Tag Archives: The European Union

U.S. and allies accuse China of global hacking spree

By Steve Holland and Doina Chiacu

WASHINGTON (Reuters) – The United States and its allies accused China on Monday of a global cyberespionage campaign, mustering an unusually broad coalition of countries to publicly call out Beijing for hacking.

The United States was joined by NATO, the European Union, Britain, Australia, Japan, New Zealand and Canada in condemning the spying, which U.S. Secretary of State Antony Blinken said posed “a major threat to our economic and national security.”

Simultaneously, the U.S. Department of Justice charged four Chinese nationals – three security officials and one contract hacker – with targeting dozens of companies, universities and government agencies in the United States and abroad.

The Chinese Embassy in Washington did not immediately respond to a request for comment. Chinese officials have previously said China is also a victim of hacking and opposes all forms of cyberattacks.

While a flurry of statements from Western powers represent a broad alliance, cyber experts said the lack of consequences for China beyond the U.S. indictment was conspicuous. Just a month ago, summit statements by G7 and NATO warned China and said it posed threats to the international order.

Adam Segal, a cybersecurity expert at the Council on Foreign Relations in New York, called Monday’s announcement a “successful effort to get friends and allies to attribute the action to Beijing, but not very useful without any concrete follow-up.”

Some of Monday’s statements even seemed to pull their punches. While Washington and its close allies such as the United Kingdom and Canada held the Chinese state directly responsible for the hacking, others were more circumspect.

NATO merely said that its members “acknowledge” the allegations being leveled against Beijing by the U.S., Canada, and the UK. The European Union said it was urging Chinese officials to rein in “malicious cyber activities undertaken from its territory” – a statement that left open the possibility that the Chinese government was itself innocent of directing the espionage.

The United States was much more specific, formally attributing intrusions such as the one that affected servers running Microsoft Exchange earlier this year to hackers affiliated with China’s Ministry of State Security. Microsoft had already blamed China.

U.S. officials said the scope and scale of hacking attributed to China has surprised them, along with China’s use of “criminal contract hackers.”

“The PRC’s Ministry of State Security (MSS) has fostered an ecosystem of criminal contract hackers who carry out both state-sponsored activities and cybercrime for their own financial gain,” Blinken said.

U.S. security and intelligence agencies outlined more than 50 techniques and procedures that “China state-sponsored actors” use against U.S. networks, a senior administration official said.

Washington in recent months has focused heavy attention on Russia in accusing Russian hackers of a string of ransomware attacks in the United States.

The senior administration official said U.S. concerns about Chinese cyber activities have been raised with senior Chinese officials. “We’re not ruling out further action to hold the PRC accountable,” the official said.

The United States and China have already been at loggerheads over trade, China’s military buildup, disputes about the South China Sea, a crackdown on democracy activists in Hong Kong and treatment of the Uyghurs in the Xinjiang region.

Blinken cited the Justice Department indictments as an example of how the United States will impose consequences.

The defendants and officials in the Hainan State Security Department, a regional state security office, tried to hide the Chinese government’s role in the information theft by using a front company, according to the indictment.

The campaign targeted trade secrets in industries including aviation, defense, education, government, health care, biopharmaceutical and maritime industries, the Justice Department said.

Victims were in Austria, Cambodia, Canada, Germany, Indonesia, Malaysia, Norway, Saudi Arabia, South Africa, Switzerland, the United Kingdom and the United States.

“These criminal charges once again highlight that China continues to use cyber-enabled attacks to steal what other countries make, in flagrant disregard of its bilateral and multilateral commitments,” Deputy U.S. Attorney General Lisa Monaco said in the statement.

(Reporting by Steve Holland, David Shepardson, Doina Chiacu and Lisa Lambert; Editing by Chizu Nomiyama and Grant McCool)

Global wheat supply to crisis levels; big China stocks won’t provide relief

FILE PHOTO: Arnaud Caron, a French farmer drives an old Mc Cormick F8-413 combine as he harvests his last field of wheat, in Vauvillers, northern France, July 23, 2018. REUTERS/Pascal Rossignol

By Nigel Hunt

LONDON (Reuters) – A scorching hot, dry summer has ended five years of plenty in many wheat producing countries and drawn down the reserves of major exporters to their lowest level since 2007/08, when low grain stocks contributed to food riots across Africa and Asia.

Although global stocks are expected to hit an all-time high of 273 million tonnes at the start of the 2018/19 grain marketing season, according to U.S. Department of Agriculture estimates, the problem is nearly half of it is in China, which is not likely to release any onto global markets.

Experts predict that by the end of the season, the eight major exporters will be left with 20 percent of world stocks – just 26 days of cover – down from one-third a decade ago.

The USDA estimates that China, which consumes 16 percent of the world’s wheat, will hold 46 percent of its stocks at the beginning of the season, which starts around now, and more than half by the end.

The 126.8 million tonnes China is estimated to hold is up 135 percent from 54 million five years earlier.

