COLD WAR 2.0

Exclusive: U.S. probes China’s Huawei over equipment near missile silos; Nebraska silos may be affected

By Todd Epp

Smartphone with a Huawei logo is seen in front of a U.S. flag in this illustration taken September 28, 2021. REUTERS/Dado Ruvic/Illustration/File Photo.

WASHINGTON, July 21 (Reuters) – The Biden administration is investigating Chinese telecoms equipment maker Huawei over concerns that U.S. cell towers fitted with its gear could capture sensitive information from military bases and missile silos that the company could then transmit to China, two people familiar with the matter said.

Authorities are concerned Huawei (HWT.UL) could obtain sensitive data on military drills and the readiness status of bases and personnel via the equipment, one of the people said, requesting anonymity because the investigation is confidential and involves national security.

The previously unreported probe was opened by the Commerce Department shortly after Joe Biden took office early last year, the sources said, following the implementation of rules to flesh out a May 2019 executive order that gave the agency the investigative authority.

The agency subpoenaed Huawei in April 2021 to learn the company’s policy on sharing data with foreign parties that its equipment could capture from cell phones, including messages and geolocational data, according to the 10-page document seen by Reuters.

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The Commerce Department said it could not “confirm or deny ongoing investigations.” It added that: “protecting U.S. persons’ safety and security against malign information collection is vital to protecting our economy and national security.”

Huawei did not respond to a request for comment. The company has strongly denied U.S. government allegations that it could spy on U.S. customers and poses a national security threat.

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The Chinese embassy in Washington did not respond to the specific allegations. In an emailed statement, it said: “The U.S. government abuses the concept of national security and state power to go all out to suppress Huawei and other Chinese telecommunications companies without providing any solid proof that they constitute a security threat to the U.S. and other countries.”

Reuters could not determine what actions the agency might take against Huawei.

Eight current and former U.S. government officials said the probe reflects lingering national security concerns about the company, which was already hit with a slew of U.S. restrictions in recent years.

For a timeline on the U.S. government’s trade restrictions on Huawei please click https://graphics.reuters.com/USA-CHINA/HUAWEI-TIMELINE/zgvomxwlgvd/

If the Commerce Department determines Huawei poses a national security threat, it could go beyond existing restrictions imposed by the Federal Communications Commission (FCC), the U.S. telecoms regulator.

Using broad new powers created by the Trump administration, the agency could ban all U.S. transactions with Huawei, demanding U.S. telecoms carriers that still rely on its gear quickly remove it, or face fines or other penalties, a number of lawyers, academics and former officials interviewed by Reuters said.

The FCC declined to comment.

U.S.-CHINA TECH WAR

Huawei has long been dogged by U.S. government allegations it could spy on U.S. customers, though authorities in Washington have made little evidence public. The company denies the allegations.

“If Chinese companies like Huawei are given unfettered access to our telecommunications infrastructure, they could collect any of your information that traverses their devices or networks,” FBI Director Christopher Wray warned in a speech in 2020. “Worse still: They’d have no choice but to hand it over to the Chinese government, if asked.”

Reuters could not determine if Huawei’s equipment is capable of collecting that sort of sensitive information and providing it to China.

“If you can stick a receiver on a (cellphone) tower, you can collect signals and that means you can get intelligence. No intelligence agency would pass an opportunity like that,” said Jim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies (CSIS), a Washington D.C.-based think tank.

One move to address the perceived threat was a 2019 law and related rules forbidding U.S. companies from using federal subsidies to buy telecoms equipment from Huawei. It also tasked the FCC with compelling U.S. carriers that receive federal subsidies to purge their networks of Huawei equipment, in return for reimbursement.

But the so-called “rip and replace” deadline to remove and destroy Huawei equipment completely will not kick in until mid-2023 at the earliest, with additional opportunities for companies to seek extensions. And reimbursements will only reach 40% of the total requested for now.

TOWERS NEAR MISSILE SILOS

Cell towers equipped with Huawei gear that are close to sensitive military and intelligence sites have become a particular concern for U.S. authorities, according to the two sources and an FCC commissioner.

Brendan Carr, one of the FCC’s five commissioners, said that cellphone towers around Montana’s Malmstrom Air Force Base – one of three that oversee missile fields in the United States – ran on Huawei technology.

In an interview this week, he told Reuters there was a risk that data from smartphones obtained by Huawei could reveal troop movements near the sites: “There’s a very real concern that some of that technology could be used as an early warning system if there happened to be, God forbid, an ICBM missile strike.”

Reuters was unable to determine the exact location or scope of Huawei equipment operating near military facilities. Individuals interviewed by Reuters pointed to at least two other likely cases in Nebraska and Wyoming.

Crystal Rhoades, a commissioner at Nebraska’s telecoms regulator, has flagged to media the risk posed by the proximity of cell towers owned by Viaero to intercontinental ballistic missile (ICBM) silos in the western part of the state.

ICBMs carry nuclear warheads to targets thousands of miles away and are stored in underground silos near military bases. The Nebraska cell towers are near a missile field overseen by F.E. Warren Air Force Base in neighboring Wyoming.

