Boot up: Samsung + Google, Google - MMI, China OS woes, and more

The launch of the Moto X will be the culmination of two years' work following Google's purchase of Motorola in 2011. Now Google has sold it.

A burst of 7 links for you to chew over, as picked by the Technology team

Heavy users of streaming video love Roku, which makes puck-size boxes used to view Internet-streamed video on television sets. Since it began piping Netflix from broadband connections into viewers' living rooms in 2008, Roku has become the favorite device among 37% of U.S. households with streaming players, compared with 24% for Apple TV, according to researcher Park Associates. On Sept. 25, Roku released new versions of its devices, making minor improvements to its cheaper models and adding content from M-Go, a video rental and purchase service owned by MediaNaviCo.

With hundreds of channel-like apps, the company already has much more content than Apple TV, although the absence of iTunes and YouTube are big gaps. Despite its early-mover advantage and coterie of hard-core users, Roku is struggling to expand beyond its niche and has been forced to find other sources of revenue besides hardware sales.

Chromecast is in the picture too, though the other 39% of so of streaming is more likely PlayStations and Xboxes.

Naoki Hiroshima says that PayPal gave out credit card data about him to a faked call (PayPal denies this) and was extorted, at the risk of losing his websites, into handing over control of @N on Twitter. Twitter said it was "investigating"; the account went from being out of use to "gone" overnight. Watch this space..

Developers!

Under attack by patent troll Lodsys? Help us with important research.

The App Developers Alliance is working to fight patent trolls like Lodsys. Will you help us by completing this survey?

Terrific reporting by Liz Gannes:

This week, Samsung and Google announced a wide-ranging deal to cross-license patents that cover mobile devices and other undisclosed categories. But there's more.

Although the exact details of those meetings could not yet be learned, sources familiar with the discussions say not only will Samsung consider dumping or altering the Magazine UX interface in future devices, but, more importantly, new Samsung devices will spotlight Google's suite of apps to get movies, music and other content at the expense of its in-house-developed software, which was once a proud showcase of Samsung's evolution as a mobile industry leader.

It's unclear what concessions Google may have made on its part. The company could have, for example, agreed to work with Samsung on a Nexus device or offered other cooperation.

Her piece appeared hours before Google announced it was selling the Motorola handset division (but not its patents) to Lenovo.

From August 2011, after Google said it would buy Motorola Mobility for $12.5bn, Motorola published an SEC filing with the "background to the merger":

In early July 2011, Andrew Rubin, Senior Vice President of Mobile at Google, contacted Dr. Jha, Chairman and Chief Executive Officer of Motorola Mobility, to request a meeting to discuss the purchase by some of Google's competitors of the patent portfolio of Nortel Networks Corporation and its subsidiaries (which we refer to in this proxy statement as "Nortel") in an auction conducted by Nortel in June 2011, and the possible impact of and potential responses to the purchase.

Buying Motorola was never about the hardware.

As China believes it can manufacture a global pop star to challenge the likes of Rihanna and Beyonce, it should come as no surprise that it has also developed a device operating system that, it hopes, can challenge Android and iOS.

But the release of the government-backed COS (China Operating System) hasn't exactly gone to plan.

The cross-platform OS has come in for such a public mauling that the state press has had to come to its defence.

Newspapers and social media have queried the similarities between COS and an implementation of Android by HTC, as well as the number of apps available and the level of government support.

Official Communist Party mouthpiece, People's Daily, has published a Q&A article answering what it called "seven major suspicions" concerning the COS.

Ari Juels, an independent researcher who was previously chief scientist at computer security company RSA, thinks something important is missing from the cryptography protecting our sensitive data: trickery.

"Decoys and deception are really underexploited tools in fundamental computer security," Juels says. Together with Thomas Ristenpart of the University of Wisconsin, he has developed a new encryption system with a devious streak. It gives encrypted data an additional layer of protection by serving up fake data in response to every incorrect guess of the password or encryption key.

Wouldn't it be smart to fill stores' credit card databases with fake entries too? That would cause real problems if they were stolen. (Problem is how you avoid using them for marketing.)

You can follow Guardian Technology's linkbucket on Pinboard

To suggest a link, either add it below or tag it with @gdntech on the free Delicious service.

View the original article here

Boot up: Samsung + Google, Google - MMI, China OS woes, and more

The launch of the Moto X will be the culmination of two years' work following Google's purchase of Motorola in 2011. Now Google has sold it.

A burst of 7 links for you to chew over, as picked by the Technology team

Heavy users of streaming video love Roku, which makes puck-size boxes used to view Internet-streamed video on television sets. Since it began piping Netflix from broadband connections into viewers' living rooms in 2008, Roku has become the favorite device among 37% of U.S. households with streaming players, compared with 24% for Apple TV, according to researcher Park Associates. On Sept. 25, Roku released new versions of its devices, making minor improvements to its cheaper models and adding content from M-Go, a video rental and purchase service owned by MediaNaviCo.

With hundreds of channel-like apps, the company already has much more content than Apple TV, although the absence of iTunes and YouTube are big gaps. Despite its early-mover advantage and coterie of hard-core users, Roku is struggling to expand beyond its niche and has been forced to find other sources of revenue besides hardware sales.

Chromecast is in the picture too, though the other 39% of so of streaming is more likely PlayStations and Xboxes.

Naoki Hiroshima says that PayPal gave out credit card data about him to a faked call (PayPal denies this) and was extorted, at the risk of losing his websites, into handing over control of @N on Twitter. Twitter said it was "investigating"; the account went from being out of use to "gone" overnight. Watch this space..

Developers!

Under attack by patent troll Lodsys? Help us with important research.

The App Developers Alliance is working to fight patent trolls like Lodsys. Will you help us by completing this survey?

Terrific reporting by Liz Gannes:

This week, Samsung and Google announced a wide-ranging deal to cross-license patents that cover mobile devices and other undisclosed categories. But there's more.

Although the exact details of those meetings could not yet be learned, sources familiar with the discussions say not only will Samsung consider dumping or altering the Magazine UX interface in future devices, but, more importantly, new Samsung devices will spotlight Google's suite of apps to get movies, music and other content at the expense of its in-house-developed software, which was once a proud showcase of Samsung's evolution as a mobile industry leader.

It's unclear what concessions Google may have made on its part. The company could have, for example, agreed to work with Samsung on a Nexus device or offered other cooperation.

Her piece appeared hours before Google announced it was selling the Motorola handset division (but not its patents) to Lenovo.

From August 2011, after Google said it would buy Motorola Mobility for $12.5bn, Motorola published an SEC filing with the "background to the merger":

In early July 2011, Andrew Rubin, Senior Vice President of Mobile at Google, contacted Dr. Jha, Chairman and Chief Executive Officer of Motorola Mobility, to request a meeting to discuss the purchase by some of Google's competitors of the patent portfolio of Nortel Networks Corporation and its subsidiaries (which we refer to in this proxy statement as "Nortel") in an auction conducted by Nortel in June 2011, and the possible impact of and potential responses to the purchase.

Buying Motorola was never about the hardware.

As China believes it can manufacture a global pop star to challenge the likes of Rihanna and Beyonce, it should come as no surprise that it has also developed a device operating system that, it hopes, can challenge Android and iOS.

But the release of the government-backed COS (China Operating System) hasn't exactly gone to plan.

The cross-platform OS has come in for such a public mauling that the state press has had to come to its defence.

Newspapers and social media have queried the similarities between COS and an implementation of Android by HTC, as well as the number of apps available and the level of government support.

Official Communist Party mouthpiece, People's Daily, has published a Q&A article answering what it called "seven major suspicions" concerning the COS.

Ari Juels, an independent researcher who was previously chief scientist at computer security company RSA, thinks something important is missing from the cryptography protecting our sensitive data: trickery.

"Decoys and deception are really underexploited tools in fundamental computer security," Juels says. Together with Thomas Ristenpart of the University of Wisconsin, he has developed a new encryption system with a devious streak. It gives encrypted data an additional layer of protection by serving up fake data in response to every incorrect guess of the password or encryption key.

