Relationship reset: Raimondo (centre) visiting Boeing Shanghai Aviation Service Co. In her meetings with Chinese officials, she raised the issue of unfair trade practices. — AFP
Shanghai: The United States wants to work with China to ensure a more “predictable” environment for American businesses in Shanghai, Commerce Secretary Gina Raimondo told officials in the economic hub yesterday.
Speaking with Shanghai Communist Party chief Chen Jining on day four of a bridge-building trip to China, Raimondo said a “stable economic relationship is good for America, good for China and good for the world”.
“The US-China economic relationship is among the most consequential in the world,” she told Chen.
Raimondo told Chen she was looking forward to talks to “bring about a more predictable business environment, predictable regulatory environment, and a level playing field for American businesses here in Shanghai”.
US firms in China have long complained about what they see as an unfair business environment, with limited protection for intellectual property and preferential treatment afforded to domestic competitors.
Those fears have been compounded this year by a broad crackdown on US consulting firms operating in China.
A new anti-espionage law, which came into force on July 1, has also spooked foreign and domestic firms as they try to decipher authorities’ intentions and, crucially, pinpoint what is off-limits.
In a Tuesday meeting with Vice Premier He Lifeng in Beijing, Raimondo raised what Washington sees as unfair trade practices by China, according to a US Department of Commerce statement.
She also emphasised the “importance of strengthening the protection of trade secrets for US businesses operating in China”.
The commerce secretary is one of a number of senior US officials to visit China in recent months – part of an effort by Washington to improve its working relationship with its largest strategic rival.
Raimondo has used the trip to seek more open discussions with the Chinese over restrictive trade curbs and the two sides have agreed to set up a working group to iron out the laundry list of trade disputes between them. — AFP
China's Ministry of Commerce (MOFCOM) has given a further explanation on the results of the latest trade talks amid US Commerce Secretary Gina Raimondo's visit to China, saying the two nations' trade ministers have agreed to meet at least once a year, and will talk directly on "key issues" in ...
Malaysia celebrates 66th anniversary of independence -
PETALING JAYA: It is not vernacular schools causing national disunity, but politicians like Tun Dr Mahathir Mohamad, says Sungai Buloh MP Datuk R. Ramanan.
The Malaysian Indian Transformation Unit (Mitra) Special Committee chairman said it was most regrettable that Dr Mahathir had to resort to a seditious statement in calling for the abolishment of vernacular schools recently.
At 98 years old, Dr Mahathir should play the role of bringing Malaysians together instead of creating division, said Ramanan, who is also PKR deputy information chief. As such, he urged the former prime minister to “stop his continuous inflammatory statements which bring no value to national unity”.
Ramanan also pointed out that unlike private schools, vernacular schools funded by the Federal Government have existed since our independence and are part of the national school system.
“The Chinese primary schools, for example, have over 100,000 Malays, Indians and other bumiputras, and like Indian primary schools, they play a major role in nation-building.
“I invite Dr Mahathir to visit these schools for himself and see their contribution to national unity in their programmes and syllabus,” said Ramanan in a statement yesterday.
He also said that some of the best talents have graduated from these primary schools and are occupying high positions in the government and private sector.
As a result of the existence of these schools, Malaysians have been able to have a grasp of Mandarin and Tamil, which are linguistic assets, said Ramanan.
“One reason why Malays and Indians are sending their children to these vernacular schools for six years of primary education is because they want their children to learn Mandarin or Tamil,” said Ramanan.
He added that with China and India being major economies, Malaysians who are able to speak these languages are marketable and sought after.
Ramanan also said that Bahasa Malaysia is also highly emphasised in these schools.
“It’s unfortunate that Dr Mahathir has chosen to see everything from a racial angle to ensure that he is in the news,” he said, while also questioning if Dr Mahathir’s grandchildren attended private or international schools or studied in national schools.
Ramanan said he was initially very hesitant to respond to Dr Mahathir’s remarks about abolishing vernacular schools, but felt that a rebuttal was necessary to put the record straight.
“It is most unfortunate that Dr Mahathir still refers to Malaysians who are not Malays as pendatang (immigrants) as we celebrate the nation’s 66th anniversary.