Viaero provides mobile telephone and wireless broadband services to about 110,000 customers in the region. It said in a 2018 filing to the FCC opposing the commission’s efforts at curbing Huawei’s expansion that approximately 80% of its equipment was manufactured by the Chinese firm.

That gear could potentially enable Huawei to glean sensitive information about the sites, Rhoades told Reuters in June.

“An enemy state could potentially see when things are online, when things are offline, the level of security, how many people are on duty in any given building where there are really dangerous and sophisticated weapons,” Rhoades said.

Rhoades said in July that she had not been updated on rip and replace efforts by Viaero in more than two years, despite requesting updated information from the company in recent weeks.

At the time of last contact, the company said it would not begin removal efforts until the FCC money became available.

The FCC advised companies on Monday how much of their funding requests it can reimburse.

Viaero did not respond to multiple requests for comment. Huawei also declined to comment.

In Wyoming, then CEO of rural carrier Union Wireless, John Woody, said in a 2018 interview with Reuters that the company’s coverage area included ICBM silos near the F.E. Warren Air Force Base and that its equipment included Huawei switches, routers and cell sites.

Last month, Eric Woody, John’s son and acting CEO, said “virtually all the Huawei gear Union purchased remains in our network.” He declined to say whether the towers close to the sensitive military sites contain Huawei equipment.

F.E. Warren Air Force Base referred comment on the Huawei equipment to the Pentagon. The United States Strategic Command, which is responsible for nuclear operations, said in a statement to Reuters: “We maintain constant awareness of activities near our installations and sites.” It noted that “any concerns are on a whole of government level” but declined to provide further details on what those concerns are.

NEW POWERS AGAINST FOREIGN ADVERSARIES

Rick Sofield, a former DOJ official in the national security division who reviewed telecoms transactions, said the Commerce Department probe could give additional bite to the FCC’s crackdown but there was nothing new in targeting Huawei.

“The U.S. government’s concerns regarding Huawei are widely known so any information or communications technology company that continues to use Huawei products is assuming the risk that the U.S. government will come knocking,” said Sofield, who represents U.S. and foreign companies facing U.S. national security reviews. He said he has not worked for Huawei.

The Commerce Department is using authority granted in 2019 that allows it to ban or restrict transactions between U.S. firms and internet, telecom and tech companies from “foreign adversary” nations including Russia and China, according to the executive order and related rules.

The two sources familiar with the Huawei investigation and a former government official said Huawei was one of the Biden administration’s first cases using the new powers, referred to Commerce in early 2021 by the Justice Department.

The Justice Department referred requests for comment by Reuters to Commerce.

The subpoena is dated April 13, 2021, the same day that Commerce announced a document request was sent to an unnamed Chinese company under the new powers.

It gives Huawei 30 days to provide seven years’ worth of “records identifying Huawei’s business transactions and relationships with foreign entities located outside of the United States, including foreign government agencies or parties, that have access to, or that share in any capacity, U.S. user data collected by Huawei.”

Noting that the “focus of this investigation is the provisioning of mobile network and telecommunications equipment…by Huawei in the United States,” it also asks Huawei for a complete catalog of “all types of equipment sold” to “any communications provider in the United States,” including names and locations of the parties to the sale.

Reporting by Alexandra Alper; Additional reporting by Diane Bartz; Editing by Chris Sanders and Lisa Shumaker

CRIMINAL CAPITALI$M OLD SCHOOL
Ex-Coinbase Manager Arrested in US Crypto Insider-Trading Case



Allyson Versprille, Silla Brush, Lydia Beyoud and Greg Farrell
Thu, July 21, 2022

(Bloomberg) -- Federal prosecutors in Manhattan brought their first ever case for insider-trading in digital coins, charging a former Coinbase Global Inc. product manager with leaking information to help his brother and a friend buy tokens just before they were listed on the exchange.

The Thursday arrest of Ishan Wahi, who helped oversee listings for a Coinbase unit focused on investment products, follows a sweeping probe involving the Southern District of New York and the Securities and Exchange Commission. The SEC also alleged Wahi violated the agency’s anti-fraud rules.

“Today’s charges are a further reminder that Web3 is not a law-free zone,” Manhattan US Attorney Damian Williams said in a statement. “Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street.” He added that Coinbase had cooperated with the probe.

Coinbase lets Americans trade more than 150 tokens, including many that have been added in recent months. Because of the platform’s status as the US’s largest crypto exchange, coins can often see a rush of interest -- and a surge in price -- immediately after being included.

Wahi tipped off his brother, Nikhil Wahi, and friend Sameer Ramani when tokens were about to be listed by the exchange, according to charges filed on Thursday in New York. Nikhil Wahi and Ramani allegedly used that information to trade dozens of tokens from at least June 2021 until April 2022 for a profit of more than $1 million, the government said.

Prosecutors charged the three men with wire fraud conspiracy and wire fraud and the SEC accused them of insider trading.

Andrew St. Laurent, an attorney for Ishan Wahi, 32, declined to comment. Ramani, 33, remains at large, according to the US Attorney’s office.

Priya Chaudhry, a lawyer for Nikhil Wahi, 26, who was also arrested, said in a statement that her client didn’t do anything wrong. “These prosecutors are trying to criminalize innocent behavior because they are looking for a scapegoat because so many people have lost money in cryptocurrency recently,” Chaudhry said. “The government is embarrassed and arresting Nikhil Wahi is a knee-jerk reaction to save face.”