“People need to get rid of China stocks (in their calculations) … if you do that, it’s just exceptionally tight,” said Dan Basse, president of AgResource Co in Chicago.

A repeat of the 2007/2008 crisis, which forced many countries to limit or ban exports, is unlikely in the absence of other drivers at the time, including $150-per-barrel crude oil.

The recent three-year high for wheat prices of $5.93 a bushel on the Chicago Board of Trade pales in comparison to the high of $13.34-1/2 a bushel in February 2008.

Importers in North Africa also appear to be better placed this time, with higher stocks of their own.

“It could have an impact on food inflation but in North African countries they have a good crop this year, fortunately, so their reliance is not as big as in the past years,” said Abdolreza Abbassian, chief economist at the United Nations’ Food and Agriculture Organisation (FAO).

“I don’t think we want to be alarmist in terms of consequences,” he added.

China started stockpiling wheat in 2006, setting a guaranteed floor price to ensure food security and stability.

At around $9.75 a bushel as of last week, Chinese prices are now so high that they cannot sell internationally without incurring a major loss.

Rabobank analyst Charles Clack said he expected China to continue to build stocks into next year but in the long-term, it would look to reduce reserves by curbing domestic production, reducing imports or conducting internal auctions.

“It will be a slow process … I wouldn’t expect exports to come flying out anytime soon,” he said.

Government wheat reserves now total nearly 74 million tonnes, according to Shanghai JC Intelligence Co Ltd, most of it from 2014-2017 but a small amount as old as 2013.

Sylvia Shi, analyst at JC Intelligence, said China would continue to import wheat it cannot produce in sufficient volumes to help meet a growing appetite for high-protein varieties for products like bread and other baked products as diets become Westernised.

DROUGHT

The wheat crop in several of the world’s biggest exporters – Argentina, Australia, Canada, the European Union, Kazakhstan, Russia, Ukraine and the United States – has suffered this year.

A spring drought in the Black Sea bread baskets Russia and Ukraine was swiftly followed by a summer heatwave in the European Union. Dry weather now also threatens crops in another important exporter, Australia.

Evidence of the serious harm done has grown as harvesting progresses.

Forecasts for the 28-member European Union have repeatedly been cut, with Germany set for its lowest grain harvest in 24 years after crops wilted under the highest summer temperatures since records began in 1881.

Russia’s agriculture ministry held a meeting with grain traders on Friday to discuss export volumes.

The ministry denied export limits were discussed but traders, some of whom were at the meeting, said curbs might be imposed later in the season following complaints from domestic meat producers about the rising cost of animal feed.

The United States is best placed to capitalize on a shortfall in global supply, with much higher stocks than rival exporters and rising production.

The outlook provides a much-needed boost for U.S. farmers caught in the crossfire of a trade war with China, a huge importer of U.S. soybeans and corn, as well as Mexico and Japan, two of the top buyers of U.S. wheat.

“The winner in the long term is the U.S. as they should get some demand flow back to them. It has been several years since we have seen the U.S. be in a position to get demand,” said Matt Ammermann, a commodity risk manager with INTL FCStone.

The Black Sea and Europe look set to lose market share, Ammermann said.

Canada, one of the world’s biggest high-quality wheat exporters, is expected to enjoy bigger yields than last year, according to a recent crop tour. But patchy rains have left crops highly variable across the western provinces.

“We don’t have a bin-buster coming. I just don’t see how we can push exports too much higher,” said Paterson Grain trader Rhyl Doyle.

SOUTHERN RESPONSE

The two major wheat exporters in the southern hemisphere, Argentina and Australia, are still months away from harvest.

A record crop is forecast in Argentina but production in Australia is expected to fall to the lowest level in more than a decade due to drought across the east coast.

Francisco Abello, who manages 7,000 hectares of land in western and north-central Buenos Aires province, said he and other growers are out to take advantage of high prices by investing in fertilizers to increase yields.

“We are having a great start to the season,” Abello said. “The ground was moist at planting time. Then it was cold and dry, which are the best conditions for the early wheat growing season.”

The Buenos Aires Grains Exchange has a preliminary wheat harvest estimate of 19 million tonnes, above what it says is the current record of 17.75 million tonnes.

In Australia, the outlook is less rosy. Analysts said production could fall below 20 million tonnes for the first time since 2008, although it is still likely to be well in excess of that year’s crop of just 13 million tonnes.

“The west of the country is looking good so the largest producing region could produce a crop in excess of 9 million tonnes alone. That may keep the headline number up,” said Phin Ziebell, an agribusiness economist at the National Australia Bank. “But with dry weather reducing output on the east, it could reduce exports nationally.”

(Additional reporting by Julie Ingwersen in Chicago, Dominique Patton and Hallie Gu in Beijing, Rod Nickel in Winnipeg, Sybille de La Hamaide and Valerie Parent in Paris, Hugh Bronstein in Buenos Aires and Colin Packham in Sydney; Graphics by Amanda Cooper; Editing by Veronica Brown and Sonya Hepinstall)