The Washington Post - USA (2021-10-23)

SATURDAY, OCTOBER 23 , 2021. THE WASHINGTON POST EZ RE A

privacy but also to national security. I f China can pair such genetic data sets, including the data au- thorities are already gathering domestically, with artificial intelligence and quantum computing, he said, it may be able to advance to the point where it is first to market with cures for diseases. “Because of our shortsighted- ness, we might wake up one day and we’ve become health-care crack addicts and China’s become our pusher,” he said. In May, China’s WuXi Biolog- ics, a biotech firm, announced it had purchased Bayer’s manufacturing plant in Germany and P fizer’s manufacturing plant in China. In June, it announced plans to build a major drug plant in Delaware, aided by a $19 million state subsidy. Last year, it said it was building a 46-acre plant in Massachusetts. If they can gain access to West- ern technology legally, “they don’t n eed to steal our [intellectu- al property],” You said. “They’re in it to win it.” Orlando and You said they are not telling businesses and universities to halt collaboration with China. Orlando said academics have made clear there are ben- efits from such partnerships. But, he said, “people can make much better decisions, smarter decisions, on how they collabo- rate.” The officials urged companies and universities to come up with best practices, review how data is stored and transferred, deter- mi ne who has access to what and ensure vetting of contractors and subcontractors. “If we can get the research community and private sector to be aware of what they’re doing and engineer security measures, we have a much better chance” of mitigating the risks, You said. [email protected]

He pointed to China’s largest genomics company, BGI, which purchased the U.S. firm Complete Genomics in 2013. Over the years, BGI has made inroads in Ameri- can hospitals and health-care in- stitutions, offering inexpensive large-scale DNA sequencing, he said. Providing such services is not illegal, but at the same time, You said, BGI is gaining access to massive amounts of Americans’ genetic data. “Unbeknownst to patients, your data might be transferred to the Chinese government,” You said. All Chinese entities are com- pelled by law to share data and technology with the Chinese government, NCSC spokesman Dean Boyd said. “There is no mecha- nism for refusal.” I n July 2020, the United States imposed sanctions on two BGI subsidiaries for using genetic analysis to further the Chinese government’s repression of Uy- ghur Muslims in China’s Xinjiang province. BGI denied the claims. You said the risk is not just to

months to raise awareness pri- marily about China but also about Russia, which is striving to make advances in AI and quantum technologies. Other areas that China is particularly active in are semiconductors and autonomous systems, officials said at a briefing for reporters Thursday. China and Russia are recruit- ing talent abroad, both in the United States and elsewhere, and seeking to acquire technology through foreign investments, academic collaborations and joint ventures, although China’s activities in this area are much more extensive, officials said. Chi- na, for instance, is making a concerted effort to buy Western semi- conductor firms, Orlando said. In what U.S. officials call the “bioeconomy,” the Chinese are targeting genomic technology that can be used to design disease therapies and identify genetic vulnerabilities in a population, said Edward You, the national counterintelligence officer for emerging and disruptive technologies.

BY ELLEN NAKASHIMA

U.S. counterintelligence offi-
cials have begun a concerted push
to warn companies and univer-
sities about the risks of working
with Chinese entities in key
emerging technologies such as
artificial intelligence, biotechnol-
ogy and quantum computing.
Officials stressed that they are
not advocating that industry and
researchers “decouple,” or cut all
ties with these entities, but they
say they want people to under-
stand that the Chinese govern-
ment has a sweeping national
plan to dominate in these fields.
Beijing’s strategy includes ac-
quiring data and know-how, not
just through hacking and other
illicit acts but also through legal
means such as acquisitions, in-
vestments and partnerships that
businesses and researchers may
not realize pose risks, top officials
at the National Counterintelli-
gence and Security Center said.
“We think there’s a lot at stake
with a lot of these technologies,”
said Mike Orlando, acting direc-
tor of the NCSC, an arm of the
Office of the Director of National
Intelligence. “If we lose suprema-
cy in these areas... we could be
eclipsed as an international su-
perpower.”
He said “hundreds of billions
of dollars’ worth” of American
technology is being targeted by
the Chinese government.
Chinese President Xi Jinping
has repeatedly urged scientists to
make advances that can help en-
sure the country’s self-reliance. In
a speech a year ago, he called for
efforts “to foster strategic emerg-
ing industries such as quantum
communications to gain an upper
hand in international competi-
tion and build new advantages
for development.”
NCSC officials have begun
their outreach in the past few

U.S. cautions firms working with China on tech

AGENCE FRANCE-PRESSE/GETTY IMAGES Visitors look at Alibaba’s new servers at the Apsara c loud computing and AI conference this week in Hangzhou, China.

BY EVA DOU AND LYRIC LI

Investors can breathe a sigh of
relief.
The world’s most indebted real
estate developer, China Ever-
grande Group, has avoided de-
fault — at least for now — after
making a key interest payment at
the 11th hour. The Chinese prop-
erty developer’s cash crisis has
sparked fears about global finan-
cial fallout from its imminent
collapse.
The state-backed newspaper
Securities Times reported Friday
that Evergrande had wired a
$83.5 million payment to bond-
holders, a day before a 30-day
grace period would have expired,
pulling it back from the brink of
one of the largest defaults in
history.
The news was received with
cautious optimism by the market,
with Evergrande’s longer-term
prospects unclear. The company
is still staggering under $300 bil-
lion in debt, about 2 percent of
China’s gross domestic product.

