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There’s also something the Chinese state calls “fusion centres” which is one of the most interesting facets of this intelligence-industrial complex in China. E
by sprafa 7y ago
There’s also something the Chinese state calls “fusion centres” which is one of the most interesting facets of this intelligence-industrial complex in China.
Essentially the state decides, let’s say high tech cutting edge batteries for storing renewable energy is where they want to invest in. They gather a few companies into a building that can do it or are interested. They then have state representatives who effectively ask “what do we need to know” and “who are the major players in the field.
In a month or so they come back again. They do big closed door presentation for all the companies in the building. Suddenly all the Chinese companies in the space start delivering R&D and eventually products that match some of the best stuff being done in the space. You could almost say they’ve learnt to copy it..
How do they do it? Industrial espionage, essentially, and building an industrial and intelligence infrastructure that allows for maximum impact of the state’s intelligence apparatus into the national economy. In a way it’s kind of brilliant.
I heard it described by an NSA analyst in a very interesting talk. I thought it was fascinating and speaks exactly to your point. The idea that we are competing with “free market” Chinese companies is a fiction that we’ve made up in our own minds. It’s just not how China works. And to be fair it’s been working gang busters for them.
edit since someone asked for it, here’s the talk - https://cybersecpolitics.blogspot.com/2017/04/fusion-centers.html?m=0 https://cybersecpolitics.blogspot.com/2017/04/fusion-centers...
My description was from memory so I hope I remembered it right.
- bb101 7y agoFascinating. Do you know any recent good books that cover the topic? I'm thinking something like Browder's Red Notice, but for China. Misha Glenny delved into China in his McMafia, but it was more about smuggling in the Fujian province, and its governor at the time: Xi.
- sprafa 7y agoI don’t know of any books. This talk was in featured in a blog called CyberSecPolitics which I follow.
- sprafa 7y agoActually just realised. The CyberSecPolitics blog has book reviews. The guy clearly knows what he’s talking about so I have no qualms saying he probably can do better book recommendations than I can.
- bb101 7y agoThanks, I'll take a look.
- ajot 7y ago> I heard it described by an NSA analyst in a very interesting talk. Is this talk available somewhere? I would like to hear that!
- sprafa 7y agoIt was in a great blog by a guy who seems to be former NSA or similar - CyberSecPolitics Looking for it right now tho is beyond my capabilities - I am on mobile and it’s 4Am where I live.. Most of the talk is centered in which cyber capabilities each country has and how they use them. He said interesting stuff about the Russians allowing a lot black hat hacking to go on - as long as it’s directed elsewhere. Then the state uses them agaisnt adversaries when needed. Lots of interesting stuff.
- sprafa 7y agohttps://cybersecpolitics.blogspot.com/2017/04/fusion-centers.html?m=0 https://cybersecpolitics.blogspot.com/2017/04/fusion-centers... Here it is, just found it. My description was completely from memory so I hope I told the story right!
- joejerryronnie 7y agoYou and the original poster have described the exact way China has, up to this point, effectively leveraged a balance between state directed means of production and corporate capitalism. It is simultaneously brilliant and terrifying. The real question is how long the communist state apparatus can restrain their desire for absolute control. If they can maintain this balance for the next 20 years, China may become the dominant superpower in the world. However, if they cannot control the party's baser instincts, the Chinese economy may collapse under its own weight within the next decade.
- tr3ndyBEAR 7y agoTo be fair, most of innovation in America also comes from the public sector not the private one. Economist Mariana Mazzucato famously wrote about this and more in her book "The Entrepreneurial State: Debunking Public vs. Private Sector Myths" which I highly recommend if you're interested. I think it's a little misguided to say that China's innovation is solely due to corporate espionage. States have always been effective at spurring innovation when it's needed. We only need to look as far back as America's highly productive and innovative war economy to see that
- sprafa 7y agoI didn’t say it was solely due to espionage, only gave an example I found interesting of how they use it for their benefit really.
- seppin 7y ago> To be fair, most of innovation in America also comes from the public sector not the private one What does that have to do with what OP is talking about?
- macspoofing 7y agoHe's trying to argue that America is like China.
- fixitfixit 7y agoWhataboutism on articles about China is inevitable. Edit: downvote all you want, but that doesn’t make it false.. https://en.m.wikipedia.org/wiki/50_Cent_Party https://en.m.wikipedia.org/wiki/50_Cent_Party
- TheKarateKid 7y agoNot sure why this is downvoted, as that's exactly what the commenter's point was.
