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China

Patriotic Chinese Hacking Group Reboots

Chown Group Lin Yong, wearing long sleeves, accepted an award from a hacker group in September. A Chinese hacking group that launched patriotic cyberattacks on websites in the U.S. and other countries is reorganizing after years of inactivity. And its founder says he can’t guarantee members won’t launch attacks again, even though the group’s new focus will be on defensive research. The re-emergence of the Honker Union of China highlights a continued nationalistic streak among certain influential Chinese hackers—something that could be a liability for China’s government if it sparks independent cyberattacks, but that could also serve its goals if it inspires talented hackers to seek work with the government or the military. Lin Yong, also known by the online name Lion, ran the group’s website from 2000 to 2004, when members attacked many foreign websites for political causes–mainly by defacing them, or altering their appearance and leaving messages. Mr. Lin himself attacked websites in the U.S., Japan and Taiwan, he said in a recent phone interview. The group took part, for instance, in a website defacement battle between Chinese and U.S. hackers in 2001, when the midair collision of a Chinese fighter jet and a U.S. Navy plane caused a diplomatic firestorm. The Honker Union at the time had up to 60,000 users of its online forums and over 20,000 on its electronic-mailing list, Mr. Lin said. According to a Dow Jones Newswires report at the time, among the group’s targets was a Philadelphia City government website, which was altered to show a waving Chinese flag and the words: “Beat down Imperialism of American!” The Honker Union has never had ties to China’s government or military, Mr. Lin said. “Honker” transliterates the key term in the group’s Chinese name: “hong ke,” or “red hacker.” The group’s new incarnation will be different, Mr. Lin said. Mr. Lin himself, who is 31 years old and lives in the southern Chinese city of Guangzhou, says he hasn’t been involved in the Chinese computer-security community since 2006 and now trades stocks and foreign currency for a living. He has also become a Buddhist, one “large reason” he decided to reorganize the Honker Union, he said in a message on the group’s new website. The reorganized Honker Union will hold network-security training sessions at colleges and encourage Chinese hackers and security students to use their skills to seek legitimate jobs, rather than turning to cybercrime to make money, Lin said. The group will also develop an online platform meant to help users turn security-related research into legitimate business plans, including by helping them find investment, Mr. Lin said. “Mainly now [we want] to get them to put energy into researching technology, and to help protect the networks of Chinese companies, government ministries and research institutions,” he said. When asked if the group would continue to launch attacks, Mr. Lin said: “We won’t, we probably won’t. If there’s some special incident, I can’t guarantee that other group members won’t have their own ideas. At least, right now there aren’t signs of that.” Lin also said attacks now would be “unnecessary,” given China’s rise on the international stage and an increase in Chinese regulations governing hacking. “You have to go according to the international situation. China’s international status is already not bad,” he said. Foreign officials and security experts for years have pointed to China as the source of many politically motivated attacks on foreign companies and governments. China’s government has repeatedly denied sponsoring hacking activity and said it is a major victim of hacking attacks. Authorities have also discouraged cyberattacks by private citizens, including in direct communication with hackers like Mr. Lin, who said a provincial police official in 2001 discouraged him from attacking the U.S. websites. (Mr. Lin says his group went ahead with attacks anyway and wasn’t punished.) The group’s reboot comes after two other prominent Chinese hackers last month led a public call for their peers to steer clear of cybercrime. A larger circle of hackers, including Mr. Lin, reviewed a document containing the appeal and put it online. That document, called the “Chinese Hackers’ Self-Discipline Convention,” asks that hackers pledge to avoid acts that could harm the public, such as stealing from regular Internet users. But it doesn’t condemn all forms of cyberattacks, leaving unclear whether it would allow activist attacks on foreign targets. For instance, the document says denial-of-service attacks–in which a target website can be knocked offline—aren’t legitimate if they are done for profit or are “not in the public interest.” It doesn’t elaborate. At a Shanghai conference last month held by the organizers of the appeal against cybercrime, Mr. Lin received an award recognizing his “social influence,” underlining the strong association his group had with the surge in patriotic cyberattacks from China a decade ago. Mr. Lin also first announced his plan to revive the Honker Union in a speech at the event. Mr. Lin has since put a new manifesto for the Honker Union on its website. Posted on Oct. 1, the “National Day” holiday that commemorates the 1949 founding of Communist China, it highlights a need to help prepare the country to defend itself in any “information war.” “There are currently companies and governments in certain countries with specialized teams actively preparing for information war, and in this area we are obviously behind,” part of the manifesto says. “As security technicians, we must cultivate future technical talent and enter companies and institutions, taking up the work of defense and construction in information security. This is our job and our social responsibility.” “Honker is a kind of spirit, a kind of patriotic spirit,” it says. –Owen Fletcher

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Chown Group
Lin Yong, wearing long sleeves, accepted an award from a hacker group in September.