“Any illicit behavior is something we take super seriously. We have zero tolerance for it,” said Paul Grewal, Coinbase’s chief legal officer. He said Coinbase immediately conducted an investigation after learning of a potential insider trading issue and put Wahi on unpaid administrative leave. Wahi was officially fired on July 15, Grewal said.

Indictment

Manhattan prosecutors launched their investigation in April, after complaints surfaced on social media about unusually well-timed investments in tokens that were listed on Coinbase. The probe gained steam in mid-May, when authorities prevented Wahi from leaving the country.

According to prosecutors, Coinbase arranged an interview for May 16 with Wahi in Seattle as part of its internal investigation into the suspicious trading activity. The night before, Wahi bought a one-way ticket for a flight to New Delhi scheduled to leave in 11 hours.

The next day, about 35 minutes before the interview was scheduled to begin, Wahi emailed Coinbase’s director of security operations to say that he “had to fly back home” but that the meeting could be rescheduled, according to the indictment. In the 11-hour period, Wahi called and texted his brother and Ramani, sending them images of the messages he had received from Coinbase’s internal security director.

Law enforcement agents showed up at the airport before Wahi could board his flight. Despite his apparent willingness to reschedule the meeting for later in the week or the following week, he brought to the airport an “extensive array of belongings, including, among other items, three large suitcases, seven electronic devices, two passports, multiple other forms of identification, hundreds of dollars in US currency” and other personal effects, according to the filing.

The government isn’t seeking detention ahead of Ishan Wahi’s trial, agreeing to remote monitoring as part of a $1 million bail package secured by his Robinhood account, prosecutors said at an initial court appearance in Seattle Thursday afternoon.

SEC Complaint

The SEC’s complaint, filed Thursday in federal court in Seattle, alleges that Ishan Wahi violated securities laws by repeatedly providing material, non-public information to his brother and friend by text and phone calls using a foreign phone. The agency said its case against the Wahi brothers and Ramani was its first for crypto insider trading.

Nikhil Wahi and Ramani repeatedly traded on that information and recklessly or “consciously avoided knowing” that Ishan was breaching his duty of care to Coinbase in providing the information, according to the complaint. The markets regulator asked the court to order them to pay civil penalties and disgorgement of unspecified amounts.

The SEC said that it was deeming nine of the digital tokens the men traded in to be “securities”-- an important designation for the agency as it continues to exert its authority over the volatile digital asset market.

“We are not concerned with labels, but rather the economic realities of an offering,” SEC Enforcement Director Gurbir Grewal said in a statement. “In this case, those realities affirm that a number of the crypto assets at issue were securities, and, as alleged, the defendants engaged in typical insider trading ahead of their listing on Coinbase,” he said.

Coinbase had policies in place to restrict employees trading or tipping off others based on confidential information, according to the SEC.

In April, Coinbase Chief Executive Officer Brian Armstrong said in a blog posting that the company had “received reports of people appearing to buy certain assets right before we announced they’d be listed.” Without providing specific examples, Armstrong added that there’s a chance that someone at the firm could leak information to outsiders and that it would hunt for misconduct and make referrals to authorities for possible prosecution if anything was found.

American officials have been stepping up their oversight of an industry they say often operates in legal gray areas. Insider trading is seen as a particular problem.

Read more: Ex-NFT Marketplace Employee Charged with Insider Trading

After years of taking a relatively cautious approach to listing tokens, Coinbase made the decision last year to significantly increase that number to take back some of the market share it had lost to competitors including rival Binance Holdings Ltd.

While Coinbase wasn’t charged, the cases could lead to additional scrutiny for the platform. In a press release, the US Attorney credited the company for cooperation in the investigation.

SEC Chair Gary Gensler has long argued that many cryptocurrencies fall under the regulator’s jurisdiction. He’s also said that digital-asset exchanges should register with the agency because they offer trading in those products. Coinbase and other crypto platforms haven’t done so thus far.

(Updates with comment from defendant’s lawyer in eighth paragraph. Previous versions corrected the spelling of defendants’ names.)

Big Oil set to open cash taps with another record quarter

July 21, 2022 Reuters

Top Western energy companies are expected to unleash billions in returns to shareholders when they announce what is set be a second-straight quarter of record-breaking profits, lifted by stellar refining margins and high oil and gas prices.

A rapid recovery in demand following the end of pandemic lockdowns and a surge in energy prices, driven by Russia’s invasion of Ukraine, have boosted profits for companies such as Exxon Mobil after a two-year slump.

Exxon earlier this month said it could post its strongest quarter yet, with profit potentially surpassing $16 billion, almost twice its first-quarter earnings.

The companies have used the cash surge to cut debt accumulated during the pandemic, and, as they reach their debt targets, analysts anticipate they will increase cash distribution to shareholders.

“Given how much balance sheet repair has already occurred in the last 18 months, we believe there is upside to shareholder distribution plans across the sector,” RBC Capital Market analyst Biraj Borkhataria said in a note.

