HSBC to freeze salaries, hiring in 2016 in battle to cut costs



Why Refusing a Pay Cut May Get You Fire?

HSBC Holdings Plc will impose a global hiring and pay freeze as part of its drive to cut as much as $5 billion in costs by the end of 2017.

The measures, which affect the consumer and investment banking businesses, were outlined in a memorandum received by employees on Friday, Gillian James, a spokeswoman for the bank, said Sunday in an e-mailed statement. Europe’s largest bank, which will release full-year earnings on Feb. 22, is mulling whether to move its headquarters away from London, partly because of the tax burden and tougher regulatory scrutiny.

“This is in line with HSBC’s moves to lower operating costs,” said Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities Co. “HSBC can’t escape from the global economic slowdown and worsening asset quality like other global banks.”

HSBC Chief Executive Officer Stuart Gulliver, 56, in June outlined a three-year plan to pare back a sprawling global network by shutting money-losing businesses and eliminate as many as 25,000 jobs as he seeks to boost profitability. Barclays Plc extended a freeze on hiring new staff indefinitely in December, while European lenders including Credit Suisse Group AG and Deutsche Bank AG are cutting thousands of jobs to shore up earnings.

The moves were reported earlier by Reuters.

The shares fell 1.6 percent to 484.25 pence at 10:10 a.m. in London, extending losses this year to about 9.6 percent. They dropped 12 percent in 2015.

Under its three-year plan, the London-based lender is seeking to reduce the number of full-time employees by between 22,000 and 25,000. In the U.K., the bank may eliminate as many as 8,000 jobs.

As part of its focus on more profitable markets, HSBC is reviewing its operations in Lebanon and may exit the Middle Eastern country, people with knowledge of the matter said earlier this month. The bank is closing its Indian private-banking business, people familiar with that move said in November.

HSBC is close to concluding an eight-month review into the best location for its headquarters, with Hong Kong seen as the leading candidate city. The lender is likely to stay based in London due to the vast logistics of relocating, Martin Gilbert, chief executive officer of Aberdeen Asset Management Plc, told Bloomberg Television in January. Aberdeen is one of the British bank’s biggest shareholders.- Bloomberg

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Hong Kong students at risk of anti-China scheming by outsiders; Chinese abroad blast protests

The Occupy Central movement in Hong Kong has lasted more than three weeks. The Hong Kong Special Administrative Region government on Tuesday held talks with the Hong Kong Federation of Students. But given a lack of positivity on the part of the latter during the talks, it remains unknown when the Occupy movement will end.

The external political situation concerning Occupy Central is increasingly clear-cut. Western public opinion has given it full support. Besides, a mix of traditional forces that are confronting the current Chinese regime, including Tibetan, Xinjiang and Taiwan separatists, Falun Gong devotees, and pro-democracy activists, have beaten the drums for the Hong Kong protests like cheerleaders.

The Occupy Central activists and their adherents must wake up. They shouldn’t act as a puppet of those hostile external forces.

With the Hong Kong radical forces becoming a new member, the anti-China camp seems to be expanding. If this is the case, it will yield terrible results.

Hong Kong, the Asian financial hub and a role model for the rule of law, will be held hostage by those hostile external forces, transforming into a battlefield between them and the rising China.

We suggest the Occupy Central activists not take on such a perilous role. Being already embroiled in the political competition in the Asia-Pacific region, they may have been pushed further than they originally intended.

The young Hong Kong students who have participated in Occupy Central should know that China, which is developing rapidly, is their home country and Hong Kong is a part of China’s rise. They therefore enjoy more opportunities than their counterparts from a smaller country. Meanwhile, they have to accordingly take responsibility to safeguard China’s security as it rises.

If the Occupy Central forces keep advancing, this will attract more international anti-China forces. The longer the protests last, the harder it will be for the Occupy Central forces to back down.

Incredible role reversals have often occurred throughout history. A marginal part or even central part of a camp could be converted into the enemies of that camp. We strongly hope the Occupy Central activities won’t do so.

The West-supported external forces will continue cheering for Occupy Central. Exiles will take the Occupy movement as their chance.

Their aim is to strike a heavy blow against China and take it down, but is this the goal of the young student participants of Occupy Central? If not, they should withdraw from the protests as soon as possible.

And for a small number of hostile elements to China, the country knows how to deal with them.

– Global Times

Chinese community leaders in London blast HK protests

Leaders of the Chinese community in Britain on Monday called on protesters in Hong Kong to stop the Occupy Central movement and let things return to normal.