Wouldn't it be smart to fill stores' credit card databases with fake entries too? That would cause real problems if they were stolen. (Problem is how you avoid using them for marketing.)

You can follow Guardian Technology's linkbucket on Pinboard

To suggest a link, either add it below or tag it with @gdntech on the free Delicious service.

View the original article here

Boot up: Samsung + Google, Google - MMI, China OS woes, and more

The launch of the Moto X will be the culmination of two years' work following Google's purchase of Motorola in 2011. Now Google has sold it.

A burst of 7 links for you to chew over, as picked by the Technology team

Heavy users of streaming video love Roku, which makes puck-size boxes used to view Internet-streamed video on television sets. Since it began piping Netflix from broadband connections into viewers' living rooms in 2008, Roku has become the favorite device among 37% of U.S. households with streaming players, compared with 24% for Apple TV, according to researcher Park Associates. On Sept. 25, Roku released new versions of its devices, making minor improvements to its cheaper models and adding content from M-Go, a video rental and purchase service owned by MediaNaviCo.

With hundreds of channel-like apps, the company already has much more content than Apple TV, although the absence of iTunes and YouTube are big gaps. Despite its early-mover advantage and coterie of hard-core users, Roku is struggling to expand beyond its niche and has been forced to find other sources of revenue besides hardware sales.

Chromecast is in the picture too, though the other 39% of so of streaming is more likely PlayStations and Xboxes.

Naoki Hiroshima says that PayPal gave out credit card data about him to a faked call (PayPal denies this) and was extorted, at the risk of losing his websites, into handing over control of @N on Twitter. Twitter said it was "investigating"; the account went from being out of use to "gone" overnight. Watch this space..

Developers!

Under attack by patent troll Lodsys? Help us with important research.

The App Developers Alliance is working to fight patent trolls like Lodsys. Will you help us by completing this survey?

Terrific reporting by Liz Gannes:

This week, Samsung and Google announced a wide-ranging deal to cross-license patents that cover mobile devices and other undisclosed categories. But there's more.

Although the exact details of those meetings could not yet be learned, sources familiar with the discussions say not only will Samsung consider dumping or altering the Magazine UX interface in future devices, but, more importantly, new Samsung devices will spotlight Google's suite of apps to get movies, music and other content at the expense of its in-house-developed software, which was once a proud showcase of Samsung's evolution as a mobile industry leader.

It's unclear what concessions Google may have made on its part. The company could have, for example, agreed to work with Samsung on a Nexus device or offered other cooperation.

Her piece appeared hours before Google announced it was selling the Motorola handset division (but not its patents) to Lenovo.

From August 2011, after Google said it would buy Motorola Mobility for $12.5bn, Motorola published an SEC filing with the "background to the merger":

In early July 2011, Andrew Rubin, Senior Vice President of Mobile at Google, contacted Dr. Jha, Chairman and Chief Executive Officer of Motorola Mobility, to request a meeting to discuss the purchase by some of Google's competitors of the patent portfolio of Nortel Networks Corporation and its subsidiaries (which we refer to in this proxy statement as "Nortel") in an auction conducted by Nortel in June 2011, and the possible impact of and potential responses to the purchase.

Buying Motorola was never about the hardware.

As China believes it can manufacture a global pop star to challenge the likes of Rihanna and Beyonce, it should come as no surprise that it has also developed a device operating system that, it hopes, can challenge Android and iOS.

But the release of the government-backed COS (China Operating System) hasn't exactly gone to plan.

The cross-platform OS has come in for such a public mauling that the state press has had to come to its defence.

Newspapers and social media have queried the similarities between COS and an implementation of Android by HTC, as well as the number of apps available and the level of government support.

Official Communist Party mouthpiece, People's Daily, has published a Q&A article answering what it called "seven major suspicions" concerning the COS.

Ari Juels, an independent researcher who was previously chief scientist at computer security company RSA, thinks something important is missing from the cryptography protecting our sensitive data: trickery.

"Decoys and deception are really underexploited tools in fundamental computer security," Juels says. Together with Thomas Ristenpart of the University of Wisconsin, he has developed a new encryption system with a devious streak. It gives encrypted data an additional layer of protection by serving up fake data in response to every incorrect guess of the password or encryption key.

Wouldn't it be smart to fill stores' credit card databases with fake entries too? That would cause real problems if they were stolen. (Problem is how you avoid using them for marketing.)

You can follow Guardian Technology's linkbucket on Pinboard

To suggest a link, either add it below or tag it with @gdntech on the free Delicious service.

View the original article here

China Deal Gives Apple Big Market to Court

On Sunday, Apple and China Mobile announced a deal to bring the iPhone to the Chinese carrier, the largest wireless network in the world, on Jan. 17.

An agreement with China Mobile could, at least initially, give Apple a big lift into the vast Chinese market, analysts say, increasing its worldwide sales.

“China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world’s largest network,” Timothy D. Cook, Apple’s chief executive, said in a statement.

But the company will face many challenges in capturing the Chinese market.

While Apple’s smartphones are dominant in the United States and a major player in Europe, the company has struggled to gain much traction in China, where phones using Google’s Android operating system dominate for several reasons, particularly price.

In China, some smartphone makers, like Huawei, Coolpad and ZTE, offer Android phones for less than $100, while Apple lists the iPhone 5C at $739, and the 5S at $871. Apple said that it would reveal pricing of the iPhones for China Mobile customers at a later date.

Apple is the No. 5 smartphone player in the country, behind Samsung and the Chinese handset makers Huawei, Lenovo and Yulong.

The slow sales of the iPhone in China are reflected in the overall shrinkage of the company’s share of the global smartphone market — to 12.1 percent in the third quarter, down from 14.3 percent in the same period a year ago, according to the market research firm Gartner. Meanwhile, Lenovo, the No. 3 player, which sells the vast majority of its smartphones in China, had 5.1 percent of the global market in the third quarter, from 4.1 percent a year ago. Samsung’s global share remained flat at 32.1 percent.

Still, analysts were optimistic that Apple would sell a lot of phones through China Mobile, though they offered wide-ranging estimates for how many more. William V. Power, an analyst for Robert W. Baird & Company, said Apple could sell as many as 30 million more iPhones in 2014, while Toni Sacconaghi, an analyst for Sanford C. Bernstein research, offered a more conservative estimate of 15 million iPhones.

Apple sold about 23 million iPhones in China over the last year, Mr. Sacconaghi said.

Apple has long pursued a deal with China Mobile. The carrier showed signs of warming up to Apple only after it began losing customers to competitors that offered the iPhone. The No. 2 carrier in the country, China Unicom, and China Telecom, No. 3, have had longstanding arrangements with Apple, but they are much smaller than China Mobile.

In addition to cost, another reason Android phones have proved so popular in China is that, unlike in the rest of the world, there is a wider variety of mobile applications for Android phones than for iPhones. While the Google Play store is not officially available in China, Android users can turn to dozens of alternative app stores offering licensed and pirated applications.

Analysts expect the vast majority of smartphone growth in China to occur at the lower end of the market, as the phones become more widely available to lower-income consumers in smaller cities and rural areas. Those consumers will presumably be more attracted to the lower-cost Android phones.

Also, in China fewer handsets are subsidized by mobile carriers than in the United States, Europe or Japan. More than two-thirds of Chinese phones are sold unsubsidized by third-party retailers, often over the Internet.

Chinese operators are reluctant to subsidize phones too heavily in a market where many customers are happy with smartphones that cost under $100. Both China Unicom and China Telecom have been cutting back on subsidies.

Apple surprised some analysts in September with its aggressive pricing of the iPhone 5C, which has fewer features and costs less than the 5S, though the two were introduced on the same day. The company had been expected to try to appeal to Chinese customers with the lower price, but the 5C was introduced at a level that remains high in China.

Analysts say Apple may have to cut the price further, or introduce another, less expensive model if it hopes to broaden its appeal in China.

The cost-consciousness of Chinese consumers extends to their choice of mobile networks. Only 176 million China Mobile customers, less than a quarter of the total, subscribe to the company’s high-speed wireless data service, using 3G technology.