“Let me quote American civil rights leader, Martin Luther King Jr, who said ‘we all come in different ships but we are in the same boat now’.
“That is the destiny of all Malaysians, regardless of our race and religion,” he said.
The world’s largest producer and consumer of tobacco, it has an estimated 300 million smokers, nearly a third of the world’s total.
Despite years of anti-smoking campaigns – Chinese President Xi Jinping reportedly gave up smoking in his 40s and banned smoking in government buildings – many continue to light up, driven by social mores, cheap cigarettes, a lack of public education and, crucially, the protection of Big Tobacco.
Cartons of smokes are considered appropriate business gifts while tobacco shops dot the streets, with prices ranging from as little as 10 yuan (RM6.40) a packet to over 200 yuan (RM127.70). Convenience stores prominently display a dizzying array of varieties.
But kicking the habit is far harder than simply going cold turkey. The tobacco industry is both regulated and controlled by the State Tobacco Monopoly Administration (STMA), an agency that provides jobs for over half a million people across the country.
In recent years, the problem has taken on a new dimension with the startling popularity of electronic cigarettes, making nicotine palatable – and readily available – even to the young.
How did the world’s second-largest economy get so addicted to smoking? And as the world moves towards tobacco-free societies, would it ever be truly possible for China to kick the habit?
Cigarette normalisation
Shortly after the establishment of the People’s Republic of China in 1949, Beijing declared that tobacco farms and cigarette manufacturing would be consolidated and managed by local governments.
When the country was put through rationing in those early years, cigarettes were among the “essentials” doled out to villagers and residents who registered with the local authorities, allowing officials to document the population.
Cigarette manufacturers also tapped iconography significant to China’s national consciousness. Brands like Xiongmao (Panda), Chunghwa (a metonym for China) and Zhongnaihai (a former imperial garden that now houses China’s leadership complex) all date back as far as the 1930s.
By the time STMA and its commercial arm China National Tobacco Corporation were created in the 1980s to consolidate and centralise tobacco production and sales, smoking was widely accepted.
Leaders ranging from Mao Zedong to Premier Zhou Enlai and Deng Xiaoping have all been photographed holding cigarettes, with ashtrays and spittoons commonplace in offices and government buildings across the country.
And it continues to play a significant role in society today.
When bistro owner Jeanne He was a bridesmaid in 2022 at a childhood friend’s wedding in Yunnan province – the country’s largest producer of tobacco – she had an important responsibility.
“I was in charge of arranging the cigarettes on trays for bridesmaids to hold up and offer to guests before the wedding dinner,” she said.
“The groomsmen had trays of snacks and candy.”
In much of China, working in the tobacco industry is seen to be as prestigious as being in the civil service, with its stable income, generous salaries and employee benefits.
In surveys of fresh graduates, China’s big tobacco firms – largely state-owned enterprises (SOE) – are consistently rated some of the best companies to work for, with degree holders happy to take on blue-collar jobs on the factory lines.
Some 98% of China’s tobacco firms are SOEs with little wiggle room for other market players. Manufacturing some 2.4 trillion cigarettes a year, the industry raked in 132 billion yuan in profits in 2022, nearly 12% up from the 118 billion yuan the year before.
China National Tobacco Corporation does not report sales figures but posted a record-breaking taxable income of 1.44 trillion yuan in 2022.
The second-highest tax payer, the Industrial and Commercial Bank of China, reported taxable income of 109 billion yuan.
The pressure that STMA exerts on the government is largely why tobacco regulation has hit a roadblock, said Dr Gan Quan, director of the China office of the International Union Against Tuberculosis and Lung Disease, a Paris-headquartered non-profit organisation aimed at eradicating tuberculosis and lung disease.
While major cities such as Beijing, Shanghai, Guangzhou and Shenzhen have been able to completely ban smoking indoors since 2007, this has been far more challenging in other cities like Chongqing.
In 2020, the city passed a law banning smoking in public places, but a loophole meant that certain establishments such as restaurants, hotels and entertainment venues were allowed to set up indoor smoking areas, exposing countless others to second-hand smoke.
