FBI Disrupts Major China Hacking Plan in the US | China in Focus

Welcome to China In Focus. I'm Tiffany Meyer. Our top story. Washington announces a win in its latest tit-for-tat cyber battle with Beijing. The FBI says it countered a massive Beijing-backed hacking network, key U.S. infrastructure organizations and U.S. allies among its targets. Countering the Chinese Communist Party's unfair business practices like large state subsidies and slave labor. A panel on Capitol Hill analyzes what could happen if they continue. And so if we wait for a world where a Taiwan invasion happens and then hoping that that will break us out of our stupor, it will have already been too late. A Japanese boy dies hours after a violent attack by a man in China Wednesday. Senior Japanese officials are urging Beijing to provide an explanation. And a first-hand account from a young man tortured in a Chinese mental hospital. He says he was held there after he exposed a massacre conducted by the Chinese Communist Party. U.S. law enforcement tackling a vast hacking operation backed by the Chinese Communist regime. According to FBI Chief Christopher Wray, hundreds of thousands of devices were combined to create this massive botnet. And it directly threatened key infrastructure in the United States. Here's Wray speaking at the Aspen Cyber Summit in Washington on Wednesday. This botnet was run by a different group of hackers, again working at the direction of the Chinese government, known as Flax Typhoon. But their chairman has publicly admitted that for years his company has collected intelligence and performed reconnaissance for Chinese government security agencies. Flax Typhoon was targeting critical infrastructure across the U.S. and overseas. Everyone from corporations and media organizations to universities and government agencies. Wray said that the Chinese group had disguised itself as an IT service company and hid in the U.S. cyber system for years. But in fact, it had been hunting for U.S. confidential data on Beijing's instructions. Beyond intelligence gathering, the FBI chief said Flax Typhoon also caused real harm to its victims. One organization in California, for instance, suffered an all-hands-on-deck cyber security incident. An IT staff needed to work long hours to remediate the threats and replace hardware, all of which took swaths of the organization offline and caused a significant financial damage. Wray said the FBI wrested control of thousands of compromised devices back from Flax Typhoon just last week. Half of the hijacked devices by Flax Typhoon were located in the U.S., but its victims were from all over the world, including some of Washington's closest allies, like the U.K., Canada and Australia. Wray called the battle one round and a much longer fight, adding that Beijing has not ruled out continuing to threaten and infiltrate U.S. businesses and key infrastructure, including the power grid, communications, plus water and transportation systems. As for why the U.S. government has warned that Beijing is racking up backdoor access to critical systems to use as leverage and disrupt Washington from responding to a potential Chinese invasion of Taiwan, China's embassy in Washington lashed out at the FBI's report, calling the U.S. allegations groundless. The Chinese Communist Party's economy is spiraling, but how are the financial blows being offset by non-market business practices? And what will happen if the West leaves them unchecked? NTD's Washington correspondent Jack Bradley has more from Capitol Hill. Countering the Chinese Communist Party's technology sector. This was a topic of discussion at a panel on Capitol Hill on Wednesday. They discussed what would happen if the Chinese regime's unfair business practices were left unchecked. The U.S. economic thinking is really oriented around one thing, and that's allocation efficiency. The Chinese system is not oriented. They don't care about that. What they care about first and foremost is dominating advanced industries that are global and lead to power. The event was hosted by the Washington-based think tank Information Technology and Innovation Foundation. One of the panelists, Rick Switzer, the former director of the State Department, said the U.S. needs to create industrial policy that is self-reliant rather than sourcing globally or being out-competed by China's highly subsidized products. And so if we wait for a world where a Taiwan invasion happens and then hoping that that will break us out of our stupor, it will have already been too late. A war over Taiwan will mean the collapse of the U.S. industrial ecosystem. Keynote speaker Congressman John Molinar, who's the chair of the House Select Committee on the CCP, said he used to think that economic engagement with the Chinese regime will lead to more freedom in the country. But it turned out the opposite was true. From the militarization of the South China Sea to unabashed economic coercion and market manipulation, flooding our communities with fentanyl, the Chinese Communist Party has shown its true colors. The bipartisan House Select Committee