tardigrada

• Zhongzhi units engaged in potentially illegal practices before Chinese shadow bank's collapse, records show
• Practices involved guaranteeing returns; using new investor funds to pay returns on existing wealth management products
• Chinese regulators had prohibited capital pool business and guaranteeing of returns to prevent financial instability
• Zhongzhi and relevant units did not respond to Reuters queries about such practices

Zhongzhi Enterprise Group, a former leader of China's shadow banking sector that declared insolvency last year, used aggressive and potentially illegal sales practices to sustain its operations as it lurched toward collapse, according to new records.

China's years-long property boom had propelled Beijing-headquartered Zhongzhi to the top of the country's $18 trillion asset-management industry and made it a key player in a shadow banking sector the size of the French economy. Asset managers such as Zhongzhi sell wealth-management products to investors. The proceeds are then channeled by licensed trust firms like its Zhongrong unit to developers and other companies that cannot tap bank funding directly because of poor creditworthiness or other reasons.

Previously unreported details show that about a year before its financial troubles burst into the open, Zhongzhi units were paying returns to existing investors in wealth-management products by using funds from new investors, and promising individual investors lucrative returns that belied the group's exposure to a deepening property crisis.

China's trust firms are known as shadow banks because they operate outside many of the rules that govern commercial lenders. But China's top banking regulator in 2018 specified that financial institutions including shadow banks and asset managers should not set up capital pools, to prevent them from using money from new sales to cover returns on existing wealth-management products, nor should they guarantee returns on wealth-management products.

China's shadow bank Zhongzhi exploited risky and potentially illegal practices before its collapse last year

• Zhongzhi units engaged in potentially illegal practices before Chinese shadow bank's collapse, records show
• Practices involved guaranteeing returns; using new investor funds to pay returns on existing wealth management products
• Chinese regulators had prohibited capital pool business and guaranteeing of returns to prevent financial instability
• Zhongzhi and relevant units did not respond to Reuters queries about such practices

Zhongzhi Enterprise Group, a former leader of China's shadow banking sector that declared insolvency last year, used aggressive and potentially illegal sales practices to sustain its operations as it lurched toward collapse, according to new records.

China's years-long property boom had propelled Beijing-headquartered Zhongzhi to the top of the country's $18 trillion asset-management industry and made it a key player in a shadow banking sector the size of the French economy. Asset managers such as Zhongzhi sell wealth-management products to investors. The proceeds are then channeled by licensed trust firms like its Zhongrong unit to developers and other companies that cannot tap bank funding directly because of poor creditworthiness or other reasons.

Previously unreported details show that about a year before its financial troubles burst into the open, Zhongzhi units were paying returns to existing investors in wealth-management products by using funds from new investors, and promising individual investors lucrative returns that belied the group's exposure to a deepening property crisis.

China's trust firms are known as shadow banks because they operate outside many of the rules that govern commercial lenders. But China's top banking regulator in 2018 specified that financial institutions including shadow banks and asset managers should not set up capital pools, to prevent them from using money from new sales to cover returns on existing wealth-management products, nor should they guarantee returns on wealth-management products.

Archived version

French security services firm Quarkslab has made an eye-popping discovery: a significant backdoor in millions of contactless cards made by Shanghai Fudan Microelectronics Group, a leading chip manufacturer in China.

The backdoor, documented in a research paper by Quarkslab researcher Philippe Teuwen, allows the instantaneous cloning of RFID smart cards used to open office doors and hotel rooms around the world.

Although the backdoor requires just a few minutes of physical proximity to an affected card to conduct an attack, an attacker in a position to carry out a supply chain attack could execute such attacks instantaneously at scale, Teuwen explained in the paper (PDF).

Teuwen said he discovered the backdoor while conducting security experiments on the MIFARE Classic card family that is widely deployed in public transportation and the hospitality industry.

The MIFARE Classic card family, originally launched in 1994 by Philips (now NXP Semiconductors), are widely used and have been subjected to numerous attacks over the years.