“Smoking is strictly prohibited in the indoor areas of public places where smoking areas can be designated,” said the text of the law.
Dr Gan, who has spent his career studying China’s tobacco control policies, said: “It has become a pattern that whenever sub-national jurisdictions try to pass smoke-free laws, you have the STMA following them (to exert pressure to water down the laws) because they don’t want the momentum to spread from big cities like Beijing and Shanghai.”
Crucially, there is no national-level smoke-free legislation that will make it mandatory for all provinces and regions to adhere to, wrote Peking Union Medical College’s Dr Xia Wan in CCDC Weekly, a publication by the Chinese Centre for Disease Control and Prevention, in an article in 2022.
In November 2014, the State Council released a draft on national tobacco control guidelines to meet its obligations under the WHO FCTC, the first time such guidelines had been introduced at a national level.
“This draft was supposed to finish seeking advice, opinions and comments from the public by the end of 2014,” Dr Xia wrote.
“But unfortunately, the draft is still stuck in that stage and has not progressed further.”
Furthermore, regulation across cities remains lax, and it is not an uncommon sight to see people lighting up under “no smoking” signs in eateries.
STMA did not respond to a request for comment.
In 2021, China’s top health body, the National Health Commission, released its second report detailing the ill effects of smoking – an update from a 2012 version.
With more than half the male population smoking, over one million people lose their lives to tobacco use every year, a number that could double by 2030.
It also noted that “e-cigarettes are unsafe and pose a health hazard” but offered no solutions to the issue.
Electronic cigarettes
Electronic cigarettes and electronic nicotine delivery systems – more commonly known as vapes – have been regulated in China since 2022, and cartridges with flavours have been banned in a bid to stop young people from picking up smoking.
But results are mixed: While such vapes are no longer easily available, one can still walk up to any number of e-cigarette shops dotting the streets, where retailers pull out flavoured stock from under the counter.
In private chats on social media platform WeChat, sellers also directly market to consumers, sending catalogues every time a new flavour hits the market.
At a shop in Beijing, where this reporter was offered an ice lemon tea-flavoured vape, the shop assistant said it was impossible to stamp out demand.
“We’re just more discreet about it and don’t display what we have on offer. Also, if we see young people coming in to buy, we won’t sell to them,” said the assistant, who wanted to be known only by her surname Su.
In eateries and even shops across major cities, people can still be seen puffing away indoors, leaving cloyingly sweet vapour in their wake.
With smoking so socially accepted, those who have successfully quit say it usually takes a life-changing event to provide a much-needed jolt.
Aircraft engineer Li Peng, 52, kicked the 30-year habit only after discovering nodules in his lungs during a medical check two years ago.
“I’ve been smoking since I was a young apprentice nearly 30 years ago, and even though my wife kept urging me to quit, I found it hard because it’s such a social activity, too,” he said.
“After the medical scare, where the doctor told me I could either quit or risk it developing into something more severe, I got the boost I needed to go cold turkey.
“But I’ll admit it was very difficult in the beginning, especially during mornings in the toilet.”
Yet, given the industry’s strong hold over the market, China is unlikely to go cold turkey any time soon.
Dr Gan said: “The anti-smoking lobby is calling for the tobacco monopoly to be broken up from the regulator, but I don’t think the government is willing or interested in doing that because it takes huge political will and capital.”
Since 2021, STMA has been swept up in a corruption probe that has involved nearly two dozen current and former senior executives, including the retired head of an Anhui subsidiary who killed himself after investigations started.
The arrests and investigation of several top STMA officials for corruption are merely part of the anti-corruption campaign rather than an attempt to reform and rein in the tobacco industry, Dr Gan noted.
“The main issue is really a lack of (anti-smoking) education... for instance, if you compare cigarette packets to places like Hong Kong and Singapore, the language is very weak and not prominently displayed,” he said.
“And we don’t do that because of opposition from the tobacco monopoly.” — The Straits Times/ANN
The writer,ELIZABETH LAW is the China Correspondent at The Straits Times.