According to a statement issued by the London Chinatown Chinese Association, the Occupy Central movement has disrupted Hong Kong long enough and needs to be wrapped up soon.

The statement called for stability through the “one country, two systems” policy and continued successful economic development for the international financial capital.

Under Hong Kong’s basic law and its top legislature’s decisions, more than 5 million Hong Kong voters have a say in who will become the chief executive in 2017 through the “one man, one vote” electoral system, said Chu Ting Tang, chairman of the London Chinatown Chinese Association, at a forum on the Hong Kong situation in London’s Chinatown.

Residents of Hong Kong, under the “one country, two systems” rule, enjoy freedom of speech, religion, education and employment, Tang said, adding that “residents can demonstrate in the streets, criticize the government, media and members of the legislative body and monitor the government without restriction”.

Tang believes that Hong Kong residents have been enjoying prosperity from a thriving economy and that their standard of living has been improving year by year.

“Since rejoining the Chinese mainland in 1997, Hong Kong’s status as an international center for commerce and trade has been strengthened. The employment rate has also reached an all-time high,” Tang said.

Shan Sheng, president of the UK Chinese Association for the Promotion of National Reunification, noted that the Occupy Central movement has had a serious impact on the residents of Hong Kong by obstructing administrative operations.

The students among the protesters are young, some even not yet in their 20s, Shan said. Their understanding of politics is rather shallow.

Since being implemented in 1997, the policy of “one country, two systems” has been progressing smoothly in Hong Kong, Shan said, adding that real estate and the economy of Hong Kong have thrived.

The current protest movement is negatively influencing that development and the everyday livelihood of Hong Kong residents, Shan added.

Thousands of Hong Kong protesters, most of them students, joined the Occupy Central movement to express their discontent over the process set by the top legislature for electing the region’s next leader through universal suffrage.

China’s Hong Kong government on Tuesday held its first formal talks with students who have been participating in the Occupy Central movement since Sept 28.

– China Daily/Asia News Network

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 The Bridled protest: Hong Kongers’ free will shall not be held hostage to
protestors. Pro-democracy protesters flash lights during a rally to
protest the violence seen in Mong Kok, in Hong Kong, China, 4 October


The Western media have secured their prize. Just as it seemed that the Hong Kong Occupy demonstratio[Read it]

The Bridled protest: Hong Kongers’ free will shall not be held hostage to protestors

Hongkong protest  Pro-democracy protesters flash lights during a rally to protest the violence seen in Mong Kok, in Hong Kong, China, 4 October 2014. – EPA/ALEX HOFFORD

The Bridled protest

Despite the tension in Hong Kong, both sides have exercised tremendous self-restraint, which must be unusual, if not unprecedented, when seen through Western eyes.

THERE has been plenty of restraint by both the protest movement and the authorities in Hong Kong. The threat by some student leaders to storm government buildings did not take place after the midnight deadline on Thursday.

If the international media still expect to see a serious clash between the protesters and the police, then I believe they will be disappointed.

Beijing must surely be aware that the world is watching. They would never want a repeat of the Tiananmen Square incident in 1989 where many protesters, mostly students, were reportedly killed. Until today, no one knows exactly the actual number of casualties.

The Chinese government has also not used harsh or emotive language except to say that the gathering is illegal and the crowd should disperse. The protesters are angry at China’s plan to vet election candidates for the first direct election of the chief executive in 2017.

Beijing had ruled at the end of August that while Hong Kong residents would have a vote, their choice of candidates would be restricted by a committee. The protest began on Sept 22 when student groups launched a week-long boycott of classes.

On Sept 28, Occupy Central and student protests joined forces and took over central Hong Kong in what is now dubbed as the “umbrella revolution”.

Despite the tension, both sides have exercised tremendous self-restraint, which must be unusual, if not unprecedented, when seen through Western eyes.

The protest was orderly, and quite extraordinary, based on the news reports which showed how protesters collected garbage and separated them into recycling bins and how the police held up placards warning of impending tear gas action. And there was even a poignant picture of a policeman helping a protester hit by tear gas.

There are good reasons – the people of  Hong Kong are fully aware that nothing that they demand, at least for now, will be fulfilled immediately. They are practical people but they want their voices to be heard by Beijing.

The people have also accepted the fact that Hong Kong is part of China. The British returned Hong Kong to China in 1997 and nothing is going to change that. The future of Hong Kong is in the hands of China – not the United Kingdom or the United States.

But the locals are also angry at the huge number of mainlanders crowding into tiny Hong Kong. The pressure on the housing, health and education sectors has led to great resentment.

