Tech war: Pelosi meets TSMC chief in Taiwan as US ramps up chip pressure on China

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US House Speaker Nancy Pelosi waves to journalists during her arrival at the Parliament in Taipei on Wednesday. Photo: AFP

 US House Speaker Nancy Pelosi on Wednesday spoke with the chairman of Taiwan Semiconductor Manufacturing Co (TSMC), the world’s leading contract chip maker, during her visit to the island, to discuss an American legislative proposal, according to a report from Taiwanese news agency CNA.

The discussions between Pelosi and Mark Liu touched on the Chips and Science Act, which was approved by the US House of Representatives and Senate last week, Ker Chein-ming, chief commissioner of the ruling Democratic Progressive Party in Taiwan’s parliament, was quoted as saying.

The new US legislation is widely seen as Washington’s plan to weaken China’s role in global semiconductor supply chains.

 

US House Speaker Nancy Pelosi arrives in Taiwan as Beijing announces live-fire military drills

Pelosi’s appointment with TSMC executives did not appear on her official itinerary, which was packed with high-profile meetings with Taiwan officials, including President Tsai Ing-wen, legislature deputy speaker Tsai Chi-chang and Vice-President William Lai, among others.

TSMC declined to comment on the meeting, which was also reported by The Washington Post.

Pelosi’s decision to carve out time for a meeting with TSMC during her whirlwind tour shows the strategic importance of Taiwan – which Beijing claims as China’s territory – in providing advanced semiconductors that are crucial to both China and the US.

TSMC is currently building a 5-nanometre semiconductor factory in the US state of Arizona, which is set to be operational in 2024, although it is expected to produce chips that lag behind the ones it will be making in Taiwan at the time.

Pelosi’s high-profile visit comes as Washington has raised its efforts to curb the development of China’s chip industry, which has grown by relying on imported technologies.

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In addition to the chips act, which promises US$52 billion in subsidies to semiconductor firms building fabs on American soil, Washington has also been promoting the so-called Chip 4 Alliance – a partnership envisioned by the US to include South Korea, Japan and Taiwan – to exclude China.

US officials are also lobbying Dutch chip equipment giant ASML to stop selling more lithography systems to wafer fabs in China.

 

Taiwan Semiconductor Manufacturing Co’s chip fabrication plants in Taiwan. Photo: Handout

While scant details of the discussions between Pelosi and Liu have emerged, reports of the meeting itself have already stirred unease in mainland China.

Xiang Ligang, a Beijing-based analyst who had blamed TSMC for withholding its state-of-the-art technologies from the mainland, said the cross-strait chip industry will focus on competition rather than cooperation, as China is determined to improve its chip production capability.

“Taiwan is only using the resources, talent and markets [on the mainland] for the sake of its own development,” Xiang said, adding that if TSMC sides with the US, it would cast a shadow over the company’s future development on the mainland.

TSMC only builds chips with older technologies in mainland China because Taiwanese law mandates that Taiwanese foundries, such as TSMC, only build products that are at least two generations behind the most advanced technologies available in Taiwan.

China still relies on TSMC’s home base and South Korea’s Samsung Electronics to supply the most advanced chips used in smartphones, as mainland chip plants still lag Taiwanese and South Korean firms by “generations”.

While China’s top chip maker, Semiconductor Manufacturing International Corp, may have achieved the ability to make 7-nm chips, according to Canadian analytics firm TechInsight, the Shanghai-based company has neither confirmed nor denied the report.

The Semiconductor Manufacturing International Corp headquarters in Shanghai. Photo; Bloomberg

The leading-edge chip-making capabilities of TSMC, which Taiwanese people call “the sacred mountain of protection”, have long fanned speculation that Beijing would one day take the island by force.

TSMC’s Liu said in an interview with CNN this week that nobody can control the firm by force because any military operation or “invasion” would “render TSMC factories inoperable”. He also said that TSMC should not be discriminated against simply because it is “close to China”.

TSMC operates a 12-inch foundry in the eastern Chinese city of Nanjing to make chips on mature 16-nm and 28-nm processes. It also has a 8-inch wafer fab in Shanghai.