Security vulnerabilities that allow “card-only” attacks (attacks that require access to a card but not the corresponding card reader) are of particular concern as they may enable attackers to clone cards, or to read and write their content, just by having physical proximity for a few minutes. Over the years, new versions of the MIFARE Classic family fixed the different types of attacks documented by security researchers.~~

• In July, the Pakistan government said it was implementing an internet firewall to protect the country from cyberattacks.

• Tech industry experts believe the moves to install the firewall and filter content have led to internet disruption.

• Entrepreneurs said the firewall will make it harder for them to raise funds and end up benefiting Chinese apps.

Many Pakistani tech entrepreneurs and industry experts are worried about the industry’s future as they believe the firewall would cut them off from the world. They say the government is trying to imitate its close ally China — which has the world’s largest and most sophisticated internet firewall — without having a similar domestic infrastructure to support its move. The internet firewall could cost Pakistan’s economy $300 million, according to the tech industry body Pakistan Software Houses Association.

Russia is using media and cultural initiatives to attract African journalists, influencers, and students while spreading misleading information.

These events are being promoted by African Initiative, a newly founded Russian media organisation which defines itself as an “information bridge between Russia and Africa”. It inherited structures previously set up by the dismantled Wagner mercenary group and is believed by experts to have links with the Russian security services.

Registered in September 2023, a month after Wagner’s leader Yevgeny Prigozhin died in a plane crash, African Initiative has welcomed former employees from his disbanded enterprises.

Its efforts have been particularly focused on the three military-run countries of Mali, Niger and Burkina Faso.

[...]

Alongside cultural events on the ground, African Initiative maintains a news website with stories in Russian, English, French, and Arabic, as well as a video channel and five Telegram channels, one of which has almost 60,000 subscribers.

[...]

Stories on the African Initiative’s website suggest without evidence that the US is using Africa as a production and testing ground for bio-weapons, building on long-discredited Kremlin disinformation campaigns.

One story echoes the Kremlin’s unsubstantiated claims about US bio-labs being relocated from Ukraine to Africa. Another maintains without evidence that US bio-labs on the continent are increasing, claiming that “under the guise of research and humanitarian projects, the African continent is becoming a testing ground for the Pentagon”, suggesting that secretive biological experiments are being conducted.

While Prigozhin’s propaganda efforts targeted mainly France, African Initiative “targets Americans to a greater degree,” says researcher Jedrzej Czerep, head of the Middle East and Africa Programme at the Polish Institute of International Affairs. “It’s far more anti-American.”

[...]

In June, a group of bloggers and reporters from eight countries were invited for a seven-day “press tour” of the Russian-occupied areas of Ukraine. The trip was organised by Russian state media and Western-sanctioned Russian officials, and the journalists visited African Initiative’s headquarters in Moscow.

"Africa wasn’t getting much information [about the war]," Raymond Agbadi, a Ghanaian blogger and scientist who studied in Russia and who participated in the “press tour”, told the BBC. "Whatever information we were getting was not convincing enough for us to understand what the war was really about.”

American influencer Jackson Hinkle, a vocal supporter of Russian President Vladimir Putin who has spread multiple false claims about Ukraine, was also on the visit.

[...]

Archived version

The rapid spread of baseless claims about Haitian immigrants reveals the need for long-term accountability in political reporting.

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Liars must pay a price

Given this landscape of rampant misinformation, journalists have an important role to play — one that goes beyond fact-checking. It's time for the media to make politicians pay a real price for spreading outrageous lies.

When a politician like J.D. Vance amplifies a baseless claim about Haitian immigrants eating pets, or when Trump asserts that schools are secretly performing gender transition surgeries, these lies shouldn't be treated as isolated incidents. They should become part of the narrative about these politicians moving forward.

Journalists have a responsibility to consistently remind the public of these lies in future coverage. Every article about Vance should mention his willingness to spread xenophobic misinformation. Every piece on Trump should reference his history of transgender fearmongering. These lies should color all future coverage of these candidates, becoming an integral part of their political identity.

By doing this, journalists are accomplishing several things at once. It holds politicians accountable for their words, creating a lasting consequence for spreading misinformation. It provides important context for readers, helping them evaluate the credibility of these figures on an ongoing basis. It may deter politicians from spreading future lies, knowing that doing so could tarnish their reputation long-term. Perhaps most importantly, it helps combat the normalization of misinformation in political discourse.