CHINA’S stuttering economic recovery post-Covid-19 pandemic reopening has stirred concerns that a protracted deep economic slowdown will have global repercussions, given its interconnectedness with each and every economy in this globalised world and transmission to both emerging and developed countries through different channels.
A slowing China economy is a bane for the world economy. While the global economy continues to gradually recover in 2023, the growth remains weak and low by historical standards, and the balance of risk remains tilted to the downside. It is not out of the woods yet.
Global manufacturing and services activities are losing momentum. Global trade, especially exports, remain in the doldrums, weighed down by weak consumer and business spending amid a continued inventory adjustment in the semiconductor sector.
Prices of commodities and energy have also softened. Global monetary tightening has started to weigh down on activity, credit demand, households and firms’ financial burden, putting pressure on the real estate market.
A slew of disappointing economic data for two consecutive months (June and July) from China indicated that the world’s second-largest economy (17.8% of the world’s gross domestic product or GDP) is indeed losing steam.
Falling exports, weak consumer spending, slowing growth in fixed investment and continued concerns about the property sector have dampened the recovery.
The emergence of deflation concerns adds to the complexity of China’s flagging recovery.
The Chinese government has provided a range of strategic measures aimed at targeting specific sectors.
These range from consumption (spending on new energy vehicles, home appliances, electronics, catering and tourism) to the property sector (reducing down-payment ratios for first-time homebuyers, lowering mortgage rates and easing purchase restrictions for buying a second house) and tax relief measures to support small businesses, tech startups and rural households.
China’s slowdown is a key risk for the world economy, commodities and energy markets as well as the semiconductor industry.
Prior to the Covid-19 pandemic, China was the world’s most important source of international travellers, accounting for 20% of total spending in international tourism (US$255bil overseas and making 166 million overseas trips in 2019).
We consider three channels through which China’s slowdown can have spillover effects on Malaysia via direct and indirect transmissions: trade and commodity prices, services and financial markets.
Overall, the estimated impact of a 1% decline in China’s GDP growth could impact about 0.5% points on Malaysia’s economic growth.
Trade is the most important channel as China has been Malaysia’s largest trading partner since 2009, with a total trade share of 16.8% (exports share: 13.1%; imports share: 21.2%) in the first half of 2023 (1H23).
Spillovers from slower China demand and commodity prices are negative for Malaysia, a net commodity exporter.
After recording seven successive years of increases in exports to China since 2017, Malaysia’s exports to China declined by 8.8% in 1H23.
In sectors such as tourism, China’s tourists are one of the major foreign tourists in Malaysia. In the first five months of 2023, Chinese tourists totalled 403,121 persons or 5.4% of total international tourists in Malaysia, and was only 12.9% of 3.1 million persons in 2019.
According to the Malaysia Inbound Tourism Association, though the number of Chinese tour groups coming to Malaysia has increased in July and August to between 800 and 1,000 for the summer vacation, the number of tourists per group is smaller between 10 and 20 persons.
While direct financial links between China and Malaysia are limited, there will be indirect spillovers through spikes in global financial volatility as investors worry that China’s deep economic slowdown would temper global growth, and also has spillovers to the US economy.
Will China foreign direct investment (FDI) inflows into Malaysia slow?
Capital movements will be influenced by the inter-linking of factors such as economic growth and investment prospects in the host country (Malaysia).
These include stable political conditions and good economic and financial management as well as conducive investment policies.
The US-China trade war and rising trends of geoeconomic fragmentation have witnessed FDI flows among geopolitically aligned economies that are closer geographically as well as geopolitical preferences.
Throughout the period 2015-2022, China’s gross FDI inflows into Malaysia averaged RM7.5bil per year. Even during the Covid-19 pandemic, China’s economic slowdown did not deter the inflows of FDI into Malaysia (RM7.8bil in 2020; RM8.1bil in 2021; and RM9.8bil in 2022).
In 1H23, China’s gross FDI inflows increased by 25.2% to RM2.1bil though it is likely that the full-year FDI will be below the average FDI inflows of RM8.6bil per year in 2020 to 2022.