A Chinese hacking group that launched patriotic cyberattacks on websites in the U.S. and other countries is reorganizing after years of inactivity. And its founder says he can’t guarantee members won’t launch attacks again, even though the group’s new focus will be on defensive research.

The re-emergence of the Honker Union of China highlights a continued nationalistic streak among certain influential Chinese hackers—something that could be a liability for China’s government if it sparks independent cyberattacks, but that could also serve its goals if it inspires talented hackers to seek work with the government or the military.

Lin Yong, also known by the online name Lion, ran the group’s website from 2000 to 2004, when members attacked many foreign websites for political causes–mainly by defacing them, or altering their appearance and leaving messages. Mr. Lin himself attacked websites in the U.S., Japan and Taiwan, he said in a recent phone interview.

The group took part, for instance, in a website defacement battle between Chinese and U.S. hackers in 2001, when the midair collision of a Chinese fighter jet and a U.S. Navy plane caused a diplomatic firestorm. The Honker Union at the time had up to 60,000 users of its online forums and over 20,000 on its electronic-mailing list, Mr. Lin said. According to a Dow Jones Newswires report at the time, among the group’s targets was a Philadelphia City government website, which was altered to show a waving Chinese flag and the words: “Beat down Imperialism of American!”

The Honker Union has never had ties to China’s government or military, Mr. Lin said. “Honker” transliterates the key term in the group’s Chinese name: “hong ke,” or “red hacker.”

The group’s new incarnation will be different, Mr. Lin said. Mr. Lin himself, who is 31 years old and lives in the southern Chinese city of Guangzhou, says he hasn’t been involved in the Chinese computer-security community since 2006 and now trades stocks and foreign currency for a living. He has also become a Buddhist, one “large reason” he decided to reorganize the Honker Union, he said in a message on the group’s new website.

The reorganized Honker Union will hold network-security training sessions at colleges and encourage Chinese hackers and security students to use their skills to seek legitimate jobs, rather than turning to cybercrime to make money, Lin said. The group will also develop an online platform meant to help users turn security-related research into legitimate business plans, including by helping them find investment, Mr. Lin said.

“Mainly now [we want] to get them to put energy into researching technology, and to help protect the networks of Chinese companies, government ministries and research institutions,” he said.

When asked if the group would continue to launch attacks, Mr. Lin said: “We won’t, we probably won’t. If there’s some special incident, I can’t guarantee that other group members won’t have their own ideas. At least, right now there aren’t signs of that.”

Lin also said attacks now would be “unnecessary,” given China’s rise on the international stage and an increase in Chinese regulations governing hacking. “You have to go according to the international situation. China’s international status is already not bad,” he said.

Foreign officials and security experts for years have pointed to China as the source of many politically motivated attacks on foreign companies and governments. China’s government has repeatedly denied sponsoring hacking activity and said it is a major victim of hacking attacks.

Authorities have also discouraged cyberattacks by private citizens, including in direct communication with hackers like Mr. Lin, who said a provincial police official in 2001 discouraged him from attacking the U.S. websites. (Mr. Lin says his group went ahead with attacks anyway and wasn’t punished.)

The group’s reboot comes after two other prominent Chinese hackers last month led a public call for their peers to steer clear of cybercrime. A larger circle of hackers, including Mr. Lin, reviewed a document containing the appeal and put it online.

That document, called the “Chinese Hackers’ Self-Discipline Convention,” asks that hackers pledge to avoid acts that could harm the public, such as stealing from regular Internet users. But it doesn’t condemn all forms of cyberattacks, leaving unclear whether it would allow activist attacks on foreign targets. For instance, the document says denial-of-service attacks–in which a target website can be knocked offline—aren’t legitimate if they are done for profit or are “not in the public interest.” It doesn’t elaborate.