Pelosi wrapped up her Taiwan tour, which prompted strongly-worded warnings from Beijing, on Wednesday afternoon. She boarded a US Air Force aircraft, accompanied by five US congress members, for the fourth leg of her Asia tour – South Korea.

Before leaving the island, Pelosi tweeted, “Make no mistake: America remains unwavering in our commitment to the people of Taiwan – now & for decades to come.” 

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 Che Pan

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Che Pan joined the Post as a technology reporter in 2020, based in Beijing. Before this, he worked as a China economy reporter at Caixin Global, with a particular focus on the macro-economy, trade and real estate. He has a master degree in Financial Regulation and Risk Management. 

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 Notes:

My media friend from Taiwan said that the most important meeting in Pelosi’s schedule was not with the DPP authorities or President Tsai, but a meeting she specifically demanded with the CEO of TSMC, the leading manufacturer of the world’s most advanced semiconductors set up by Chiang Ching-Kuo and his technocrats, Sun Yun-Suan and Morris Chang, during the pinnacle of Taiwan's economic miracle in the 1980s. TSMC is the designer and manufacturer of the super awesome M2 chips powering our iPhones and Macbooks.

US Congress has passed bills forcing TSMC to set up chip fabs in Arizona and transfer their technology to the US, even though this is very much against the wishes of TSMC management. TSMC has repeatedly said that costs in the US are too high, and there are not enough quality engineers with the skills needed in the US. But the US Commerce Department and US Congress don’t care because they are run by lawyers who are only good at issuing sanctions and threatening other countries through legislation and the power of the US military.

In short, Pelosi and the US Congress do not give a damn about Taiwan's "democracy". They only care that TSMC’s fabs and engineering know-how are wholesale transferred to the US and don’t ever fall in China’s hands. This was the reason behind her demand to meet TSMC’s management while she was in Taiwan.

Poor Taiwan. It is getting stripped of its TSMC crown jewel and assets by the US even before it has died. 

 

    

 

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China Has Painted Itself Into a Semiconductor Corner

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Revenue for China's largest chipmaker SMIC up 41.6% y-o-y

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Why is it that the West is so preoccupied with demonizing China?

 

 As I See It by Professor Dennis Etler*

American political analyst who holds a doctorate in anthropology from the University of California, Berkeley

“Why is it that the West is so preoccupied with China? The usual answer is that China's economic growth is challenging Western global hegemony which has held sway for at least 250 years. The Chinese military has also reached parity with that of the West, so it is no longer subject to Western intimidation and bullying. All that is true and reason for the West to want to savage China and portray it as the root of all evil.*

But there is one other consideration that must be taken into account. It's not only China's economic prowess and military might that frightens the West, it is also China's success as a nation versus the West's failure.

Moreover, China has forged a society in which there is harmony between its different ethnicities in contrast to the systemic racism that characterizes Western society. 

Western ruling elites and their media mouthpieces do not want to acknowledge the fact that China has eliminated extreme poverty while more and more of their own people descend into poverty. They do not want to admit that China has constructed a 21st century infrastructure while they lag far behind. They do not want to confront the fact that the Chinese people ⁹overwhelmingly support their government while people in the West have lost confidence in their own, they do not want to accept that China beat COVIDC-19 while they haven't, and finally they are loathe to accept the fact that a non-white nation has out performed them and will continue to do so into the foreseeable future.

In order to deflect attention away from these truths the West has concocted a series of lies and slanders that allow them to deny reality. Instead of poverty alleviation the West imagines "genocide." Instead of the advances in HSR, EVs, alt-energy and e-commerce they focus on "IP theft," instead of a socioeconomic system that serves the people, they accuse China of forced labor and forced sterilizations. Instead of seeing China as defending its national sovereignty in the South China Sea, Hong Kong and Taiwan, it's called an aggressor. 

*All the China-bashing serves multiple purposes but ONE of the main reasons is to make sure that people in the West do not get to hear nor see what the real China is all about because if they did they may get ideas that the Western elites don't want then to have, such as socialism works for the betterment of the 99% while capitalism works primarily to enrich the 1%.” 

This is the best one, do send this to your overseas friends because it is from the eyes of an American. 