The profit bonanza has stirred demands for governments to increase taxes on energy companies to help consumers deal with record-high electricity and fuel prices. Britain, home to Shell and BP, imposed a 25% windfall tax in May.

In the United States, President Joe Biden accused Exxon of making “more money than God,” and said companies were exploiting a global oil supply shortage to fatten profits.

Oil prices rose in the second quarter, with benchmark Brent crude averaging around $113 a barrel in the quarter, compared with $102 a barrel in the first three months.

CASH MACHINES

The energy majors’s good fortunes – BP Chief Executive Officer Bernard Looney called his company a “cash machine” has also increased pressure on boards to revise their shareholder returns plans, drawn up mostly after the pandemic struck.

Shell, BP and TotalEnergies have indicated they will boost returns in the form of share repurchases.

But some investors say they should do more.29dk2902l

Shell’s Chief Executive Officer Ben van Beurden told Reuters last week that Europe’s largest oil and gas company was considering growing returns beyond its current target of 20% to 30% of cash generation.

The London-based company is forecast to report adjusted earnings of $10.8 billion in the second quarter, according to Refinitiv analyst consensus figures, smashing the previous quarter’s record of $9.1 billion.

Shell pledged in 2020 to raise dividends by 4% annually after it trimmed its flagship payout by more than 60% in response to a collapse in energy demand at the height of the coronavirus crisis, in the first cut since the 1940s.

Some investors and analysts say that with the strong outlook for energy prices, Shell should hike its dividend further.

“Based on a $70 long-term oil price, we see significant potential for Shell to increase its dividend and guide towards longer-term dividend growth,” Jonathan Waghorn, portfolio manager at the Guinness Global Energy fund, said.

Shell has the capacity to increase its dividend by as much as 50% at current prices, Waghorn said.

Shell declined to comment on dividends.

Analaysts at Jefferies expect BP to raise its share buybacks to $3.5 billion in the second quarter from $2.5 billion in the previous quarter. HSBC analysts expect the London-based company to increase its dividend by 4% or even more.

TotalEnergies is expected to increase repurchases by 50% to $3 billion, Jefferies said.

Exxon and Chevron, which had suspended buybacks, have accelerated cash distributions in recent months, making analysts bet share repurchases could stay flat.

Exxon has more than doubled its buyback target to $30 billion through next year, while Chevron has updated its buyback guidance to the high end of its $5 billion to $10 billion annual range.

Second-quarter profits are expected to be boosted by a sharp rise in profits from refining, which have more than doubled in the quarter to $45.5 a barrel, according to BP average estimates.

Shell and Total report on July 28, Exxon and Chevron report on July 29. BP discloses its financial earnings on Aug. 2.

Nord Stream turbine stuck in transit as Moscow drags feet on permits: sources

Russia reopened the pipeline — critical to the EU's natural gas supply — on Thursday after a maintenance shutdown, but the pipeline was still operating at reduced capacity

Reuters
Holger Hansen
Publishing date:Jul 21, 2022 

Last month, Moscow cut the capacity of Nord Stream 1 by 60 per cent, citing the delayed return of the turbine being serviced by German power equipment company Siemens Energy. Russia reopened the pipeline on Thursday after a ten-day scheduled maintenance shutdown, but it was still operating at reduced capacity. 

PHOTO BY JOHN MACDOUGALL/AFP VIA GETTY IMAGES


BERLIN — A missing turbine that Moscow says has caused the Nord Stream 1 pipeline to pump less gas to Europe is stuck in transit in Germany because Russia has so far not given the go-ahead to transport it back, two people familiar with the matter said.

The turbine, which usually operates at the Russian Portovaya compressor station, had been undergoing maintenance in Canada but was flown back to Cologne, Germany, on July 17 by logistics firm Challenge Group, one of the people said.

It is currently unclear when the turbine can be returned, the people said, adding this could still take days or even weeks.

The transport back to Germany happened after weeks of consultations between Berlin and the Canadian government over whether such a move would violate Western sanctions imposed on Russia in the wake of its invasion of Ukraine.

Last month, Moscow cut the capacity of Nord Stream 1 by 60 per cent, citing the delayed return of the turbine being serviced by German power equipment company Siemens Energy.

Russia reopened the pipeline on Thursday after a ten-day scheduled maintenance shutdown, but it was still operating at reduced capacity.

Germany dismisses Russia’s argument that the missing turbine is the reason for lower supplies via Nord Stream 1, and has accused Moscow of using gas flows as a political weapon.

Russia has said that the return of the turbine had a direct impact on the pipeline’s safe operation, adding documentation from Siemens Energy needed to reinstall it was still missing.

One of the sources said Moscow had so far not provided the documents needed to import the turbine into Russia, including details on where exactly to deliver it and via which customs station.

“Under normal circumstances, the maintenance of turbines is a routine operation for us,” Siemens Energy said in a statement. “Naturally, we want to transport the turbine to its place of operation as quickly as possible. However, the time it takes is not exclusively within our control.”



The Kremlin said earlier on Thursday that all difficulties with the supply of Russian natural gas to Europe, including the turbine issue, were caused by Western restrictions, and that Russia remained an indispensable part of European energy security.

German Economy Minister Robert Habeck said of the turbine earlier on Thursday: “Sometimes one has the impression that Russia no longer wants to take it back.

