Archive January 13, 2021

Joe Biden poised to name foreign policy expert as Asia tsar

Joe Biden is poised to name Kurt Campbell, a veteran foreign policy expert, to serve in the newly created role of Asia tsar, in a move designed to reflect the growing importance of US-China relations.

The president-elect will announce his choice of Mr Campbell, a former top Pentagon official who also served as the top State department official for Asia during the Obama administration, soon, said three people familiar with the move.

The Financial Times reported last month that Mr Biden was considering creating the new position inside the White House because of the rising importance attached to tackling a wide range of challenges from China.

One person familiar with the decision said it was partly taken because of the need to better integrate China policy across different government agencies with a veteran Asia expert at the helm. The person said Mr Biden recognised that China was an issue that every government agency — not just the traditional foreign policy, defence and economic-related departments — would have to grapple with more than in the past.

Mr Biden will come into office on January 20 facing a range of challenges, ranging from how to deal with Beijing’s crackdown on the pro-democracy movement in Hong Kong to trade policy. He will also have to decide whether to maintain some of the tougher actions on China that Donald Trump launched in his final months in office.

Mr Campbell is close to Anthony Blinken, the incoming secretary of state, and Jake Sullivan, the incoming national security adviser. He is married to Lael Brainard, a Federal Reserve governor who was expected to become Treasury secretary but lost out to Janet Yellen, the former Fed governor.

Along with Mr Sullivan, Mr Campbell, who has close ties to policymakers in Japan, is viewed as being one of the more hawkish Democrats on China. In an article in Foreign Affairs magazine two years ago, he said Washington needed a “clear-eyed rethinking” of its approach to Beijing after years of the US foreign policy establishment wrongly forecasting China’s path.

“Nearly half a century since Nixon’s first steps toward rapprochement, the record is increasingly clear that Washington once again put too much faith in its power to shape China’s trajectory,” Mr Campbell wrote with Ely Ratner, who is expected to become the top Pentagon Asia official.

In a separate Foreign Affairs article this month, Mr Campbell said US strategy for the Indo-Pacific region would benefit from drawing lessons from European history, including “the need for an allied and partner coalition to address China’s challenge to both”. He said the Trump administration had caused huge strains on alliances in Asia.

Mr Biden has signalled that rebuilding US relationships, including for the purposes of a creating more leverage with China, will be a top priority.

“Donald Trump himself strained virtually every element of the region’s operating system,” Mr Campbell wrote with Rush Doshi, a China expert who is expected to be named a China director at the National Security Council.

The Biden transition team did not respond to a request for comment.

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FBI races to track insurrectionists before Joe Biden’s inauguration

One of the more alarming discoveries by US law enforcement on the day the US Capitol was stormed were two pipe bombs found outside the Washington headquarters of the Republican and Democratic parties.

With just a week until America’s political elite will reassemble at the Capitol for Joe Biden’s inauguration, federal investigators have acknowledged they have no idea who planted the explosives — or why they failed to detonate.

The inability to identify the individuals behind some of the most martial acts during last week’s attack has raised fears that hardcore insurrectionists remain at large and could threaten Mr Biden’s swearing in on January 20 or other events leading up to the transition of power.

“We saw calls for violence against law enforcement and encouragement to armed struggle . . . and warnings to get ready because this is only a taste of what’s to come,” said Joanna Mendelson, associate director at the Anti-Defamation League’s Center on Extremism.

Federal prosecutors on Wednesday said that more than 170 case files had been opened against pro-Trump rioters for infractions ranging from trespassing to sedition and murder, with more than 70 already charged.

But they also acknowledged they have not determined whether the attack was co-ordinated or instigated by what appeared to be more organised elements who participated in the rampage, or whether some participants were planning to kidnap and kill individual members of Congress.

The charges brought by federal authorities so far have not alleged a wider organisational effort, but Department of Justice officials have said their initial priority had been to identify and arrest people involved in the riot as quickly as possible and that broader charges might follow later.

Thus far, many of those charges have been brought against what the FBI has termed “aspirational” rather than “intentional” coup plotters, who may have talked the language of violent overthrow without any real plan to follow through.