There are plenty of video clips on YouTube posted by Hong Kong people on what they see as the crass and rude behaviour of the less-polished mainlanders, which ranges from eating in the underground train to defecating in the streets to loud chattering. These have led to scuffles between Hong Kong people and mainland tourists and these are well documented.

There has been retaliation, in the apparent clash of cultures, except for the fact that both are ethnically Chinese. One professor appeared on Chinese TV and called the people of Hong Kong names while claiming that they were paying homage to London. He also hammered the Hong Kong people for preferring to speak Cantonese instead of Mandarin.

On the other hand, advertisements have appeared in Hong Kong newspapers, referring to the mainlanders as locusts who hog the resources of Hong Kong.

As far back as January, the South China Morning Post had reported on protesters who marched along Canton Road, a luxury shopping street that is a popular destination for mainland tourists, holding up signs that read “Go Back to China” and “Reclaim Hong Kong”.

Xenophobia seems like an oxymoron because the Hong Kong residents and the mainlanders are all Chinese and belong to the same country.

Ironically, Hong Kong’s retail sector is crying at the missed business opportunities of the Oct 1 China national day. This is when mainlanders flock to Hong Kong for long holidays and, of course, to dine and shop. This time they have stayed away as a result of the protests and it is Hong Kong that is paying the price. Shops have been forced to shut because of the protests and businessmen are blaming the student leaders.

In fact, Beijing does not have to do anything against the protesters. The central government can afford to sit it out because the students will eventually have to go back to classes, the protesters need to report for work, and businesses must go on.

This is Hong Kong after all, where the cost of living is among the highest in the world. Sitting on the road will not last long when there are hefty bills to be paid.

A middle-ground solution to allow both sides to back down without losing face looked possible, but the plan for the students to talk with Chief Secretary Carrie Lam appears to have been scuttled by the clashes in Mongkok.

Hong Kong Chief Executive Leung Chun-ying has said he would not negotiate with the student leaders, nor would he resign.

Now, the students have called off the talks with Lam, claiming that the police had allowed “triad” gangsters to infiltrate their protest camps.

But the talks will have to eventually be held because it is the right thing to do. Any dialogue between them will reflect the genuine desire of both sides to end the impasse. It will also show that Beijing is prepared to hear and respect the voices of the young people in Hong Kong, which is an autonomous territory.

This is an opportunity for the students to put on record that they accept Beijing. The reality is that their anti-communist China slogans, which may be morale-boosting during their protests, won’t change a thing. It is better that these students be practical instead of being too idealistic.

Business Hong Kong will not allow students to lead at the expense of Hong Kong and China, it is as simple as that. The clashes between the students and the traders in Mongkok on Friday are a sign that patience is wearing thin for those who need to earn a living.

Interestingly enough, most of the student leaders in the Tiananmen protest are now growing old in exile in the US, UK and France. Unable to return home, they could never have imagined how Beijing has embraced capitalism and the speed of economic progress as China’s middle class expands.

As academics Chen Dingding and Wang Jianwei of the University of Macau correctly pointed out in an article, “The English word ‘crisis’ in Chinese actually consists of two words: danger and opportunity. A crisis itself is not necessarily a bad thing – it also presents an opportunity to solve the problem.”

I agree. In the case of Hong Kong, it is better that Beijing let Hong Kong grow at its own pace and in its own way. And the people of Hong Kong can protest, but they should not go overboard.

Source: On the beat Wong Chun Wai The Star/Asia News Network

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group’s managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.
Hong Kongers’ free will shall not be held hostage to protestors

Hongkong protest_Beijing Hong Kong’s prosperity and stability are hard-won and should be treasured, while Hong Kongers’ free will shall not be held …

BEIJING, Oct. 4 (Xinhua) — Hong Kong’s prosperity and stability are hard-won and should be treasured, while Hong Kongers’ free will shall not be held hostage to those organizers of the Occupy Central movement who have ulterior motives, critics appealed.

Yin Haoliu, a Chinese American freelancer, wrote in an open letter to three initiators of the illegal movement: “Democracy is a step-by-step process that can not be approached in haste, otherwise it will bring about troubles.”

“What’s wrong with the Communist Party of China which hopes to see a person who loves China and loves Hong Kong elected as Hong Kong’s chief executive? Are you willing to choose a chief executive that sells Hong Kong and the whole country?” Yin asked in the letter.