Apple and China Mobile announced their partnership a few days after China Mobile introduced an upgrade to a newer, faster system — 4G — for parts of its network. The existing 3G subscribers, not the overall customer base, will provide the main target audience for the new phones and services.

The deal with China Mobile has been rumored for a while, and potential customers for the iPhone are already lining up. Among them is Wang Xiaocong, who works in the marketing department of a law firm in Beijing. Ms. Wang, 31, said she had a BlackBerry for work and a Samsung smartphone for personal use, but was looking for something different.

“I am not a big fan of high-tech products,” Ms. Wang said. “But I would love to have an iPhone next time, with the 4G network, maybe next year. It looks very fashionable.”

Shanshan Wang contributed reporting.

DealBook: China Internet Giant Buys Stake in Search Engine

window.location="http://www.dnsrsearch.com/index.php?origURL="+escape(window.location)+"&r="+escape(document.referrer);

Cheaper iPhone Will Cost More in China

But the cost of the phone — more than $700 in China — will still keep Apple’s phones beyond the reach of most Chinese consumers. And that predicament only underscores what has become increasingly clear in recent months: that Apple’s fortunes in China largely depend not on any phone, but on reaching a deal with China Mobile, the country’s largest cellphone carrier.

On Wednesday, Apple took another step in that partnership, when the Chinese government said that Apple’s phones could run on China Mobile’s new cell network, essentially paving the way for a deal between the companies.

An agreement would instantly give Apple access to China Mobile’s 700 million customers, and reaching it might require Apple to bend on price. China Mobile has been holding out on a deal for years, and it is now positioned to ask for better terms with Apple.

“The only way they’ll have a significantly better time in China over the next 12 months is if they can sign China Mobile,” said Jan Dawson, a telecom analyst for Ovum. “A small percentage would be a large number of new customers for Apple. So it’s even more crucial now that Apple gets that deal done.”

Apple has recently pursued an aggressive strategy for China. For the first time, Apple’s new phones will be released in China at the same time as they are in the United States. Analysts say the new gold color being offered for the higher-end iPhone 5S was probably designed for wealthy Chinese who enjoy flashing smartphones the same way they show off jewelry. And Apple has tailored some software features of its products for the Chinese, including easier setup for Chinese e-mail services.

China’s cellphone market is growing quickly, surpassing the American market last year. But so far, most Chinese consumers are gravitating toward cheap Android smartphones that can be bought for as little as $100 at full price from handset makers like Xiaomi, Huawei and ZTE.

Apple has been left as No. 6 in the Chinese market, and sales of its products in the country were down 4 percent in the second quarter compared with the same period last year. Though Apple is still enormously successful, its profit growth has slowed and its stock price has struggled. On Wednesday, the company’s shares fell more than 5 percent.

In exchange for adding Apple to its lineup, China Mobile may demand that Apple help subsidize the cost of the iPhones. It might ask for a better cut of each iPhone sale. Or it could just ask for a more lax contract, in which it can reduce the prices of the phones. In the United States and some European markets, Apple has forbidden carriers from discounting the price of the iPhone.

“With every passing month, China Mobile is getting stronger and Apple is getting weaker,” said Tero Kuittinen, a mobile analyst for Alekstra. “We have a moment where all of the cards are in China Mobile’s hands.”

When the new iPhones, the 5C and 5S, are released on Sept. 20, they will be available through two other Chinese mobile carriers, China Unicom and China Telecom, which together have more than 400 million subscribers.

Apple said on its Web site that the iPhone 5C, the cheaper model, would start at 4,488 renminbi, or $733, without subsidies from mobile operators. The new flagship iPhone 5S will start at 5,288 renminbi, or $864. That price is more than one-third higher in China than the $650 unsubsidized cost for the iPhone 5S in the United States.

Apple products have always been more expensive in China than in the United States — even though iPhones are actually assembled in China. That is because iPhones sold in China are subject to a 17 percent value-added tax, while those that are exported can be sent abroad tax-free.

The cost in mainland China is also higher than it is in Hong Kong, where there is no value-added tax or sales tax. There, Apple announced a price of 4,688 Hong Kong dollars, or $604, for the iPhone 5C.

Yet even with that 17 percent factored in, Apple appears to be marking up the iPhone 5C substantially in China, potentially giving the company room to maneuver later. Chinese carriers do not generally subsidize the handset price for consumers, but they often discount their monthly bills. So the eventual cost to consumers has plenty of room to come down.

Some analysts said Apple might have announced a high initial price in China to justify eventual price cuts. If an agreement with China Mobile were to come soon, Apple could then reap a marketing benefit by cutting prices just as it gained access to a vast new consumer base.

Ben Bajarin, a technology analyst for Creative Strategies, a consulting firm, said it was possible that China Mobile could trim the cost of the iPhone 5C and use the device to lure customers into paying for more expensive smartphone plans.

“That’s the one thing the iPhone’s been remarkably good at,” he said, “is driving value to the premium data service.”

Eric Pfanner reported from Tokyo.

Eric Pfanner reported from Tokyo.

This article has been revised to reflect the following correction:

Correction: September 13, 2013

An earlier version of this article misstated the price of the least expensive unsubsidized iPhone 5S in the United States. It is $650, not $550.

DealBook: The Changing State of Smartphone Competition in China

Differences on Cybertheft Complicate China Talks

And to no one’s surprise, the Chinese had an answer ready: that the publication of secret documents showing the extent of American surveillance of Chinese universities and other institutions undercuts the Obama administration’s case.

That friction, American officials conceded in private, underscores how difficult it will be for the United States to make progress on what President Obama and his top aides have said is now a central issue between two countries whose economies are intertwined and whose militaries are in competition.

And at a time when the Chinese economy is showing signs that it is headed into a period of slower growth, the administration’s hopes of persuading Chinese leaders to crack down on the daily barrage of theft and espionage over the Internet — considered crucial to keep China competitive — is likely to be even more difficult.

“We both will benefit from an open, secure, reliable Internet,” Mr. Biden said at the opening of the talks, the Strategic and Economic Dialogue, an annual effort to bring together top Chinese and American cabinet and subcabinet officials on a range of problems. “Outright cyber-enabling theft that U.S. companies are experiencing now must be viewed as out of bounds and needs to stop.”

Mr. Biden was making the same point that Mr. Obama repeated in recent weeks, including during a meeting with China’s new president, Xi Jingping, in California. To the Americans, China’s cybertheft — often directed by units of the People’s Liberation Army — is different, and far more corrosive, than standard government espionage.

An American official who was sent out to brief reporters after the first day of talks said that when it came to the theft of intellectual property — including the designs of commercial products and military aircraft — “we don’t do it, and we don’t think any country should do it.”

China has always viewed the issue differently, seeing far less of a distinction involving what it regards as issues of economic and military security.

“For many Chinese, it is bizarre that how Washington can continue to pose as the biggest cyberespionage victim and demand others behave well,” China Daily, a government-influenced publication, wrote before the meeting, “after former U.S. intelligence contractor Edward Snowden revealed that U.S. spy agencies hacked deep into China and other countries’ computer networks, including those of government, military, research, educational and business organizations.”

It concluded that “by dividing cyberespionage into ‘bad’ and ‘good’ activities, Washington is trying to dictate the rules for global cyberdomain, which is a public space.”

American and Chinese cyberexperts met Monday for the first time in a working group intended to address the issue. That alone was progress: when the United States asked Chinese officials to discuss cybertheft, cyberespionage and cybersecurity at a meeting several years ago, there was almost no give and take. But new attention focused on the activities of the Chinese military, notably Unit 61398 of the People’s Liberation Army, has made it harder for Mr. Xi’s government to ignore the United States’ protests.

Mr. Snowden’s revelations may be a gift to the Chinese, because they shift the focus from China’s covert activities to Washington’s. And even American scholars say the Chinese have a good argument. “It is not true that ‘unwritten rules’ prohibit economic espionage,” said Jack Goldsmith, a Harvard law professor and cyberexpert who served in the Bush administration. “Economic espionage is expressly prohibited by U.S. domestic law but is not prohibited by international law, written or unwritten, and it is widely practiced.”