At a Shanghai conference last month held by the organizers of the appeal against cybercrime, Mr. Lin received an award recognizing his “social influence,” underlining the strong association his group had with the surge in patriotic cyberattacks from China a decade ago. Mr. Lin also first announced his plan to revive the Honker Union in a speech at the event.

Mr. Lin has since put a new manifesto for the Honker Union on its website. Posted on Oct. 1, the “National Day” holiday that commemorates the 1949 founding of Communist China, it highlights a need to help prepare the country to defend itself in any “information war.”

“There are currently companies and governments in certain countries with specialized teams actively preparing for information war, and in this area we are obviously behind,” part of the manifesto says. “As security technicians, we must cultivate future technical talent and enter companies and institutions, taking up the work of defense and construction in information security. This is our job and our social responsibility.”

“Honker is a kind of spirit, a kind of patriotic spirit,” it says.

–Owen Fletcher

Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment.

In 2009, China announced that by 2020 it would reduce carbon intensity 40% from 2005 levels.

China is the world’s fastest-growing major economy, with an average growth rate of 10% for the past 30 years.

The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.

Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government.

The technological level and quality standards of its industry as a whole are still fairly low, notwithstanding a marked change since 2000, spurred in part by foreign investment.

Over the years, large subsidies were built into the price structure, and these subsidies grew substantially in the late 1970s and 1980s.

On top of this, foreign direct investment (FDI) this year was set to “surpass $100 billion”, compared to $90 billion last year, ministry officials predicted.

Last year was the eighth consecutive year that the nation’s ODI had grown.

China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Agriculture is by far the leading occupation, involving over 50% of the population, although extensive rough, high terrain and large arid areas – especially in the west and north – limit cultivation to only about 10% of the land surface.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

Hogs and poultry are widely raised in China, furnishing important export staples, such as hog bristles and egg products.

Offshore exploration has become important to meeting domestic needs; massive deposits off the coasts are believed to exceed all the world’s known oil reserves.

There are also deposits of vanadium, magnetite, copper, fluorite, nickel, asbestos, phosphate rock, pyrite, and sulfur.

The largest completed project, Gezhouba Dam, on the Chang (Yangtze) River, opened in 1981; the Three Gorges Dam, the world’s largest engineering project, on the lower Chang, is scheduled for completion in 2009.
Beginning in the late 1970s, changes in economic policy, including decentralization of control and the creation of special economic zones to attract foreign investment, led to considerable industrial growth, especially in light industries that produce consumer goods.

China’s economy, though strengthened by the more liberal economic policies of the 1980s and 90s, continues to suffer from inadequate transportation, communication, and energy resources.

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Patriotic Chinese Hacking Group Reboots

China

New Publication: A Guide for Foreign Investors on Navigating China’s New Company Law

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The sixth revision of China’s Company Law is the most extensive amendment in history, impacting foreign invested enterprises with stricter rules on capital injection and corporate governance. Most FIEs must align with the New Company Law by July 1, 2024, with a deadline of December 31, 2024 for adjustments. Contact Dezan Shira & Associates for assistance.


The sixth revision of China’s Company Law represents the most extensive amendment in its history. From stricter capital injection rules to enhanced corporate governance, the changes introduced in the New Company Law have far-reaching implications for businesses, including foreign invested enterprises (FIEs) operating in or entering the China market.

Since January 1, 2020, the Company Law has governed both wholly foreign-owned enterprises (WFOEs) and joint ventures (JVs), following the enactment of the Foreign Investment Law (FIL). Most FIEs must align with the provisions of the New Company Law from July 1, 2024, while those established before January 1, 2020 have bit more time for adjustments due to the five-year grace period provided by the FIL. The final deadline for their alignment is December 31, 2024.

In this publication, we guide foreign investors through the implications of the New Company Law for existing and new FIEs and relevant stakeholders. We begin with an overview of the revision’s background and objectives, followed by a summary of key changes. Our in-depth analysis, from a foreign stakeholder perspective, illuminates the practical implications. Lastly, we explore tax impacts alongside the revisions, demonstrating how the New Company Law may shape future business transactions and arrangements.