“You should know that on your opposite side are the silent majority… if Hong Kong falls into chaos, you could flee to foreign countries, but how about the ordinary Hong Kongers that are left behind?” he said.

“Christopher Francis Patten said the decision by the Standing Committee of the National People’s Congress on Aug. 31 that granted universal suffrage in Hong Kong was false…then was he himself as the governor of Hong Kong elected by the Hong Kong people?” the retired doctor said.

Yin said Hong Kong had tided through numerous difficulties with full support of the Chinese mainland since the Basic Law was put into practice, so the initiators of Occupy Central should treasure the city’s current prosperity and stability.

On Friday, the Russian Foreign Ministry said Moscow hopes that stability will resume as soon as possible in Hong Kong.

“Events in Hong Kong belong to China’s internal affairs. Russia hopes the stability of the Hong Kong Special Administrative Region (HKSAR) would be resumed as soon as possible,” the ministry’s information and press department told Xinhua.

Singapore’s Foreign Minister Kasiviswanathan Shanmugam said in an interview with Lianhe Zaobao that many reports on Hong Kong made by the Western media were untrue and biased to China.

They intentionally ignored a fact that Hong Kong had never implemented a democratic system under the British rule for some 150 years, he said, adding that Beijing’s plan has granted Hong Kong much more democratic space than what Hong Kongers got in the times of British-ruled Hong Kong.

“Everyone shall be clear about one point, that is, what the central government did conforms with Hong Kong’s Basic Law,” the foreign minister said.

He said Hong Kong is deeply dependent on the Mainland, including employment and livelihood.

Even though a little anti-Mainland sentiment appeared in Hong Kong, the central government is still generous to Hong Kong, he added.

Jeff Bader, who ran Obama’s first term White House East Asia policy, told the Washington Post that for Beijing, there is no room for compromise on issues such as Chinese stability and the leadership of the Communist Party of China.

He also mentioned that millions of Hong Kongers will not support or tolerate the protest that grinds the city to halt for days.

The negative impact of Occupy Central includes a bit of a brain drain, Bader predicted.

Hong Kong has been partially paralysed by the large-scale protests that started on Sept. 28.

A large number of Occupy protesters have taken over major streets in Mong Kok, one of the city’s most bustling areas, for at least four days, which has seriously affected businesses of local shops, restaurants and vendors, and forced schools and banks to be closed.

Friday afternoon, some anti-Occupy people clashed with Occupy protesters in Mong Kok and Causeway Bay, Hong Kong’s two major commercial areas. Several people were injured during the clashes.

Hong Kong Chief Executive Leung Chun-ying gave an urgent TV broadcast Friday evening, calling on all citizens, no matter what attitude they may have toward the Occupy movement, to keep calm and not to use violence or disrupt public order under any circumstances.


Hong Kong protests: Western media reports biased against …

There has been much anti-China bias in Western media’s reporting on Hong Kong’s situation, said Foreign Minister K. Shanmugam, as he …

Hong Kong CE calls for peace after clashes

HONG KONG, Oct. 3 (Xinhua) — Hong Kong’s Chief Executive Leung Chun-ying gave an urgent TV broadcast on Friday evening calling for peace after Occupy protesters clashed with anti-Occupy people in Mong Kok and Causeway Bay, Hong Kong’s two major commercial areas.

Leung called on all citizens, no matter what attitude they have toward the Occupy, they have to keep calm, and not use violence or disrupt order under any situation. Full story

Chinese public voice opposition againt HK Occupy Central

BEIJING, Oct. 4 (Xinhua) — Chinese people from all walks of life have voiced their strong denouncement and opposition against the illegal gatherings of the Occupy Central movement in Hong Kong over these days.

The Occupy Central movement has seriously affected the social order in Hong Kong and runs counter to the rule of law, said Beijing citizen Zhao Qing. Full story.

Firmly safeguard rule of law in HK: People’s Daily

BEIJING, Oct. 3 — Democracy and the rule of law are interdependent, and a democracy without the rul[Read it]

Property investments: good Infrastructure a way to huge profits and success

Buy property with good connectivity, investors advised – The road to huge profits

Leon Lee at Penang Property Fair
Packed room: Lee giving his talk on ‘Infrastructure goes a long way when picking the best property’ during The Star Property Fair 2013 at G Hotel, Penang.

PROPERTY investors should look out for the connectivity of road infrastructure when it comes to securing ideal property, said Zeon Properties chief executive officer Leon Lee in Penang.

He said infrastructure such as transportation hubs and bridges were vital elements that ensured property prices in their surrounding areas would soar.