on the CCP has released over 150 recommendations on how to counter the Chinese Communist Party. This may be one of the few areas of bipartisan agreement that we see in Congress. Reporting from Washington, D.C., Jack Bradley, NTD News. Is Chinese-owned short video app TikTok gathering sensitive American user data, and could it be used by the Chinese communist regime? Steve Lanz with NTD's Capital Report spoke to Daniel Castro, vice president and director of the Center for Data Innovation at the Information Technology and Innovation Foundation. They discussed the danger TikTok poses to safety and privacy. Daniel Castro, thank you so much for joining us. Thanks for having me. Of course, Daniel, the judge is repeatedly pressing TikTok's attorneys about why the platform is so reluctant to cut ties with the Chinese Communist Party, and if they did so, that it wouldn't actually be banned from the United States. From a data security perspective, why is this the crux of the matter? I think there are a lot of Americans, including many in Washington, who are concerned about the fact that this is a platform, TikTok, that's used across the country. It's used by people in the military. It's used by people, students, children. It's used by everyone. And this app can collect data, and that data is potentially being sent back to China. And once it gets there, we really don't know exactly what the government can do to access it, the Chinese government. And another major concern is that the CCP is shaping American opinion and thought through these TikTok algorithms. How effective can this be, and what evidence do we have of this taking place, if any? There's some evidence that there are certain types of events that show up less frequently on TikTok than they do on other platforms. TikTok's response is that this is just the nature of different user bases, different interests. But we would have to see more studies to know for sure. There's certainly, though, the fact that TikTok's algorithm itself is something that is not open. So we don't know what exactly they're doing, what information, what kind of content they're prioritizing over other content. And that's something that, again, raises more questions. Speaking of that closed off algorithm, there's a few things that I'm curious, genuinely curious about. One is why the algorithm, and correct me if I'm wrong, is different from the one that they use in China and the one that they have here operating in the United States. People talk about this TikTok ban. It's not really banned. It's just forcing the sale of. If they get fair market value, why not sell it? And it seems like under no circumstances did they want to give up the goods, if you will, to that algorithm. That's right. So it is a global company, but it operates differently in China than it does the rest of the world. One of the criticisms is that the company has kind of a better algorithm, some people say, for children in China than they do for children in the United States. I think the company would argue it's just different markets. They're treating them differently. But some people are concerned that maybe they're using this app as a way to harm U.S. children, at least not take the same precautions that they're taking in China to protect them. As to the law itself, yes, this was a law that President Biden signed in April that gives the company up to 90 days to sell, or it will face a ban. And so I think that the company, from the company's perspective, they're saying, you know, one, we don't want to sell. And two, it's not clear that there's a buyer out there who would actually take the company, because many of the deep pockets that could afford this would be big tech firms. And the antitrust policies would generally oppose such a merger between, you know, for example, a meta Facebook and Instagram buying TikTok. But third, it's also hard to see exactly how the company could sell without turning over some of its secret sauce, which is the algorithm, and how it could split itself into two companies, one that's running the rest of the world and one that's running for the United States, because all this data still has to connect and share. If these are different companies, it's not clear how all that data would come together. Daniel Castro, really appreciate you joining us. Thank you. Absolutely. And a tragedy in China earlier today, a Japanese boy died at the hospital after being stabbed by a Chinese man outside his school in southern China. Japanese senior officials are now urging China to provide all the facts around the case. Here's Tokyo's foreign minister. The embassy of Japan in China and the consulate general in Guangzhou have requested all the facts surrounding this incident from China, and have also strongly requested that all possible efforts be made to ensure the safety of Japanese nationals. I am a random resident in Shenzhen. As the Chinese people, we oppose this behavior. We oppose this teaching of hatred. Many of us have been under such hatred education for a long time, which has led to such evil consequences. The Japanese prime minister