How the US sanctions and isolates companies and governments: the Entity List
The US's Entity List contains the names of companies, research institutes, individuals and others that the US considers a risk to its economic or national security.
Listed companies are blocked from buying, selling, or lisencing goods or services from American firms. They're also blocked from buying or lisencing anything that contain American-made goods, no matter where it comes from.
Chinese entities include:
- AI startups that specialize in facial and voice recognition, like Hikvision, Megvii, SenseTime and IFLYTEK
- Huawei, the smartphone and telecommunications company
- Supercomputer makers like Sugon and The National Supercomputer Centers in Changsha, Guangzhou and Tianjin
- Sichuan University in Chengdu
- Beijing University of Aeronautics and Astronautics
Surveillance and Privacy
AI-enabled technologies produce and rely on vast troves of personal data, most of which is unregulated and vulnerable to theft and misuse.
These technologies include:
- Facial recognition: It helps users unlock their smartphones. It also helps police in China track criminal suspects and monitor members of the Uyghur ethnic minority.
- Personalization: It helps consumers make necessary purchases and discover entertainment, but also encourages developers to collect personal data from increasingly far-flung sources.
- Voice assistants: They help users answer questions, create calendar events, and set alarms. They also record audio accidentally, and until recently relied on human reviewers to listen to private audio to improve their responses.
- Smart home products: Similar to voice assistants, these products allow users to remotely operate appliances, set temperatures and access security footage. They also collect a vast amount of private information about the home life of their users.
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China is a major leader AI investment and development. And with government encouragement, China's giant population produces more AI-usable data than perhaps anywhere else on earth.
Here's how China is unique in artificial intelligence development:
- The country's authoritarian political regime: The Chinese government closely controls the economy. This has allowed the Chinese Communist Party to funnel vast amounts of wealth and tax incentives to companies that develop AI products.
- By investing large sums into AI companies and capping the RoI it receives, the government has given Chinese startups access to capital found nowhere else outside of Silicon Valley.
- China's huge population: The country's massive middle class has largely embraced the conveniences and features that AI models provide, and thereby produce more useful data than any other group on earth. The more data produced, the better the technology gets.
- The country's history of political control has, arguably, created a friendly environment for companies that want to build services that require vast amounts of user data. While the debate over privacy rages in Europe, the controversy is felt far less in China.
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SenseTime is interesting for many reasons:
- It's the world's largest AI unicorn, worth more than $7.5 billion.
- It has close ties with Beijing, despite the fact that it was founded in Hong Kong.
- It's now at the center of the US-China trade dispute, having just been blacklisted by the US government.
SenseTime specializes in facial- and pattern-recognition in images, video and audio, and works closely with the Chinese government, as well as MIT, Qualcomm, Nvidia, and others.
Founded in 2014, Sensetime first received attention for their DeepID algorithm, which was the first facial recognition tool that recognized faces more accurately than the human eye.
SenseTime went on to be named one of China's five "national champions" of AI in 2018, alongside Alibaba, Tencent, Baidu, and iFlyTek, which earmarks it for special treatment, government contracts and potentially longterm investment.
Since its founding, SenseTime has raised over $2.6 billion from Alibaba, Qualcomm, Softbank and others.
More recently, the company has been accused of helping Chinese authorities monitor and track Uighur muslims. Critics, inlcuding the US government, say that SenseTime's software is used in China's mass surveillance program in areas like Xinjiang, where authorities deploy a vast surveillance network to monitor and track citizens.
In October, the US put SenseTime on its Entity List, which prevents it from buying or using any technology or product that contains US-made components.
While Sensetime denies that its technology is being used to discriminate against citizens, it does have verified clients among China's police departments, which use its technology in security cameras to find and track suspects. SenseTime previously owned a 51% stake in a join-venture in Xinjiang, but it sold its ownership in early 2019.
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China's social credit system
China's social credit system has been described as a nationwide, all-encompassing personal rating mechanism, used to punish and reward citizens based on their financial history, personal contacts and even the amount of time they play video games.
In reality, the social credit system does not produce a single, nationwide credit rating for Chinese citizens. At least not yet. In fact, many people may not have a social credit score, or even know if they do.
Announced in 2014, the social credit system has been tested across a patchwork of social and consumer apps and local government pilot programs (like those already running in Shandong and Xinjiang).
The nearest thing to a nationwide score for Chinese citizens is likely the Supreme People's Court's debtors list, which contains the names of 14.5 million people with longterm debt.
The official social credit system is slated to roll out in 2020. Shortly after announcing the system, the People's Bank of China granted approval to eight private firms ($) to run their own pilot programs. Since then, local government-led ratings systems have also sprouted up across the country as well.
Five years on, the future of the system is somewhat uncertain. When it is fully rolled out, it may ultimately gather data from disparate sources that already exist-- like the debtor's list, local government data, and individual browsing histories and social media activity to compile metrics wherever available.
“The social credit system is just really adding technology and adding a formality to the way the party already operates,” Samantha Hoffman, a consultant at the International Institute for Strategic Studies, told Foreign Policy.
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