China Survelliance Net to Extend Across the Strait

J Michael Cole, former intelligence analyst, has a great piece in the Taipei Times today pointing out the problems with the stake that China Mobile has taken in Far EasTone....

While a 12 percent minority stake in a firm may appear innocuous, the target sector — telecommunications — is a sensitive one, as it touches on matters of individual liberties and freedom of expression. In democratic countries, intelligence agencies must obtain a warrant before they can intercept someone’s conversations on mobile phones, land lines or via electronic means of communication such as the Internet.

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No country today has refined the art of control and seizure of communication more than China, which relentlessly polices Internet chat rooms, phone conversations, e-mail, video content and SMS exchanges, as well as more traditional media such as print, radio and TV, doing so both preemptively — that is, to prevent individuals from making certain claims, or “leaking” information that is assessed as “secret” — and post-facto as evidence of subversion or “splittism.”

These efforts come in many guises, from cute cartoon reminders on Web sites and state-owned portals establishing the parameters of what users are allowed to say, to worryingly intrusive spyware targeting specific dissident groups within China and abroad, as was recently exposed in the Tracking GhostNet report.

It is with this in mind that China Mobile’s proposed investment in Taiwan’s third-largest telecoms service provider, which has a 25.5 percent share of the market of about 24.7 million subscribers, is so worrying. The problem does not lie with a Chinese company buying a stake in the Taiwanese firm, but the fact that the Chinese government has a 67.5 percent share in China Mobile. Not only does this mean that part of the NT$17.77 billion (US$528 million) investment would come from Chinese state coffers, but it would leave the door open for the introduction of Chinese individuals on the board of directors at Far EasTone.

Through this and by dint of further investments in the company, human-to-human contact, sharing of corporate data and electronic exchanges, the Chinese government could, if it chose, gain access to subscriber information (overtly or covertly) and thereby facilitate electronic surveillance of Taiwanese citizens. The implication is that the Chinese government could now monitor Taiwanese dissidents — or independence advocates — with far greater ease.

What makes this proposed investment doubly troubling is China Mobile’s chairman, Wang Jianzhou (王建宙), who during the World Economic Forum in Davos, Switzerland, last year, raised eyebrows after revealing with disquieting nonchalance the extent of the personal data his company had on Chinese subscribers as well as the willingness of his company to provide personal subscriber information to Chinese authorities on request. Although Wang has since 1999 worked in the private sector, his ties to the Chinese government include positions as technology director in the Zhe­jiang government, director-general of the posts and telecommunications bureau in Hangzhou, director-general of the planning and construction department at the Ministry of Posts and Telecommunications and director-general of the general planning department at the Ministry of Information Industry.

As J Michael notes, once China has its foot in the door, there is no doubt that China Mobile's stake will be used against Taiwan citizens.

One reason that is so is because Taiwan is already classified as an "endemic surveillance society" by Privacy International, and has one of the worst international records. There is nothing in the Taiwan experience to suggest there will be resistance to a China presence in Taiwan's surveillance networks. Note that the presence of Chinese personnel at Far EasTone at some point, implied by the deal, means that China will not merely be able monitor dissidence in all its forms, but also to intercept corporate and private business data. Forbes.com offers this article on China from last year:

McIndoe says the tracking usually begins with the temporary confiscation of a laptop, cellphone or PDA at customs. If this happens, consider it a "virtual guarantee" that its contents will copied, including everything from sensitive call lists to clues on how to infiltrate a network back home. Calls and text messages can also be remotely monitored, particularly if a key word like Tibet or Falun Gong has triggered the surveillance system.

Safest Bets
Unfortunately, cellphones or PDAs purchased outside of China are not immune to eavesdropping. Once a call or text goes through the country's cellphone towers, it may be picked up by authorities. McIndoe's advice is to leave these devices at home or wipe them clean of information before arriving. In some cases, employers keep sanitized loaner laptops on hand for this purpose. Either way, devices should be professionally scanned for bugs if they return to the U.S.

Though it may seem safer, e-mailing from an Internet cafe is the worst alternative. These are aggressively monitored by authorities interested in browsing and e-mailing activities. McIndoe warns that log-in usernames and passwords are easily captured and that accessing a virtual private network from a cafe or any wi-fi hotspot can expose the system to malicious software. Exercise caution about accessing e-mail accounts and be sure to change logins upon returning home.

Another article today noted that KMT and DPP legislators were criticizing the deal:

The unexpected move incurred criticism from lawmakers on the Transportation Committee. Chinese Nationalist Party (KMT) Legislator Lo Shu-lei (羅淑蕾) said the announcement had been made to cause speculation on the markets. Lo claimed that Far Eastern Group had been able to boost its total market value to NT$94.3 billion following the announcement.

“[The announcement] is intended to cheat and lie to individual investors in the stock market so they will invest in the company,” Lo said. “But the NCC have done nothing about it.”

Lo said the maximum penalty of NT$600,000 for violating the Act Governing Relations between peoples of the Taiwan Area and the Mainland Area (兩岸人民關係條例) meant nothing to the company.

Peng said the Mainland Affairs Council (MAC) remained the nation’s highest authority when approving Chinese investment in the telecommunications industry. The NCC was only planning to allow Chinese investment in second-category telecoms carriers, not first-category carriers, she said.

The Telecommunications Act (電信法) states that first category businesses hold licenses allowing them to construct networks and offer services, whereas second category firms can only lease networks to offer services.

“Chinese firms are prohibited from investing in telecommunication services,” Peng said, adding that the MAC is canvasing suggestions from different administrative authorities to formulate a list of industries in which Chinese firms would be allowed to invest.

Peng said the NCC has asked Far EasTone to brief the commission about the investment on Monday. The firm’s representative assured the commissioners that so far it had yet to receive any investment from China Mobile.

In other words, Far EasTone's China funding inflow is simply one manifestation of the fundamental problem of large firm disregard for the law in Taiwan, and of the government's reluctance to pass meaningful legislation and to make meaningful the existing legal framework. Does anyone really believe that in this context of legal ambiguity and regulatory impotence, China Mobile will be blocked from accessing Taiwan subscriber data and from listening in to calls?
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Daily Links

• Echo Taiwan found this bird's eye view of the attack on protesters at the temple in Tainan earlier this week.
• Exports continue to fall.
• Understanding China's external portfolio from the CFR.
• US Committee of 100 on China meeting on CSPAN. US experts apparently think Taiwan's democracy gives Ma the right to sell out the island to China. They can go right on claiming that to each other as long as the Taiwanese remain in paralyzed somnabulence.

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