told reporters he considers this an extremely despicable crime. Many Chinese citizens stopped by the school and laid bouquets for the 10-year-old Japanese boy. Most of them covered themselves with sunglasses and face masks to avoid being recorded or recognized. However, on Chinese social media, there are still many hateful comments directed toward Japanese people. Earlier in June, a Chinese citizen attacked a Japanese mother and her son with a knife. In the same month, four U.S. instructors were also victims of knife attacks by a Chinese man. The motive of the violent attack remains unknown. On the heels of the deadly incident, some experts point out that it's part of a greater trend, as tensions between China and Japan soar. The two nations are facing off in a drawn-out dispute over maritime activities. The latest incident happened Wednesday, when a Chinese aircraft carrier ventured into waters along Japan's coast for the first time, just 24 nautical miles from the nation's coastline. Japan's government called the ship's presence totally unacceptable. China responded on Thursday, saying the carrier was on a training exercise in line with international laws. Beijing said Japan was over-interpreting the issue. Chinese military activity has increased near Japan and around Taiwan in recent years. Last month, Japan launched a protest with Beijing after a Chinese Navy survey vessel entered Japanese waters. It also accused a Chinese spy plane of breaching its airspace. Coming up, Taiwan is warning about fake online information. That's as some social media accounts reportedly try to link the detonation of pagers targeting Hezbollah with Taiwan's government. Who is behind the online operations? A first-hand account from a young man tortured in a Chinese mental hospital. He says he was held there after he exposed a massacre conducted by the Chinese Communist Party. And the globe's biggest buyer of foreign food is losing its purchasing power. And experts say the shift won't be changing anytime soon. More on that after the break, here on China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer. Taiwan officials are warning about fake online information. That's regarding the detonation of thousands of pagers targeting Hezbollah in Lebanon after a Taiwanese firm was linked to the production of the devices. NTD Taiwan correspondent Joy Qiu has more. National security units are monitoring online rumors suspected to originate from abroad that aim to maliciously link Taiwan's government to the case. This is not the case. What can be certain is that pagers exported from Taiwan do not have a problem with exploding. Taiwan-based company Gold Apollo said it did not manufacture the devices used in the attack. Instead, they were made by a Europe-based company which has a license to use its brand. After the attack, several overseas social media accounts tried to link the case with Taiwan's government. Taiwan's national security department suspects Beijing is behind these efforts. Joy Qiu, NTD News, Taiwan. The mark of Taiwan-based company Gold Apollo found on pagers that detonated across Lebanon Tuesday. Two European companies were allegedly involved in the manufacturing of these pagers. The Taiwanese company said the devices were made by Hungary-based BAC Consulting. But Hungarian media reported that the sale was actually facilitated by a Bulgaria-based company called Nortak. The Bulgarian government said it's probing a Bulgarian company over the matter. A young man sent to a mental hospital in China only to be thrust into a nightmare. He says it all started after he voiced his opinions about China's system and his comments found their way to Chinese police through his neighbors. He later fled China to escape further persecution. Now living in the free world, he reveals that Chinese mental hospitals are being used by the Chinese Communist Party to harshly suppress dissent. Here's more on his story. Zhou Xiao is an IT professional from eastern China's Jiangsu province. In 2012, he bypassed China's internet firewall to watch a documentary about the 1989 Tiananmen massacre, where Chinese soldiers opened fire on students and citizens. Estimates put the death toll in the thousands. But Zhou's decision to share what he learned with his neighbors landed him in trouble. He was reported on to local police and was sent to a mental hospital without medical referral or legal process. Just a warning, the following content may be disturbing to some viewers. The mental hospital is a very brutal place, very vicious. Why? Because it has almost unlimited power. They can very easily destroy someone. They don't go through any procedure. They just say you're sick or violent. Then they can restrain you for months or even a year. He says staff injected him with unknown drugs and subjected him to other so-called treatments. I went through electroconvulsive therapy, ECT, five times. It's an electric shock to the brain. He says the shocks caused memory loss. He also witnessed other practices. They used needles, like acupuncture needles. They inserted many into the body and then applied