The Daily Signal - China's Surveillance State Has Killed Privacy

Episode Date: October 28, 2021

The Chinese Communist Party’s system of mass surveillance is like something out of a dystopian sci-fi novel, destroying any semblance of privacy in the country for both individuals and businesses. In a recent international incident, popular job networking site LinkedIn shut down operations in China after the strain of working with the authoritarian government became too much. According to Riley Walters, LinkedIn was being forced to share data with the Chinese Communist Party. Amid privacy concerns, the company left the country. Walters, deputy director of the Hudson Institute Japan Chair, warns that the surveillance state can have real consequences for both Chinese citizens and the international community. "If you happen to be one of the few people left in the United States who has a Huawei phone, or if you live in Europe and you have some Chinese telecommunications device, is that information being transported back to China? If it's out in China, you're out of luck. It's there," he says. Walters joins the show to discuss the implications of China’s surveillance state on Chinese domestic life, as well as the world at large. We also cover these stories: Attorney General Merrick Garland testifies before the Senate Judiciary Committee about the ongoing fallout surrounding his Justice Department memo asking the FBI to address alleged violence and harassment aimed at local school officials. Sen. Joe Manchin, D-W.Va., says he does not like the idea of a billionaire tax. Consumers’ Research launches a new ad campaign targeting investment management company BlackRock’s ties to the Chinese Communist Party. Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Thursday, October 28th. I'm Virginia Allen. And I'm Doug Blair. Like something out of a dystopian sci-fi novel, the Chinese Communist Party's system of mass surveillance has destroyed any semblance of privacy in the country for both individuals and businesses. In a recent international incident,

popular job networking site LinkedIn shut down operations in China after the strain of working with the authoritarian government became too much. Today's guest is Riley. Walthers, Deputy Director of the Hudson Institute, Japan Chair. He joins the show to discuss the implications of China's surveillance state on Chinese domestic life, as well as the world at large. But before we get to Doug's conversation with Riley Walters, let's hit the top news stories

of the day. On Wednesday, Attorney General Merrick Garland testified before the Senate Judiciary Committee about ongoing fallout surrounding a Department of Justice memo asking the FBI to address alleged violence and harassment aimed at local school board officials. During the hearing, Garland said that a letter sent by the National School Board's Association containing an apology for referring to parents as domestic terrorists had not changed the Department of Justice's position, and he stood by the initial memo that he sent out. Here's Garland via Fox News.

Senator, I think all of us have seen these reports of violence and threats of violence. That is what the Justice Department is concerned about. It's not only in the context of violence and threats of violence against school board members, school personnel, teachers, staff. It's an arising tide of threats of violence against judges, against prosecutors, against secretaries of state, against election administrators, against doctors, against protesters, against news reporters. That's the reason that we responded as quickly as we did when we got a letter indicating that there were threats of violence and violence with respect to school officials and school staff. That's the reason. That's what we are concerned about. That's part of our core responsibility. The letter that was subsequently sent does not change the association's concern about violence or threats of violence. It alters some of the language in the letter, language in the letter that we did not rely on and is not contained in my own memorandum.

The only thing the Justice Department is concerned about is violence and threats of violence. The Attorney General faced heavy criticism from Republican senators, including a contentious exchange with Senator Tom Cotton from Arkansas. Cotton questioned Garland about a reported incident in Loudoun County, Virginia, involving the rape of a girl by a then-14. year old biological boy reportedly in a skirt that occurred in the women's bathroom. The girl's father, Scott Smith, was arrested and charged with disorderly conduct and resisting arrest after claiming that the Loudoun County School Board had covered up the rape. Here's a part of that exchange between Cotton and Garland via Cotton's Twitter. Do you apologize to Scott Smith and his 15-year-old daughter, Judge?

Senator, anyone whose child was raped as a most horrific crime? I can imagine and is certainly entitled and protected by the First Amendment to protest to their school board about this. But he was cited by the School Board Association as a domestic terrorist, which we now know. That letter and those reports were the basis for your... No, no, Senator. That's wrong. Judge, this is shameful. This testimony, your directive, your performance is shameful.