Citing an example, Lee said the completion of a bridge connecting Shenzhen, China, and the New Territories of Hong Kong, had seen property prices in the surrounding areas escalating by about 155% over a period of 10 years.

He singled out another example in the form of the Malaysia-Singapore second link connecting Tanjung Kupang, Johor and Tuas in Singapore.

“In 2002, the property price in New Territories of Hong Kong was about HKD$29,522 (RM12,154) per sq m.

“It shot up to HKD$75,416 (RM31,049) in 2013, which took only about 10 years.

“My logic is simple, just watch out for those infrastructure. If there is connectivity or the distance between one place and another is shortened, property prices in that area will surely shoot up,” he told the participants during his talk titled ‘Infrastructure Goes a Long Way When Picking the Best Property’ at G Hotel on Saturday.

On a local perspective, Lee said the prices of property in Batu Maung had increased significantly as the second Penang bridge is scheduled to open to traffic soon.

“In 2007, a terrace house in Batu Maung was worth about RM700,000. But now, a similar unit is priced at RM1.4mil. This is evident to my point earlier,” he said.

He added that Penangites should take notice of the recent announcement by the state government, including the 6.5km undersea tunnel project linking Gurney Drive and Bagan Ajam.

The projects also comprise a 4.6km bypass linking Air Itam to Tun Dr Lim Chong Eu Expressway, 12km Tanjung Bungah-Teluk Bahang paired road and a 4.2km stretch between Gurney Drive and Tun Dr Lim Chong Eu Expressway, bypassing the city centre.

“Chances are high that property prices will boom in the surrounding areas,” Lee said.

The talk was sponsored by Hong Leong Bank.

Penang Property Fair a huge success

Penang Property Fair 2013
Upwards: Potential buyers looking at the MRCB project during the final day of the Property Fair at Gurney Plaza in Penang.

GEORGE TOWN: The Star Property Fair 2013 concluded with Penang and Kuala Lumpur-based developers locking in some RM227.6mil from the sales of residential and commercial properties showcased in G Hotel and Gurney Plaza.

Seven of the property development companies exclusively marketed by Zeon Properties Sdn Bhd generated RM136mil in sales over the past four days from Thursday.

Masmeyer Holdings Sdn Bhd generated RM50mil in sales from some 50 units of its Marinox condominium in Tanjung Tokong.

Zeon chief executive officer Leon Lee said Singapore-based UOA Group and Magna Putih respectively sold about RM25mil and RM20mil worth of property in Kuala Lumpur and Penang.

“UOA sold about 25 units of its Scenaria@North Kiara Hills condominium project in Mont Kiara while Magna Putih sold 20 units of its Mansion One serviced suites in Jalan Sultan Ahmad Shah, Penang.

“Other developers such as Mayland Universal Sdn Bhd (RM15mil), Mammoth Empire Holdings Sdn Bhd (RM10mil), Malaysian Resources Corp Bhd (RM15mil), and Venn Properties Sdn Bhd (RM6mil) registered RM46mil in sales,” he said.

Lee said the achievement was higher than anticipated in view of the increasing difficulty for buyers to obtain bank financing nowadays, adding that partial payments were received for the sales.

“Among the projects that attracted much attention and enquiries included Venn Signature, a gated terraced project by Venn Properties in Jalan Raja Uda, Butterworth.

“Penang investors were also attracted to the Scenaria@North Kiara Hills by UOA Group, as the units are priced competitively,” he said.

UEM Sunrise Berhad, SP Setia Bhd, Bukit Kiara Properties Sdn Bhd, TPPT Sdn Bhd, and Lone Pine Group achieved RM68.6mil in sales during the event which ended yesterday.

SP Setia sales and marketing manager Susie Loh said they secured RM18.6mil in sales despite many people not being able to make up their mind on the spot.

Visitors having a look at a property model at the SP Setia Berhad Group booth during the fair in Gurney Plaza.
Visitors having a look at a property model at the SP Setia Berhad Group booth during the fair in Gurney Plaza

“But we are hopeful of converting a large number office reservations into sales. Many wanted to check out our project sites before signing.”

UEM sales and marketing senior manager Shamsul Bahari Aini said they managed to hit RM20mil.

“We sold about 15 units and this is one of our best results in The Star Property Fair.

“In fact, I believe we can even surpass our target as there are at least five buyers who looked really interested in our projects,” he said.

BHL Waterfront Sdn Bhd and Bandar Utama Development Sdn Bhd secured RM20mil and RM3mil in sales respectively.