Despite the discovery of the pipe bombs and the highly organised nature of some of the rioters, many experts believe much of the mob violence was opportunistic rather than carefully planned.

High-profile rioters who have been arrested thus far — including “QAnon Shaman” Jake Angeli, who was pictured wearing horns on his head, and Richard Barnett, who put his feet up on Speaker Nancy Pelosi’s desk in her personal office — have little history of participation in organised extremist movements.

“The fact that they were there taking selfies and stealing podiums — it was more for the ‘gram’ in a sense,” said Marc-André Argentino, a doctoral candidate at Concordia University who studies how extremist groups leverage technology, referring to the Instagram social network.

Still, there are signs some had prepared for more serious violence. Two men charged with unlawful entry to the Capitol were pictured in military gear and with plastic handcuffs, echoing the equipment carried by the militia who planned to abduct Michigan governor Gretchen Whitmer last year.

Another man was arrested with a pistol that had a round loaded in the chamber, while a fourth had brought 11 Molotov cocktails in his pick-up truck, each filled with melted styrofoam and petrol, “an explosive mixture that has the effect of napalm”, the DoJ said in a court filing.

In addition, the FBI said it was able to intercept and detain those known to lead the most violent and belligerent groups, such as Enrique Tarrio, head of the extremist Proud Boys organisation, who was arrested and banned from Washington two days before the riot, after being found in possession of two high-capacity firearms magazines.

Many of the most hardline supporters of President Donald Trump did not attend last week’s rally, believing it had become impossible to overturn Mr Biden’s victory.

Still, some of the most prominent members of the rightwing nativist movement who rioted at the Capitol remain at large, and experts believe that some other militants who stayed away may be inspired to target the inauguration because of the attack’s success in disrupting the certification of Mr Biden’s victory.

“They would love to disrupt the inauguration — they’re violent revolutionaries who wish to kill their enemies,” warned Mike Rains, who runs Adventures in HellwQrld, a podcast focused on QAnon. “They’d love it if the coup had gone better.”

The planned deployment of troops to Washington could encourage extremists to choose other targets, said Megan Squire, a professor at Elon University in North Carolina.

One of those whose whereabouts remain unknown is Tim Gionet, an alt-right member who uses the moniker Baked Alaska. Mr Gionet, who was arrested in Arizona last year after attacking a bouncer with mace, live-streamed the riot while viewers donated to his stream and gave him directions, including calls to violence.

Ms Mendelson said that the more than 50 individuals the ADL had helped to identify ran the ideological gamut, with about a dozen extremists affiliated with white supremacist and anti-government movements.

Nicholas Ochs, a Hawaiian Proud Boy leader, was arrested for unlawful entry on Friday, but on Tuesday said that he had been released on bond. A former congressional candidate, Mr Ochs posted videos and tweets of the storming. “The people inside didn’t even wreck things,” he wrote on Telegram the day after the riot. “It was just kinda a happy atmosphere to be honest.”

But the scale of the riots means that many have yet to be arrested. “There were thousands of people,” Ms Mendelson said. “For the process to be accurate and thorough takes some time.”

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Australian scientists cast doubt on Oxford/AstraZeneca vaccine

A group of Australian scientists has called on the government to review its Covid-19 immunisation strategy over concerns that the Oxford/AstraZeneca vaccine was not effective enough to generate herd immunity.

Several immunologists and the opposition Labor party said on Wednesday Canberra should seek additional supplies of the BioNTech/Pfizer and Moderna vaccines, which trials show have higher efficacy — a measure of prevention of infection or severe disease — than the Oxford/AstraZeneca jab.

Some health experts are also advocating for a “pause” in the rollout of the Oxford/AstraZeneca vaccine next month. The proposal has been rejected by Canberra.

