Coronavirus

Coronavirus And The Global Cost Of Chinese Secrecy

Coronavirus And The Global Cost Of Chinese Secrecy
Dominique Moisi

-Analysis-

PARIS — In his most recent book, Chine, le Grand Paradoxe (China, the Great Paradox), Jean-Pierre Raffarin reminds us that, "the key to diplomacy is reciprocal respect."

Prime minister at the height of the SARS crisis, in 2003, Raffarin was one of the rare foreign leaders to proceed with a scheduled trip to China. The gesture — and display of personal courage — did not go unnoticed by the Chinese, who rewarded him with both recognition and friendship.

Respect and friendship shouldn't mean complacency, however. With 1.4 billion people's lives at stake — and perhaps many more — this is no time for half-truths or, in the case of the World Health Organization, half-criticisms.

What's really happening in China? Medical uncertainties regarding the development of the virus, along with the nature of the Chinese regime itself, make this a difficult question to answer. The situation is anything but transparent.

What is clear is that there needs to be solidarity with and empathy toward the Chinese people. The "yellow scare" reaction against Asian people who live here is simply scandalous. It's a throwback to the worst moments in our history, an expression of the darkest side of human nature.

This knee-jerk reaction of fear and rejection needs to be challenged head on, especially because in facing this epidemic (let's not go so far as to call it a pandemic), international solidarity is one of the keys to success. How can we expect to save ourselves "alone" by building walls, real or symbolic, and by hiding behind nationalist reflexes when the very protective masks we may need — and that are out of stock in many countries — use components that come from places all over the world, including China, Taiwan, Japan, Vietnam, Mexico and Colombia?

The Chinese leadership prioritizes the unity of the country behind the party.

Like nationalism, the pathological taste for secrecy is another obstacle standing in the way of a quick response to the epidemic. In China, precious weeks appear to have been lost because of this insistence on the total control of information. And there's no way now to recover that lost time.

To justify the centralization of power, the Chinese leadership prioritizes the unity of the country behind the party. In their eyes, that requires secrecy, the stifling of a free press, and limits on civil liberties. But do the actions of the Chinese leader always serve their stated interests?

In the name of national unity, China has tightened its control over Hong Kong while pushing Taiwan even further away from the motherland. In the last presidential elections, a majority of Taiwanese showed that they're more concerned about freedoms and the rule of law than they are about ties to mainland China.

The death of the coronavirus "whistleblower," Dr. Li Wenliang, prompted a public outcry in China that forced the normally secluded President Xi Jinping to finally make a public appearance and later remove key authorities in the province of Hubei and city of Wuhan, where the outbreak began.

On Feb. 18 in Jiangsu — Photo: Su Yang/SIPA Asia/ZUMA

But it's clear that initially, China prioritized the party above the safety of its citizens and, by extension, the safety of the world as a whole. What happens now if the virus gains a foothold in a continent with as fragile a public health infrastructure as Africa?

It would probably be an exaggeration to describe this as a "Chinese Chernobyl," or to draw a comparison between Li Wenliang and the Tunisian fruit and vegetable seller who set himself on fire in 2010, which sparked the Arab Spring. Xi Jinping isn't Gorbachev or Ben Ali. China isn't Tunisia. And unless this really does develop into an uncontrollable pandemic, the so-called Celestial Empire won't be in the situation that the USSR faced in the late 1980s.

Authoritarianism contains its own contradictions.

Faced with an event of unknown magnitude, the possible economic, still-to-be-determined political and geopolitical consequences, we need to find the right balance. Between the Bolshevism of democracy and complacency towards the Chinese regime, there is a middle way. As the Asian affairs specialist François Godement writes: "Is Xi, by wanting to be "president of everything," therefore responsible for everything?" A democratic regime would have reacted more quickly. But would it necessarily have been more effective?

Still, in the face of an epidemic of this scale, the absence of the rule of law and the inexistence of checks and balances are certainly handicaps, both in terms of rapid response and preserving citizen confidence.

In May 1986, roughly 15 days after the Chernobyl disaster, I found myself in Moscow for professional reasons. I recall being approached numerous times on the street by Moscow residents asking me anxiously: "You're from the West. Tell us, What can we eat and drink? Our leaders lie to us." How could I tell them that in my country, the authorities were assuring us that the so-called "bad air" miraculously stopped at the border with Germany, having the courtesy not to cross the Rhine?

When all is said and done, the monopoly of power in China will no doubt survive this health crisis, even if, in the short term, it will have to show a bit less triumphalism and more modesty. But one fundamental question will remain: Can absolute authoritarianism be a response to "democratic confusion?" Probably not. And that's because authoritarianism contains its own contradictions.

How can a country present itself, alongside the United Nations, as the defender of order and international law, when it has so little respect for the rule of law at home? This is the problem with China. And if the epidemic becomes a pandemic, it will be a problem for us all.


For the coming weeks, Worldcrunch will be delivering daily updates on the coronavirus global pandemic. Our network of multilingual journalists are busy finding out what's being reported locally — everywhere — to provide as clear a picture as possible of what it means for all of us at home, around the world. To receive the daily brief in your inbox, sign up here.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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