China was the largest foreign investor in Malaysia’s manufacturing sector in 2016 to 2022 before dropping to second position in 2022 and the fourth position in 2021.
There was a contrasting picture when it comes to China’s approved investment in the manufacturing sector, which saw two consecutive years of decline (2022: 42.5% to RM9.6bil and 2021: 6.5% to RM16.6bil) and declining further by 17.8% to RM4.3bil in the first quarter of 2023.
We believe that Malaysia will remain one of the preferred investment destinations to China, given both countries’ strong established friendship and bilateral ties in trade and investment as well as people-to-people movements.
Malaysia needs to enhance its investment climate with progressive policies to rival regional peers to offer the country as a China Plus One destination for China and foreign companies.
Malaysia can offer investments to build a chip-testing and packaging factory, advanced manufacturing technologies such as robotics and automation, manufacturing electric vehicle supply chain, petrochemicals, renewable energy, agriculture and food processing.
China can offer the technology, innovation and technical know-how as well as talent that deepen the country’s industry integration with global supply chains and also links Malaysia and China to South-East Asia.
China can invest in Malaysian manufacturing companies to help them adopt advanced manufacturing technologies and further improve their competitiveness.
The RM170bil prospective investments (comprising RM69.7bil from 19 memoranda of understanding and RM100.3bil from the round-table meeting) concluded during the prime minister’s visit to China are set to provide a massive investment boost to our economy for years to come.
Among these are China’s Rongsheng Petrochemical Holdings, which will invest RM80bil to build a petrochemical park in Pengerang, Johor; and investment from Geely, with an initial investment of RM2bil in the Tanjung Malim Automotive Valley, which will gradually increase to RM23bil in the future.
LEE HENG GUIE is Socio-Economic Research Centre executive director. The views expressed here are the writer’s own.
China's official manufacturing purchasing managers' index (PMI) continued to improve in August, marking the third consecutive monthly increase despite the index remaining in contraction territory.
China is set to further increase financial support for private enterprises by introducing measures to lift the proportion of loans to private enterprises, according to the People's Bank of China (PBC), the country's central bank.
US investment restrictions on key technology sectors in China will undermine industries that are highly dependent on the global division of labor and a free and fair international economic order, China's trade promotion agency said on Wednesday
US Commerce Secretary Gina Raimondo was wrapping up her "successful and productive" four-day high-stakes visit to China on Wednesday, with the visit yielding material results, including the establishment of new communication channels to seek solutions to specific busine
China's economy isn't as bad as the prevailing mood suggests and growth is moving in the right direction as consumer spending picks up, said Chris Torrens, vice chairman of the Britis
China's top financial regulators on Thursday issued a notice to lower down payments for both first- and second-time homebuyers, while further cutting interest rates on existing mortgages, aiming to better meet housing demand and promote the healthy and steady development of the real estate market.
Knowing what to do can be the difference between a costly trip to the repair shop and a diy fix at home.
MANY of us have been there before – an accidental click or file download that leaves us worrying about whether our passwords have been stolen or our webcam has been compromised.
Or maybe it’s the system becoming slow, erratic, freezing, or crashing, which may hint that something strange is going on with your machine.
But hiring a professional can be an expensive affair, and lugging around an entire desktop computer for troubleshooting is anything but fun, so it’s best to check if you can fix the issue yourself.
Those on Windows 7 or 8 should take note that their operating system (OS) is in end-of-life status, making it especially vulnerable to malware as it no longer receives security updates.
Antivirus 101
One thing to keep in mind is that no antivirus or anti-malware tool is perfect, as one may detect a virus while another misses it completely.
Like seeing a doctor, it’s valuable to have a second opinion in the form of another software scanner. Good options include Malwarebytes, Avast Antivirus, and antivirus programs from Kaspersky.
However, the first thing you’ll want to do is download Rkill (bit.ly/rkill), a handy tool from Bleeping Computer that kills malware still resident in memory and running in the background, also known as “processes”. It will also list them in a text file.
This is vital, as active malware can attempt to trick and hide from antivirus programs.
Then do an antivirus scan – don’t use more than one at the same time, as simultaneous scans can result in the antivirus programs mistaking each other for malware.