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 China sanctions US House Speaker Nancy Pelosi and her immediate family members following her Taiwan visit

 

Speaker of the US House of Representatives Nancy Pelosi Photo: VCG

Chinese Foreign Ministry announced Friday to sanction US House Speaker Nancy Pelosi and her immediate family members because she disregarded China's serious concern and firm opposition and insisted on visiting China's Taiwan region.

It seriously interferes in China's internal affairs, undermines China's sovereignty and territorial integrity, tramples on the one-China principle and threatens peace and stability in Taiwan Straits, Foreign Ministry Spokesperson said. 

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On Tuesday night, US House Speaker Nancy Pelosi sneakily landed in China's Taiwan island like a thief, detonating the mine she has thrown over the situation in the Taiwan Straits and China-US ties. China has repeatedly warned on how egregious the nature of the visit and how serious the consequences could be. But Pelosi turned a deaf ear, neither did Washington take effective measures to stop it, which triggered a new round of tension and severe challenges across the straits.

This time, the whole world has seen clearly who is changing the status quo in the Taiwan Straits, who provoked first, and who is undermining cross-Straits peace and stability. It is a great irony that these three points have been exactly US and Western public opinions' targets of attacks against China for some time. The Taiwan Democratic Progressive Party (DPP) authorities have taken the chance to make itself the "victim" and play the pity card. All of a sudden, the international public opinion concerning Taiwan was stirred into pandemonium.

But in the face of Pelosi's visit to Taiwan, US' rhetoric to call black white, its hegemonic mentality and gangster logic, as well as the essence of the DPP authorities' moves to "rely on US support for their independence agenda", are all exposed. US Secretary of State Antony Blinken's false countercharges could not even convince US allies and partners, nor could they explain US' behaviors. Former Australian prime minister Paul Keating, Singapore's Prime Minister Lee Hsien Loong and others have expressed concerns about a possible conflict broken out between China and the US, which is certainly not an endorsement of Pelosi's behavior. The DPP authorities, which normally have strong desire to put up a show, is unusually low-key this time before the visit, which tells how diffident it is.

Pelosi's stupid, reckless, dangerous provocative actions welded the entire responsibility for undermining peace and stability across the Taiwan Straits to the US and the DPP authorities. This is a new escalation of collusion between the US and the Taiwan island, a serious and destructive change to the status quo in the Taiwan Straits, and it is also betrayal of US' serious political commitment to China. In addition to violating the one-China principle and the Three Communiqués between China and the US, the visit also violates the United Nations Resolution 2758. Some politicians in the US use the so-called separation of powers as a guise to try to shirk responsibility. Their argument doesn't hold water at all.

Any independent sovereign country will never allow external interfering forces and internal separatist forces to jointly conspire to undermine its sovereignty, security and territorial integrity, let alone a big country like China. To defend China's core interests, any countermeasures taken by China are legitimate and necessary, and are exercising the rights that a sovereign country has. In fact, compared to the forms, the effect of the countermeasures is more important.

First of all, the great risk Pelosi created must backfire on herself. In other words, we should create the risk of Pelosi's Taiwan visit to significantly increase the cost of her political performance and enhance the price she has to pay. We should make people like Pelosi understand that Taiwan is not a place where they can visit at will. The route of the plane Pelosi took on Tuesday shows that the aircraft circled over the South China Sea in apparent fear of the PLA conducting live-fire exercises in the relevant waters. China's military deterrence actions have made Pelosi feel the danger.

Second, China's countermeasures will not be one-off but a combination of long-term, resolute and steadily advancing actions. Just as Pelosi was on her way to Taiwan, the PLA Air Force has sent its Su-35 fighter jets to cross the Taiwan Straits. PLA Eastern Theater Command will hold joint military operations around Taiwan island with joint maritime and air drills in north, southwest, southeast of island, long-range artillery shooting in Taiwan Straits, and conventional missile test firing in sea regions east of island starting Tuesday night. PLA will also conduct important military exercises and training activities including live-fire drills surrounding the island of Taiwan, from Thursday to Sunday.

From the de facto breaking of the "median line" of the Taiwan Straits, to PLA's regular patrols in Taiwan's southwest "airspace" and full circle flights around the island, to the clear emphasis that the Taiwan Straits are not international waters, every provocation by the US and Taiwan in recent years has been countered by the mainland's further strengthening of actual control over the Straits. This time won't be an exception.