Some may argue that this approach compromises journalistic objectivity. However, consistently reporting on a politician's documented history of spreading lies isn't a form of bias — it's responsible journalism. Facts aren't partisan, and the public deserves to know when their leaders have a track record of dishonesty.

Moreover, this strategy could help break the cycle of misinformation we're currently trapped in. If politicians know that spreading lies will damage their credibility long-term, they may think twice before amplifying unverified claims for short-term political gain.

Of course, this approach requires courage from news organizations. They must be willing to withstand accusations of bias and potential loss of access to these political figures. But the alternative – allowing politicians to spread harmful lies without consequence — is far more damaging to our democratic discourse.

Archived version

China is providing Russia with “very substantial” military support in exchange for key technological capabilities, US Deputy Secretary of State Kurt Campbell said on Tuesday (10 September) after talks with EU and NATO counterparts.

“We’re seeing coordination, diversification and efforts at the highest levels of both governments to try to both hide and protect certain elements of this worrisome collaboration,” Campbell told a group of reporters, including Euractiv, in Brussels.

“What the Chinese are providing – and we have provided our colleagues here in Europe, both in NATO and EU venues [with information] – [is] direct support for Russia’s defence industrial base,” Campbell said.

"The Bibi Files”, a new documentary by filmmakers Alexis Bloom and Alex Gibney, features never-before-seen footage of Israeli police interrogating Prime Minister Binyamin Netanyahu, his family and his inner circle on corruption allegations. The documentary was screened as a work-in-progress at the 2024 Toronto Film Festival on Monday, hours after a Jerusalem court rejected a petition by Netanyahu to block the screening.

Iranian authorities have reportedly arrested on false charges, threatened, or harassed the family members of dozens of people killed, executed, or imprisoned during the protests over the last two years, Human Rights Watch said today. Two years after the outbreak of the 2022 “Woman, Life, Freedom” protests, Iranian authorities continue to silence and punish family members demanding accountability for violations against their loved ones.

BBC Persian reported on August 16, 2024, that the Nazarabad criminal court in Alborz province in northern Iran sentenced Mashallah Karami to 8 years and 10 months in prison on charges of “participation in money laundering” and “obtaining property through illegitimate means.” Karami’s son, Mohammad Mehdi Karami, was executed on January 7, 2023, for participating in the protests. His father is also facing a fine and the confiscation of his assets as part of his sentence. Ali Sharifzadeh Ardakani, his lawyer, said in an interview with Shargh Daily newspaper that the funds and assets were public donations to support Karami, though none of the donors had sued for repayment.

A US military veteran who received the world's first whole-eye transplant has made significant progress a year later and has been able to resume his normal life, researchers say.

Aaron James, 46, also received a rare partial-face transplant. He lost most of his face in an accident in 2021 while working as a high-voltage utility lineman.

His donor eye has so far maintained normal pressure and blood flow and retained its size, unlike donor eyes in animals that often shrink after transplants, researchers at NYU Langone Health said in a new study.

Mr James has not regained sight in that eye, but researchers are hopeful he might eventually be able to see out of it again.

[...]

Last May, he underwent 21 hours of surgery that involved more than 140 healthcare professionals.

The donated face and eye came from a single male donor in his 30s. During the surgery, doctors injected adult stem cells from the donor's bone marrow into the optic nerve to encourage its repair.

[...]

The 46-year-old military veteran is only the 19th person in the US to undergo a face transplant and the first person in the world to receive an entire human eye transplant.

China’s influence increasingly threatens the academic world in Brazil. In recent years, the country’s main higher education institutions, such as the State University of Campinas (Unicamp) and the Federal University of Minas Gerais (UFMG), have established partnerships with Chinese institutions at an ever-increasing rate. Experts warn of the risks of this growing soft power that Beijing uses to promote the Chinese model.

“China’s influence on Brazilian universities has never been greater,” journalist Gabriel de Arruda Castro, editor of Brazilian daily Gazeta do Povo, told Diálogo. “Obviously, this opens the door to the presence of representatives of an authoritarian regime, which is not the case when Brazil establishes academic partnerships with countries like Germany or France.”