- Barrin92 7y agoThe original post seems to assert that >"The idea that we are competing with “free market” Chinese companies is a fiction that we’ve made up in our own minds" this fiction applies to a significant degree in the United States too.
- DiogenesKynikos 7y agoThis just completely ignores the massive sums of money Chinese companies are spending on R&D. I'm sure that China engages in industrial espionage, as do many countries, but chalking up China's development into higher-value-added economic sectors to espionage leaves out the fact that they now spend more on R&D than Japan, Germany and South Korea combined.
- dragonelite 7y agoThere comes a time when stealing and integrating IP is not worth the effort. See the 5g development thats going on, where Huawei is undisputed king from what i gathered they are outspending R&D the next two competitor combine. Off course they will now also receive a lot of patent licensing income. Now that 5g is being rolled out..
- high_5 7y agoWell, your comment reminded me of DARPA.
- antimora 7y agoThis makes me think that the whole IP sharing/stealing is in the cultural fabric of Chinese business dealings. And it would be nearly impossible for Trump to fix it through his current trade negotiations.
- sprafa 7y agoSomeone explained to me recently that it might be that part of Trump’s strategy is that by cutting off technology transfers and attacking Chinese IP theft (ie “fusion Centers”) he wants to block China’s way into high tech entirely.
- yourbandsucks 7y agoCultural schmultural. They're in a place where it makes sense to do it, they're pragmatic, they do it. The US industrial revolution was kick-started by IP theft as well: https://www.history.com/news/industrial-revolution-spies-europe https://www.history.com/news/industrial-revolution-spies-eur... Would you do any different if you were in charge of a country and your people need to eat? "Sorry starving peasants, we must respect international IP law"?
- sprafa 7y agoFascinating story. Thanks for sharing. It does put the Chinese example into perspective...
- TheKarateKid 7y ago> Would you do any different if you were in charge of a country and your people need to eat? They do it, and most of their people still can't afford to eat.
- sprafa 7y agoMost of the Chinese can’t afford to eat?? That’s a pretty bold claim. Evidence?
- hos234 7y agoSo govt bureaucrats are driving innovation? To the point where they create market leading mega corps. Is that the claim? Sounds like magic if you have ever met government bureaucrats.
- danmaz74 7y agoThink about DARPA and their competitions.
- quipquopro 7y agoYou are thinking of bureaucrats in the western world. These are eunuchs working under the thumb of political appointees within the context of democratic politics. They are hedged in by expectations that they are there to perform a public service. In China, the people exist to serve the party, so there is a role reversal when it comes to who is in charge. This is how/why the government is able to force companies to come together and share their secrets.
- ivanhoe 7y agoI'm sure they do it, but I'm also pretty sure everyone else is doing it too, to some extent at least - FSB, NSA, BND, DGSE and Mossad were all previously accused of it. And not just industrial espionage, but also of providing contacts, logistics and actively lobbying in emerging markets for their national companies to get the best deals, which also often includes corruption and gray-zone private deals with local government officials. As someone who lives in one of those countries I've heard some pretty grim stories.
- sprafa 7y agoTrue. The analyst says the fusion centres model is relatively unique and quite “good” tho. He seems particularly impressed with it and how effective it is at “piping down” information.
- Havoc 7y ago>here’s the talk It's at 36 minute mark
- brainpool 7y agoChina is very different from the enlightened world. The drive to do real innovation is not there in the sense that we recognize it. The reason is that they are about 2500 years behind in thought. After the The Hundred Schools of Thought/zhūzǐ bǎijiā - 諸子百家/诸子百家, a time of great intellectual and philosophical discourse, debate, and deliberation in Chinese history (ca. 400 BC), most if not all major intellectual discourse stops. This was because Confucius and his teachings on ethics, and Laozi and his Tao Te Ching became canonized and nearly elevated to the status of religion (which is what many consider Taoism and Confucianism to be). The middle kingdom also never moved beyond the strict traditional rigid structure of a legalist state equipped with a harsh supreme bureaucracy. A style of governance and politics which is arguably still used to this day by the ruling Communist party. China just never moved on. Period.
- deleted 7y ago[deleted]