That's not... Thank God you are not on the Supreme Court. You should resign and disgrace, Judge. As of yet, the Department of Justice has not rescinded the memo. West Virginia Democrat Senator Joe Manchin says he does not like the idea of a billionaire tax. Oregon Democrat Senator Ron Wyden is chairman of the Senate Finance Committee. Wyden has proposed a new bill that would heavily tax Americans who earn 100 million or more for three consecutive years. Reporters asked Manchin Wednesday if he would support the bill per the Hill.

I don't like the connotation that we're targeting different people. There's people that basically, they've contributed to society that create a lot of jobs and invest a lot of money and give a lot to philanthropic pursuits. But it's time that we all pull together and row together. Senate Budget Committee Chairman Bernie Sanders appeared to be less than pleased with Manson's concerns over the billionaire tax. He told reporters Wednesday morning that every sensible progressive revenue option that the president wants, that the American people want, that I want, seems to be. sabotaged. But Wyden says he's going to keep promoting the bill. He said Wednesday that talks over the billionaire tax are going to continue. Consumers Research launched a new ad campaign on Wednesday targeting investment management company BlackRock's ties to the Chinese Communist Party.

The campaign began with a video ad titled Betting on China, which highlights how BlackRock invests American funds into Chinese industries. The ad is set to run a national network's as a TV spot. In addition to the TV ad, the campaign will involve billboards plastered throughout New York City, where BlackRock is headquartered, along with the targeted digital campaign involving a website at blackrock loves china.com. The site contains images of the billboards, the TV ad, as well as numerous articles tying BlackRock to the Chinese Communist Party. In a statement announcing the launch of the campaign, Consumer's Research's Executive Director

Will Hild said, no amount of woke posturing can hide what BlackRock is really up to. The idea that an American company is taking billions of dollars and using it to bet on China's success is extremely concerning. We can't allow this to continue. Funneling Americans' hard-earned retirement savings to China is unsafe from both a national security and financial perspective. Now stay tuned for my conversation with Riley Walters,

as we discuss the implications of the Chinese Communist Party's system of master's surveillance. Conservative women. Conservative feminist. It's true. We do exist. I'm Virginia Allen, and every Thursday morning on problematic women, Lauren Evans and I sort through the news to bring you stories and interviews that are particular interest to conservative leaning or problematic women. That is women whose views and opinions are often excluded or mocked by those on the so-called feminist left. We talk about everything from pop culture to pop. Policy and Politics. Search for problematic women wherever you get your podcast.

Our guest today is Riley Walters, Deputy Director of the Hudson Institute Japan Chair. Riley, thank you so much for joining us. Yeah, thanks for having me. Of course. I wanted to have you on the show to talk about a troubling issue that is coming out of Asia, which is the Chinese Communist Party has begun ranking its citizens based on what it's calling social credit. actions that the party likes will raise your score and actions that the party dislikes will lower your score.

So let's begin with how did this system end up getting into place? Well, you know, in all bureaucracy, new rules take time. And so it's sort of this social credit system that they're toying with. You know, you think of financial credit, right? Everyone has financial credit or you've got really good credit, you've got really bad credit. And so it's sort of expanded from that. The banking sector has an idea of what kind of score people have. They're trying to encourage more people to actually invest in the banking sector to build off of that.

And so that little nugget right there of an idea has kind of expanded, as you've said, into other ideas. Thinking of ways that if you're a model citizen, for example, you might get some benefit out of it. if you are a not ideal citizen or a company, for example, who does really poorly, you get a negative score. I want to say that, you know, it's not really one score at this time. I think some cities perhaps have been toying with this idea of a single score, but it's a little bit more obscure than that because it touches so many different aspects of the society. There's the financial aspect of it.

There's this societal aspect of it. There's, you know, like a business side of it. It's a lot more complicated than, say, you know, Doug has a score of 1,000. Right. And you spit on the street, you minus 50 points. You help an old lady cross the road. You get 100 points. It's not exactly that is that simple.