If the scans turn up positive, potentially malicious items will be listed, and the antivirus will prompt you on what action to take, such as to quarantine or remove the affected file or folder.
It’s best practice to look up the name listed by the antivirus, as it could be a false positive.
Then switch over to the alternative antivirus tool and run another scan to cover blind spots.
If the antivirus discovered an issue and fixed it, then all is well; otherwise, you will have to get your hands dirty by engaging in a little “digital forensics”.
‘Suite up’, digital detective
Your digital forensics work will require a toolkit to analyse and understand your computer better, especially what’s causing the issue.
Our recommendation is the Sysinternals Suite (bit.ly/sysinternalssuite), a set of utilities from Microsoft that provides a detailed view of what each and every program and process is doing.
Like Rkill, Sysinternals is meant to do the same, except that you will be the one identifying, disabling, and removing the malware manually.
One of the most useful tools it contains is the Process Explorer (procexp64.exe in the Suite folder), which lists all the active processes in a system, one of which could be malware.
In Process Explorer, click on the options tab and enable the options for both “Verify Image Signatures” and “Check Virustotal.com”.
Things to look for here are processes without descriptions or verified image signatures from a third-party vendor to indicate it’s a legitimate program.
The description and signature columns may turn up blank for some Windows processes, so ignore those and focus on the ones labelled “unverified”.
Virustotal.com is a website that collates information from 75 different malware-scanning engines because, you know, who needs a second opinion when you can get 75?
If a process is legitimate, then it should have a proper description, a verified image signature from a third-party vendor (like Microsoft or Adobe), and not be flagged by any of the antivirus engines (0/75).
A side note: users looking to check if a specific file is malware can also upload it directly to Virustotal.com, though the size is limited to 650MB.
Make sure to look up each process to find out more about it before taking action, as there are many different types of malware out there, with some being more difficult to remove. There’s a shortcut to searching online included in the right-click menu to help with this. Process Explorer can also be used to uncover processes that are utilising the resources of your graphic card, RAM, and storage.
For a more granular view of what a process is doing, the Process Monitor (Procmon64.exe) tool includes details like where a process is writing a file and whether it’s making a network connection to upload something.
Do note that it is still not immune to false positives. Two of my legitimate processes are always flagged by Virustotal: Apagent.exe (for an Apple Airport Router that was repurposed as network attached storage) and Gaming services. exe (an official process from Microsoft for its video game platform and store).
When a malicious process is discovered, right-click and view its properties, which will reveal details like how it is being launched and where the file is being stored.
Like with Rkill, you will need to kill the malicious process, though some malware types run multiple processes at once so that they can restart each other as you kill them.
In this case, it’s best to “suspend” the target processes first before terminating them.
Then move on to the Autoruns (Autoruns64.exe) tool to disable it from starting up automatically when the machine turns on.
Avoid deleting the entry right away since it could be a misidentified process; instead, disable it first to confirm it is indeed malware.
Once sure, navigate to the folder hous usually ing the malware – these are “user folders” like Temp or Appdata, as administrative rights are not required for malware to access them – and delete the source file to end your woes.
Though, for more complex malware, manual removal may be difficult or downright impossisure ble, so make to check what is involved.
In the worst scenario, case there’s always the nuclear option of doing a clean install of Windows, but this will wipe out your entire system.
3 Reasons Why AI Generated Deepfakes Are a Growing Concern The Era of Digital Deception
Sophisticated scam technology harnessing artificial intelligence is capable of deceiving even the most vigilant.
COMPUTER-GENERATED children’s voices that fool their own parents. Masks created with photos from social media deceive a system protected by face Id.
They sound like the stuff of science fiction, but these techniques are already available to criminals preying on everyday consumers.
The proliferation of scam tech has alarmed regulators, police, and people at the highest levels of the financial industry. artificial intelligence (ai) in particular is being used to “turbocharge” fraud, US Federal Trade Commission chair Lina Khan warned in June, calling for increased vigilance from law enforcement.
Even before ai broke loose and became available to anyone with an Internet connection, the world was struggling to contain an explosion in financial fraud.
