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Security: Europe’s pushback against Chinese tech has only just begun

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Hacking scheme to steal university research for military applications traced back to China
Prominent names feature on the hacking list.

Amid growing international suspicion about China’s tech companies, a new report suggests the Chinese government could be behind the theft of corporate secrets from chip-making equipment business ASML. 

According to Dutch newspaper Financieele Dagblad, technology stolen by employees at ASML in California was shared with XTAL, a company with links to the Chinese state.

ASML has a dominant position in selling circuitry technology used in making processors. Customers include leading chipmakers such as Intel, Samsung, TSMC, and GlobalFoundries.

SEE: Cybersecurity in an IoT and mobile world (ZDNet special report) | Download the report as a PDF (TechRepublic)

Following the report, ASML, which is headquartered in Veldhoven in the Netherlands, downplayed what boss Peter Wennink disparagingly described as a “conspiracy theory”.

“The facts of the matter are that we were robbed by a handful of our own employees based in Silicon Valley, who had broken the law to enrich themselves,” Wennink said in the statement about the California incident, which resulted in a November 2018 court case in the US.

“Some of the individuals happened to be Chinese nationals, but individuals from other nations were also involved. We resent any suggestion that this event should have any implication for ASML conducting business in China.”

Last year, ASML did about €1.7bn ($1.9bn) of business in China and expected to do about the same this year. That is a significant part of the company’s business, which reported net sales of €10.9bn in 2018.

Despite the denials from ASML, this case is bound to fuel growing suspicions in Europe about Chinese intentions.

“This is not the only such incident,” confirms Jonathan Holslag, a professor of international politics at Brussels University, who has written several books about China.

“In general, it’s taken European countries a lot of time to get to grips with the magnitude of the Chinese industrial espionage problem. They’ve been more inclined to brush it aside and prioritize business opportunities,” he tells ZDNet.

Recently several European leaders, including Dutch prime minister Mark Rutte and French president Emmanuel Macron, have called for a more realistic, and less naive, relationship with China.

In Germany, members of the business community who first saw the Chinese market as a grand opportunity have returned home with bitter complaints about unfair treatment and difficult conditions. Angst about the 2016 Chinese takeover of German robotics company, Kuka, has not abated either.

In March, Brussels finalized a new EU investment-screening framework, an area where European states have been behind other countries. The framework, which entered into force in April, screens potential external investors for risks to security or public order, especially if there is involvement with critical infrastructure or other sensitive projects.

As the Mercator Institute for China Studies, or MERICS, in Berlin noted in a March 2019 paper: “While non-discrimination toward the nationality of an investor is a core principle … of the new regulation, some of its provisions overlap with core characteristics of Chinese investment in Europe to date.”

For one thing, “the new rules call for heightened scrutiny of investments by directly or indirectly state-controlled entities”, the institute’s analysts point out.

However, as Holslag also tells ZDNet, the new European rules cannot be a cure-all because there is still a lack of intelligence about Chinese companies, which often arrive in a sector or a company as minority shareholders, or working through intermediaries.

“It’s one thing to claim companies need to be screened but that requires a lot of resources,” the China expert explains. Those costs can be problematic, especially for smaller European countries, he adds.

Doubtless this issue is part of the reason why some analysts have expressed concern about a Chinese charm offensive in smaller eastern European states. After last week’s EU-Beijing summit in Brussels, Chinese premier Li Keqiang went to Croatia for the first time to meet eastern European business people and politicians there.

A leaked draft of potential legislation from Germany’s Ministry of the Interior, seen by local journalists at the end of March, appears to suggest that the Germans want better intelligence gathering.

Germany has already been warned by the US that if it uses Chinese telecoms equipment manufacturer Huawei, in the new, high-speed, 5G network, the US will restrict intelligence sharing.

Although Huawei has continuously denied it, the suspicion that the company might use its componentry to spy on users, or be forced to give up data by the Chinese government, isn’t going away.

Germany had already increased security specifications for manufacturers tendering on its 5G project and the Interior Ministry’s 90-page draft bill goes further. It suggests that any company providing “core componentry for critical infrastructure” in Germany will need to sign a “declaration of trustworthiness”, after which its equipment will also undergo a more thorough security check.