Third, China's countermeasures fundamentally aim to promote the process of national reunification. The time and momentum to achieve the reunification of the motherland are always firmly in our own hands. No matter what form they take to support Taiwan and contain the mainland, forces like Pelosi cannot change the historical and legal fact that Taiwan belongs to China, nor can they hinder the trend of China realizing full reunification. It should be noted that every step external forces, such as the US, and the DPP authorities take to upgrade their collusion and provocations, the faster China will realize the full reunification.

Like a "political god of plague," Pelosi didn't do any good to the region except bringing risks and tensions to Taiwan. Some media in Taiwan have revealed that the DPP authorities had secretly withdrawn its invitation to Pelosi, but had to continue to arrange the reception under the censure of the US politician. This piece of news is quite intriguing, as it vividly demonstrates the DPP authorities' low and shady mentality and Pelosi's peremptory and selfish attitude toward Taiwan. It is a true microcosm of the relationship between the US and Taiwan. It is also a disgrace and sorrow, to which the reunification of the two sides of the Taiwan Straits will put a complete end.

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line" ceases to exist The PLA drills around Taiwan island are unprecedented: -conventional missiles are expected to fly over the island for the 1st time -PLA forces will enter area within 12 nautical miles to the island -"median

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China to speed up reunification process with comprehensive action as it ramps up military readiness against Pelosi’s Taiwan visit

 

US House Speaker Nancy Pelosi Photo: AFP

 

US House Speaker Nancy Pelosi is expected to arrive on the island of Taiwan on Tuesday night according to foreign media reports, with rising concerns and opposition over her trip within the island and increasing military activities by the Chinese mainland, the Taiwan authorities and the US military in the region. Analysts from both sides of the Taiwan Straits said this risky move will totally change the situation in the region, while the mainland will more actively dominate and speed up the reunification process with comprehensive measures including military and political actions, and these actions will let the US and the secessionist Democratic Progressive Party (DPP) authorities feel the pain.

There are many options on the table for China to speed up the reunification process. These could include striking Taiwan military targets, just as the PLA did in the previous Taiwan Straits crisis, pushing new legislation for national reunification, sending military aircraft and vessels to enter the island's "airspace" and "water areas" controlled by the Taiwan authorities and ending the tacit cease-fire with the Taiwan military.

Whether Pelosi can make her trip to Taiwan happen or not, there is no reason for China to be nervous, because such a political show will not change the overwhelming advantages, especially the military one, held by the mainland against the Taiwan authorities and the US in the region. Nor will the trip provide any possibility of "Taiwan independence," and it cannot change the unshakable hard fact that Taiwan is part of China, said experts, noting that what China needs to do is to use this incident to maximize its advantage and keep pushing the reunification process.

Hua Chunying, a spokesperson of the Ministry of Foreign Affairs, said at a routine press conference on Tuesday that "it was the US who takes the provocative action first and has caused the escalation of Taiwan Straits tension. The US should and must take full responsibility for this."

Military preparations

Both of aircraft carriers of the PLA Navy have reportedly moved out from their homeports respectively amid Pelosi's possible visit to the island of Taiwan, which media reported could happen on Tuesday evening.

The aircraft carrier Liaoning on Sunday embarked on a voyage from its homeport in Qingdao, East China's Shandong Province, and the aircraft carrier Shandong on Monday set out from its homeport in Sanya, South China's Hainan Province, accompanied by a Type 075 amphibious assault ship, media on the island of Taiwan reported on Tuesday.

Foreign commercial satellite imageries obtained by the Global Times on Tuesday also show that the aircraft carrier Liaoning was not in its homeport on Sunday, a Type 075 amphibious assault ship was sailing in the South China Sea on Sunday, and the aircraft carrier Shandong was sailing in the South China Sea on Monday.

Some analysts said that as Pelosi's aircraft may enter Taiwan's self-claimed "air defense identification zone" along the east coast of Taiwan after departing Malaysia, the Chinese mainland vessels appeared earlier to get into position and are closely monitoring Pelosi's route.