“Until we get more data that shows that AstraZeneca is as good as the others, the scientific and medical risk that you take is that you won’t get herd immunity,” said Andrew Miller, president of the Australian Medical Association in Western Australia. “The political risk is that you will get a good vaccine for the rich and a not so good vaccine for the poor”

Dr Miller said Canberra should halt the planned rollout of the Oxford/AstraZeneca jab and source vaccines with the highest efficacy. Because Australia has largely reined in the virus — unlike the UK or US — it should wait and source the best vaccines available to build public confidence, he added.

However, the government said the Oxford/AstraZeneca vaccine would provide vital protection against the virus and there were no plans for a policy U-turn.

“The AstraZeneca vaccine is effective, it is safe, and it’s a high-quality vaccine,” said Paul Kelly, Australia’s chief medical officer. “It will be available as soon as the TGA [medicine regulator] gives its tick, which we expect will be in February.”

Australia’s vaccine strategy suffered a blow last month when a homegrown candidate developed by the University of Queensland and CSL was abandoned after several trial participants returned false positives for HIV. However, Canberra had a contingency plan and agreed A$3.3bn ($2.6bn) of deals with pharmaceutical companies for alternative vaccines.

Its largest order is with AstraZeneca. The Anglo-Swedish drugmaker has agreed to supply 53m doses of its vaccine, which achieved an average efficacy of 70 per cent in trials. It has also ordered 10m doses of the BioNTech/Pfizer vaccine, which has achieved efficacy of more than 90 per cent and is also expected to be approved by the TGA next month.

Canberra has also agreed to purchase 51m doses of Novavax vaccine, although these are not expected to be available until mid-2021.

Some scientists are concerned by Australia’s reliance on Oxford/AstraZeneca, noting trial data showed that when the jab was given as two full doses at least a month apart, its efficacy was only 62 per cent.

“Pivoting towards the Moderna and Pfizer vaccines looks like a good idea in an ideal situation,” said Stephen Turner, president of the Australia and New Zealand society for Immunology.

He called a review of Canberra’s vaccine strategy appropriate but warned there were practical difficulties in rolling out the BioNTech/Pfizer vaccine because it needs to be stored at minus 70C. The Oxford/AstraZeneca vaccine, which can be kept at 2C to 8C, could be a useful tool in the short-term to control the virus, said Mr Turner.

The Australasian Virology Society said it did not support a “pause” in vaccine rollout. Rather, all the data should be analysed for safety and efficacy by Australia’s medicines regulator before a final decision to rollout the Oxford/AstraZeneca vaccine, it said.

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The Labor party said the government should agree more deals with vaccine manufacturers, noting it had three contracts while other developed economies had five or six. But it has not called for a pause in the rollout of the Oxford/AstraZeneca vaccine.

Peter Collingon, professor of microbiology at Australian National University, described calls to halt the rollout as “unrealistic”. He said it was unlikely the government could source enough alternative vaccines this year and it was crucial to get high-risk people vaccinated before winter.

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Goans rally against Modi plan to turn tourist magnet into coal hub

In the sleepy Goan beachfront town of Cansaulim, Angelo Fernandes and his neighbours stand guard in front of their 236-year-old church, watching a contractor haul away construction materials.

Hours earlier, local residents had been locked in a stand-off with railway workers sent to lay new track to transport coal through the community.

The showdown ended when local politicians intervened, work was suspended and the contractor pledged to remove the building materials. Mr Fernandes was there to ensure the contractor kept his word.

“Now we are wearing masks because of corona[virus], but if coal comes we’ll have to wear them forever,” he said.

The fiery encounter reflects growing anger in Goa against a government plan to turn the coastal state into a hub for the transport of coal through seaside villages and dense forests en route to large steel and power plants inland.

Companies such as JSW Steel and the Adani Group are using Goa’s Mormugao Port to import about 10m tons of coal from Australia and South Africa for use by heavy industries in neighbouring Karnataka state.

But Narendra Modi’s Bharatiya Janata party government is pushing for a massive expansion of the port’s coal-handling capacity to at least 41m tonnes a year by 2035.

To haul this huge quantity of coal from the port to industrial sites, authorities want to widen a highway and lay another track alongside the 153-year-old Portuguese-built railway line. The track runs through sensitive wildlife areas in the Western Ghats, mountains that have been recognised as significant biodiversity hotspots.