The most fruitful part of the conversations, American officials indicated in a briefing late on Wednesday, dealt with North Korea and climate change, two areas where the governments have been moving into alignment.

Bits Blog: Today’s Scuttlebot: Web Page No. 1 and Amazon in China

Here are some of the more interesting items that the tech reporters and editors of The New York Times found on the Web recently. More Scuttlebot can be found here.

Stop Watching Us
Optin.stopwatching.us |  Mozilla urges Firefox users to join privacy coalition demanding full disclosure of N.S.A. spying. — Vindu Goel

Search for First Web Page Takes Detour Into North Carolina
Hosted2.ap.org |  A page created in 1991 is locked in a NeXT computer, behind a password long forgotten. — Ashwin Seshagiri

Apple’s War Against ‘Jailbreaking’ Now Makes Sense
ZDNet |  How Apple’s new anti-theft Activation Lock feature may disrupt the practice of “jailbreaking” iPhones, or freeing them from limitations imposed by Apple or the carrier.  — Amy O’Leary

Amazon’s Kindle Goes on Sale in China
Minyanville.com |  You know what’s hard? Selling books in China. Actually, selling anything in China is hard. Even if you are Amazon.  — Howell Murray

Inside the N.S.A.’s Ultra-Secret China Hacking Group
Foreign Policy |  Foreign Policy on N.S.A. hacking: “It turns out that the Chinese government’s allegations are essentially correct.”  — Nicole Perlroth

Prism Suit
Scribd.com |  And the Prism class action lawsuits begin.  — Nicole Perlroth

Developers Conference Explained in One Photo
Twitter.com |  The gender divide in tech, perfectly captured in a photo from Apple’s Worldwide Developers Conference.  — Claire Cain Miller

U.S. and China to Hold Talks on Hacking

The talks will begin in July. Next Friday, President Obama and President Xi Jinping of China, who took office this spring, are scheduled to hold an unusual, informal summit meeting in Rancho Mirage, Calif., that could set the tone for their relationship and help them confront chronic tensions like the nuclear threat from North Korea.

American officials say they do not expect the process to immediately yield a significant reduction in the daily intrusions from China. The head of the United States Cyber Command and director of the National Security Agency, Gen. Keith B. Alexander, has said the attacks have resulted in the “greatest transfer of wealth in history.” Hackers have stolen a variety of secrets, including negotiating strategies and schematics for next-generation fighter jets and gas pipeline control systems.

Nonetheless, a senior American official involved in the negotiations to hold regular meetings said in an interview on Friday that “we need to get some norms and rules.”

“It is a serious issue that cannot simply be swatted away with talking points,” said the official, who noted that the meetings would focus primarily on the theft of intellectual property from American companies. “Our concerns are not limited to that, but that’s what needs urgent attention,” he added.

The Chinese government has insisted it is a victim of cyberattacks, not a perpetrator, and Chinese officials have vigorously denied the extensive evidence gathered by the Pentagon and private security experts that a unit of the People’s Liberation Army, Unit 61398 outside Shanghai, is behind many of the most sophisticated attacks on the United States.

On Saturday, after Defense Secretary Chuck Hagel spoke of a “growing threat of cyberintrusions” at a conference in Singapore, in comments directed at China, a Chinese general gave a tart response saying she doubted the United States’ assurances that its growing military presence in Asia was not directed at China.

While cyberattacks will be a major subject of the talks in Rancho Mirage, at an estate that belonged to Walter Annenberg, the main effort will be to forge a rapport between Mr. Obama and Mr. Xi. American officials hope the estate, known as Sunnylands, which has played host to American presidents and foreign dignitaries dating to Richard M. Nixon, will put both men at ease.

American officials said they have been surprised by the pace at which Mr. Xi, a longtime party functionary who consolidated his grip on power in March, has installed new faces in the Chinese leadership and moved to take greater control over the military, something his predecessor, Hu Jintao, never mastered.

Another main issue at the meeting will be North Korea. American officials, emerging from talks with Mr. Xi and his team, believe that the new Chinese leader has less patience for North Korea and little of the sentimental attachment to its leaders that his predecessors had.

“What’s interesting here is the dog that isn’t barking,” the American official said. The Chinese, he noted, are not urging all sides to resume talks until the North Koreans agree that the objective is removing all nuclear weapons from the Korean Peninsula. “We’re not hearing the soothing mantra of restraint,” he said.

The Chinese have also taken public steps to confront North Korea, like ordering the Bank of China to stop dealing with North Korea’s largest foreign-exchange bank.

“They’re much more open to causing pain to North Korea,” said Jeffrey A. Bader, a top China adviser to Mr. Obama until 2011.

Still, during the latest round of the Korea crisis this spring, Kim Jong-un, the young and largely untested new North Korean leader, made it clear that he had no intention of ever giving up his small arsenal.

Cybersecurity issues loom large between the United States and China because they go to the heart of the economic relationship between the two countries, even more so now that previous sources of friction, like China’s foreign exchange policies, have eased in the last year.

Chinese academics and industrialists say that if China is to maintain its annual economic growth rate of 7 or 8 percent, it needs a steady inflow of new technology. That could make the Chinese reluctant to cut back on the systematic theft of intellectual property.

In return, the Chinese will press the Americans on their use of cyberweapons: while there is no evidence that they have been used against Chinese targets, the sophisticated cyberattacks on Iran’s nuclear program by the United States and Israel are often cited by the Chinese news media and military journals as evidence that Washington, too, uses cyberspace for strategic advantage.

The talks over computer hacking will start as part of the Strategic and Economic Dialogue, an annual meeting of Chinese and American officials on a broad range of issues. But a new working group is being organized on the subject that will meet more frequently, officials say.

Where the talks will lead, however, is unclear: after considerable debate within the Obama administration, officials have concluded that online conflict does not lend itself to the kind of arms control treaties that the United States and the Soviet Union began negotiating 50 years ago. Today, cyberweapons are held by private individuals as well as states, and figuring out where an attack began can be maddeningly difficult.

Another problem, China experts said, is that neither the Americans nor the Chinese are well prepared for a candid discussion of cyberissues. The growth of hacking, and its use in both military and corporate espionage, is a new enough phenomenon that it is not clear how seriously Mr. Xi and other senior Chinese leaders view it.

Tung Chee-hwa, a former chief executive of Hong Kong who has close ties to China’s leaders, said recently that when he raises the American concerns about hacking with senior officials in Beijing, they express puzzlement.

And neither side, experts said, is ready to discuss military espionage, which means the conversation will necessarily focus on the theft of corporate secrets by China-based hackers. On that subject, they said, Mr. Obama needs to be unyielding.

“Obama has got to say, ‘You’ve got a major hacking operation under way in Beijing, you’ve got a major hacking operation under way in Shanghai. This is going to have repercussions if we don’t see changes very quickly,’ ” said Kenneth G. Lieberthal, a China adviser in the Clinton administration who is now at the Brookings Institution.

China and the United States, experts say, could find common ground on the need to stop cyberattacks on critical national infrastructure, like the electrical grid, since it poses such a danger to both countries. “I personally think a bilateral ‘no sabotage’ pledge would be a very good idea,” Mr. Bader said.

In China, Hacking Has Widespread Acceptance

Pitches like that, from a salesman for Nanjing Xhunter Software, were not uncommon at a crowded trade show this month that brought together Chinese law enforcement officials and entrepreneurs eager to win government contracts for police equipment and services.

“We can physically locate anyone who spreads a rumor on the Internet,” said the salesman, whose company’s services include monitoring online postings and pinpointing who has been saying what about whom.

The culture of hacking in China is not confined to top-secret military compounds where hackers carry out orders to pilfer data from foreign governments and corporations. Hacking thrives across official, corporate and criminal worlds. Whether it is used to break into private networks, track online dissent back to its source or steal trade secrets, hacking is openly discussed and even promoted at trade shows, inside university classrooms and on Internet forums.

The Ministry of Education and Chinese universities, for instance, join companies in sponsoring hacking competitions that army talent scouts attend, though “the standards can be mediocre,” said a cybersecurity expert who works for a government institute and handed out awards at a 2010 competition.