Okay. So given that there are a multitude of different scores that we might be seeing here, it's not as simple as, you know, one score in particular. What are some of the consequences of having a series? of lower scores or what happens if you have a particularly high set of scores? What are some of the implications for your everyday life? Well, you know, I think they haven't really rolled out. I think there's actually more implications for business in this right now. For people, for individuals, essentially what it has meant, and really we've seen this

happening over quite some time in China, is just the elimination of anonymity, right? So your privacy, there's hardly anything. privacy is becoming a scarce resource in China. And this is tied into that program. You know, if you want to get a cell phone, if you want to get on the internet, you have to have your national citizen ID. And then this has implications for feeding into that score. And so anyways, going back to sort of, I think, where we really see the effect is on businesses. Now, the positive side, there's not a whole lot on the positive side just yet, right?

You know, communism isn't really known for really helping its citizens. But if you do bad things, you're going to get punished, right? And so what we see is things like blacklisting, right? If your company does bad things. And usually actually legitimately bad things. Like if you use really terrible products or if you like cheat or if you steal, things like that, you know, you can be blacklisted. and essentially means sometimes, again, the definition of the severity and the consequences varies. But what it could mean is, you know, you have more inspectors coming to look at your business.

You know, maybe you're not first in line for certain projects. Really, it's, you know, it just means more bureaucracy, which means more government intervention, which means, you know, if you're not in favor of the government, you're going to have a hard time doing business. So you mentioned some of these things that would affect the score of both a business and an individual. I do want to focus a little bit more on the individual. So you've mentioned that it's not as relevant to individuals, but what are some of the

things that citizens are graded on in terms of these social credit scores? You know, it could be a multitude of things. Again, I think various cities are still playing with this. We haven't seen this credit system, I think, in its full involvement, right? It's, again, it's a relatively new government program. And, you know, if you think about within the United States, you know, we have federal and state programs, you know, in China, you have cities, major cities, provinces as well, rolling out their own version of this. Again, like I was saying, looking more toward, like the positive side, like, how do you encourage more people to do this? How do you encourage more people to do less of another thing?

But to the actual grading of it, what influences it? Again, finance could be a big part of that. If you are known for taking loans and not paying them, you know, think of things that affect your own credit score at home. If you have a lot of credit cards, if you have a lot of debt, that can negatively impact it. again, I think for people, it hasn't really hit a lot of the negative aspects yet, right? So as far as this scoring system is involved, I mean, we could talk about other things in China that if you do, you know, bad things, they'll come and get you. But as far as this credit scoring system is involved, it's pretty benign, I think, at this

point in relative sense, you know, as long as you're not, you know, ethnically weaker, living in Western China, you're generally okay, you know, as long as you don't have a lot of outstanding debt. Interesting. So are there any examples that we can point to of Chinese businesses or citizens who have gotten punished for having problematic scores or something that's cropped up in that way? Yeah, you can go online. Usually, you know, I would think it's pretty hard to find in English, given that, you know,

a lot of this isn't necessarily covered in Western media. Usually there's some good websites that will translate Chinese news or Chinese local, like provincial court documents, things like that. But I think there's a few. I can't think of any names. And even if I did, I'm not sure many listeners would recognize their business because it's usually, it'd probably be like a smaller medium enterprise where, you know, if you haven't been really interacting well with the local government, if you haven't.

haven't really been abiding by some of the local laws. And, you know, you've been doing questionable business practices, whatever that means, depending on the set of regulations that they've laid out. Yeah, I think there's a few who have been blacklisted already. I don't have a concrete number, of course, of how many is on this list. You know, one of the things I think this whole system is actually established to design is a self-regulating mechanism, right? So it's essentially, you know, you hear about it, right? And so you're worried. You yourself as an individual or a business, or you hear about this system and

worried that you could potentially be on the wrong side of this list one day. And so you, it's sort of a self, not self-censoring, but sort of in that same manner, a self-regulating mechanism to make sure that you do better without the government actually having to get involved. Right. Well, that does kind of bring up the question of enforcement. So when I imagine this kind of, you know, Chinese Communist Party surveillance state, I imagine something out of like Minority Report, right? Or it's like they just have these government bureaucrats that are, you know, sitting there and just watching you before you do something wrong.