Evergrande’s stock closed 4.3 percent higher in Hong Kong. “While it is obviously a positive step, people want to see a viable plan for the next payment,” said Scott Mollen, a partner at Herrick Feinstein, a New York-based law firm that represents some Chi- nese real estate companies. “The fundamental issues remain and need to be addressed.” Beijing has been seeking to reassure the public this week, with senior officials stepping for- ward to say the risk of contagion was controllable. Chinese Vice Premier Liu He and Yi Gang, the central bank governor, were among those who addressed Ev- ergrande, a rare case of so many Chinese leaders publicly discuss- ing the plight of a single company. “I think, overall, the Ever- grande risk is an isolated case,” Yi said on Wednesday at the annual G30 International Banking Semi- nar. “First, we’re going to try to prevent contagion to other real estate companies. Second, we’ll prevent contagion to other parts of the financial sector.” Evergrande, founded in 1996, rode its way to the top of China’s housing boom while building up a mountain of debt. Its founder, Xu Jiayin, briefly became China’s wealthiest businessperson in 2017 and Evergrande the world’s

most valuable real estate company in 2018. The Securities Times report on Friday didn’t say how Evergrande financed the interest payment or if there was government inter- vention. Evergrande did not respond to requests for comment. Analysts had previously played down the idea that Beijing would step in with a bailout, saying Evergrande’s collapse would serve as a warning to other companies that have spent too loosely. Evergrande had missed an interest payment on a bond on Sept.

It had 30 days to make the
payment before formally enter-
ing default.
A default had looked all but
assured after Evergrande’s at-
tempts to sell assets to raise cash
fell through Wednesday. Ever-
grande told the Hong Kong Stock
Exchange that it would not be
able to sell a majority stake of its
property services unit to another
Chinese developer, Hopson, be-
cause the two had failed to agree
to terms.
“In view of the difficulties,
challenges and uncertainties in
improving its liquidity, t here is no
guarantee that the Group will be
able to meet its financial obliga-
tions,” Evergrande had said in a
filing on Wednesday.
Financial contagion has begun
in China’s property sector as

cash-strapped developers find themselves unable to secure new loans. Several smaller developers have defaulted this month, including Fantasia Holdings and Sinic Holdings, which defaulted on $250 million in bonds due for repayment Monday. Fitch Ratings said in a research note Thursday that there could be “substantial consolidation in the sector” and impact on housing sales, long a driver of China’s economy. “Rising uncertainty among prospective home buyers will hurt sales in the near-term,” Fitch said. Investors had feared a worst- case scenario in which Ever- grande’s collapse could snowball across the global financial sector like Lehman Brothers did in

Economists say this looks
unlikely, partly because of Bei-
jing’s signals that it will prevent
wider fallout.
Mollen said that Evergrande’s
plight has caused increased due
diligence for loans and deals with
other Chinese real estate compa-
nies, even as they argue that they
aren’t at risk.
“Our significant Chinese cli-
ents say, ‘We are not Evergrande,
we have liquidity, we have not
violated deleveraging rules,’ ” he
said.
[email protected]

China’s Evergrande dodges default

QILAI SHEN/BLOOMBERG NEWS

A worker drives t hrough the construction yard at China Evergrande Group’s Health Valley development on the outskirts of Nanjing,
China, on Friday. Evergrande has avoided default — at least for now — after making a key interest payment at the 11th hour.

Developer’s troubles still present economic risks, though

BY AMY CHENG

Russian President Vladimir Putin again attacked Western liberalism in a fiery address on Thursday, blasting “cancel cul- ture” and advances in gay and transgender rights. Speaking at the annual meeting of the Valdai Discussion Club in the Black Sea resort of Sochi, Putin stressed that his country should adhere to its own “spirit- ual values and historical tradi- tions,” while steering clear of “so- ciocultural disturbances” in the West. Some Westerners believe “the aggressive deletion of whole pag- es of their own history, reverse discrimination against the majority in the interests of minorities

