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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

Q1 2024 Brief on Transfer Pricing in Asia

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Indonesia’s Ministry of Finance released Regulation No. 172 of 2023 on transfer pricing, consolidating various guidelines. The Directorate General of Taxes focuses on compliance, expanded arm’s length principle, and substance checks. Singapore’s Budget 2024 addresses economic challenges, operational costs, and sustainability, implementing global tax reforms like the Income Inclusion Rule and Domestic Top-up Tax.


Indonesia’s Ministry of Finance (MoF) has released Regulation No. 172 of 2023 (“PMK-172”), which prevails as a unified transfer pricing guideline. PMK-172 consolidates various transfer pricing matters that were previously covered under separate regulations, including the application of the arm’s length principle, transfer pricing documentation requirements, transfer pricing adjustments, Mutual Agreement Procedure (“MAP”), and Advance Pricing Agreements (“APA”).

The Indonesian Directorate General of Taxes (DGT) has continued to focus on compliance with the ex-ante principle, the expanded scope of transactions subject to the arm’s length principle, and the reinforcement of substance checks as part of the preliminary stage, indicating the DGT’s expectation of meticulous and well-supported transfer pricing analyses conducted by taxpayers.

In conclusion, PMK-172 reflects the Indonesian government’s commitment to addressing some of the most controversial transfer pricing issues and promoting clarity and certainty. While it brings new opportunities, it also presents challenges. Taxpayers are strongly advised to evaluate the implications of these new guidelines on their businesses in Indonesia to navigate this transformative regulatory landscape successfully.

In a significant move to bolster economic resilience and sustainability, Singapore’s Deputy Prime Minister and Minister for Finance, Mr. Lawrence Wong, unveiled the ambitious Singapore Budget 2024 on February 16, 2024. Amidst global economic fluctuations and a pressing climate crisis, the Budget strategically addresses the dual challenges of rising operational costs and the imperative for sustainable development, marking a pivotal step towards fortifying Singapore’s position as a competitive and green economy.

In anticipation of global tax reforms, Singapore’s proactive steps to implement the Income Inclusion Rule (IIR) and Domestic Top-up Tax (DTT) under the BEPS 2.0 framework demonstrate a forward-looking approach to ensure tax compliance and fairness. These measures reaffirm Singapore’s commitment to international tax standards while safeguarding its economic interests.

Transfer pricing highlights from the Singapore Budget 2024 include:

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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New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024

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China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.


Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.

China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.

The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.

In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.

Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.

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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Is journalist Vicky Xu preparing to return to China?

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Chinese social media influencers have recently claimed that prominent Chinese-born Australian journalist Vicky Xu had posted a message saying she planned to return to China.

There is no evidence for this. The source did not provide evidence to support the claim, and Xu herself later confirmed to AFCL that she has no such plans.

Currently working as an analyst at the Australian Strategic Policy Institute, or ASPI, Xu has previously written for both the Australian Broadcasting Corporation, or ABC, and The New York Times.

A Chinese language netizen on X initially claimed on March 31 that the changing geopolitical relations between Sydney and Beijing had caused Xu to become an expendable asset and that she had posted a message expressing a strong desire to return to China. An illegible, blurred photo of the supposed message accompanied the post. 

This claim was retweeted by a widely followed influencer on the popular Chinese social media site Weibo one day later, who additionally commented that Xu was a “traitor” who had been abandoned by Australian media. 

Rumors surfaced on X and Weibo at the end of March that Vicky Xu – a Chinese-born Australian journalist who exposed forced labor in Xinjiang – was returning to China after becoming an “outcast” in Australia. (Screenshots / X & Weibo)

Following the publication of an ASPI article in 2021 which exposed forced labor conditions in Xinjiang co-authored by Xu, the journalist was labeled “morally bankrupt” and “anti-China” by the Chinese state owned media outlet Global Times and subjected to an influx of threatening messages and digital abuse, eventually forcing her to temporarily close several of her social media accounts.

AFCL found that neither Xu’s active X nor LinkedIn account has any mention of her supposed return to China, and received the following response from Xu herself about the rumor:

“I can confirm that I don’t have plans to go back to China. I think if I do go back I’ll most definitely be detained or imprisoned – so the only career I’ll be having is probably going to be prison labor or something like that, which wouldn’t be ideal.”

Neither a keyword search nor reverse image search on the photo attached to the original X post turned up any text from Xu supporting the netizens’ claims.

Translated by Shen Ke. Edited by Shen Ke and Malcolm Foster.

Asia Fact Check Lab (AFCL) was established to counter disinformation in today’s complex media environment. We publish fact-checks, media-watches and in-depth reports that aim to sharpen and deepen our readers’ understanding of current affairs and public issues. If you like our content, you can also follow us on Facebook, Instagram and X.

Read the rest of this article here >>> Is journalist Vicky Xu preparing to return to China?

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