A military expert who asked for anonymity told the Global Times that with the participation of the aircraft carriers, the PLA could conduct more effective intercept operations, because it will take longer for fighter jets to be launched from airports in the mainland to arrive in the areas to the east or south of Taiwan island, while the shipboard aircraft will be more flexible as long as the fleets have arrived in the relevant region.

Citing an anonymous source, Reuters reported on Tuesday that several PLA aircraft flew close to the "median line" of the Taiwan Straits on Tuesday morning, and Taiwan-based outlets said two Chinese mainland guided-missile frigates and a survey ship sailed from north to south through Yonaguni Island waters, heading east of Taiwan island.

As of Tuesday noon, flights at airports in several cities in Fujian Province, including Xiamen, Fuzhou and Quanzhou, have been partially canceled, according to Xiamen Airlines, citing air traffic control.

US military forces are also taking actions. Four US warships, including an aircraft carrier, were positioned in waters east of the island on "routine" deployments, Reuters reported on Tuesday.

Aircraft carrier the USS Ronald Reagan (CVN-76) and big deck amphibious ship USS Tripoli (LHA-7), with Marine F-35B Lighting II Joint Strike Fighters embarked, are operating in the vicinity of Taiwan, on the edge of the South China Sea, according to the August 1 edition of the USNI News Fleet and Marine Tracker.

A Pentagon spokesperson told USNI News on Monday that the ships were operating normally in the region and would not detail force protection measures for the visit of the third-highest ranking US official to the region.

Concerns within the island

But there is still a possibility that Pelosi could eventually land on the island due to complicated reasons, as Taiwan media also reported that due to security concerns, the DPP authorities once withdrew the "invitation" to Pelosi, but due to Pelosi's pressure, the authorities eventually compromised and make arrangement for her trip.

Many Taiwan web users complained how Pelosi could be so arrogant and bossy, to force Taiwan to play in a show with her. "After the show you will go back to the US, but what about the mess you leave here in Taiwan?" said a web user.

Hung Hsiu-chu, former chairwoman of the KMT, the major opposition party within the island, said there are two different views on Pelosi's trip to Taiwan - one group do not want Pelosi to come and do not know why she would come as this could only add conflicts for the Chinese mainland, the US and Taiwan. Another group think that if Pelosi wants to support Taiwan secessionism, she could let the House pass an act to recognize "Taiwan independence," so why would she come to the island to create such a big mess?

Some also consider that the US is tolerating Pelosi's risky move to test the bottom-line set by the Chinese mainland, Hung said, noting that "God bless, hopefully nothing bad will happen."

Taiwan Taoyuan International Airport received a threatening letter on Tuesday morning which claimed that "three explosive devices have been placed at the airport to stop the US House Speaker's visit to Taiwan," media reported. The New Party, a pro-reunification political party in the island, and some civil society groups plan to protest at the Grand Hyatt Hotel in Taipei where it is believed Pelosi will stay if she visits the island, according to media reports.

The DPP authorities and the many senior politicians are keeping silent without any high-profile preparation for welcoming Pelosi, as analysts said this reflects the high concerns within the island. Pelosi's visit is creating great troubles but due to the weak position of the DPP authorities in front of the US, the island must cooperate and has no room to make independent decisions.

What the mainland can do

Chinese analysts said the struggle between China and the US at this point is about dignity and concrete strategic interests, but the latter is much more important, so China will not merely focus on playing a game of chicken and hawk with Pelosi, as changing the whole situation of the region is much more significant and valuable.

The Chinese mainland really knows the importance of "strategic patience," just like when many people expected that China would crack down on the Hong Kong turmoil in 2019 with force when rioters attacked the central government's liaison office, but the facts prove that China did not act in that way but eventually realized a land-slide victory to reinforce its governance in Hong Kong. "So this time, China will teach the US a lesson again, as it will use US mistakes to comprehensively change the Taiwan Straits situation, just as it did in Hong Kong in recent years," said a Beijing-based senior expert on international relations who asked for anonymity.

Wang Jiangyu, a professor of law at the City University in Hong Kong, said China will use this incident to strengthen its sovereignty claim over Taiwan. "For instance, sending squadrons of military aircraft to enter the 'airspace' of Taiwan, or sending military vessels to enter the 'water areas' controlled by the Taiwan military," he said.