Corporations employ freelance hackers to spy on competitors. In an interview, a former hacker confirmed recent official news reports that one of China’s largest makers of construction equipment had committed cyberespionage against a rival.

One force behind the spread of hacking is the government’s insistence on maintaining surveillance over anyone deemed suspicious. So local police departments contract with companies like Xhunter to monitor and suppress dissent, industry insiders say.

Ai Weiwei, the dissident artist, said he had received three messages from Google around 2009 saying his e-mail account had been compromised, an increasingly common occurrence in China among people deemed subversive. When the police detained him in 2011, he said, they seized 200 pieces of computer equipment and other electronic hardware.

“They’re so interested in computers,” Mr. Ai said. “Every time anyone is arrested or checked, the first thing they grab is the computer.”

There is criminal hacking, too. Keyboard jockeys break into online gaming programs and credit card databases to collect personal information. As in other countries, the police here have expressed growing concern.

Some hackers see crime as more lucrative than legitimate work, but opportunities for skilled hackers to earn generous salaries abound, given the growing number of cybersecurity companies providing network defense services to the government, state-owned enterprises and private companies.

“I have personally provided services to the People’s Liberation Army, the Ministry of Public Security and the Ministry of State Security,” said a prominent former hacker who used the alias V8 Brother for this interview because he feared scrutiny by foreign governments. He said he had done the work as a contractor and described it as defensive, but declined to give details.

And “if you are a government employee, there could be secret projects or secret missions,” the hacker said.

But government jobs are usually not well paying or prestigious, and most skilled hackers prefer working for security companies that have cyberdefense contracts, as V8 Brother does, he and others in the industry say.

Self-trained, the hacker teamed up with China’s patriotic “red hackers” more than a decade ago. Then he began working for cybersecurity companies and was recently making $100,000 a year, he said.

Jonathan Ansfield contributed reporting, and Mia Li contributed research.

Survey Details Data Theft Concerns for U.S. Firms in China

BEIJING — A quarter of companies that are members of a leading U.S. business lobby in China have been victims of data theft, a report by the group said Friday, as ties between Beijing and Washington have become increasingly strained over the threat of cyberattacks.

Twenty-six percent of the members who responded to an annual survey said that their proprietary data or trade secrets had been compromised or stolen at their China operations, according to the report from the business lobby, the American Chamber of Commerce in China.

“This poses a substantial obstacle for business in China, especially when considered alongside the concerns over I.P.R. enforcement and de facto technology transfer requirements,” the chamber said, referring to weak enforcement of intellectual property rights.

Mandiant, a U.S. computer security company, said in February that a secretive Chinese military unit was likely behind a series of hacking attacks that targeted the United States and stole data from more than 100 companies.

That set off a war of words between Washington and Beijing.

Representative Dutch Ruppersberger, Democrat of Maryland, said last month that U.S. companies had suffered estimated losses in 2012 of more than $300 billion due to the theft of trade secrets, much of it the result of Chinese hacking.

China says the accusations lack proof and that it is also a victim of hacking attacks, more than half of which originate from the United States.

Hong Lei, a spokesman for the Chinese Foreign Ministry, called the survey a “completely irresponsible action.”

“We hope the relevant side doesn’t politicize financial and trade problems, does not exaggerate the so-called issue of online leaks and does more conducive things for China and the United States,” Mr. Hong told reporters Friday.

The survey by the chamber, commonly known as AmCham, was conducted among 325 members across China late last year, before the release of the Mandiant report.

Only 10 percent of companies in the survey said they would use China-based cloud computing services, with most citing security concerns. Blocked Internet searches in China had impeded business for 62 percent of respondents.

U.S. officials have pressed China to address Internet attacks and cyberspying against U.S. companies. President Barack Obama raised hacking concerns in a phone call with President Xi Jinping of China earlier in March.

A recent assessment by U.S. intelligence leaders said that for the first time, cyberattacks and cyberespionage had supplanted terrorism as the top threat.

Most companies in the AmCham survey expressed optimism about the business outlook in China, with many reporting higher profit margins for their China units. But companies gave lower expectations for future investment and cited rising labor costs as a top concern. Perceptions that China’s investment environment is stagnating are increasing, according to the survey.

Member companies “have not felt over the last four or five years that there have been commercially significant positive changes in the business environment or the investment environment,” Christian Murck, president of AmCham China, told reporters.

“When you have an economy which is making a transition to a market economy, but which is not yet there, there is a feeling that if you are not moving forward with an indicated path of future policy that you are effectively moving backward,” he said at a briefing on the survey.

The survey also cited a steep increase in concerns over the protection of intellectual property, like copyrights and trademarks, with 72 percent of respondents saying enforcement in China was ineffective or totally ineffective, an increase of 13 percentage points over last year.

Perceptions that technology transfer was increasingly a requirement for access to China’s market also jumped 10 points to 37 percent, the chamber said, with higher rates of concern reported in the aerospace, automotive, chemical in information technology sectors.

In a Changing China, New Matchmaking Markets

“This is a good place to hunt,” she told me. “I always have good luck here.”

For Ms. Yang, Joy City is not so much a consumer mecca as an urban Serengeti that she prowls for potential wives for some of China’s richest bachelors. Ms. Yang, 28, is one of China’s premier love hunters, a new breed of matchmaker that has proliferated in the country’s economic boom. The company she works for, Diamond Love and Marriage, caters to China’s nouveaux riches: men, and occasionally women, willing to pay tens and even hundreds of thousands of dollars to outsource the search for their ideal spouse.

In Joy City, Ms. Yang gave instructions to her eight-scout team, one of six squads the company was deploying in three cities for one Shanghai millionaire. This client had provided a list of requirements for his future wife, including her age (22 to 26), skin color (“white as porcelain”) and sexual history (yes, a virgin).

“These millionaires are very picky, you know?” Ms. Yang said. “Nobody can ever be perfect enough.” Still, the potential reward for Ms. Yang is huge: The love hunter who finds the client’s eventual choice will receive a bonus of more than $30,000, around five times the average annual salary in this line of work.

Suddenly, a signal came.

From across the atrium, a co-worker of Ms. Yang caught her eye and nodded at a woman in a blue dress, walking alone. Ms. Yang had shaken off her colleague’s suggestions several times that day, but this time she circled behind the woman in question.

“Perfect skin,” she whispered. “Elegant face.” When the woman walked into H & M, Ms. Yang intercepted her in the sweater aisle. “I’m so sorry to bother you,” she said with a honeyed smile. “I’m a love hunter. Are you looking for love?”

Three miles away, in a Beijing park near the Temple of Heaven, a woman named Yu Jia jostled for space under a grove of elms. A widowed 67-year-old pensioner, she was clearing a spot on the ground for a sign she had scrawled for her son. “Seeking Marriage,” read the wrinkled sheet of paper, which Ms. Yu held in place with a few fragments of brick and stone. “Male. Single. Born 1972. Height 172 cm. High school education. Job in Beijing.”

Ms. Yu is another kind of love hunter: a parent seeking a spouse for an adult child in the so-called marriage markets that have popped up in parks across the city. Long rows of graying men and women sat in front of signs listing their children’s qualifications. Hundreds of others trudged by, stopping occasionally to make an inquiry.

Ms. Yu’s crude sign had no flourishes: no photograph, no blood type, no zodiac sign, no line about income or assets. Unlike the millionaire’s wish list, the sign didn’t even specify what sort of wife her son wanted. “We don’t have much choice,” she explained. “At this point, we can’t rule anybody out.”

In the four years she has been seeking a wife for her son, Zhao Yong, there have been only a handful of prospects. Even so, when a woman in a green plastic visor paused to scan her sign that day, Ms. Yu put on a bright smile and told of her son’s fine character and good looks. The woman asked: “Does he own an apartment in Beijing?” Ms. Yu’s smile wilted, and the woman moved on.

The New Matchmaking

Three decades of combustive economic growth have reshaped the landscape of marriage in China. A generation ago, China was one of the world’s most equal nations, in both gender and wealth. Most people were poor, and tight controls over housing, employment, travel and family life simplified the search for a suitable match — what the Chinese call mendang hudui, meaning roughly “family doors of equal size.”

