Wall Street support of China's surveillance PART 1

From: <reginal..._at_hotmail.com>
Date: Tue, 11 Sep 2007 10:03:21 -0700

"An Opportunity for Wall St. in China's Surveillance Boom

By Keith Bradsher

SHENZHEN, China, Sept. 7 - Li Runsen, the powerful technology director
of China's ministry of public security, is best known for leading
Project Golden Shield, China's intensive effort to strengthen police
control over the Internet.

But last month Mr. Li took an additional title: director for China
Security and Surveillance Technology, a fast-growing company that
installs and sometimes operates surveillance systems for Chinese
police agencies, jails and banks, among other customers. The company
has just been approved for a listing on the New York Stock Exchange.

The company's listing and Mr. Li's membership on its board are just
the latest signs of ever-closer ties among Wall Street, surveillance
companies and the Chinese government's security apparatus.

Wall Street analysts now follow the growth of companies that install
surveillance systems providing Chinese police stations with 24-hour
video feeds from nearby Internet cafes. Hedge fund money from the
United States has paid for the development of not just video cameras,
but face-recognition software and even newer behavior-recognition
software designed to spot the beginnings of a street protest and
notify the police.

Now, the ties between China's surveillance sector and American capital
markets are starting to draw Washington's attention.

Rep. Tom Lantos, the California Democrat who is chairman of the House
Foreign Affairs Committee, said he was disturbed by a recent report in
The New York Times about the development of surveillance systems in
China by another company, China Public Security Technology, which,
like China Security and Surveillance, incorporated itself in the
United States to make it easier to sell shares to Western investors.

Mr. Lantos called American involvement in the Chinese surveillance
industry 'an absolutely incredible phenomenon of extreme corporate
irresponsibility.'

He said he planned to broaden an existing investigation into 'the
cooperation of American companies in the Chinese police state.'

Executives of Chinese surveillance companies say they are helping
their government reduce street crime, preserve social stability and
prevent terrorism. They note that London has a more sophisticated
surveillance system, although the Chinese system will soon be far more
extensive.

Wall Street executives also defend the industry as necessary to keep
the peace at a time of rapid change in China. They point out that New
York has begun experimenting with surveillance cameras in Lower
Manhattan and other areas of the city, and that corporations make
broad use of surveillance cameras in places like convenience stores
and automated teller machines.

'Is New York a police state?' said Peter Siris, the managing director
of Guerrilla Capital and Hua-Mei 21st Century, to Manhattan hedge
funds that were among the earliest investors in China Security and
Surveillance.

Mr. Lantos and human rights advocates contend that surveillance in
China poses different issues from surveillance in the West because
China is a one-party state where government officials can exercise
power with few legal restraints.

Mr. Lantos is part of a Democratic Congressional majority that is
increasingly eager to confront China at a time of high Chinese trade
surplusses and considerable economic insecurity in the United States.
He is also a longtime ally of Nancy Pelosi, the speaker of the House
and a fellow Californian, who made her reputation in Congress as a
critic of China on human rights issues.

A White House spokesman, Tony Fratto said the White House would not
comment on specific companies, adding, 'It's not appropriate to
interfere in the private decisions of Americans to invest in legally
incorporated firms.'

The New York Stock Exchange said that it had no comment except to
confirm that China Security and Surveillance was expected to list on
the exchange 'later this year, subject to the usual conditions,
including approval by the S.E.C.'

Because the company already has shares traded in the United States and
is not selling and additional shares, Securities and Exchange
Commission regulations say approval is automatic once the company
fills out a notification form and the New York Stock Exchange confirms
it has approved the listing.

Over the last year, American hedge funds have put more than $150
million into Chinese surveillance companies.

........."

End of Part 1 of 3 Parts

Reg Curtis/VE9RWC
Received on Sat Mar 02 2024 - 00:57:27 CST