electric current. They said it's electroshock. They openly admitted it wasn't for treatment, but for punishment. I didn't go through it myself, but I saw others who did. They were in severe pain, screaming and crying uncontrollably. During his stay, he saw at least three men die, one from illness, another was beaten to death. A third man vanished and wasn't seen again. At the time, the hospital also repeatedly drew blood from young patients. He believes the samples were used for organ matching, making them potential targets for forced organ harvesting. He was kept in the hospital for seven months. After his release, he fled China and arrived in Japan in 2019. Chinese are really suffering and pitiful. Chinese people didn't choose the Chinese Communist Party. Instead, party forced itself on Chinese people and won't leave. I can't help but wonder how the Chinese people ended up with such a ruthless, rogues party. The U.S. Congressional Executive Commission on China reports that the Chinese regime often sends people with no history or confirmation of mental health issues to psychiatric hospitals and uses these facilities as a means of political repression. When the world's largest food buyer, China, loses buying power, farmers across the world feel it. Recent data shows that the country has been reducing its grain imports as it deals with a shrinking population and a slow economy. The U.S. Department of Agriculture says its forecast for food exports to China is $3 billion lower than expected. It said the trend is driven by reduced demand, lower prices and strong competition. Besides the U.S., French barley and Australian wheat farms are also taking a hit, given the smaller purchase orders from China. What's at the root of the shift? Inside China, citizens have grappled with a slowing economy and a severe real estate crisis in recent years. Because of it, growing numbers of people are saving rather than spending. With households making decisions like eating out less and purchasing fewer expensive items, like meat, while grocery shopping. On top of lower consumer confidence, the amount of shoppers in the country is also shrinking. China is facing an aging population and has seen population numbers fall for two years in a row. The COVID-19 pandemic also caused mass deaths in the country. According to NTD's own investigation and calculations, the death toll across China over the past four years could total over 100 million. Ultra-cheap and small electric vehicles are popular in China. State subsidies and low-cost manufacturing give Chinese automakers a big advantage. But why aren't cheap electric vehicles as available in the U.S. for people who want them? NTD's Sean Marshall investigates. Some may not know that GM is partnered with Chinese auto manufacturer Wuling. The Wuling Hongwang Mini EV is a $5,000 electric car sold in China. It sold for as little as $4,000 and at one time around $2,800 with a mandatory $28 a month five-year EV battery subscription. The new model seems to be on the horizon according to patent photos that must be registered in China before a car can be sold. Many people on social media are commenting that they love an ultra-cheap simple electric vehicle but they are non-existent for U.S. shoppers. U.S. manufacturers have generally agreed that micro compact EVs or very cheap EVs are not profitable inside the U.S. That's why companies like smart the smart car that most of us know left a couple of years ago and that's why the cheapest EV coming to market today is the Nissan Leaf which has been around for quite some time. The Bolt even from Chevy that left and that was about $30,000. The cheapest one you can get today is $28,000. Even 100% tariffs make many Chinese EVs cheaper than American EVs. Industry experts have differing opinions about the lack of cheap EVs in the United States. Kevin Tynan, the director of research at an auto dealer focused investment bank, the Procedo Group, told InsideEV manufacturers are in the business of making money not selling vehicles. He says that car companies can get a bigger margin on a more expensive product. Even if it's a smaller battery vehicle the money is going to be made on the expensive versions. Ford CEO Jim Farley gave a different opinion in Ford's second quarter earnings call. He believes smaller more affordable vehicles are the way to go for EV and volume. Why? Because the math is completely different than internal combustion engines. In ICE the business we've been in for 120 years the bigger the vehicle the higher the margin but it's exactly the opposite for EVs. The larger the vehicle the bigger the battery the more pressure on margin because customers will not pay a premium for those larger batteries. With that said you still won't find a Ford EV or any new electric vehicle in the United States for under $20,000. Sean Marshall, NTD News. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover send us an email at ChinaInFocusNTD.com. We'd love to hear from you. For around the clock original news coverage visit us at NTD.com or download our NTD app. Thanks for watching. See you tomorrow.