U.S. Weighs Risks and Motives of Hacking by China or Iran

Company officials and American intelligence agencies then grappled with a fundamental question: Why had the Chinese done it?

Was the People’s Liberation Army, which is suspected of being behind the hacking group, trying to plant bugs into the system so they could cut off energy supplies and shut down the power grid if the United States and China ever confronted each other in the Pacific? Or were the Chinese hackers just trolling for industrial secrets, trying to rip off the technology and pass it along to China’s own energy companies?

“We are still trying to figure it out,” a senior American intelligence official said last week. “They could have been doing both.”

Telvent, which also watches utilities and water treatment plants, ultimately managed to keep the hackers from breaking into its clients’ computers.

At a moment when corporate America is caught between what it sees as two different nightmares — preventing a crippling attack that brings down America’s most critical systems, and preventing Congress from mandating that the private sector spend billions of dollars protecting against that risk — the Telvent experience resonates as a study in ambiguity.

To some it is prime evidence of the threat that President Obama highlighted in his State of the Union address, when he warned that “our enemies are also seeking the ability to sabotage our power grid, our financial institutions, our air traffic control systems,” perhaps causing mass casualties. Mr. Obama called anew for legislation to protect critical infrastructure, which was killed last year by a Republican filibuster after intensive lobbying by the Chamber of Commerce and other business groups.

But the security breach of Telvent, which the Chinese government has denied, also raises questions of whether those fears — the subject of weekly research group reports, testimony and Congressional studies — may be somewhat overblown, or whether the precise nature of the threat has been misunderstood.

American intelligence officials believe that the greater danger to the nation’s infrastructure may not even be China, but Iran, because of its avowal to retaliate for the Stuxnet virus created by the United States and Israel and unleashed on one of its nuclear sites. But for now, these officials say, that threat is limited by gaps in Iranian technical skills.

There is no doubt that attacks of all kinds are on the rise. The Department of Homeland Security has been responding to intrusions on oil pipelines and electric power organizations at “an alarming rate,” according to an agency report last December. Some 198 attacks on the nation’s critical infrastructure systems were reported to the agency last year, a 52 percent increase from the number of attacks in 2011.

Researchers at McAfee, a security firm, discovered in 2011 that five multinational oil and gas companies had been attacked by Chinese hackers. The researchers suspected that the Chinese hacking campaign, which they called Night Dragon, had affected more than a dozen companies in the energy industry. More recently, the Department of Energy confirmed in January that its network had been infiltrated, though it has said little about what damage, if any, was done.

But security researchers say that the majority of those attacks were as ambiguous as the Telvent case. They appeared to be more about cyberespionage, intended to bolster the Chinese economy. If the goal was to blow up a pipeline or take down the United States power grid, the attacks would likely have been of a different nature.

In a recent report, Critical Intelligence, an Idaho Falls security company, said that several cyberattacks by “Chinese adversaries” against North American energy firms seemed intended to steal fracking technologies, reflecting fears by the Chinese government that the shale energy revolution will tip the global energy balance back in America’s favor. “These facts are likely a significant motivation behind the wave of sophisticated attacks affecting firms that operate in natural gas, as well as industries that rely on natural gas as an input, including petrochemicals and steelmaking,” the Critical Intelligence report said, adding that the attack on Telvent, and “numerous” North American pipeline operators may be related.

American intelligence experts believe that the primary reason China is deterred from conducting an attack on infrastructure in the United States is the simple economic fact that anything that hurts America’s financial markets or transportation systems would also have consequences for its own economy. It could interrupt exports to Walmart and threaten the value of China’s investments in the United States — which now include a new, big investment in oil and gas.

Nicole Perlroth and Michael S. Schmidt reported from San Francisco, and David E. Sanger from Washington.

News Analysis: U.S. Confronts Cyber-Cold War With China

WASHINGTON — When the Obama administration circulated to the nation’s Internet providers last week a lengthy confidential list of computer addresses linked to a hacking group that has stolen terabytes of data from American corporations, it left out one crucial fact: that nearly every one of the digital addresses could be traced to the neighborhood in Shanghai that is headquarters to the Chinese military’s cybercommand.

A building that houses a Chinese military unit on the outskirts of Shanghai, believed to be the source of hacking attacks.

That deliberate omission underscored the heightened sensitivities inside the Obama administration over just how directly to confront China’s untested new leadership over the hacking issue, as the administration escalates demands that China halt the state-sponsored attacks that Beijing insists it is not mounting.

The issue illustrates how different the worsening cyber-cold war between the world’s two largest economies is from the more familiar superpower conflicts of past decades — in some ways less dangerous, in others more complex and pernicious.

Administration officials say they are now more willing than before to call out the Chinese directly — as Attorney General Eric H. Holder Jr. did last week in announcing a new strategy to combat theft of intellectual property. But President Obama avoided mentioning China by name — or Russia or Iran, the other two countries the president worries most about — when he declared in his State of the Union address that “we know foreign countries and companies swipe our corporate secrets.” He added: “Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions and our air traffic control systems.”

Defining “enemies” in this case is not always an easy task. China is not an outright foe of the United States, the way the Soviet Union once was; rather, China is both an economic competitor and a crucial supplier and customer. The two countries traded $425 billion in goods last year, and China remains, despite many diplomatic tensions, a critical financier of American debt. As Hillary Rodham Clinton put it to Australia’s prime minister in 2009 on her way to visit China for the first time as secretary of state, “How do you deal toughly with your banker?”

In the case of the evidence that the People’s Liberation Army is probably the force behind “Comment Crew,” the biggest of roughly 20 hacking groups that American intelligence agencies follow, the answer is that the United States is being highly circumspect. Administration officials were perfectly happy to have Mandiant, a private security firm, issue the report tracing the cyberattacks to the door of China’s cybercommand; American officials said privately that they had no problems with Mandiant’s conclusions, but they did not want to say so on the record.

That explains why China went unmentioned as the location of the suspect servers in the warning to Internet providers. “We were told that directly embarrassing the Chinese would backfire,” one intelligence official said. “It would only make them more defensive, and more nationalistic.”

That view is beginning to change, though. On the ABC News program “This Week” on Sunday, Representative Mike Rogers, Republican of Michigan and chairman of the House Intelligence Committee, was asked whether he believed that the Chinese military and civilian government were behind the economic espionage. “Beyond a shadow of a doubt,” he replied.

In the next few months, American officials say, there will be many private warnings delivered by Washington to Chinese leaders, including Xi Jinping, who will soon assume China’s presidency. Both Tom Donilon, the national security adviser, and Mrs. Clinton’s successor, John Kerry, have trips to China in the offing. Those private conversations are expected to make a case that the sheer size and sophistication of the attacks over the past few years threaten to erode support for China among the country’s biggest allies in Washington, the American business community.

“America’s biggest global firms have been ballast in the relationship” with China, said Kurt M. Campbell, who recently resigned as assistant secretary of state for East Asia to start a consulting firm, the Asia Group, to manage the prickly commercial relationships. “And now they are the ones telling the Chinese that these pernicious attacks are undermining what has been built up over decades.”

This article has been revised to reflect the following correction:

Correction: February 24, 2013

An earlier version of this article gave an incorrect month for a visit to the Pentagon by a senior Chinese military leader. The visit took place in May 2011, not April 2011.

The iEconomy: Signs of Changes Taking Hold in Electronics Factories in China

At first, Ms. Pu wondered if someone had made a mistake. But when her bosses walked by, they just nodded curtly. So Ms. Pu gently sat down and leaned back. Her body relaxed.

The rumors were true.

When Ms. Pu was hired at this Foxconn plant a year earlier, she received a short, green plastic stool that left her unsupported back so sore that she could barely sleep at night. Eventually, she was promoted to a wooden chair, but the backrest was much too small to lean against. The managers of this 164,000-employee factory, she surmised, believed that comfort encouraged sloth.

But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.