The Star advertising sales and business development manager (north) Simone Liong said about 40,000 people visited the fair.

The official event partner is Zeon Properties and Hong Leong Bank is the sponsor.


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No privacy on the Net !

Revelations about PRISM, a US government program that harvests data on the Internet, has sparked concerns about privacy and civil rights violations. But has there ever been real privacy and security on the WWW?

NSA_rivacy demonstrators-obamaDemonstrators hold posters during a demonstration against the US Internet surveillance program of the NSA, PRISM, at Checkpoint Charlie in Berlin, Germany, ahead of US President Barack Obama’s visit to the German capital.

IMAGINE a time before email, when all your correspondence was sent through the post. How would you feel if you knew that somebody at the post office was recording the details of all the people you were corresponding with, “just in case” you did something wrong?

I think quite a few of you would be upset about it.

Similarly, some Americans are furious over revelations made about a system called PRISM. In the last few weeks, an allegation has been made that the US government is harvesting data on the Internet by copying what travels through some of its Internet Service Providers.

The US Director of National Intelligence has said that PRISM “is not an undisclosed collection or data mining program”, but its detractors are not convinced that this doesn’t mean no such program exists.

I think there are mainly two kinds of responses to this revelation: “Oh my God!” and “What took them so long?”.

The Internet has never really been secure. Because your data usually has to travel via systems owned by other people, you are at their mercy as to what they do with it. The indications are that this is already being done elsewhere.

Countries such as China, India, Russia, Sweden and the United Kingdom allegedly already run similar tracking projects on telecommunications and the Internet, mostly modelled on the US National Security Agency’s (unconfirmed) call monitoring programme. For discussion, I’ll limit myself for the moment to just emails – something that most people would recognise as being private and personal.

I find many people are surprised when I tell them that sending email over the Internet is a little bit like sending your message on a postcard. Just because you need a password to access it, doesn’t mean it’s secure during transmission.

The analogy would be that your mailbox is locked so only you can open it, but those carrying the postcard can read it before it reaches its final destination. Of course, there are ways to mitigate this. One has to be careful about what one put in emails in the first place. Don’t send anything that would be disastrous if it were forwarded to someone else without your permission.

You could also encrypt your email, so only the receiver with the correct password or key could read it, but this is difficult for most end users to do. (For those interested in encrypting emails, I would recommend looking at a product called PGP.)

The analogy holds up for other Internet traffic. It’s easy to monitor, given enough money and time. And as easy as it is for the Good Guys to try to monitor the Bad Guys, it’s just as easy for the Bad Guys to monitor us hapless members of the public.

But who do we mean by the Bad Guys? Specifically, should the government and law-enforcement agencies be categorised as ‘Bad Guys’ for purposes of privacy? Generally, the line oft quoted is “if you have nothing to hide, then you have nothing to worry about”.

Yet, I think we all accept that there should be a fundamental right to privacy, for everybody from anybody. An interesting corollary to being able to express your thoughts freely is that you should also be able to decide when and how you make them public.

The fault in relying on organisations that say “trust us” isn’t in the spirit of their objectives, but in how the humans in them are flawed in character and action.

An example quoted regularly at the moment is how the FBI collected information about Martin Luther King because they considered him the “most dangerous and effective Negro leader in the country”.

One way of defining the boundaries are by codifying them in laws. For example, the Malaysian Personal Data Protection Act prohibits companies from sharing personal data with third parties without the original owner’s consent.

However, this law explicitly does not apply to the federal and state governments of Malaysia. Another clause indicates that consent is not necessary if it is for the purpose of “administration of justice”, or for the “exercise of any functions conferred on any person by or under any law”.

In relation to the revelations of PRISM, several questions come to mind: Can Internet traffic (or a subset of it) be considered “personal data”? Is it possible for government agencies to collect and store such data without your consent?

And if so, what safeguards are there to ensure that this personal data is accurate, is used correctly and is relevant for storage in the first place?

This should be a sharp point of debate, not just in terms of which of our secrets the government can be privy to, but also of which of the government’s information should be readily accessible by us.

True, there is so much data out there that analysing it is not a trivial task. However, companies such as Google are doing exactly that kind of work on large volumes of unstructured data so that you can search for cute kittens. The technology is already on its way.

Perhaps I am being over-cautious, but it seems a bit fantastical that people can know your deepest and darkest secrets by just monitoring a sequence of 1’s and 0’s. But, to quote science fiction author Phillip K. Dick, “It’s strange how paranoia can link up with reality now and then”.