If you or your company require assistance with Company Law adjustments in China, please do not hesitate to contact Dezan Shira & Associates. For more information, feel free to reach us via email at china@dezshira.com.

 

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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Lingang New Area in Shanghai Opens First Cross-Border Data Service Center to Streamline Data Export Process

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The Lingang New Area in Shanghai has launched China’s first Cross-Border Data Service Center to facilitate data export for companies in Shanghai. The center will help with applications, data catalogs, and management, aiming to provide legal and safe cross-border data transfer mechanisms.


The Lingang New Area in Shanghai’s Pilot Free Trade Zone has launched a new cross-border data service center to provide administrative and consulting services to companies in Shanghai that need to export data out of China. The service center will help facilitate data export by accepting applications from companies for data export projects and is tasked with formulating and implementing data catalogs to facilitate data export in the area. The Shanghai cross-border data service center will provide services to companies across the whole city.

The Lingang New Area in the Shanghai Pilot Free Trade Zone has launched China’s first Cross-Border Data Service Center (the “service center”). The service center, which is jointly operated by the Cybersecurity Administration of China (CAC) and the local government, aims to further facilitate legal, safe, and convenient cross-border data transfer (CBDT) mechanisms for companies.

The service center will not only serve companies in the Lingang New Area but is also open to companies across Shanghai, and will act as an administrative service center specializing in CBDT.

In January 2024, the local government showcased a set of trial measures for the “classified and hierarchical” management of CBDT in the Lingang New Area. The measures, which have not yet been released to the public, seek to facilitate CBDT from the area by dividing data for cross-border transfer into three different risk categories: core, important, and general data.

The local government also pledged to release two data catalogs: a “general data” catalog, which will include types of data that can be transferred freely out of the Lingang New Area, and an “important data” catalog, which will be subject to restrictions. According to Zong Liang, an evaluation expert at the service center, the first draft of the general data catalog has been completed and is being submitted to the relevant superior departments for review.

In March 2024, the CAC released the final version of a set of regulations significantly facilitating CBDT for companies in the country. The new regulations increase the limits on the volume of PI that a company can handle before it is required to undergo additional compliance procedures, provide exemptions from the compliance procedures, and clarify the handling of important data.

Also in March, China released a new set of technical standards stipulating the rules for classifying three different types of data – core, important, and general data. Importantly, the standards provide guidelines for regulators and companies to identify what is considered “important” data. This means they will act as a reference for companies and regulators when assessing the types of data that can be exported, including FTZs such as the Lingang New Area.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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A Concise Guide to the Verification Letter of Invitation Requirement in the China Visa Process

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The application procedures for business visas to China have been simplified, with most foreigners now able to apply for an M/F visa using only an invitation letter from a Chinese company. Some countries are eligible for visa-free entry. However, a Verification Letter of Invitation may still be needed in certain cases. Consult the local Chinese embassy for confirmation.


In light of recent developments, the application procedures for business visas to China have undergone substantial simplification. Most foreigners can now apply for an M/F visa using only the invitation letter issued by a Chinese company. Additionally, citizens of certain countries are eligible to enter China without a visa and stay for up to 144 hours or even 15 days.

However, it’s important to note that some applicants may still need to apply for a “Verification Letter of Invitation (邀请核实单)” when applying for an M/F visa to China. In this article, we will introduce what a Verification Letter of Invitation is, who needs to apply for it, and the potential risks.

It’s important to note that in most cases, the invitation letter provided by the inviting unit (whether a public entity or a company) is sufficient for M/F visa applications. The Verification Letter for Invitation is only required when the Chinese embassies or consulates in certain countries specifically ask for the document.

Meanwhile, it is also essential to note that obtaining a Verification Letter for Invitation does not guarantee visa approval. The final decision on granting a visa rests with the Chinese embassy abroad, based on the specific circumstances of the applicant.

Based on current information, foreign applicants in Sri Lanka and most Middle East countries – such as Turkey, Iran, Afghanistan, Syria, Pakistan, and so on – need to submit a Verification Letter for Invitation when they apply for a visa to China.

That said, a Verification Letter for Invitation might not be required in a few Middle East countries, such as Saudi Arabia. Therefore, we suggest that foreign applicants consult with their the local Chinese embassy or consulate to confirm in advance.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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