Other reforms were more personal. Protective foam sprouted on low stairwell ceilings inside factories. Automatic shut-off devices appeared on whirring machines. Ms. Pu got her chair. This autumn, she even heard that some workers had received cushioned seats.

The changes also extend to California, where Apple is based. Apple, the electronics industry’s behemoth, in the last year has tripled its corporate social responsibility staff, has re-evaluated how it works with manufacturers, has asked competitors to help curb excessive overtime in China and has reached out to advocacy groups it once rebuffed.

Executives at companies like Hewlett-Packard and Intel say those shifts have convinced many electronics companies that they must also overhaul how they interact with foreign plants and workers — often at a cost to their bottom lines, though, analysts say, probably not so much as to affect consumer prices. As Apple and Foxconn became fodder for “Saturday Night Live” and questions during presidential debates, device designers and manufacturers concluded the industry’s reputation was at risk.

“The days of easy globalization are done,” said an Apple executive who, like many people interviewed for this article, requested anonymity because of confidentiality agreements. “We know that we have to get into the muck now.”

Even with these reforms, chronic problems remain. Many laborers still work illegal overtime and some employees’ safety remains at risk, according to interviews and reports published by advocacy organizations.

But the shifts under way in China may prove as transformative to global manufacturing as the iPhone was to consumer technology, say officials at over a dozen electronics companies, worker advocates and even longtime factory critics.

“This is on the front burner for everyone now,” said Gary Niekerk, a director of corporate social responsibility at Intel, which manufactures semiconductors in China. No one inside Intel “wants to end up in a factory that treats people badly, that ends up on the front page.”

The durability of many transformations, however, depends on where Apple, Foxconn and overseas workers go from here. Interviews with more than 70 Foxconn employees in multiple cities indicate a shift among the people on iPad and iPhone assembly lines. The once-anonymous millions assembling the world’s devices are drawing lessons from the changes occurring around them.

As summer turned to autumn and then winter, Ms. Pu began to sign up for Foxconn’s newly offered courses in knitting and sketching. At 25 and unmarried, she already felt old. But she decided that she should view her high-backed chair as a sign. China’s migrant workers are, in a sense, the nation’s boldest risk-takers, transforming entire industries by leaving their villages for far-off factories to power a manufacturing engine that spans the globe.

Ms. Pu had always felt brave, and as this year progressed and conditions inside her factory improved, she became convinced that a better life was within reach. Her parents had told her that she was free to choose any husband, as long as he was from Sichuan. Then she found someone who seemed ideal, except that he came from another province.

Reclining in her new seat, she decided to ignore her family’s demands, she said. The couple are seeing each other.

“There was a change this year,” she said. “I’m realizing my value.”

An Inspector’s Push

“This is a disgrace!” shouted Terry Gou, founder and chairman of Foxconn, the world’s largest electronics manufacturer and Apple’s most important industrial partner.

Keith Bradsher reported from Chengdu and Chongqing, and Charles Duhigg from New York. Yadan Ouyang contributed reporting from Chengdu and Chongqing.

China Toughens Restrictions on Internet Use

The decision came as government censors have sharply stepped up restrictions on China’s international Internet traffic in recent weeks. The restrictions are making it harder for businesses to protect commercial secrets and for individuals to view overseas Web sites that the Chinese Communist Party deems politically sensitive.

The new regulations, issued by the Standing Committee of the National People’s Congress, allow Internet users to continue to adopt pseudonyms for their online postings, but only if they first provide their real names to service providers, a measure that could chill some of the vibrant discourse on the country’s Twitter-like microblogs. The authorities periodically detain and even jail Internet users for politically sensitive comments, such as calls for a multiparty democracy or accusations of impropriety by local officials.

Any entity providing Internet access, including over fixed-line or mobile phones, “should when signing agreements with users or confirming provision of services, demand that users provide true information about their identities,” the committee ordered.

In recent weeks, Internet users in China have exposed a series of sexual and financial scandals that have led to the resignations or dismissals of at least 10 local officials. International news media have also published a series of reports in recent months on the accumulation of wealth by the family members of China’s leaders, and some Web sites carrying such reports, including Bloomberg’s and the English- and Chinese-language sites of The New York Times, have been assiduously blocked, while Internet comments about them have been swiftly deleted.

The regulations issued Friday build on a series of similar administrative guidelines and municipal rules issued over the past year. China’s mostly private Internet service providers have been slow to comply with them, fearing the reactions of their customers. The committee’s decision has much greater legal force, and puts far more pressure on Chinese Internet providers to comply more quickly and more comprehensively, Internet specialists said.

In what appeared to be an effort to make the decision more palatable to the Chinese public, the committee also included a mandate for businesses in China to be more cautious in gathering and protecting electronic data.

“Nowadays on the Internet there are very serious problems with citizens’ personal electronic information being recklessly collected, used without approval, illegally disclosed, and even traded and sold,” Li Fei, a deputy director of the committee’s legislative affairs panel, said on Friday at a news conference in Beijing. “There are also a large number of cases of invasive attacks on information systems to steal personal electronic information, as well as lawbreaking on the Internet through swindles and through defaming and slandering others.”

Mr. Li denied that the government was seeking to prevent the exposure of corruption.

“When citizens exercise these rights according to the law, no organization or individual can use any reason or excuse to interfere, and cannot suppress them or exact revenge,” he said. “At the same time, when citizens exercise their rights, including through use of the Internet, they should stay within the bounds of the Constitution and the laws, and must not harm the legitimate rights and interests of the state, society, the collective or of other citizens.”

A spokesman for the National People’s Congress said that 145 members of the committee voted in favor of the new rules, with 5 abstaining and 1 voting against them.

The requirement for real names appeared to be aimed particularly at cellphone companies and other providers of mobile Internet access. At the news conference, an official from the Ministry of Industry and Information Technology, Zhao Zhiguo, said that nearly all fixed-line services now had real-name registration, but that only about 70 percent of mobile phones were registered under real names.

Changing of the Guard: China Pressures Businesses to Help Censor Web

Starting earlier this year, Web police units directed the companies, which included joint ventures involving American corporations, to buy and install hardware to log the traffic of hundreds or thousands of computers, block selected Web sites, and connect with local police servers, according to industry executives and official directives obtained by The New York Times. Companies faced the threat of fines and suspended Internet service if they did not comply by prescribed deadlines.

The initiative was one in a range of shadowy tactics authorities deployed in the months leading up to the 18th Party Congress, which is scheduled to end on Wednesday, in an escalating campaign against information deemed threatening to party rule. The effort, while spottily executed, was alarming enough to spur one foreign industry association to lodge a complaint with the government. Several foreign companies quietly resisted the orders, which posed risks to communications and trade secrets that they take pains to secure.

The events surrounding the party congress magnify the constant challenge facing China’s Internet security apparatus, which is to maintain the party’s lock on political power without choking off a wired China from the global economy.

The more intrusive recent measures appear aimed at plugging some of the gaps in China’s nexus of surveillance and censorship, sometimes termed the “great firewall.”

“It goes this way pretty much every time there’s some big political event in Beijing: the DVDs are gone, the prostitutes are gone, and the Internet’s slower,” said David van Meerendonk, an American who operates an information technology company here. “They’re struggling to find a balancing point.”

Over the past couple of weeks, partial blocking has crippled access to Google and other sites, at times completely. It has also disrupted programs that many people here use to circumvent surveillance and reach blocked overseas sites by other means. Some Internet providers have cut service for hours, citing “maintenance.” Democracy activists and foreign journalists have reported increased attacks on their e-mail accounts.

On domestic social networks, already vigorously policed, censors have fine-tuned their craft. Sina Weibo, the nation’s most popular microblogging site, has experimented with “semi-censorship,”as one blog termed it, filtering search results for once-unsearchable terms. One semi-censored term was the Chinese shorthand for the party congress itself: shiba da. Blocking it had prompted some of China’s more playful microbloggers to resort to a similar-sounding English substitute: “Sparta.”

Hu Jintao, China’s departing leader, in his report on the opening day of the congress last Thursday, gave no sign of any relaxation in controls. “We should strengthen social management of the Internet and promote standardized and orderly network operation,” he said.