The existing line makes a steep climb through Bhagwan Mahaveer Sanctuary and Mollem National Park, passing in front of the Mandovi River’s spectacular 320m Dudhsagar Falls.

Goans are now mobilising to resist a project they believe will both expose local communities to large quantities of highly polluting coal dust, and break up a significant wildlife corridor that is home to panthers, leopards and other endangered species.

Angry flash mobs have forced the suspension of the double-tracking work in several locations over recent months.

Locals fear their ‘world-class’ Dudhsagar waterfall will be destroyed ©  Dmitrii Melnikov/Alamy

“People are asking, ‘What’s in it for us?’” said lawyer Savio Correa, who lives near the Mormugao Port. He added that residents were already plagued by coal dust. “You want to carry coal, but are Goans benefiting, or are we sacrificing our health and our economy for the benefit of somebody else?”

Past talk of double-tracking the railway line was squelched by state-level politicians. In 2013, Goa’s top forest official described the wildlife sanctuary, adjacent to Mollem National Park, as a haven for “highly indigenous and endangered species . . . which will be completely disturbed” by adding an extra track.

But Mr Modi’s government has redoubled its efforts since 2016 as part of a national drive for “port-led” industrial development.

Contentious environmental clearances for the heavy infrastructure in the wildlife sanctuary were granted in a virtual meeting in early April, when Indians were still confined to their homes during a coronavirus lockdown. About 80 hectares of prime forest are now set to be destroyed.

Claude Alvares, director of the Goa Foundation, an environmental campaign group that has filed a lawsuit against the project, said New Delhi appeared to be acting at the behest of powerful corporates.

“Goa is the darling of the country because it’s the greenest place still left,” Mr Alvares said. “This is the place with priceless air. You don’t initiate a programme to fatally damage that air for the next 100 to 200 years.”

He added: “They say it is in the national interest. Our counter is that protecting wildlife is also in the national interest. We are constitutionally required to make sure wildlife is protected.”

Adani said it had “no plans of further expansion of operations” at Mormugao Port, adding that the facility still had spare coal-handling capacity.

“Existing infrastructure is only fulfilling the existential needs,” Adani said. “These allegations of pressurising the government are baseless.” JSW did not respond to requests for comment.

The furore is piling pressure on Pramod Sawant, Goa’s chief minister, caught between an angry public and the national BJP leadership’s development drive. After being criticised at a public gathering, he impetuously pledged coal handling at Mormugao would be cut by half.

But Goans remain wary. In the village of Kullem on the outskirts of the Bhagwan Mahaveer sanctuary, Manish Lambor, the local headman, said many residents depended on tourism for their livelihood, and feared their “world-class waterfall” would be destroyed. “If they disturb the waterfall, what will tourists see?” he asked.

Restaurateur Tribolo Souza, who lives just outside the Mollem National Park where authorities aim to build a four-lane highway, is furious. “The government of the day is not concerned about Goa,” he said. “They are all out to sell Goa.”

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South Korea conglomerate draws investor ire with retail merger plan

One of South Korea’s top 10 conglomerates is facing investor outrage over a proposed $3bn merger of two retail units from foreign and minority shareholders who say the deal unfairly favours the group’s founding family.

Investors say the merger proposed by GS Group shortchanges minority stakeholders. It is the latest sign, they say, that efforts by the administration of President Moon Jae-in to reform the sprawling family-run groups are failing despite rising investor activism in the country.

GS Group is South Korea’s eighth-largest conglomerate by assets and one of the country’s oldest such family-run groups, known as chaebol. It is an offshoot of the family behind the LG group, with Won66.8tn ($60bn) in assets and interests ranging from retail to energy and construction.

In November, it announced a plan to combine GS Retail with GS Shop, its home shopping affiliate, in July 2021 to strengthen their retail business in the face of stiff domestic competition.

But the group’s proposed merger ratio of 4.22 shares of GS Retail for one share of GS Shop has angered investors. The situation has evoked the contentious tie-up of two units Samsung pushed through in 2015 after seeing off an activist challenge, and Hyundai Motor’s group restructuring plan three years ago that was shelved due to strong shareholder opposition.