> Logic is the antithesis of emotion but mathematician-turned-scriptwriter Dzof Azmi’s theory is that people need both to make sense of life’s vagaries and contradictions. Speak to him at

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Upset over US cyber spying!

There are increasingly strong reactions to revelations that United States agencies are spying on Internet use by Americans and foreigners as well as planning cyber actions on foreign targets.

US cyber spying

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THE revelations of data collection on a massive scale by the United States’ security agencies of details of telephone calls and Internet use of its citizens and foreigners are having reverberations around the world.

Much of the responses have been on the potential invasion of privacy of individuals not only in the United States but anywhere in the world who use US-based Internet servers.

Also revealed is a US presidential directive to security agencies to draw up a list of potential overseas targets for US cyber-attacks.

This lays the Unites States open to charges of double standards and hypocrisy: accusing other countries of engaging in Internet snooping or hacking and cyber warfare, when it has itself established the systems to do both on a mega scale.

The revelations, published in the Guardian and Wall Street Journal, and based on a leak by a former US intelligence official, include that US security agencies have access to telephone data of Verizon Communications, AT&T and Sprint Nextel, as well as from credit card transactions.

They also can access data from major Internet companies – Google, Yahoo, Microsoft, Facebook, AOL, Apple, PalTalk, Skype and YouTube—under the Prism surveillance programme.

Millions of Internet users around the world use the servers or web-based services of the companies mentioned.

Two American citizen groups, the American Civil Liberties Union (ACLU) and the New York Civil Liberties Union, have filed a lawsuit against the US administration.

“Those programmes constitute unreasonable intrusions into American’s private lives that’s protected by the Fourth Amendment (on search and seizure),” said Brett Kaufman of the ACLU, as quoted by IPS news agency.

Governments and people outside the United States are equally upset, or more so, that they apparently are also covered by the massive US surveillance programme.

The European Union’s commissioner of justice Viviane Reding has written to the US attorney general asking if European citizens’ personal information had been part of the intelligence gathering, and what avenues are available for Europeans to find out if they had been spied on.

In China, commentators and opinion makers are citing double standards on the part of the United States.

An article in the China Daily commented that the massive US global surveillance programme as revealed is certain to stain Washington’s overseas image and test developing China-US ties.

An editorial in another Chinese paper, Global Daily, stated: “China needs to seek an explanation from Washington.

“We are not bystanders. The issue of whether the United States as an Internet superpower has abused its powers touches on our vital interests directly.”

In their summit last week in California, United States President Barack Obama reportedly pressed Chinese President Xi Jinpeng to curb cyber-spying by Chinese agencies and companies.

The breaking news about the United States snooping on Internet users must have caused some discomfort to Obama when bringing up this issue.

A Chinese Foreign Ministry spokesperson last week reiterated that “China is also a victim to the most sophisticated cyber hacking”.

Though less publicised, a part of the leaks published in the Guardian, was a 18-page directive from President Obama to his security and intelligence officials to draw up a list of potential overseas targets for US cyber-attacks.

The October 2012 directive states that what it calls Offensive Cyber Effects Operations (OCEO) “can offer unique and unconventional capabilities to advance US national objectives around the world with little or no warning to the adversary or target and with potential effects ranging from subtle to severely damaging”, according to the June 7 Guardian article by Glenn Greenwald and Ewen MacAskill.

The directive says the government will “identify potential targets of national importance where OCEO can offer a favorable balance of effectiveness and risk as compared with other instruments of national power”.

The aim of the document was “to put in place tools and a framework to enable government to make decisions” on cyber actions, a senior administration official told the Guardian.

Obama’s move to establish a potentially aggressive cyber warfare doctrine will heighten fears over the increasing militarisation of the Internet, comments the Guardian article.

It adds that the United States is understood to have already participated in at least one major cyber attack, the use of the Stuxnet computer worm targeted on Iranian uranium enrichment centrifuges, the legality of which has been the subject of controversy.

In the presidential directive, the criteria for offensive cyber operations in the directive is not limited to retaliatory action but vaguely framed as advancing “US national objectives around the world”.

Obama further authorised the use of offensive cyber attacks in foreign nations without their government’s consent whenever “US national interests and equities” require such non-consensual attacks. It expressly reserves the right to use cyber tactics as part of what it calls “anticipatory action taken against imminent threats”.

The Guardian commented: “The revelation that the US is preparing a specific target list for offensive cyber-action is likely to reignite previously raised concerns of security researchers and academics, several of whom have warned that large-scale cyber operations could easily escalate into full-scale military conflict.”