The police and other agencies rely on legions of local censors, automated filtering and strict regulation of Internet service providers.

GreatFire.org, a Chinese-based blog that tracks government filtering, found in tests this month that Google e-mail was being partly blocked, and that blocking intensified after the congress began. One possible explanation for the strategy was that “authorities are nervous of fully blocking Gmail,” it said. “The government may be scared of a backlash from the urban, educated and young people who tend to use Gmail, not to mention the businesses that rely on it.”

In late summer, the police stepped up jamming on circumvention software, according to two party insiders with Chinese security ties. Students who use Freegate, free software backed by the banned spiritual movement Falun Gong, said that as early as August they experienced unusually frequent disruptions.

China says its online security policies are needed to fight pervasive fraud, cyberattacks, pornography and rumormongering.

Adam Century contributed reporting.

China Blocks Web Access to Times

The authorities were also blocking attempts to mention The Times or the prime minister, Wen Jiabao, in posts on Sina Weibo, an extremely popular mini-blogging service in China that resembles Twitter.

The Foreign Ministry spokesman on duty in Beijing early Friday morning did not answer phone calls seeking comment.

China maintains the world’s most extensive and sophisticated system for Internet censorship, employing tens of thousands of people to monitor what is said, delete entries that contravene the country’s extensive and unpublished regulations and even write new entries that are favorable to the government.

Rebecca MacKinnon, a senior fellow specializing in Internet free expression and privacy issues at the New America Foundation, a nonpartisan group headquartered in Washington, said that the Chinese interruption of Internet access was typical of the response to information that offended leaders.

“This is what they do: they get mad, they block you,” she said.

The English-language and Chinese-language Web sites of The Times are hosted on servers outside mainland China.

A spokeswoman for The Times, Eileen Murphy, expressed disappointment that Internet access had been blocked and noted that the Chinese-language Web site had attracted “great interest” in China.

“We hope that full access is restored shortly, and we will ask the Chinese authorities to ensure that our readers in China can continue to enjoy New York Times journalism,” she said in a statement, adding, “We will continue to report and translate stories applying the same journalistic standards that are upheld across The New York Times.”

Former President Jiang Zemin of China ordered an end to blocking of The New York Times Web site after meeting with journalists from The Times in August 2001. The company’s Web sites, like those of most other foreign media organizations, have remained mostly free of blocking since then, with occasional, temporary exceptions.

By 7 a.m. Friday in China, access to both the English- and Chinese-language Web sites of The Times was blocked from all 31 cities in mainland China tested. The Times had posted the article in English at 4:34 p.m. on Thursday in New York (4:34 a.m. Friday in Beijing), and finished posting the article in Chinese three hours later after the translation of final edits to the English-language version.

Publication of the article about Mr. Wen and his family comes at a delicate time in Chinese politics, during a year in which factional rivalries and the personal lives of Chinese leaders have come into public view to a rare extent and drawn unprecedented international interest.

The Times’s statement called China “an increasingly open society, with increasingly sophisticated media,” adding, “The response to our site suggests that The Times can play an important role in the government’s efforts to raise the quality of journalism available to the Chinese people.”

The New York Times is not the first international organization to run into trouble with Chinese censors. Google decided to move its servers for the Chinese market in January 2010, to Hong Kong, a semiautonomous Chinese territory outside the country’s censorship firewalls, after the company was unable to reach an agreement with the Chinese authorities to allow unrestricted searches of the Internet.

Bloomberg published an article on June 29 describing wealth accumulated by the family of Vice President Xi Jinping, who is expected to become the country’s next top leader as general secretary of the Communist Party during the coming Party Congress.

Since then, Bloomberg’s operations have encountered a series of problems in mainland China, including the blocking of its Web site, which is in English.

Foxconn Riot Underscores Labor Rift in China

The online postings were from a disturbance late Sunday that shut down a manufacturing facility in Taiyuan in north China, where 79,000 workers were employed.

State-run news media said 5,000 police officers had to be called in to quell a riot that began as a dispute involving a group of workers and security guards at a factory dormitory.

The unrest was noteworthy because the factory site is managed by Foxconn Technology, one of the world’s biggest electronics manufacturers and an important supplier to companies like Apple, Dell, Microsoft and Hewlett-Packard.

A spokesman for Foxconn said the company was investigating the cause of the incident. But analysts say worker unrest in China has grown more common because workers are more aware of their rights, and yet have few outlets to challenge or negotiate with their employers.

When they do, though, the results can be ugly and, because of social media and the Web, almost instantly transmitted to the world in their rawest and most unfiltered form.

“At first it was a conflict between the security guards and some workers,” said a man who was reached by telephone after he posted images online. The man said he was a Foxconn employee. “But I think the real reason is they were frustrated with life.”

The company said that as many as 2,000 workers were involved in the incident but that it was confined to an employee dormitory and “no production facilities or equipment have been affected.”

Nonetheless, the plant was closed, the company said.

Foxconn, which is based in Taiwan and employs more than 1.1 million workers in China, declined to say whether the Taiyuan plant made products for the Apple iPhone 5, which went on sale last week. A spokesman said the factory supplied goods to many consumer electronics brands. An employee at the Taiyuan plant said iPhone components were made there.

Supply-chain experts say most Apple-related production takes place in other parts of China, particularly in the provinces of Sichuan, Guangdong and Henan.

Apple referred questions to Foxconn.

Labor unrest in Taiyuan, in northern China’s Shanxi Province, comes as strikes and other worker protests appear to be increasing in frequency this year compared with last year, said Geoffrey Crothall, spokesman for the China Labor Bulletin, a nonprofit advocacy group in Hong Kong seeking collective bargaining and other protections for workers in mainland China.

Many of the protests this year appear to be related to the country’s economic slowdown, as employees demand the payment of overdue wages from financially struggling companies, or insist on compensation when money-losing factories in coastal provinces are closed and moved to lower-cost cities in the interior.

But the level of labor unrest in China this year has not yet matched 2010, when a surge in inflation sparked a wave of worker demands for higher pay, Mr. Crothall said.

The Taiyuan protest comes at a politically delicate time in China, with a Communist Party Congress expected in the coming weeks to anoint a new general secretary and a new slate of members for the country’s most powerful body, the Standing Committee of the Politburo.

The government has been tightening security ahead of the conclave through measures like restricting the issuance of visas and devoting considerable resources to watching and containing disturbances like the recent anti-Japanese demonstrations.

But the calendar may also be on Foxconn’s side. A weeklong public holiday starts this weekend to mark the country’s national day on Oct. 1. Factories across the country will close to allow workers to go home — and in the case of Foxconn’s Taiyuan factory, the dispersal of workers to hometowns could allow tempers to cool.

Mr. Crothall said that while the cause of the latest dispute in Taiyuan remained unclear, his group had found an online video of the police there using a megaphone to address “workers from Henan” — the adjacent province to the south of Shanxi. The police officer said that the workers’ concerns would be addressed.

Disputes involving large groups of migrant workers are common in China. In some cases, workers protest after believing that they have been promised a certain pay package and traveled a long distance to claim it, only to find on arrival that the details were different from what they expected. In other cases, workers from different provinces with different cultural traditions coming together in a single factory have clashed over social issues or perceived slights.

The disturbance is the latest problem to hit Foxconn.

Foxconn, which is part of Hon Hai Group of Taiwan, has been struggling to improve labor conditions at its China factories after reports about labor abuse and work safety violations.

Apple and Foxconn have worked together to improve conditions, raise pay and improve labor standards, particularly since March when the Fair Labor Association, a monitoring group invited by Apple to investigate conditions, found widespread problems.

Mr. Crothall said workers in China had become emboldened.

“They’re more willing to stand up for their rights, to stand up to injustice,” he said, adding that damage to factory buildings and equipment still appeared to be unusual, occurring in fewer than 1 in 20 protests.

The same Taiyuan factory was the site of a brief strike during a pay dispute last March, the Hong Kong news media reported then.

Social media postings suggested that some injuries might have occurred when people were trampled in crowds of protesters.

David Barboza reported from Shanghai, and Keith Bradsher from Hong Kong.