“That means the pretext of technical problems actually has a political background, and that is the opposite of being a guarantor for energy security in Europe.”


MORE ON THIS TOPIC
Russia restarts Nord Stream gas to Europe — but only at 40% capacity level

Habeck said the government was in close contact with Siemens Energy and that it would communicate when the turbine arrives in Russia and has been handed over to Nord Stream’s majority-owner Gazprom.

A spokesperson for Germany’s Economy Ministry declined to comment further. Challenge Group, the logistics company, did not immediately respond to a request for comment. Gazprom, Russia’s natural gas export monopoly, did not reply to repeated requests for comment on Nord Stream 1 and turbines.

© Thomson Reuters 2022

Ukraine's ports to reopen under deal to be signed Friday, Turkey says

Publishing date:Jul 21, 2022 • 

Russia and Ukraine will sign a deal on Friday to reopen Ukraine’s Black Sea ports to grain exports, Turkey said, raising hopes that an international food crisis caused by Russia’s invasion could be eased.

Ukraine and Russia, both among the world’s biggest exporters of food, did not immediately confirm Thursday’s announcement by the office of the Turkish presidency. But in a late night video address Ukrainian President Volodymyr Zelenskiy hinted his country’s Black Sea ports could soon be unblocked.

The blockade by Russia’s Black Sea fleet has reduced supplies to markets around the world and sent grain prices soaring since Russian President Vladimir Putin ordered troops into neighboring Ukraine on Feb. 24.

Full details of the agreement were not immediately released. U.N. Secretary-General Antonio Guterres was going to Turkey, a U.N. spokesperson said. The agreement was due to be signed on Friday at 1330 GMT, Turkish President Tayyip Erdogan’s office said.

Zelenskiy, whose address mainly focused on Ukrainian forces’ potential to make gains on the battlefield, said: “And tomorrow we also expect news for our state from Turkey – regarding the unblocking of our ports.”

SANCTIONS

Moscow has denied responsibility for worsening the food crisis, blaming instead a chilling effect from Western sanctions for slowing its own food and fertilizer exports and Ukraine for mining its Black Sea ports.

U.S. State Department spokesperson Ned Price said Washington would focus on holding Moscow accountable for carrying out the agreement.

The United Nations and Turkey have been working for two months to broker what Guterres called a “package” deal – to resume Ukraine’s Black Sea grain exports and facilitate Russian grain and fertilizer shipments.

Russia on Thursday said the latest round of European Union sanctions would have “devastating consequences” for security and parts of the global economy.

Foreign Ministry spokesperson Maria Zakharova said in a statement that the 27-nation bloc proposed to ease some earlier sanctions in a bid to safeguard global food security, and Moscow hoped this would create conditions for the unhindered export of grain and fertilizers.

BATTLEFIELD

Zelenskiy met senior commanders on Thursday to discuss weapons supplies and intensifying attacks on Russians.

“(We) agreed that our forces have the strong potential to advance on the battlefield and inflict significant new losses on the occupiers,” Zelenskiy said in his video address.

Ukraine has accused Russia of stepping up missile strikes on cities in recent weeks to terrorize its population. Moscow denies attacking civilians and says all its targets are military.

Kyiv hopes that Western weapons, especially longer-range missiles such as U.S. High Mobility Artillery Rocket System (HIMARS) will allow it to counterattack and recapture territory lost in the invasion.

The main frontlines have been largely frozen since Russian forces seized the last two Ukrainian-held cities in eastern Luhansk province in battles in late June and early July. Russian forces are also focused on neighboring Donetsk province.

Russia aims to fully capture all of Donetsk and Luhansk on behalf of its separatist proxies.

It claimed control of the southern port city of Mariupol two months ago after a brutal battle that killed thousands and forced hundreds of thousands to flee.

Those who stayed behind now face a new battle: how to survive without functioning water or sewage supplies in the city where about 90% of buildings were destroyed, and where rubbish and human remains rot in the rubble under the summer heat.

“You start a fire, you cook food, breakfast for the children,” one resident told Reuters. “In the afternoon you go find some work or get your dry ration to feed the children dinner. It’s Groundhog Day, as they say: you wake up and it’s always the same.”

Russia called its invasion a “special military operation” to rid Ukraine of fascists, an assertion the Ukrainian government and its Western allies said was a baseless pretext for an unprovoked war.


(Reporting by Reuters bureaux; writing by Grant McCool; Editing by Cynthia Osterman and Stephen Coates)

Grim tank conspiracy goes viral amid China's $9 billion crisis

Nick Whigham

·News Editor

Wed, 20 July 2022 

China's internet censors are working in overdrive to block vision leaking onto the wider internet of residents protesting in the street as anger in parts of the country over banking malpractice threatens to snowball.

Angry homebuyers in China are threatening to stop paying mortgages on hundreds of unfinished housing projects after construction companies faltered, leaving them with incomplete homes.

In Henan province, in central China, bank depositors say they've been prevented from withdrawing their money for weeks, sparking angry scenes and clashes with police.

"When you buy off the plan – and most people don't know this – in most cases you’re paying up front for the whole property before it's built," says Ben Hillman, Director of the Australian Centre on China in the World at ANU.