[...]

Although agreements between Brazilian and foreign universities are common, Castro points out that these countries respect the independence and academic autonomy of their teaching centers. Chinese universities, on the other hand, are subject to the strict control of the Beijing government. “From the point of view of the Chinese regime, it doesn’t make any sense to fund any project that might be critical of the Chinese model,” says Castro.

[...]

Part of the Chinese influence in Brazilian universities is exerted through partnerships with the Confucius Institute, an entity linked to the Chinese Ministry of Education, whose official mission is to spread Chinese culture and language.

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On August 13, 2020, the U.S. State Department designated the Confucius Institute as a “foreign mission” of China, noting that it promotes “Beijing’s global propaganda and malign influence campaign” in classrooms.

[...]

In 2023, Germany’s Federal Office for the Protection of the Constitution (BfV) called the Confucius Institute a tool of political influence. “China’s activities and forms of cooperation threaten to undermine academic freedom in the field of education and research,” the BfV said in its annual report, German news agency Deutsche Welle reported.

[...]

“Obviously, the official view of the regime is not challenged in these cases. The promotion of Chinese culture is therefore mixed with the promotion of the Chinese regime,” says Castro. “In my research, I didn’t find any perspective critical of China.”

[...]

He believes there may be a risk of espionage by China in these initiatives. “Perhaps because it is not perceived as a direct adversary of China, Brazil has a little less of this aspect [of espionage]. But perhaps there is ‘soft espionage’ here: knowing where Brazil stands in certain areas of knowledge, in order to later use this as a strategic advantage in a possible competition in some area or to offer solutions,” he says.

“This is more or less what it [China] does in Africa by other means. In other words: meeting local demand pragmatically at first, but making these countries increasingly dependent on China,” Castro added.

[...]

China’s influence increasingly threatens the academic world in Brazil. In recent years, the country’s main higher education institutions, such as the State University of Campinas (Unicamp) and the Federal University of Minas Gerais (UFMG), have established partnerships with Chinese institutions at an ever-increasing rate. Experts warn of the risks of this growing soft power that Beijing uses to promote the Chinese model.

“China’s influence on Brazilian universities has never been greater,” journalist Gabriel de Arruda Castro, editor of Brazilian daily Gazeta do Povo, told Diálogo. “Obviously, this opens the door to the presence of representatives of an authoritarian regime, which is not the case when Brazil establishes academic partnerships with countries like Germany or France.”

[...]

Although agreements between Brazilian and foreign universities are common, Castro points out that these countries respect the independence and academic autonomy of their teaching centers. Chinese universities, on the other hand, are subject to the strict control of the Beijing government. “From the point of view of the Chinese regime, it doesn’t make any sense to fund any project that might be critical of the Chinese model,” says Castro.

[...]

Part of the Chinese influence in Brazilian universities is exerted through partnerships with the Confucius Institute, an entity linked to the Chinese Ministry of Education, whose official mission is to spread Chinese culture and language.

[...]

On August 13, 2020, the U.S. State Department designated the Confucius Institute as a “foreign mission” of China, noting that it promotes “Beijing’s global propaganda and malign influence campaign” in classrooms.

[...]

In 2023, Germany’s Federal Office for the Protection of the Constitution (BfV) called the Confucius Institute a tool of political influence. “China’s activities and forms of cooperation threaten to undermine academic freedom in the field of education and research,” the BfV said in its annual report, German news agency Deutsche Welle reported.

[...]

“Obviously, the official view of the regime is not challenged in these cases. The promotion of Chinese culture is therefore mixed with the promotion of the Chinese regime,” says Castro. “In my research, I didn’t find any perspective critical of China.”

[...]

He believes there may be a risk of espionage by China in these initiatives. “Perhaps because it is not perceived as a direct adversary of China, Brazil has a little less of this aspect [of espionage]. But perhaps there is ‘soft espionage’ here: knowing where Brazil stands in certain areas of knowledge, in order to later use this as a strategic advantage in a possible competition in some area or to offer solutions,” he says.

“This is more or less what it [China] does in Africa by other means. In other words: meeting local demand pragmatically at first, but making these countries increasingly dependent on China,” Castro added.

[...]