Investors have also bristled over a restructuring plan by LG Corp. Last month, US-based activist hedge fund Whitebox Advisors launched a campaign to halt a spin-off of several affiliates that it said was aimed at helping a member of the founding family start his own business rather than creating value for shareholders.

Minority shareholders of GS Shop say the merger ratio undervalues the country’s biggest home shopping network, which averages more than Won100bn in annual net profit and has about Won600bn in cash and cash-equivalent assets.

“The merger is similar to the Samsung case in nature as the merger ratio favours the controlling family and it doesn’t properly reflect corporate value,” said Albert Yong, managing partner at local hedge fund Petra Capital Management. “Opaque deals that benefit large shareholders at the expense of minority shareholders are still happening.”

The companies say the ratio was decided in line with prevailing South Korean regulations.

The founding Huh family owns more than half of GS Holdings, which controls 66 per cent of GS Retail and 36 per cent of GS Shop. GS Retail runs a chain of convenience stores, supermarkets and hotels in South Korea while GS Shop has about 18m customers.

“GS Shop was significantly undervalued, despite its substantial asset value,” said a US hedge fund manager with investments in the country.

But analysts say investors face an uphill battle to block the deal at the shareholder meeting scheduled for May.

Foreign investors own 26 per cent of GS Shop, less than the group’s holding company. State-run National Pension Service, which has a 5 per cent stake, has said it will vote on the deal according to its stewardship code, which stresses the importance of its fiduciary duty.

“The GS deal will likely win shareholder approval without much trouble,” said the US hedge fund manager. “It is just disappointing to see the interests of minority shareholders continue to be ignored in the country.”

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WhatsApp fights back as users flee to Signal and Telegram

Facebook is scrambling to deal with a sudden competitive threat to its messaging platform WhatsApp after a change to its terms of service sparked privacy concerns and prompted users to turn to rivals such as Signal and Telegram in droves.

The encrypted messaging app, which has more than 2bn users globally, and several of its senior executives spent Tuesday trying to clarify forthcoming privacy policy changes covering the data that can be shared between WhatsApp and its parent now that it is deepening its push into ecommerce.

Signal was downloaded 8.8m times worldwide in the week after the WhatsApp changes were first announced on January 4, versus 246,000 times the week before, according to data from Sensor Tower.

The app also got a boost when Elon Musk, the chief executive of Tesla, tweeted “Use Signal” on January 7. 

By contrast, WhatsApp recorded 9.7m downloads in the week after the announcement, compared with 11.3m before, a 14 per cent decrease, Sensor Tower said.

Telegram, a popular messaging app among cryptocurrency traders, also benefited from the WhatsApp concerns. It reached 11.9m downloads the week after the January 4 change from 6.5m the week before, Sensor Tower said. In a message sent to all its users on Tuesday, Telegram said that it had now surpassed 500m active users. 

Some users interpreted WhatsApp’s new policies as suggesting that sensitive user data will be shared with its parent company for the first time, even including the content of messages, prompting outrage on social media — and a forceful correction from the company.

WhatsApp said in a statement posted late on Monday that the policy update, which comes into force on February 8, “does not affect the privacy of your messages with friends or family in any way”, adding that it wanted to address “rumours going around”. 

While neither app will be allowed to access any messages, WhatsApp’s privacy policies have since 2016 allowed it to share certain other user data with its parent company. 

According to the latest update, Facebook and WhatsApp will now also be able to share certain payments and transactions data in order to boost advertising, as the company pushes further into ecommerce with the development of digital storefront features such as Facebook Shops. 

The changes also outline how merchants communicating with customers via WhatsApp can choose to store those chats in Facebook-hosted servers, and use that data to inform their advertising on Facebook. 

Several top company executives took to Twitter on Tuesday to publicly defend the changes, including Adam Mosseri, chief executive of Instagram, which is also owned by Facebook. “There is a lot of misinformation about the WhatsApp ToS [terms of service] right now,” he said.