"People have bought properties that don’t exist yet.

With property developers faltering, home buyers in parts of China are refusing to pay their mortgage. Source: Getty

"That’s a crisis — it would be for anyone involved — and often entire families have pooled their resources to purchase these properties," he told Yahoo News Australia.

Families who have paid a deposit of about 20 per cent, and making mortgage repayments are staring at the prospect of losing the lot.

"You can see why people are risking life and limb to protest," Associate professor Hillman said.

Loose lending and moral hazard rife in Chinese banking

Ass Prof Hillman believed there was a genuine desire from the Chinese government to fix the banking problems but it would take time to resolve.

"There’s been so much loose lending in China over the years," he said, particularly in the regional banks where these protests were concentrated.

There is a greater degree of moral hazard in the country's banking system because "there’s more of an expectation that you’ll be bailed out if something goes wrong".

While banking malpractice is a "massive social problem" in the country, Ass Prof Hillman said localised protests about property and land deals are not uncommon.

Demonstrators hold banners during a protest over the freezing of deposits by rural-based banks, outside a People's Bank of China building in Zhengzhou, Henan province. Source: Reuters

Authorities are typically happy to let residents blow off steam, however the latest bout of unrest has threatened to calcify into a wider protest.

"Social media changes the dynamic and increases the chances to amplify the protest and for it to spread ... That's something that terrifies the [Chinese Communist] Party," he said.

Bank boycott videos scrubbed from social media

Four banks in Henan province and one in neighbouring Anhui have been frozen since mid-April, the South China Morning Post reported.

About 40 billion yuan (roughly A$9 billion) belonging to depositors around the country is missing, the publication reported in an editorial this week.

With growing concern of systemic risk in the country's banking system, authorities have urged patience while clamping down on online expression.

One video showing fingerprinted notices from homebuyers declaring a boycott on mortgage payments for incomplete developments was blocked on Douyin, the Chinese version of TikTok. The social media platform said "the content didn't pass scrutiny", Reuters reported.

Plain-clothed security personnel pull on a demonstrator's shirt while dragging him away during a protest over the freezing of deposits. Source: Reuters

Other videos that were blocked or deleted from social media sites included scenes of empty construction sites, protesters scuffling with bodyguards, and analyst commentaries on the boycott movement, underscoring the sensitivity of the issue.

On the social media platform Weibo, the hashtag #stopmortgagepayments has been censored, with a notice saying: "Due to related laws and rules, the topic page cannot be displayed."

A number of bank protesters told Reuters they were also unable to upload content of the ongoing protests on WeChat.

Misleading footage of tanks on Chinese streets go viral

Chinese social media companies are subject to strict laws requiring them to censor content that "undermines social stability" or is critical of the central government.

The tight control of information and the frequent scrubbing of posts breeds suspicion and ultimately creates a vacuum for misinformation.

Vision of tanks in Rizhao City in eastern China have gone viral for all the wrong reasons. Source: Twitter

A viral clip showing tanks in Chinese streets has been widely shared with people falsely claiming the tanks have been sent in to quell protests related to the banking turmoil.

A number of accounts with large followings have shared the footage, racking up hundreds of thousands of likes and shares on Twitter, while a Reddit post claiming the tanks were "protecting banks" garnered more than 1350 comments and sparked news articles

However the footage appears to be from a military town in the eastern province of Shandong taken on July 17, and unrelated to the banking protests.

Ass Prof Hillman says the CCP is aware its strict censorship creates a vacuum for counter narratives and misinformation online, particularly outside of China.

"The party is obsessed with control. It will start working on its on narrative and propaganda and allowing visitors once it feels it has everything under control.

"What is interesting is what kind of actors are behind this disinformation," he added, alluding to anti-CCP groups.

Xi Jinping gunning for third term

The protests have erupted at a sensitive time for Beijing. Chinese President Xi Jinping is expected to secure a third leadership term at the 20th Communist Party Congress later this year, and social stability is crucial ahead of the meeting.

In response, regulators and local governments have stepped up efforts to reassure critics that projects will be completed and task forces have been created.

Meanwhile authorities are cracking down on the flow of information. An official at a Chinese developer said his boss had banned staff from commenting on the mortgage protests, even off the record, due to an "order from above".

Analysts at some securities and research firms in China told Reuters they were also advised not to comment on the protests.

with Reuters

Rare 180kg eagle ray jumps into boat

 and gives birth: 'Absolutely scary'

Carly Bass

·News Reporter

Thu, 21 July 2022 

A family got the shock of their lives while on a fishing trip last week after a rare spotted eagle ray suddenly jumped into their boat, before giving birth to four pups.

April Jones was on the water with her son, husband and father-in-law off the coast of Alabama in the US on Friday but they weren't expecting to land a huge 180kg sea animal.

Sharing incredible photos on Facebook, Ms Jones explained they were just about to pack up and move locations when suddenly they felt a thud.

It took "four grown men" to lift the animal - which is approximately 1.5 meters - to safety. Source: Facebook

"I felt something hit me," she told Fox News. "And then I see this big blob flopping around in the back of the boat."

Her husband Jeremy Jones told media he was unaware of what had happened, but he heard his wife screaming before he turned around.