Is that kind of how this is being enforced at the moment? Or is there a sense of maybe citizen on citizen reporting or citizen on business reporting? You know, for, you know, our cyberpunk friends who understand, you know, like these dystopic films in the future where, like, minority report where people are surveilling, there is a big data aspect to this, you know, where I mentioned the different aspects like credit scores and business information and financial regulations. There is an attempt right now to sort of aggregate all that data into a way that's easily, monitorable. I don't know if that's the right word. But, you know, a way to look at it. And so as a path to enforcement. Now, the actual enforcement, I think, comes down to, you know, it's a little bit more bureaucratic than that. It's, you know, do you have regulators go out to businesses and what do banks do with this information? You know, can you get a loan in the future? It's a little bit

more disaggregated, I think, at that point. But before that, again, going back, it goes back to the fact that all this information, they're attempting to collect all this into one or several places to analyze it, collect it, analyze it, and use it however they see fit, eventually, whatever that means. How do Chinese businesses or Chinese people feel about these systems of surveillance and social credit? Do they, have a view on this? Do we have any information about how they feel about this? You know, I haven't looked into that. I'm sure there is some dissent, but I'm sure it's also not publicly available. Again, you know, it's, I think what we're seeing is a China that is

being less open, right? Its citizens are going to have fewer opportunities to voice an opinion that is an opposition to what the government is doing, right? Now, they can voice an opinion in so long as it doesn't complicate or contradict what sort of the initial push is. But I think we're seeing a more closed off China politically, socially, economically, in all degrees. And it's certainly worrying. And I hope that a lot of Chinese people can see this. But, you know, we see to sort of go to the extreme of this, right? I think of North Korea.

North Korea is closed off. to the world except for China. China has an end. But, you know, the people there, it's much more of the extreme of, I think, what you're sort of suggesting, right? It's where people police each other. Like, you can't say your true thoughts around your own friends out of fear of being, you know, tattled on, right?

And what that can mean for you and your family. I don't think we're there yet in China. But it's definitely, you know, it's the extreme of where China could. potentially go one day. I don't think they would get there because North Korea is such an extreme example. But it is worrying to see them slide on this on so many different aspects. And it's not going to get better. It's not going to get better, at least in the near term. Maybe by the time we're old, by the time we're as old as, you know, Xi Jinping, maybe once he's died and, you know, whoever replaces him comes along and maybe it'll change.

So you've mentioned a little bit of the domestic possible implications for this. You've said that, you know, it looks like we're sliding towards North Korea, but we don't think we'll get there. What are some of the international implications of this type of surveillance structure existing in China? Well, it's definitely whirring in the aspect of data collection. We've been talking about this for years in that China has these national security and cybersecurity laws, which effectively means, you know, Beijing can access any information within its country at any time. And, you know, it's questionable what Chinese telecommunications and an IT companies abroad are doing to, if asked, basically, if asked for information,

outside of China, right? So, you know, if you happen to be one of the few people left in the United States who has a Huawei phone, or, you know, if you live in Europe and you have some Chinese telecommunications device, you know, is that information being transported back to China? Now, if it's already in China, you're out of luck. It's there. If it's not in it's in the United States, if it's in Europe, if it's in Asia, somewhere else like Japan or Korea, you might be fine. But again, it's hard to have some of that

insight and whether it's going back. But once it is back, it's there. And, you know, the Chinese are very adamant that, you know, this is necessary for their national security to have access to any of information anywhere at any time. And sometimes companies, they try and say things like, no, we don't, we don't give them our information domestically. But honestly, that's not. That's true. It's probably something in the language that they're saying, right? It's a little bit different.

They're saying we're not actively giving it to them. But if asked, they would give it to them. If I can just sort of give an example of sort of the ways that, I think a recent example of what's happening, you heard about LinkedIn in China? I don't know if that was on your list. No, go please. Yeah, yeah. So LinkedIn, we're all sort of familiar.

with it. If you're looking for a job in the United States, usually it's a good resource. It's much better than USA jobs. Maybe. I don't know. But LinkedIn is in China. It's one of the few American Western websites to have full access in China. Full access with a large asterisk. But anyways, they just recently announced that they can't do business in China anymore, not with their model. So they're effectively going to have to pull out of China because of many of these laws that China has about information collecting and policing what's allowed on their website, basically free speech. You're not allowed to say certain things. There's some very famous and well-known reporters, I think, in town here who have a dual American LinkedIn website, which they can't effectively use because of that different system that China has. And so LinkedIn's having to pull out.

