In this week’s edition, the World Bank warns of a grim economic outlook for China and East Asia. In the US, the FCC issues its first space debris fine, and the Supreme Court reviews laws restricting social media content moderation. Meanwhile, hackers leverage AI in cyberattacks. Generative AI jobs cluster in specific metro areas, the San Francisco Bay Area downtowns face record-high office vacancies, and X removes headlines from external links.
Industrial Policy & International Security
The article discusses the need for the United States and its allies to adopt a multifaceted strategy to counter China’s economic and technological practices. China employs market distortions, subsidies, and technology transfer requirements to dominate key industries. Traditional engagement methods are deemed insufficient in addressing these challenges. The current American strategy to counteract China’s dominance involves promoting domestic competitiveness and protecting critical technologies. A third option for policy makers is to pool market demand with allies by insulating markets from China’s unfair practices, redirecting demand, and ensuring fair competition.
The United States and its allies are considering the concept of Conventional-Nuclear Integration (CNI) as a strategy to deter adversaries, such as Russia and China, from using nuclear weapons in regional conflicts. CNI involves integrating conventional and nuclear forces to manage escalation, strengthen deterrence, and maintain flexibility in response to nuclear or other attacks. Russia and China have developed dual-capable missile systems, indicating their belief in using nuclear weapons to gain strategic advantage in conventional conflicts. However, these raise the risk of blurring the lines between conventional and nuclear forces and effectively communicating resolve and restraint to adversaries.
The World Bank has lowered its growth forecasts for China and East Asia’s developing economies for 2024, citing concerns over China’s economic slowdown and external factors like US protectionism and rising debt levels. China’s growth projection for 2024 has been lowered to 4.4% from the previous estimate of 4.8%, while East Asia’s developing economies are expected to grow by 4.5%, down from the previous estimate of 4.8%. This marks the region’s slowest growth since the late 1960s, excluding exceptional events like the pandemic and financial crises.
The FCC has imposed its first fine for space debris on Dish Network, penalizing the company $150,000 for failing to properly take its satellite EchoStar-7 out of close orbit. Dish admitted liability, explaining that the satellite ran out of propellant before it could move into a safer orbit. In addition to the fine, Dish is required to implement a compliance plan. Space debris can damage operational infrastructure in space and interfere with terrestrial and space-based communication systems. The FCC’s enforcement of space debris rules sends a clear message about its authority in this area.
The Supreme Court has agreed to review the legality of Texas and Florida laws that restrict the ability of social media platforms to moderate content. The laws, challenged by industry groups NetChoice and the Computer & Communications Industry Association, face opposition from technology companies like Facebook, Google, TikTok, and Twitter. Supporters of the laws argue that they prevent censorship and protect conservative voices, while advocates of content moderation say they are necessary to combat misinformation and extremism. The cases will be heard in the court’s upcoming term.
DIU asks industry about affordable, mass-produced unmanned aerial systems | Breaking Defense
The Defense Innovation Unit (DIU) is seeking industry proposals for affordable, mass-produced “unmanned aerial delivery vehicles.” This request follows the Pentagon’s announcement of the Replicator initiative, which aims to counter China’s military capabilities by producing “attritable autonomous systems” across “multiple domains” within two years. DIU is looking for systems that can fly at least 500 nautical miles, integrate multiple data streams, deliver modular payloads, and that can demonstrate an initial flight test within seven months of an award.
The Quantum Chips Are Stacking Up | Foreign Policy
Countries around the world are realizing the potential benefits of leading in quantum computing. Quantum computing operates differently from classical computing, allowing complex functions to be performed simultaneously, potentially solving problems beyond the reach of supercomputers. Applications include drug discovery, climate change modeling, and more. However, quantum computers are still in their infancy, requiring extremely low temperatures to function, and scalability remains a challenge. Governments are investing in quantum computing due to its potential for transforming various fields, including military technology, artificial intelligence, and cybersecurity.
A Tool to Help Boards Measure Cyber Resilience | Harvard Business Review
Boards of directors should shift their focus from cybersecurity protection to resilience. Traditional cybersecurity metrics, such as technical and organizational indicators, provide boards with insufficient information to gauge cyber resilience effectively. A balanced scorecard for cyber resilience (BSCR) is recommended to help boards assess the broader business impact of cyber risks. The BSCR includes financial, technological, organizational, and supply chain indicators, along with a qualitative assessment of the biggest risk and an action plan for each area. By emphasizing resilience, organizations can better prepare for cyber incidents and ensure their ability to continue operations.
Hackers With AI Are Harder to Stop, Microsoft Says | Wall Street Journal
Hackers are leveraging AI tools to refine the language and imagery used in phishing attacks and influence operations. An emerging trend in ransomware attacks involves hackers remotely encrypting data and sending encrypted files to different computers, making it harder for victims to recover their data. General data exfiltration attacks doubled between November 2022 and June 2023, while human-operated ransomware attacks increased by 200% between September 2022 and June. Companies are responding by employing AI capabilities to their security tools.
State & Local Tech Ecosystems
Generative AI technology and the companies developing it are clustering in a small number of places. Over 60% of generative AI job postings in the year ending in July 2023 were concentrated in 10 metro areas, with the Bay Area being a significant hub. This concentration resembles the patterns seen in previous digital technology industries. Policymakers and technologists need to take active steps to promote a more inclusive AI geography, such as expanding research programs, improving digital education and training, and leveraging place-based industrial policy programs to support emerging local AI ecosystems.
Office vacancy rates in the Bay Area’s major downtown districts have reached record highs, driven by tech companies reducing their office space. In quarter three, San Jose’s downtown vacancy rate was 31.5%, up from 31.3% in the previous quarter. Oakland had a 29.7% vacancy rate, up from 28.5%, while San Francisco’s rate was 33.9%, up from 31.6%. When sublease space is considered, the situation becomes even worse. Despite these challenges, real estate executives see some signs of improvement, particularly in downtown San Jose.
The US warns of a Chinese global disinformation campaign that could undermine peace and stability | Associated Press
The U.S. State Department has released a report detailing China’s tactics for shaping global public opinion. Examples include the creation of fake authors who publish pro-China articles, and social media trolls that attack the credibility of dissenters. The report warns that Beijing’s information campaign could undermine U.S. interests and diminish freedom of expression worldwide. China criticized the report as “disinformation” and accused the U.S. of weaponizing the global information space. Beijing has been working to improve its image globally but has faced accusations of human rights abuses, particularly in Xinjiang, where Uyghurs have faced forced labor and unwarranted detention.