"I hear stuff breaking and flopping, my grandpa falls into me. I look back, this ray is laying in the back of the boat," he told US news site WSPA.

The giant rare 180kg eagle ray lept into the boat before having babies. Source: Facebook

Boat begins to sink due to huge 180kg animal

Due to the sheer size of the animal, they struggled to put her back in the water so they desperately made some calls to find out what to do.

They estimated to eagle ray to weigh up to 180kg (400 pounds) and she was "most likely over 5ft (1.5 meters) when fully flat," Ms Jones wrote on Facebook.

A new problem quickly arose when their boat began to sink under the weight of the animal.

The boat was filling with water so they decided to head back to shore, Ms Jones said.

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In the meantime, they tried to keep the ray alive for the 20-minute trip by splashing water on her consistently.

When they pulled into the closest boat ramp, by luck there was an aquarium and marine research centre – Dauphin Island Sea Lab.

"I ran into the lab to see if anyone could help get her out. In the meantime, some people had come to the boat and helped her get out," she told Fox News.

The female ray gave birth to four pups, but none of them survived. Source: Facebook

Incredible discovery after animal gives birth

Ms Jones said it took "four grown men" to help lift her from the boat, but that's when they made an astonishing discovery.

The mama ray had given birth to four pups right there on the boat, but unfortunately, none of them survived.

It's not known if they were stillborn or if they died during the ordeal.

According to Dauphin Island Sea Lab, rays can suddenly give birth if they encounter a stressful situation.

"It's not uncommon for wild animals to release their young when they feel their life is in danger," curator of the Dauphin Island Sea Lab Brian Jones told Fox.

"We think the reason she was jumping is due to a remora — or suckerfish— being stuck to her belly since it was also in the boat," Ms Jones revealed.

If the ray had landed back in the water the suckerfish would’ve fallen off. But it just so happened to land on Ms Jones inside the boat instead.

April Jones was with her son and husband (pictured) as well as her father-in-law. Source: Facebook

Ms Jones said they were "devastated" that the babies did not survive, but "there was nothing we could have done".

The babies were donated to the Dauphin Island Sea Lab for education purposes.

Woman injured after 'scary' ordeal

The incredible incident left Ms Jones with a shoulder strain and sore collar bone after "half of her body hit half of mine".

She also spent the night in the emergency room for checkups.

"No one knows what they would have truly done unless they were in this situation, we did the best we could to keep the mama alive until we could get help," she said.

Ms Jones said that while it was "beautiful" to see the animal up close, how it unfolded was "absolutely scary"

Vale Indonesia, China's Huayou sign agreement with Ford for nickel plant

 Thursday July 21, 2022 

JAKARTA, July 21 (Reuters) - Nickel miner Vale Indonesia, China's Zhejiang Huayou Cobalt and U.S. car maker Ford Motor signed a non-binding memorandum of cooperation to build a plant in Indonesia to extract nickel chemicals, Vale said in a statement on Thursday. The companies plan to create a partnership to build a plant to produce 120,000 tonnes per annum of mixed hydroxide precipitate, material extracted from nickel ore that would be used in batteries for electric vehicles.

Vale said the new partnership with Ford will be built on its framework agreement with Huayou, signed in April. Under the April agreement, Huayou will develop the project in Southeast Sulawesi and Vale will have rights to acquire up to a 30% stake in the project. ""This three-way relationship is a creative way to secure the nickel Ford needs to help deliver millions of EVs for our customers and it keeps our environmental, social and governance goals front and center in the process,"" Lisa Drake, Ford's vice president of EV industrialization, said in the statement. ""Not only will this partnership with Ford and PT Vale bring to our customers stable and sustainable supply, but also will benefit the increasingly robust EV industry and Indonesian economy,"" Huayou's Executive Vice Chairman, George Q. Fang, said in the statement.

The project is expected to be completed in 2025. Indonesia is keen to utilise its rich nickel reserves to attract investment into metal processing, production of EV batteries material and building EV onshore. The government from 2020 banned export of unprocessed nickel ore to ensure supply for existing and potential investors.

(Reporting by Fransiska Nangoy; Editing by Andrea Ricci)

Ford to buy cheaper CATL EV batteries

to catch Tesla

Joseph White and Ben Klayman

Thu, July 21, 2022 

DETROIT (Reuters) - Ford Motor Co on Thursday said it will import lower-cost lithium iron batteries for its North American electric pickup trucks and SUVs from Chinese battery champion CATL, as it works on a broader alliance with CATL and an array of separate deals to secure battery and battery materials into the next decade.

Ford Vice President Lisa Drake said the automaker plans to secure lithium-iron, or LFP, batteries from a new 40 GWh factory in North America starting in 2026. Drake would not say if that factory would be built by CATL. Reuters reported in May that CATL was looking at U.S. sites to build EV batteries to serve Ford and BMW.

Ford's decision to use lithium-iron batteries in its best-selling North American EVs is the latest sign that lithium iron's lower cost - Ford said the chemistry can cut material costs by 10-15% - is worth the trade-off in range. Tesla is offering LFP batteries in some lower-priced Model 3 sedans sold in the United States. Electric truck and van maker Rivian also has said it intends to use LFP batteries.