Signal was co-founded by WhatsApp co-founder Brian Acton after he left the company following disagreements over user privacy and its lack of independence from its parent company.

The sudden jump in users at Signal and Telegram has raised questions about whether the smaller apps are prepared to scale. Last week, Signal said it was “continuing to shatter traffic records and add capacity” after experiencing some problems with the creation of groups on its services and delays in sending verification codes to users.

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Affirm prices above range in further sign of hot IPO market

Affirm, the consumer lender led by PayPal co-founder Max Levchin, sold shares well above its expected price range during an initial public offering, in a sign of the continued exuberance for new US listings.

The San Francisco-based company raised $1.2bn in the offering after selling shares at $49 a piece, according to two people briefed on the matter, a price level that exceeded its already bumped up range of $41 to $44.

Affirm would have a market capitalisation of $11.9bn at the IPO price, based on the number of shares outstanding after the offering. The company declined to comment.

Affirm’s listing extended a frenzied run of tech IPOs dating back to the second half of last year, while delivering a second big win for Mr Levchin almost two decades after he helped to take PayPal public.

Founded by Mr Levchin in 2012, Affirm offers a “buy now, pay later” product that online shoppers can use to spread out payments on big-ticket items. Affirm makes most of its revenues from fees it charges to merchants, often resulting in customers paying zero interest. The company also offers interest-bearing loans without late fees.

Sales through Peloton, the fitness company, have historically produced a large chunk of Affirm’s business, representing 28 per cent of the company’s total revenues in the 12 months to June.

The company reported net losses of $113m on revenues of $510m in the 12 months to June, shrinking from losses of $121m on $264m of revenues in the previous fiscal year.

A boom in the business of online consumer lending means it has faced competition from overseas groups such as Afterpay and Klarna, as well as PayPal, which introduced a buy now, pay later offering last year.

Affirm’s IPO comes during a busy week of new listings in the US. The ecommerce site Poshmark and the mobile gaming company Playtika are also expected to go public in the coming days, providing an early test of the market this year.

At Affirm’s IPO price, Mr Levchin would own a stake in the company worth almost $1.4bn. Since leaving PayPal, he has become known as a prolific investor, backing tech start-ups through his firm SciFi VC and starting new companies through a vehicle called HVF.

The Singaporean sovereign wealth fund GIC was the largest outside investor in Affirm, with a stake that would be worth almost $1.1bn at the IPO price. Shopify, the Canadian ecommerce company, also held more than $990m in shares it received from a partnership it struck with Affirm last year, which allowed the fintech company to offer its product on Shopify merchant sites.

Morgan Stanley, Goldman Sachs and Allen & Co served as lead underwriters on the offering.

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Boom in private companies offering disinformation-for-hire

Politicians are increasingly hiring private companies to spread disinformation online, according to researchers who found campaigns run by third-party contractors targeting 48 different countries over the past year.

The Oxford Internet Institute said the “disinformation-for-hire” market is booming, with advertising, marketing and public relations companies offering to manipulate online opinion for political parties and governments.

The OII said private contractors help to identify which groups to target with messages, and then “prompt the trending of certain political messages” either through fake accounts or with armies of bots, or automated accounts.

Researchers said they had found evidence of at least $60m of spending on such campaigns since 2009, although the real total may be far higher.

Hiring a third party to spread disinformation allows political groups to keep themselves at arm’s length. For example, Facebook said last year that it found some “co-ordinated inauthentic” online activity likely linked to Turning Point USA, a pro-Donald Trump youth campaign group, and carried out by Rally Forge, a marketing firm, ahead of the US election.

Facebook banned Rally Forge from its platform, but Turning Point escaped any penalties. Rally Forge did not immediately respond to a request for comment and did not comment on its ban at the time.

The report included the relabelling of the Conservative party Twitter account as “factcheckUK” during a political debate ahead of the 2019 general election as an example of “party-led disinformation”. It noted that the digital communications firm Topham Guerin had been hired by the Conservatives after its success in the Australian election earlier that year.