These are unprecedented acts of declaring sovereignty over Taiwan, and if China can send its signal of determination to effectively contain the provocations made by the US and other Western countries, the situation will be in favor of the Chinese side in the future, Wang said.

Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, told the Global Times on Tuesday that China's reaction will not just a momentary action but will consider the whole security mechanism of Taiwan.

"The Chinese mainland could exercise its sovereignty and rights of control over the airspace on the island and adjacent sea areas around the island, to make sure there will be no another case like 'Pelosi's visit' that could happen again, and to better safeguard national sovereignty," he said.

Song Zhongping, a Chinese military expert and TV commentator, said based on the experience of the previous Taiwan Straits crisis, the PLA will strike Taiwan military targets but will not directly fire at US targets, so it is possible that the PLA will strike some Taiwan military targets this time as well, and the mainland could also consider speeding up legislation for a national reunification law and even publish a timetable for reunification which will impose real pressure on the US and Taiwan authorities. 

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Scammers getting smarter now and so should we

 

 

Scammers keep getting bolder and bolder with their extortion methods. From impersonating landlords to illegal debt collection tactics, there is no shortage of ways scammers will try to separate you from your money. Be aware of these five red flags when getting on the phone, checking your email, or using social media. This can help you avoid getting trapped in a conversation with a scammer in the first place.

 

Whether it’s through email, text, phone calls or direct messages, scams seem to be everywhere on the internet. Not all scams are obvious and many specifically target small business owners. Learn how to recognize a scam, protect your business and know what to do if you become a victim of a scam.

Being forearmed with knowledge is key to not falling prey to well-trained scammers

 Arm yourself with knowledge to identify a swindler

RIGHT before my eyes, I witnessed my friend falling for a classic Macau scam over the phone.

The call from a “government official” had him hooked. Frantically, I gestured to my friend to end the call but he was like a man possessed.

Someone on the other end of the line, claiming to be a government official, informed my worried friend that he had been implicated in a crime of sorts and the only way to escape the consequences was to transfer his money into a “safe account”.

After 45 minutes on the phone, he sent RM5,000 to one such bank account, and this happened on his pay day!

Recalling the incident, my friend said the caller was so convincing and believable that it was hard to cut the line.

This incident came to mind when the long arm of the law finally caught up with Tedy Teow, the founder of MBI (Mobility Beyond Imagination) well-known for its superlative money-making scheme.

He was detained in Thailand about a week ago and is believed to be wanted for questioning over several money-laundering cases in a few countries.

From what I could tell, the news failed to generate much interest on the ground, especially in Penang where the scheme used to have a large number of followers.

It could be that many of his victims were resigned to the fact that their money was as good as gone, even though Teow got arrested.

I have many acquaintances who put money into MBI. A few earned some returns. Most did not.

Now, it is “successful” Macau scams that are dominating the chatter in coffeeshops, offices, watering holes and messaging groups.

Indeed, teachers, engineers, doctors and even a politician were among the prized scalps of these so-called officers from banks or government and law enforcement agencies.

In May, a businessman from Port Dickson with a net worth of over Rm100mil lost a record Rm21mil in one such scam after he allegedly revealed his bank Transaction Authorisation Code (TAC) numbers to a “bank official”.

A sizeable number of scam victims were retirees who lost their hard-earned savings.

As pointed out in one news report, these scammers actually go through a month-long boot camp conducted by professional trainers before they are sent out for con jobs.

Psychology, negotiation skills, the art of persuasion, they learn it all.

They go through gauntlets of role-playing, with one being the “victim” and the other the scam caller, all under the watchful eyes of the trainers.

It has become challenging these days for lawmen to outfox the syndicates which have members even sitting for exams before being certified competent enough to man scam call centres.

And now we hear of increasing cases of dubious bank transfers: money being unknowingly transferred out of savings and fixed deposit accounts after victims were said to have downloaded phone apps.

Protect yourself by not downloading apps from dubious sites!

Then there are the online lovers to whom the lonely give their money even though they have never met face to face.

For those not in the know, this actually happens gradually.

First, the amounts asked for are small. These are quickly returned with a small but appreciable profit. Only after trust is established will the scammer ask for the big amounts.