In the United States alone, consumers lost almost Us$8.8bil (Rm40.9bil) last year, up 44% from 2021, despite record investment in detection and prevention. Financial crime experts at major banks, including Wells Fargo and Co and deutsche Bank ag, say the fraud boom on the horizon is one of the biggest threats facing their industry.
On top of paying the cost of fighting scams, the financial industry risks losing the faith of burned customers.
“It’s an arms race,” says James Roberts, who heads up fraud management at the Commonwealth Bank of australia, the country’s biggest bank.
“It would be a stretch to say that we’re winning.”
The history of scams is surely as old as the history of trade and business.
One of the earliest known cases, more than 2,000 years ago, involved a greek sea merchant who tried to sink his ship to get a fraudulent payout on an insurance policy.
Look back through any newspaper archive, and you’ll find countless attempts to part the gullible from their money.
But the dark economy of fraud, just like the broader economy, has periodic bursts of destabilising innovation.
new technology lowers the cost of running a scam and lets the criminal reach a larger pool of unprepared victims.
Email introduced every computer user in the world to a cast of hard-up princes who needed help rescuing their lost for tunes.
Crypto brought with it a blossoming of Ponzi schemes that spread virally over social media.
The future of fake
The ai explosion offers not only new tools but also the potential for life-changing financial losses.
and the increased sophistication and novelty of the technology mean that everyone, not just the credulous, is a potential victim.
The Covid-19 lockdowns accelerated the adoption of online banking around the world, with phones and laptops replacing face-to-face interactions at bank branches.
It’s brought advantages in lower costs and increased speed for financial firms and their customers, as well as openings for scammers.
Some of the new techniques go beyond what current off-theshelf technology can do, and it’s not always easy to tell when you’re dealing with a garden-variety fraudster or a nation-state actor.
“We are starting to see much more sophistication with respect to cybercrime,” says amy Hoganburney, general manager of cybersecurity policy and protection at Microsoft Corp.
Globally, cybercrime costs, including scams, are set to hit US$8 trillion (RM37.18 trillion) this year, outstripping the economic output of Japan, the world’s third-largest economy.
By 2025, it will reach US$10.5 trillion (RM48.8 trillion), after more than tripling in a decade, according to researcher Cybersecurity Ventures.
In the Sydney suburb of Redfern, some of Roberts’ team of more than 500 spend their days eavesdropping on cons to hear firsthand how ai is reshaping their battle.
a fake request for money from a loved one isn’t new. But now parents get calls that clone their child’s voice with ai to sound indistinguishable from the real thing.
These tricks, known as social engineering scams, tend to have the highest hit rates and generate some of the quickest returns for fraudsters.
Today, cloning a person’s voice is becoming increasingly easy.
Once a scammer downloads a short sample from an audio clip from someone’s social media or voicemail message – it can be as short as 30 seconds – they can use ai voice-synthesising tools readily available online to create the content they need.
Public social media accounts make it easy to figure out who a person’s relatives and friends are, not to mention where they live and work and other vital information.
Bank bosses stress that scammers, who run their operations like businesses, are prepared to be patient, sometimes planning attacks for months.
What fraud teams are seeing so far is only a taste of what ai will make possible, according to Rob Pope, director of new Zealand’s government cybersecurity agency, CERT nz.
He points out that ai simultaneously helps criminals increase the volume and customisation of their attacks.
“It’s a fair bet that over the next two or three years we’re going to see more ai-generated criminal attacks,” says Pope,
a former deputy commissioner in the New Zealand Police who oversaw some of the nation’s highest-profile criminal cases. “What AI does is accelerate the levels of sophistication and the ability of these bad people to pivot very quickly. AI makes it easier for them.”
To give a sense of the challenge facing banks, Roberts says right now the Commonwealth Bank of Australia is tracking about 85 million events a day through a network of surveillance tools.
That’s in a country with a population of just 26 million.
The industry hopes to fight back by educating consumers about the risks and increasing investment in defensive technology.
New software lets CBA spot when customers use their computer mouse in an unusual way during a transaction – a red flag for a possible scam.
