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PJ Media encourages you to read our updated PRIVACY POLICY and COOKIE POLICY.

The global world vs the global world

News that China was caught inserting a custom spy chip into the computer supply chain in 2015 is worrisome because it is probably the tip of a very large iceberg.  "The attack by Chinese spies reached almost 30 U.S. companies, including Amazon and Apple, by compromising America’s technology supply chain, according to extensive interviews with government and corporate sources."  Beijing's strategy was clever and simple: they piggybacked their rogue chip onto a ubiquitous video compression circuit board they manufactured for a US company by intimidating or bribing engineers at the plant level.

The middlemen would request changes to the motherboards’ original designs, initially offering bribes in conjunction with their unusual requests. If that didn’t work, they threatened factory managers with inspections that could shut down their plants. ...

This system could let the attackers alter how the device functioned ... alter part of that code so the server won’t check for a password—and presto! A secure machine is open to any and all users.  ... U.S. officials had caught China experimenting with hardware tampering before, but they’d never seen anything of this scale and ambition. ...

Obama was reluctant to get tough on the Chinese because they were by then part of his world. "One Friday in late September 2015, President Barack Obama and Chinese President Xi Jinping appeared together ... after months of negotiations, the U.S. had extracted from China a grand promise: It would no longer support the theft by hackers of U.S. intellectual property to benefit Chinese companies. Left out of those pronouncements ... was the White House’s deep concern that China was willing to offer this concession because it was already developing far more advanced and surreptitious forms of hacking founded on its near monopoly of the technology supply chain."

Global interdependence, whether reflected in manufacturing partnershipss or international political corruption imposed risks which are only now being fully realized. China can spy on the West and it's hard to do anything about it. The difficulty of escaping from the logistics trap was  forcefully described by the South China Morning Post. "Tethered by the supply chain: US tech community resists Donald Trump’s China tariffs, fearing collateral damage."  Companies and countries are now tethered to their enemies.

Josh Kallmer of the Information Technology Industry Council said that "the companies that are engaged both in the production of goods and supply of services have really complex global supply chains that cannot just be picked up and moved". ... Trump said at the time that ZTE’s violations were a national security concern, and the hard line the commerce department was taking was in keeping with the president’s threats to place tariffs on up to US$150 billion in Chinese imports.