Despite the optimistic verdict on last week’s EU-China summit in Brussels, where the Chinese promised to be better business partners, long-time China watchers, Kristin Shi-Kupfer and Mareike Ohlberg, the Berlin-based authors of an April study, ‘China’s digital rise. Challenges for Europe‘, are unsure it will change the current, distrustful mood in the tech sector.

“A pushback against China’s digitization and technology may only just have begun,” they conclude. 

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These Are 3 Of The Worst EVs Of All Time

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If you walk into any Chevrolet dealership today, you are more than likely to see a few Chevy Sparks on the lot. The current model is equipped with a 1.4L four-cylinder engine that puts out a grand total of 98 horsepower. It’s Chevy’s cheapest car at just under $14,000 and offers features like CarPlay standard. Until recently, some new Sparks could be configured with manual crank windows — truly innovative.

Back in 2013, General Motors made an all-electric version of the Spark to comply with California’s (new at the time) emissions regulations (via Green Car Reports). The result was a less than valiant effort. Its motors were assembled just outside of Baltimore, Maryland, and shipped all the way to GM’s operations in South Korea for production.

For specs, the Spark wasn’t weak at 140 horsepower and over 300 foot-pounds of torque, but it only had a realistic range of about 80 miles, and it took more than seven hours to charge without a fast charger. An Edmunds review of the 2016 model noted that charging from a 110-volt outlet took over 20 hours for a full battery. To make matters worse, Spark EVs in the United States were only offered in Oregon, California and Maryland, according to Edmunds. 

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Which Is The Better Electric Car?

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If you prioritize acceleration, battery range, and self-driving technology, the Tesla Model 3 is the clear winner. However, the Polestar 2 comes on top if you consider comfort and interior quality. Besides that, the Polestar 2 is a hatchback with hints of a premium Volvo and the Tesla Model 3 is a sedan similar to the Model S — but smaller.

As for the price, the 2023 Polestar 2 starts at $48,800. If you’re buying the 2022 model, it will cost you about $2,500 less than the 2023 model. But if you want the 2023 Long Range Dual Motor trim, it will cost you about $51,900. The biggest improvement of the 2023 Polestar 2 over the 2022 model year is the 11 miles of extra range on the Long Range Dual Motor variant.

The Tesla Model 3 Rear-Wheel Drive starts at $46,990, while the Long-Range trim is sold at $54,490. The Tesla Model 3 Performance is the most expensive trim at $61,990. But with the U.S. Inflation Reduction Act, the Tesla Model 3 will become eligible for the $7,500 tax credit starting January 1, 2023 — although only the trims that are sold for less than $55,000 will be considered.

Unless Volvo builds the Polestar 2 in the U.S., it won’t qualify for the new tax incentive under the Inflation Reduction Act. However, we know Volvo is building an electric SUV in the U.S., and it will be known as the Polestar 3. 

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Google Stadia Shutdown Took Employees, Game Devs By Surprise

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Video game designer and founding member of multiple game studios, Rebecca Heineman shared on Twitter that her company was lined up for a Stadia game release on the first day of November, but instead got heartbreak. Indie developer Simon Roth mentioned that neither did he receive any warning in advance from Google, nor did the Stadia division reach out to him via email or phone well after the news broke out.

But it was not just indie developers that Google kept in the dark. Even heavyweights like Bungie, which brought users “Halo” and “Destiny” games, were apparently unaware of the Stadia bombshell dropping out of nowhere. Plaion, which owns multiple publishing units and ten game studios, also pointed out that it wasn’t informed in advance. Publishers Goldfire Studios and No More Robots told Kotaku that they each had a game coming out on Stadia next year.

Pixel Games shared that it finalized the deal to bring no less than three games over to Google’s cloud gaming service just a day earlier. Google, on the other hand, is reportedly working with the affected studios with schemes like reimbursing the costs of development and porting existing games to its platform. According to an Axios report, Stadia reps are reaching out to publishing and development partners with reimbursement deals.

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