Anything suspicious, including the destination of an order and how the purchase is processed, can alert staff in as few as 30 milliseconds, allowing them to block the transaction.
At Deutsche Bank, computer engineers have recently rebuilt their suspicious transaction detection system, called Black Forest, using the latest natural language processing models, according to Thomas Graf, a senior machine learning engineer there.
The tool looks at transaction criteria such as volume, currency, and destination and automatically learns from reams of data what patterns suggest fraud.
The model can be used on both retail and corporate transactions and has already unearthed several cases, includone ing involving organised crime, money laundering, and tax evasion.
Wells Fargo has overhauled its tech systems to counter the risk of Ai-generated videos and voices. “We train our software and our employees to be able to spot these fakes,” says Chintan Mehta, Wells Fargo’s head of digital technology. But the system needs to keep evolving to keep up with the criminals. Detecting scams, of course, costs money.
The digital dance
One problem for companies: Every time they tighten things, criminals try to find a workaround.
For example, some US banks require customers to upload a photo of an ID document when signing up for an account.
Scammers are now buying stolen data on the dark web, finding photos of their victims on social media, and 3D-printing masks to create fake IDS with the stolen information.
“And these can look like everything from what you get at a Halloween shop to an extremely lifelike silicone mask of Hollywood standards,” says Alain Meier, head of identity at Plaid, which helps banks, financial technology companies, and other businesses battle fraud with its ID verification software. Plaid analyses skin texture and translucency to make sure the person in the photo looks real.
Meier, who’s dedicated his career to detecting fraud, says the best fraudsters, those running their schemes as businesses, build scamming software and package it up to sell on the dark web.
Prices can range from US$20 (RM95) to thousands of dollars.
“For example, it could be a Chrome extension to help you bypass fingerprinting or tools that can help you generate synthetic images,” he says.
As fraud gets more sophisticated, the question of who’s responsible for losses is getting more contentious.
In the United Kingdom, for example, victims of unknown transactions – say, someone copies and uses your credit card – are legally protected against losses.
If someone tricks you into making a payment, responsibility becomes less clear.
In July, the US top court ruled that a couple who were fooled into sending money abroad couldn’t hold their bank liable simply for following their instructions.
But legislators and regulators have leeway to set other rules: The government is preparing to require banks to reimburse fraud victims when the cash is transferred via Faster Payments, a system for sending money between UK banks.
Politicians and consumer advocates in other countries are pushing for similar changes, arguing that it’s unreasonable to expect people to recognise these increasingly sophisticated scams.
Banks worry that changing the rules would simply make things easier for fraudsters.
Financial industry leaders around the world are also trying to push a share of the responsibility onto tech firms.
The fastest-growing scam category is investment fraud, often introduced to victims through search engines where scammers can easily buy sponsored advertising spots.
When would-be investors click through, they often find realistic prospectuses and other financial data. Once they transfer their money, it can take months, if not years, to realise they’ve been swindled when they try to cash in on their “investment”.
In June, a group of 30 lenders in the UK sent a letter to Prime Minister Rishi Sunak asking that tech companies contribute to refunds for victims of fraud stemming from their platforms.
The government says it’s planning new legislation and other measures to crack down on online financial scams.
The banking industry is lobbying to spread responsibility more widely, in part because costs appear to be going up. Once again, a familiar problem from economics applies in the scam economy, too.
Like pollution from a factory, new technology is creating an externality, or a cost imposed on others. In this case, there’s a heightened reach and risk for scams.
Neither banks nor consumers want to be the only ones forced to pay the price.
Chris Sheehan spent almost three decades with the country’s police force before joining National Australia Bank Ltd, where he heads investigations and fraud.
He’s added about 40 people to his team in the past year with constant investment by the bank.
When he adds up all the staff and tech costs, “it scares me how big the number is”, he says.
“I am hopeful because there are technological solutions, but you never completely solve the problem,” he says. It reminds him of his time fighting drug gangs as a cop.
Framing it as a war on drugs was “a big mistake”, he says.
“I will never phrase it in that framework – of a war on scams – because the implication is that a war is winnable,” he says. “This is not winnable.” – Bloomberg