Meanwhile, UN Human Rights Council’s Special Rapporteur Frank La Rue issued a report on June 4 on the increasing use of surveillance, warning that unfettered state access to surveillance technologies could compromise human rights to privacy and freedom of expression, as protected by the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights (ICCPR).

The report warned too against the use of “an amorphous concept of national security” as a reason to invade people’s rights to privacy and freedom of expression, arguing that such an invasion potentially “threatens the foundations of a democratic society”.

Global Trends

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US Spy Snowden Says U.S. Hacking China Since 2009

Support: Protesters shout slogans in support of former US spy Edward Snowden as march to the US consulate in Hong Kong
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The United States has hacked hundreds of Chinese civilians since 2009. But its favored hacking technique isn’t to target individual PCs via advanced persistent threat (APT) attacks, in the manner of the Chinese military. Instead, it prefers to compromise foreign network backbones, thus potentially gaining access to hundreds of thousands of systems at once. That revelation was delivered by whistle-blower Edward Snowden, until recently a contractor for the National Security Agency. He emerged from hiding Wednesday to grant an interview to Hong Kong’s South China Morning Post.

“We hack network backbones — like huge Internet routers, basically — that give us access to the communications of hundreds of thousands of computers without having to hack every single one,” he told the Post.

According to NSA documents reviewed by the Post, which haven’t been verified, targets of the NSA’s Prism program have included computers in both mainland China and Hong Kong. People targeted included systems at Hong Kong’s Chinese University, as well as government officials, businesses and students in the region. But the Post reported that the program didn’t appear to target Chinese military systems.

[ Security standoff at recent U.S.-China summit: Read U.S.-Chinese Summit: 4 Information Security Takeaways. ]
According to Snowden, he learned of at least 61,000 such NSA hacking operations globally. The Post didn’t specify whether those operations all allegedly occurred since 2009.

Why go public with the NSA’s alleged hacking campaign? Snowden said he wanted to highlight “the hypocrisy of the U.S. government when it claims that it does not target civilian infrastructure, unlike its adversaries.”

“Not only does it do so, but it is so afraid of this being known that it is willing to use any means, such as diplomatic intimidation, to prevent this information from becoming public,” he said.

Snowden first arrived in Hong Kong May 20, and said that the choice of venue wasn’t accidental. “People who think I made a mistake in picking Hong Kong as a location misunderstand my intentions. I am not here to hide from justice, I am here to reveal criminality,” he said, noting that he planned to stay until “asked to leave.” Noting that the U.S. government had already been “bullying” Hong Kong authorities into extraditing him, Snowden said that he would legally fight any such attempt.

How will Hong Kong handle Snowden’s case? “We can’t comment on individual cases,” Hong Kong’s chief executive, Leung Chun-ying, told Bloomberg Wednesday. “We’ll handle the case according to our law.”

Hong Kong is a special administrative region of China, and Beijing could influence the government’s legal thinking. But when asked in a Thursday press conference if the Chinese government had received any requests from Washington related to Snowden’s case, Hua Chunying, a spokeswoman for China’s foreign ministry, said only: “We have no information to offer,” reported The Hindu in India.

Snowden previously said he would prefer to “seek asylum in a country with shared values,” and named Iceland. Asked to respond to a spokesman for Russian president Vladimir Putin recently saying that were Snowden to apply for asylum in his country, authorities would consider his request, Snowden replied: “My only comment is that I am glad there are governments that refuse to be intimidated by great power.”

Snowden said he hadn’t contacted his family since leaving the country, but feared for both their safety as well as his own. He also appeared disinclined to glorify what he’d done. “I’m neither traitor nor hero. I’m an American,” he said. “I believe in freedom of expression. I acted in good faith but it is only right that the public form its own opinion.”

How has China reacted to Snowden’s revelations that the NSA is spying on the Chinese? Chinese foreign ministry spokewoman Hua said in a regular press conference Thursday that the government has been following the revelations of NSA monitoring detailed by Snowden, and she repeated calls from the Chinese government — agreed to in principle at last week’s U.S.-China summit in California — to launch a cybersecurity working group to increase “dialogue, coordination and cooperation” between the two countries.

“We also think adoption of double standards,” she said, “will bring no benefit to settlement of the relevant issue.”

By  Mathew J. Schwartz
IT finally has its security priorities right, our annual survey shows. Also in the new, all-digital Strategic Security issue of InformationWeek: Five counterintuitive insights on innovation from our recent CIO Summit.

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