previously infected. 

— 29-fold lower in California and 15-fold lower in New York in those who had been infected but never vaccinated. 

— 32.5-fold lower in California and 20-fold lower in New York in those who had been infected and vaccinated. 

But the difference in the rates between those last two groups was not statistically significant, the researchers found. 

Hospitalization data, only from California, followed a similar pattern. 

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Teen Pilot One Stop from Finishing Round-the-world Solo Flight

A 19-year-old British-Belgian pilot landed her plane on Wednesday at an airstrip near Frankfurt, Germany, one stop away from becoming the youngest woman to fly around the world solo.

Zara Rutherford told reporters she wanted to “sleep for a week” after she climbed out of the single-seat Shark ultralight aircraft at Egelsbach airfield a few kilometers from Frankfurt. If all goes as planned, Rutherford will land Thursday in Kortrijk, Belgium, where her journey began August 18. 

The nearly 51,500-kilometer journey took her across the Atlantic Ocean, over Iceland and Greenland, and into New York City. Down the U.S. East Coast and the Caribbean to Columbia then back up through Central America and up the U.S. West Coast to Alaska and across the Bering Strait to Russia, south to South Korea, Indonesia, India, the Mideast and back to Europe.

The trip was all the more challenging as she flew without the aid of flight instruments or a pressurized cabin. 

Weather, minor equipment issues and visa problems in Asia set her back from her schedule by several days. But at this point, Rutherford told reporters she is glad to be almost done.

She said her big goal is to use her experience to encourage other young women to go into flying or study science, technology and mathematics “and other fields they might not have thought about.” 

Rutherford plans to go to college next September in either Britain or the United States to study engineering.

If she lands in Belgium as planned Thursday, Rutherford will have broken a record set by American aviator Shaesta Waiz, who was 30 when she set the existing record for the youngest woman to circumnavigate the world solo in 2017. 

Some information for this report was provided by The Associated Press and Reuters. 

 

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Global Health Experts Weigh In on Biden’s Pandemic Performance

It’s been a year since U.S. President Joe Biden took the oath of office on the steps of the U.S. Capitol. He inherited a global coronavirus pandemic that, from the campaign trail, he promised to end. VOA’s Arash Arabasadi reports on his handling of the pandemic.

Producer: Arash Arabasadi.

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French Actor Gaspard Ulliel, 37, Dies After Ski Accident

French actor Gaspard Ulliel, known for appearing in Chanel perfume ads as well as film and television roles, died Wednesday after a skiing accident in the Alps, according to his agent’s office. He was 37.

Ulliel portrayed the young Hannibal Lecter in 2007’s “Hannibal Rising” and fashion mogul Yves Saint Laurent in the 2014 biopic “Saint Laurent.” He is also in the upcoming Marvel series “Moon Knight,” and was the advertising face of the Chanel men’s fragrance Bleu de Chanel.

Ulliel was hospitalized Tuesday after the accident in the Savoie region’s Rosiere ski area, the Savoie prosecutor’s office said. The office of the actor’s agent said Ulliel died on Wednesday. It provided no details.

Local broadcaster France Bleu said Ulliel was hospitalized with a skull injury, and that he apparently collided with another skier at a crossing point on the slopes. The other skier was not hospitalized, according to France Bleu. Police and prosecutors would not discuss details of the accident.

Ulliel started in television while still in middle school and went on to win two of France’s top cinema awards, the Cesar. 

Tributes poured in from shocked fans and the corridors of power. French Prime Minister Jean Castex tweeted an homage that said, “Gaspard Ulliel grew up with cinema and cinema grew up with him. They loved each other madly.”

The accident conjured up memories of when Formula One great Michael Schumacher hit his head in a ski accident in 2013 in the French ski resort of Meribel, about 50 kilometers (30 miles) from where Ulliel was skiingl. Both were treated at Grenoble University Hospital.

Schumacher, 53, has not been seen in public in eight years, and little has been released about his physical and mental condition. The German auto racing legend suffered serious head injuries when he fell and hit the right side of his head on a rock off the side of a demarcated slope. He was skiing with his teenage son while on a family vacation in the Alps.

After Ulliel’s accident, the mountain police service for the Rosiere ski area said its personnel have been carrying out five or six rescues per day as the snow hardened in recent days.

In the neighboring Haute-Savoie region, a 5-year-old girl was killed Saturday when a skier crashed into her. The man was handed preliminary manslaughter charges, according to the Haute-Savoie prosecutor, who cited excessive speed as the likely reason for the accident.

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US Government to Distribute 400 Million High-Quality Face Masks

U.S. news outlets said Wednesday that the Biden administration will distribute 400 million high-quality face masks free of charge to the American people beginning next week.

A White House official, speaking anonymously, said the N95 masks will be shipped to thousands of local pharmacies and community health centers across the United States beginning later this week, with three masks available per adult. The program will be fully operational by early February.

The N95 masks are part of the 750 million masks housed in the federal government’s Strategic National Stockpile, which stores critical medicines and medical supplies for use during a public health emergency. The U.S. Centers for Disease Control and Prevention recently advised that N95 masks, which are designed to fit tightly on a person’s face, “offer the highest level of protection” against COVID-19, compared to other face masks.

The officials say the distribution of the N95 masks will be the largest deployment of personal protective equipment in U.S. history.

Announcement of the free N95 face masks comes on the same day as the official debut of the federal government’s new website that allows Americans to request free rapid coronavirus test kits. Millions of households began placing orders for the test kits Tuesday during a soft launch of Covidtests.gov. The website allows each household to order a maximum of four tests after clicking on a link that connects to a U.S. Postal Service form.

Some occupants of apartments and other multi-unit dwellings, however, complained on social media that the website’s address verification tool was enforcing the four-per-person household, only allowing one family per building to request the tests.

The two programs are part of an aggressive new effort by the Biden administration to combat a surge of new COVID-19 infections largely driven by the highly contagious omicron variant of the coronavirus.

A high-ranking official with the World Health Organization says the world could turn the corner on the COVID-19 pandemic this year through a more equitable distribution of vaccines and treatments.

Dr. Michael Ryan, the director of WHO’s health emergencies program, told the World Economic Forum Tuesday that COVID-19 may never be eradicated, but stressed the current public health emergency could finally come to an end if more vaccines finally reach the world’s poorest countries.

The U.N. health agency has repeatedly criticized the world’s richest countries for building up huge stockpiles of COVID-19 vaccines and using them to administer booster shots to its citizens, while poorer nations have barely received even a first dose of a vaccine.

More than 334,469,000 people around the globe have been sickened since COVID-19 was first detected in Wuhan, China in late 2019, according to figures compiled by the Johns Hopkins Coronavirus Resource Center. The center reports more than 5.5. million deaths globally.

Germany announced Wednesday that it had recorded 112,323 new COVID-19 cases, the country’s highest-ever daily figure and the first time it had broken the 100,000 mark for a single day. The Robert Koch Institute, Germany’s disease control and prevention agency, said 70 percent of the new cases were driven by the highly-contagious omicron variant. The surge of new infections has prompted the government of new Chancellor Olaf Scholz to consider imposing mandatory vaccinations.

Tokyo and 12 other Japanese prefectures will be placed under new COVID-19 restrictions effective Friday as Japan struggles with an omicron-driven surge. Prime Minister Fumio Kishida told reporters Wednesday in the Japanese capital the new decree will allow local governors to limit the operating hours of bars and restaurants and ban the sale of alcohol. The restrictions will remain in effect until February 13.

Some information for this report came from the Associated Press, Reuters, Agence France-Presse.

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