The situation has never been more urgent as there are still victims who fall prey to such tactics almost on a daily basis.

If you get a call from a scammer, stay calm and rightfully hesitate when asked to reveal your personal banking and user login details.

In the course of a true fraud investigation, government and law enforcement agencies will not transfer calls among themselves. Bank Negara will not transfer your calls to Bukit Aman and vice versa, and never call back the number that was given.

Remember, the police will never threaten to arrest you over the phone; they prefer to do it face to face.

And if it’s a pre-recorded message, just hang up.

Most importantly, if you are a law-abiding citizen who has done nothing wrong, there is indeed nothing to fear. 

By TAN SIN CHOW

sctan@star.com.my

              

 

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Punishing persecution: US Trafficking in Persons (TIP) report released 2022

 

There is a need for a rational or more balanced TIP measurement for Malaysia.

MANY Malaysians are, by now, aware that Malaysia sits on Tier 3 of the US State Department’s recently released 2021 Trafficking in Persons report.

This is the second year running that we’ve been placed in the bottom rank and it’s hard to accept or even fathom.

Tier 3 countries are those which don’t adhere to the minimum standards and fail to make significant efforts to comply.

Unbelievable as it may sound, Malaysia has been dumped together with the likes of Afghanistan, Myanmar, Iran, North Korea and Eritrea, among others.

And Curacao, which only a search on the Internet revealed its location and informed me is a Dutch Caribbean Island.

Naturally, Russia and China – the two enemies of the United States – grace Tier 3, too. No prizes for anticipating those rankings. StarPicks Looking for stability and growing earning capacity in a post-pandemic world

While Malaysia isn’t exactly the paragon of labour laws, especially for migrant workers, we really shouldn’t accept this report as the gospel truth.

Unfortunately, there’s not much we can do because this is a report from the very powerful US of A, but we should oppose it, nevertheless, even if the government’s silence is hardly exemplary.

The TIP report may have irked us but we have little choice except to face the implications of it.

After all, the US is a big trading partner at No 17 spot with bilateral trade in goods at US$71.4bil (RM317.8bil) in 2021.

China has been Malaysia’s No 1 trading partner for the last 13 consecutive years hitting US$176.8bil (RM786.8bil) in 2021.

The impact of this report is serious because any form of bans or seizure of our palm oil and rubber gloves, due to allegations of forced labour, would cost us millions and a dented reputation.

The 634-page report even has a section on the powers of the US president, which allows him to penalise errant countries if he deems necessary, and his jurisdiction covers a wide area.

Most of us would also not take the trouble to find the link to the lengthy report and read the contents in its entirety, including politicians and journalists who have freely offered their opinions.

It’s hard to comprehend, especially when, with due respect, the Philippines is in Tier 1. In Tier 2, the notable countries include Benin, Bangladesh, Burundi, Congo, Guatemala, Ecuador, Gambia, Liberia, Mozambique, Niger, Sierra Leone, Guatemala, Cote D’Ivore (Ivory Coast), Nigeria, Rwanda and Lesotho.

Tier 2 countries are those whose governments do not fully comply with the US Victims of Trafficking and Violence Protection Act’s minimum standards but are making significant efforts to bring themselves into compliance. The

Tier 2 watch list includes Burkina Faso, Cameroon, Chad, Comoros, Djibouti, El Salvador, Ethiopia, Gabon, Eswatini (ex-Swaziland), Mali, Guinea and more.

And Malaysia is in Tier 3 – far away from some of these countries, where human lives mean nothing. Something’s wrong here.

So, how does the US define violations of human trafficking? They include forced labour, prostitution, imposition of debts, restrictions of movement, contract violation, wage fraud, assault, passport retention and threats of deportation.

At page 364, the report says, “the government of Malaysia does not fully meet the minimum standards for the elimination of trafficking and is not making significant efforts to do so, even considering the impact of the Covid-19 pandemic on its anti-trafficking capacity; therefore, Malaysia remained on Tier 3.”

But it concedes that “the government took some steps to address trafficking. The government amended its anti-trafficking law and Employment Act to include more expansive definition of forced labour, convicted more traffickers than the previous reporting period; issued more freedom of movement passes for identified victims in government-funded shelters, increased the number of interpreters and victim assistance specialists (VAS) to assist victim through judicial process, and adopted a five-year national action plan.”