Drake said Ford wants to secure more batteries and battery materials from North America, but cautioned: "I wouldn't say that we have 100% confidence that all of these can be localized...It's hard work."

Ford said it also has agreed with CATL to explore using the Chinese company's batteries in Ford vehicles sold in the United States, Europe and China.

CATL said in a statement "the two companies plan to leverage their respective strengths to jointly explore new business opportunities worldwide," involving lithium-iron and other battery technologies.

The CATL agreements are part of a series of deals Ford disclosed to show that it is speeding up efforts to secure battery capacity and raw materials. Among them was an agreement to explore buying lithium from Australian mining giant Rio Tinto, and nickel from Vale SA's units in Canada and Indonesia, China's Huayou Cobalt and BHP. [nL4N2Z231K]

Some of the metals agreements are linked to projects that likely will not be producing until the later part of the decade. The Rio and Compass Minerals deals involve so-called direct lithium extraction technologies that have never worked at commercial scale.

Investors are concerned that supplies of battery materials and battery-making capacity will not keep up with demand for electric vehicles, leaving some automakers short in the later years of this decade.

Ford said it has now sourced about 70% of the battery capacity it needs to support its goal of building more than 2 million EVs worldwide by late 2026.

U.S. government officials are increasingly concerned about the auto industry's reliance on China as the dominant source for battery materials and battery cells.

Ford's decision to use CATL's lithium iron phosphate batteries for the Mustang Mach-E starting next year, and the F-150 Lightning in 2024, marks a significant win for the Chinese battery maker, and a shift in U.S. marketing strategy for Ford.

Lithium-iron batteries typically deliver less driving range than comparable batteries that use nickel and cobalt, and until recently, automakers had stuck with more expensive nickel-cobalt chemistries for the U.S. market, where longer driving range is a key competitive measure.

"We know battery material costs is where the war will be won," Drake said during a call Thursday. "LFP will give the biggest step function down" in costs.

Lower-cost batteries could allow Ford to drop prices for the Lightning and Mach-E, or boost profit margins.

Ford said it is aiming for 8% pretax profit margins on its EVs by 2026. The company has said its EV business currently is not profitable. Even an 8% margin would be short of the 14.6% operating margin Tesla Inc reported Wednesday for the second quarter.

Ford is aiming to expand its annual EV production rate to 600,000 vehicles globally by late 2023, and more than 2 million by the end of 2026. It expects the compound annual growth rate for EVs to top 90% through 2026, more than doubling the forecast industry growth rate.

In March, Ford boosted its planned spending on EVs through 2026 to $50 billion from its prior target of $30 billion, and reorganized its operations into separate units focused on EVs and gasoline-powered vehicles with Ford Model e and Ford Blue, respectively.

The company is also working with LG Energy Solution and its long-time battery partner SK Innovation.

(Reporting by Joseph White and Ben Klayman in Detroit, additional reporting by Ernest Scheyder in Houston; Editing by Bernadette Baum and Andrea Ricci)

UPDATE 1-Activists say Mexico not enforcing environmental laws related to Mayan Train project


Thu, July 21, 2022 
(New throughout, adds details and background)

MEXICO CITY, July 21 (Reuters) - Several environmental groups submitted a claim on Thursday saying "Mexico is failing to effectively enforce its environmental laws to assess the environmental impacts" related to Mexican President Andres Manuel Lopez Obrador's multibillion-dollar Mayan Train project.

Lopez Obrador's flagship project, aimed at attracting tourists to Mexico's Yucatan Peninsula, has been beset by legal challenges.

The groups allege the 1,470-km (910-mile) line is being rushed through without adequate environmental impact studies.

"Inadequate soil and geophysical studies fail to consider the fragility of the Yucatan Peninsula's karst and soil, resulting in elevated risks of infrastructure sinking and fuel transportation accidents," said the statement by the groups. They made the submission under the United States-Mexico-Canada Agreement (USMCA) with the Commission for Environmental Cooperation (CEC).

On Tuesday, Lopez Obrador said the project had been deemed a matter of national security, which could allow development to proceed despite a series of legal injunctions stalling construction.

The CEC has 30 days to review the submission and determine whether it meets the requirements to take action under the USMCA agreement, it said in a statement.

The activist movement "Selvame del Tren," which participated in the submission, held a press conference earlier Thursday to announce a campaign it called "the uncomfortable pillow."

Activists named 15 business executives and politicians, including Lopez Obrador, as those they said should struggle to sleep at night over the environmental destruction caused by the project.

"We have to wake up in Mexico, not only in environmental issues, but in the rule of law, respect for the law of the highest authority," said activist Gemma Santana. 

Greenpeace activists protest at one of the construction sections of the Mayan train due to the environmental impact and the destruction of the jungle caused by the project, in Playa del Carmen, Mexico March 28, 2022. REUTERS/Paola Chiomante

An activist takes pictures of felled trees at one of the construction sections of the Mayan train during a protest due to the environmental impact and the destruction of the jungle caused by the project, in Playa del Carmen, Mexico April 23, 2022. REUTERS/Raquel Cunha

(Reporting by Kylie Madry and Cassandra Garrison, Editing by Anthony Esposito and David Gregorio)