They're actually going to create a whole separate entity for the Chinese market, which is purely jobs. It's basically benign. Like, this job is available, you know. But if you think about what LinkedIn is in the United States, you can comment about anything. I actually posted recently about this and about how poorly LinkedIn is managing this. I can say on LinkedIn how bad LinkedIn is doing. Right. But in China, that doesn't really work anymore.

Right. So given that this is something that has international implications, what has been the response from international either bodies, including the UN or the WTO, and then other countries, the United States obviously included in that, but maybe Western Europe, what are some of the responses from the international community? Well, I think on the censorship side, you know, there's definitely a concern about the viability or the future of free speech in China. You know, it's concerning to see any country walk back on the ability for its citizens to share their thoughts and not be punished, right?

So there's a societal aspect to that. There is a security concern, I think, if we're thinking about Chinese businesses abroad and what it can mean for the protection of your personal information. You know, you would expect local businesses to do their due diligence and make sure that your proprietary information is protected, right? But there is a question now of whether that's true with dealing with Chinese companies. And I think for international businesses, you know, they're looking at the business environment in China and really questioning, you know, I give businesses a bit of a break. I think they understand, a lot of them understand that China was never an ideal market. But, you know, and so they see the environment there, and they've always sort of expected things to deteriorate, but probably not as quickly as they have over the past five years. And so I think, you know, a lot of companies are sort of pushing up their timeline of questioning how much longer they should be in China.

And it's not an easy question, you know. I feel bad for a lot of investors, but at the same time, You know, there are other places to invest as well, which are probably just as thriving of a market. One of the things that we do here sometimes about businesses in China is this concept of decoupling, right? Where you kind of are, we're not going to sell in China anymore, or I've even heard there's sort of the three-prong solution, right? It's either you go full in on China and abandon other markets, you go full in on exterior markets and abandon China, or you try to make it work. and the third one seems to be the least likely because those are just two, it's like oil and water. I mean, what are your thoughts on that concept?

You know, there's no one solution. You know, as my, as the Japan chair, HR McMaster at Hudson says, decoupling is a red herring. It's not a viable strategy. It's an intent. An intent isn't strategy, right? You might not want people to deal with China, but that's not a strategy. Right. For businesses and even people, you know, there's no one solution.

We mentioned LinkedIn. Basically, LinkedIn's going to have to split off an entire new entity to deal with within China. Some companies, they're a little bit more flexible. They're willing to stay there. You know, I think I'm trying to remember all the companies. But, you know, like Microsoft, I think still has some businesses in China. Apple, of course, Starbucks.

deer, I think, like farm equipment. There's a lot of well-known Western companies that rely on the manufacturing within China. Some have decided that, you know, they're looking around. They're looking at alternative markets. Usually Southeast Asia is a growing market, and so they'll usually look there. And then others, you know, who have been in China for as long as they have, say, we know what we're doing. We've been here for long enough, and we're not going to go anywhere else because China is as much as their economy seems to be deteriorating, it's still growing faster than many of the

other alternatives. And we're willing to take the risk at the potential gains, right? Because that's what business is. It's gains versus risk. And so they're willing to make that bet. As we wrap up this interview, if you could just point our listeners maybe in a direction, if they They want to learn more about these data questions or questions about the Chinese sort of approach to how they interact with their own businesses and businesses from the exterior, the social credit system as a whole. Where would you point them and where can they go? Where do I start? You know, just one really useful resource that I find is the State Department actually has this annual paper that they'll publish called their investment. environment, I believe. It's called, or no, investment climate report. I think that's what it's called.

And they do a report for every country. And it's basically reports written by State Department personnel within those countries who interact with local businesses. And it gives a layout of basically, it provides also resources, so alternative links that people can click on if they want to do more. But it gives a good summary of the investment environment. So people looking to invest there or elsewhere, right? So you can read China's page. I'm sure it's lengthy. I'm sure there's a lot of concerns.

But you can look at alternatives as well, like Japan, South Korea, Vietnam, and, you know, see how people are thinking about these different environments. That's one I would point people to. Thank you so much, Riley, for joining us. That was Riley Walters, deputy director of the Hudson Institute's Japan Share. Again, thank you so much for your time. Thanks. Good to be back. Thanks. Of course. Yeah. And that'll do it for today's episode. Thanks so much for listening to The Daily Signal

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