A weekly digest of the latest news and research related to the work of the Technology, Economics, and Governance Working Group. Topics covered in the digest include cybersecurity, domestic regulation, innovation, international competition, social media disinformation, and the California exodus.
This week’s roundup features coverage of the Chinese economy’s response to Western sanctions against Russia and dampened exports resulting from COVID lockdowns and decreasing US demand. Additionally, Alvaro Bedoya is confirmed to join the FTC, a bill to establish a new Big Tech watchdog is introduced in the Senate, RAND and Brookings publish analyses of incorporation of AI tools in military operations, a ransomware attack devastates Costa Rica, the US and Ukraine collaborate on cybersecurity, California raises the minimum wage in response to inflation, and Reuters uncovers evidence that US police instructors have ties to white supremacist groups.
Industrial Policy, International Competition, and Cooperation
Chinese Tech Giants Quietly Retreat From Doing Business With Russia | The Wall Street Journal
US sanctions have successfully driven several large Chinese tech firms to distance themselves from Russia, despite Beijing’s opposition to Western pressures to weaken business ties with Moscow. Chinese tech exports to Russia declined sharply in recent months due to wide-reaching sanctions imposed by the United States and its allies intended to weaken the Russian military’s access to high-tech goods. Major firms that have cut shipments to Russia include Lenovo Group and Xiaomi Corp. In contrast to their American and European counterparts, few Chinese firms have made public statements about Russia’s invasion of Ukraine. Notably, DJI announced that it would suspend sales in Russia and Ukraine and declared blanket opposition to the use of their products in combat to cause harm.
China’s extraordinary export boom comes to an end | The Economist
After last year’s boom, strict COVID lockdowns in Shanghai have slowed China’s export growth. In April, Beijing’s exports only rose by 3.9% compared to 2021 as many manufacturing facilities found themselves limited by supply chain disruptions caused by COVID outbreaks. Fears that the situation in Beijing will worsen inflationary pressures in the United States are mostly unfounded, as the underlying causes of recent inflation are largely domestic. However, weakening US demand for Chinese goods as America’s economy slows down is likely playing a significant role in Beijing’s faltering growth rates.
On Wednesday, Vice President Harris cast a tie-breaking vote in the Senate to confirm Alvaro Bedoya as a member of the Federal Trade Commission, restoring a Democratic majority at a critical time for Big Tech regulation. Majority Leader Chuck Schumer framed Bedoya’s appointment as a move crucial for advancing consumer protections and antitrust regulation, while Minority Leader Mitch McConnell opposed Bedoya’s confirmation, pointing to his social media history and criticism of Trump administration policies. Bedoya is expected to focus on updating privacy rulemaking under the direction of FTC Chair Lina Khan.
Senator Michael Bennet introduced a bill on Thursday that would create the Federal Digital Platform Commission, a new watchdog responsible for enforcing and implementing regulations directed at the nation’s largest tech firms. The Commission would include five leading members. Bennet believes transferring Big Tech oversight from the resource constrained Federal Trade Commission and Department of Justice to a specialized organization is needed to best protect public interests.
Exploring the Civil-Military Divide over Artificial Intelligence | RAND Corporation
Although many defense experts anticipate that AI capabilities will determine future US military outcomes, the vast majority of investment in AI technologies comes from the private sector. To better understand civilian attitudes toward AI integration in the military, RAND researchers surveyed hundreds of workers from top Silicon Valley tech firms, alumni of top-ranking computer science schools, and software engineers working for defense contractors. The results indicate a willingness among all sampled populations to support a wide range of military applications for AI; although, Silicon Valley employees were generally less comfortable with AI-enabled lethal force. The researchers encourage expanded collaboration between Silicon Valley and DoD, particularly in the cyber realm where common interests are the strongest.
In 2003, two Royal Air Force personnel lost their lives when American soldiers fired a Patriot interceptor missile at their British jet, which had been erroneously identified as an Iraqi missile by an automated targeting system. Today, the AI renaissance and the push for more powerful automated decision-making have amplified the risks of similar tragedies occurring on a far larger scale. Some experts have advocated for a doctrine that ensures systems always prioritize accuracy over speed. The military would accept greater risk tolerance for autonomous systems and place them in harm’s way before human operators. To address these types of risks as AI becomes more commonplace on the battlefield, the DoD released ethical principles for AI in 2020 and initiated work with multiple vendors to develop AI testing and explainability tools.
Costa Rica declared a state of emergency on Wednesday after a wave of ransomware attacks exposed citizens’ personal data and interrupted the country’s tax collection. Conti, a ransomware group aligned with Russia, was responsible for the attack. The US Department of State has offered a $10 million reward for information leading to the identification of the Conti hackers.
U.S. Support for Connectivity and Cybersecurity in Ukraine | U.S. Department of State
The Office of the Spokesperson for the US Department of State released a fact sheet this week detailing American support for Ukrainian cybersecurity. The report explains how members of the FBI have shared intelligence with Ukrainian partners on Russian cyber intelligence operations. In turn, Ukrainian officials have offered their own threat intelligence on Russian operations to the FBI. Other initiatives include a USAID program that assists essential service providers within Ukraine and an extended defense collaboration effort between US Cyber Command and its Ukrainian counterparts.
State & Local
California’s minimum wage will rise to $15.50, triggered by soaring inflation | Los Angeles Times
Inflationary pressures have triggered a provision in California state law to raise the minimum wage by fifty cents to $15.50 an hour. This marks the first time in the law’s six-year history that inflation has provoked a wage increase. Proponents of a higher minimum wage believe that this adjustment will help working class families weather increasing costs of goods. Critics say that small wage increases would do little to solve the underlying issues and hurt struggling business owners. The change will go into effect in January of next year.
Freedom of Speech, Domestic Democracy, and Extremism
A recent Reuters investigation uncovered evidence that many US police instructors employed the use of racist teaching materials and had ties to white supremacist hate groups such as the Proud Boys. Journalists also found that dozens of current and retired law enforcement trainers were registered as members of the Oath Keepers, a violent anti-government group that participated in the January 6th insurrection. These findings convey an urgent need for police departments to implement policies explicitly prohibiting employees from participating in extremist organizations.