... constitute movement toward
public renewal,” Putin said. “It’s
their right, but we are asking
them to steer clear of our home.
We have a different viewpoint.”
Putin, who told the Financial
Times of London newspaper in
2019 that liberalism had become
“obsolete,” has loudly advocated
for what he considers to be tradi-
tional family values. In his Thurs-
day remarks, he said the notion
that children are “taught that a
boy can become a girl and vice
versa” is monstrous and “on the
verge of a crime against humani-
ty.”
He also suggested that trans-
gender rights supporters were
demanding an end to “basic
things such as mother, father,
family or gender differences.”
The authoritarian leader has
sought to portray himself as a
symbol of virile masculinity — for
instance, by being photographed
shirtless on horseback — while
ramping up a state-led pressure
campaign on sexual minorities in
Russia.
Putin rules a country where
there have been numerous cred-
ible reports of the torture and
imprisonment of gay men. In
2013, he signed a law against “gay
propaganda” that Human Rights
Watch said prompted increased
hostility toward LGBTQ commu-
nities and made it harder for
children to access information
about nontraditional relations.
Putin’s rhetoric is not dissimi-
lar to those of many right-wing
populist leaders in Eastern Eu-
rope and the United States, who
have targeted sexual minorities
in an attempt to shore up support.
The Thursday remarks reflect

efforts to rally “hardcore con- servatives and supporters of traditional values” around Putin, wrote Ta tiana Stanovaya, head of the Moscow-based R.Politik think tank, on a Te legram channel. Putin is trying to show that he “stands for values that will not divide society and throw it into chaos,” said Matthew Sussex, a Russia expert at the Australian National University. “On the one hand, it’s a unifying message. But on the other hand, it does hit... the transgender and gay commu- nities that the Russian government has continued to target.” Despite the attack on liberal values, Kremlin spokesperson Dmitry Peskov said that the speech should not affect Russia’s relationship with Western coun- tries. “Russia has been, is and will be an integral part of Europe,” he said. Meanwhile, asked by former Trump adviser Christian Whiton on Thursday to comment on the likelihood of the former president seeking the White House again in 2024, Putin initially demurred. Instead, he asked the adviser who his choice would be. When Whiton said Trump, Putin re- sponded with a smile and said, “I understand you.” The U.S. intelligence community has concluded that Russia conducted a sweeping and un- precedented campaign to inter- fere in the 2016 presidential elec- tion. Putin has denied any in- volvement. [email protected]

Isabelle Khurshudyan in Moscow contributed reporting.

Putin slams trans rights,

other values of the West

YEVGENY BIYATOV/SPUTNIK/EPA-EFE Russian President Vladimir Putin has loudly advocated for what he considers to be traditional family values.

BY REIS THEBAULT AND QUENTIN ARIÈS

brussels — They called her a “haven of peace” and a “compro- mise machine.” They compared her to the Eiffel To wer and praised both her “sobriety” and “good humor.” After 16 years and 107 E.U. summits, European leaders bade farewell to German Chancellor Angela Merkel on Friday with a collective “danke schön.” Even though Merkel will be around until German parties can hammer out a new government, this week’s two-day meeting of E.U. leaders was likely her last: the closing act in an extraordi- nary run as head of the bloc’s largest economy and a powerful force on the European Council, composed of the 27 member states’ political leaders. Presidents and prime minis- ters broke from discussions of migration and trade to shower the retiring Merkel with praise. Other long-serving leaders have come and gone — among them her onetime mentor Helmut Kohl, French presidents François Mitterrand and Jacques Chirac, and British Prime Minis- ter To ny Blair. But Merkel’s exit has received outsize attention because she was widely seen as a beacon of stability and unity through particularly tumultuous times, including fiscal crises, deep disputes over immigration, and Britain’s break from the bloc. “You are a monument,” Euro- pean Council President Charles Michel told her in an informal closed-door ceremony, according to an E.U. official who spoke on the condition of anonymity to describe the event. “Comparisons come to mind. The European Council without Angela is like Rome without the Vatican or Paris without the Eiffel To wer.”

Michel even called in Merkel’s “BFF,” former president Barack Obama, who delivered a video address to mark the moment, commending the German chancellor’s navigation through suc- cessive upheavals. “Thanks to you, the center has held through many storms,” Obama said. “So many people, girls and boys, men and women, have had a role model who they could look up to through chal- lenging times. I know because I am one of them.” The summit’s first day had been dominated by debate over how the European Union should respond to democratic backslid- ing in Poland. While some leaders wanted to push for the most significant financial sanctions possible, Merkel called repeatedly for more dialogue. In the end, the group discussed the issue for two hours but made no decisions. “Frau Merkel was a compro- mise machine,” said Luxembourg Prime Minister Xavier Bettel, who said she “will leave a big gap” at the helm of Europe. Lithuanian President Gitanas Nauseda called Merkel “the stabi- lizing factor, which was crucially needed, especially in very compli- cated circumstances.” “In critical moments, Angela was that lady, that madam who intervened and helped us find a solution,” Nauseda said. But Merkel’s critics have, at times, faulted her for her incre- mental approach, saying she has delayed decisions at the E.U. level in an effort to preserve consensus and avoid infighting. That cautious approach, some say, a llowed for the erosion of democratic norms in Poland, Hungary and elsewhere. Her tactics even earned their own verb: “Merkeln,” meaning to dither or bide one’s time. The E.U. leaders are scheduled to meet again Dec. 16. By then, it is possible that Olaf Scholz, whose party topped September elections, will be Germany’s new chancellor and Merkel’s replace- ment on the council. Otherwise, Merkel may return for an encore. [email protected]

E.U. leaders hail Merkel

as ‘monument’ of unity

After 107 bloc summits, this was likely the last for retiring German leader

The Washington Post - USA (2021-10-23)

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