Several campaigns stretched across borders. The Canada-based PR firm Estraterra was banned by Facebook after it found a campaign that spanned El Salvador, Argentina, Uruguay, Venezuela, Ecuador, and Chile. Topham Guerin and Estraterra did not immediately respond to a request for comment.

“For a long time our perception of propaganda and disinformation was that they come from governments,” said Sam Woolley, a professor focused on propaganda research at the University of Texas at Austin, “rather than considering the fact that they are part of a commercial enterprise.”

“What we’ve realised is that many of the firms that build online disinformation are based in democratic countries as well,” Mr Woolley said, adding that many use marketing jargon such as “reputation for hire” to disguise their activities.

“The level of sophistication has certainly increased,” said Oumou Ly, a fellow at Harvard’s Berkman Klein Center who studies disinformation. Techniques include buying up comment space, artificially linking keywords to search terms to boost visibility and “narrative laundering”, in which media is created to give existing stories more credibility.

Some 317,000 accounts and pages have been removed by Facebook and Twitter between January 2019 and November 2020, the research found. The OII said it had found private contractor-run disinformation campaigns targeting 25 countries in 2019, showing the scale of the increase.

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Detained US lawyer urges Hong Kong to look to Ireland for inspiration

The first expatriate to be arrested under Hong Kong’s new national security law has appealed to local democracy activists not to give up hope, comparing their movement with Ireland’s struggle for self-rule.

John Clancey, a 79-year-old American lawyer and former Roman Catholic priest, has become an unlikely potential source of tension between Washington and Beijing just as US president-elect Joe Biden prepares to take office.

He was arrested last week alongside 52 other activists in a crackdown that has sparked concerns China is deepening a purge of Hong Kong’s pro-democracy movement beyond prominent politicians to civil society groups, and more peripheral supporters of the cause.

“Look at Irish history . . . They were completely hopeless for so long, but eventually they got part of Ireland — they got a republic,” Mr Clancey told the Financial Times.

“In a difficult situation we shouldn’t just give up and have no hope for the future.”

Mr Clancey was still asleep when police arrived to detain him last Wednesday. After his arrest, police escorted Mr Clancey, a Hong Kong permanent resident, to his office to conduct a search. His firm, headed by veteran lawyer Albert Ho, is known for representing anti-government activists.

His arrest has stirred fears authorities will target lawyers in Hong Kong who represent opposition figures in political cases — a tactic common in mainland China.

Before moving to Asia, Mr Clancey helped with voter registration during the 1960s US civil rights movement, during which he said he became a fan of Martin Luther King.

He began working as a Catholic priest in Hong Kong in 1968 and eventually left the priesthood to marry in 1985. He retrained as a lawyer in his 50s after working with labour rights activists.

John Clancey was one of 53 activists detained in early morning raids last week © AP

The lawyer said the city had suffered similar periods of hopelessness about the prospects of democracy before, such as under British colonial rule. “During those dark days people were asking for democracy and it didn’t look hopeful at all,” he said. “Long-term, I’m still optimistic,” adding it was “good for China and Hong Kong”.

Mr Clancey’s arrest has been linked to his role as treasurer of Power for Democracy, a civil society group that was involved in a primary vote organised by Hong Kong’s opposition last year to determine which candidates would run in elections for the Legislative Council, the city’s de facto parliament. He was released after his arrest and has yet to be charged.

The city’s government subsequently postponed the election.

The government has accused those arrested last Wednesday of attempting to “subvert” Chinese state power by organising the runoff. Subversion is punishable with up to life in prison under the new security law.

Caught by surprise at the strength of pro-democracy protests in Hong Kong in 2019, Beijing has blamed foreigners for stirring up the demonstrations that often ended in violent clashes.

There are expatriate lawyers dotted throughout the city’s internationally respected legal system, which underpins its role as a financial hub.

The US consulate general has offered Mr Clancey assistance, a person familiar with the matter said.

Mr Clancey said, however, he did not expect any special treatment based on his citizenship but just his rights as a permanent resident under Hong Kong’s mini constitution, which includes a right to vote. He said he had no plans to flee the city.