The sectors mentioned involved trafficking victims such as household workers, and those in palm oil and rubber manufacturing sectors.

The TIP report hardly had the good grace to use the word “allegedly” in many instances in the report. Instead, it expects everything to be taken as fact without evidential backing.

It harps a lot on employers holding the passports of workers. However, most Malaysian employers have long known that workers who run away are barely perturbed about losing these documents.

The impression given is that their embassies issue replacements with minimum fuss.

Employers have suffered huge losses signing contracts to recruit foreign workers – only to see them run away to another employer for higher wages.

Certainly, our weaknesses need to be addressed. Many may be mere allegations and even cultural differences in the American interpretations and definitions, but there are many areas in which we need to improve.

Fine-tuning the law and going after corrupt officials are surely matters of concern.

Malaysian employers have expressed disappointment that the revisions of the Malaysian Sustainable Palm Oil (MPSO) certification scheme for palm oil plantations to improve workers’ rights, had not been acknowledged in the TIP report.

The MPSO revisions included clear emphasis on worker rights. But why did the TIP report ignore these changes, invariably raising suspicion to whether there was a predetermined conclusion for the report on Malaysia?

“The report is also clear that it does not take responses by non-governmental and commercial sectors into account. In other words, it is supposed to be a critique of government policies.

“There is a problem with this approach; sectors that are doing the right thing – and even attempting to remedy the situation – are nonetheless penalised for their actions,” reads the rebuttal from Malaysian Palm Oil Labor Facts.

It said the report “appears to be authored by the Fair Labor Association – an NGO that many of Malaysia’s plantation companies have engaged with directly to improve labour rights situation in Malaysia” and “in fact, the highlights that one of the recommendations that the TIP report made to Malaysia was greater engagement with NGOs – something the industry was already doing.”

It pointed out that in one entry in the TIP report, it used “the same quote for three years running,” so, “does this mean the TIP report has just become something of a box-ticking exercise?”

The TIP report is admittedly useful, but the US also needs to acknowledge that many steps have been taken to improve human and labour rights, especially in the palm oil sector.

Malaysia also recently formally ratified the International Labour Organisation forced labour convention, known as Protocol 29, to commit Malaysia’s efforts to eliminate forced labour.

Last year, Malaysia even signed up with Alliance 8.7, a global partnership to accelerate efforts to eradicate force labour, modern slavery and child labour around the world.

Malaysia depends on oil, gas and palm oil, which have become the life savers of this country, and these commodities have helped improve the lives of many Malaysians, especially for those from the rural areas.

The Gross Domestic Product from the palm oil industry, according to 2020 figures, was estimated at RM36.87bil.

More than 650,000 smallholders and over a million people rely on the palm oil industry as their source of income.

Malaysia is also a net exporter of crude petroleum as it exported over RM53bil worth of petroleum in 2020.

But palm oil producers seem to have a harder time with continuously bad press and unfair tactics applied by European countries.

Basically, this is just a bitter fight between palm oil, sunflower oil and soybean, of which the US is the world’s leading producer.

Deforestation and its impact on animals have always been emotive issues used effectively against the palm oil industry – of which Malaysia and Indonesia make up the bulk of.

In the peninsula, oil palm planted area in 2021 covered around 5.74 million hectare (45.5%), Sabah (26.6 %) and Sarawak (28%).

Although Johor covers about 699,217ha, it is much lower than Pahang at 755,906ha, but the former has found itself in the spotlight recently. Palm oil is not even Johor’s main revenue source.

No one has, however, reported that elephant paths have been set up in Johor plantations to ensure these animals have access to food, since planters are aware that if their homes are affected, their plantations, too, would be compromised.

Two recent issues – the claims by the Sulu heirs on Sabah and the TIP reports – have certainly affected Malaysia. Instead of jumping on the naysayer bandwagon, which seems fashionable to some of us, it’s time Malaysians rally to defend our country. 

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Wong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 35 years in various capacities and roles. He is now group editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer. On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

• https://twitter.com/chunwai09
• http://www.wongchunwai.com/

 

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