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Japan’s NTT bets on battery storage and the green transformation

Japanese telecommunications group Nippon Telegraph and Telephone is about to drastically transform itself as the global trend of decarbonisation accelerates.

As part of its new strategy, NTT has tied up with the Iwate prefecture city of Miyako, whose energy networks were cut off in 2011 as a result of the devastating earthquake and tsunami. Learning from this bitter experience, the city now uses renewable energy sources to meet about 30 per cent of its electricity needs. It plans to raise the proportion to 100 per cent by 2050 through its tie-up with NTT.

NTT consumes 1 per cent of the electricity generated in Japan to run its huge telecom infrastructure. It now plans to use this infrastructure as part of its new businesses involving decarbonisation. For example, NTT is considering installing batteries at its 7,300 telecom service buildings across Japan so it can store electricity produced from local renewable energy sources such as sunlight and wind power. This offers a solution to the main weakness of renewables: their volatility and intermittency due to unstable weather conditions, causing difficulties in matching supply and demand.

Furthermore, if the more than 10,000 vehicles that NTT owns are replaced with electric vehicles, they can serve as back-up power sources for essential facilities such as hospitals during disasters.

“We will increase renewable energy on our own and play the role of adjusting supply and demand for energy in various parts of the country,” said Jun Sawada, president and chief executive of NTT.

Jointly with major Japanese trading house Mitsubishi Corp, NTT will also break into the business of virtual power plants, connecting distributed renewable energy through high tech. By fiscal 2030, NTT plans to be capable of providing renewable energy-based electricity on a scale comparable to a major electric power company, supplying businesses and local governments.

This article is from Nikkei Asia, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan.

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In addition to NTT, other big companies are flocking to the field of green transformation. Of the 225 companies whose stock prices are used to calculate the closely watched Nikkei Stock Average, at least 39 have implemented zero-emission targets. Together they account for some 20 per cent of the 225 companies’ combined market capitalisation.

The trend was triggered by Prime Minister Yoshihide Suga’s announcement soon after taking office last September that Japan would achieve net-zero carbon emissions by 2050.

The pledge was expected to bring opposition from manufacturers. Steelmakers, which produce a large chunk of Japan’s industrial carbon emissions, are close to the ruling Liberal Democratic Party and contribute large sums to LDP lawmakers’ political fundraising organisations.

But Mr Suga, among others, possibly calculated that the commitment will prompt structural changes in Japan’s industry and stimulate the economy while winning popular support.

His decision has pushed Japanese companies to join the bandwagon heading towards carbon neutrality. Around the world, the green transformation is already affecting the corporate values of businesses.

For example, major Danish electric power generator Orsted has already sold its domestic power and gas retail business in pursuit of becoming a company that earns its profit from renewable energy, especially offshore wind power.

In October 2020, Henrik Poulsen, then chief executive of Orsted, declared the completion of its conversion to a global renewable energy company.

Orsted used to generate electricity from fossil fuels. Mr Poulsen called it a typical company relying on “black energy” because it was responsible for one-third of Denmark’s greenhouse gas emissions.

Around 2009, Orsted began to push ahead with decarbonisation programmes under the slogan “from black to green” promoted by Mr Poulsen, who took the helm in 2012.

Although Mr Poulsen stepped down from the post at the end of 2020, Orsted is not changing its plan to spend DKr200bn ($33bn) on renewable energy over the seven years from 2019. The company aims to increase its generation capacity from renewable energy by more than 30m kilowatts and slash its carbon emissions by 98 per cent in 2025 from the 2006 level.

As investors have welcomed Orsted’s strategic change, its market capitalisation has increased roughly fivefold from 2016, when it went public, and topped that of BP, which used to be much larger.

In the US, the renewable energy company NextEra Energy temporarily surpassed ExxonMobil in market capitalisation.

The era has arrived when corporate growth strategies are greatly affected by investment aiming for zero carbon.

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A version of this article was first published by Nikkei Asia on January 5, 2021. ©2021 Nikkei Inc. All rights reserved.

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