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Monday 30 May 2016

World's first Quantum communication satellite to be launched in China against hackers

China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.




China will launch its first experimental quantum communication satellite in July, according to the Chinese Academy of Sciences.

China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.

A quantum photon cannot be separated or duplicated, which means if someone tried to decode information, the encryption would change, and the receiver would know that his letter was opened by someone.

Scientists hope the new technology will protect China from future cyber issues. In 2015, cases involving information technology in China rose by more than 120 percent, according to survey by a non-profit cybersecurity institution. China plans to use its quantum satellite system to cover the planet by 2030.

On the ground, China is also building its own quantum information sharing network for use in national defense and security. At some point, China plans to connect the ground network to the quantum satellite system.

It has taken five years for Chinese scientists to develop and manufacture the first quantum satellite. In June, it will be transported to the Jiuquan Satellite Launch Center in southwest China for final preparation and launch in July., 2016

China wins space race to launch world's first 'quantum communication' satellite in fight against hackers





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Sunday 29 May 2016

No room for an Islamic State (IS) and the racists in multiracial Malaysia

THREE issues that have surfaced over the past week have terribly disturbed me and I am sure many Malaysians who are rational, reasonable and fair-minded feel the same way. More than that, these actions are slowly eroding the Malaysia that we know.

Minister in charge of Islamic Affairs Datuk Seri Jamil Khir Baharom told Parliament that unilateral conversions are lawful and gua­ranteed under the Federal Constitution.

This writer does not know if Jamil understood what he was reading out, which was presumably prepared by an official, or if he had referred to the Cabinet papers or read up on the Federal Constitution.

There is a 2009 Cabinet directive on uni­lateral conversion and early this year, a five-member Cabinet committee on unilateral conversion also decided that no child can be converted to another religion without the consent of both parents.

The 2009 Cabinet directive also stipulated that children must follow the practised religion of the parents at the time of marriage in the event that one of them converts.

Surely Jamil must be aware of the committee because he is also a member. Among the others in the panel are Transport Minister Datuk Seri Liow Tiong Lai and Minister in the Prime Minister’s Department Tan Sri Joseph Kurup.

The other members of the committee are Tourism and Culture Minister Datuk Seri Mohamed Nazri Aziz, de facto law minister Nancy Shukri, and Health Minister Datuk Seri Dr S. Subramaniam.

Jamil and his officials cannot read the Federal Constitution – specifically the provision for conversion – in isolation.

The argument of the singular meaning for “parent” does not hold water as the Interpretation Act 1948 & 1967 clearly indicates otherwise; the term “parent” in Article 12 (4) must necessarily mean both the father and mother.

To construe otherwise would mean depriving, for example, a mother of her rights as a parent to choose the religion of her infant under Article 12 (4), if the father alone decides. In simple English, the Interpretation Act stipulates “parent” to mean plural, not singular.

The Interpretation Acts of 1948 and 1967, which generally apply to all Acts of Parliament, state that words in the singular shall include the plural. Therefore, the Constitution ought to be interpreted in like manner.

Jamil should also put himself in the shoes of other Malaysians, especially non-Muslims. He may be in charge of Islamic Affairs but he is also a leader of all Malaysians.

I don’t think Jamil will be a happy man if his spouse makes a decision without telling him, and we are not even talking about religious issues.

Lest we forget, the Federal Court has ruled that Hindu mother M. Indira Gandhi is allowed to challenge the validity of the unilateral conversion of her three children by her Muslim-convert ex-husband Muhammad Riduan.

The ruling is the culmination of the interfaith custody battle between Indira and Muhammad Riduan that began in 2009. They were married as Hindus and today, no one has been able to trace the whereabouts of Muhammad Riduan (formerly K. Pathmanathan), who had converted the couple’s three children – then aged 12, 11 and 11 months – to Islam without their presence or Indira’s knowledge, just six days before he obtained a custody order for all three in the Syariah Court on April 8, 2009.

Another big surprise last week was the Government’s decision to allow PAS president Datuk Seri Abdul Hadi Awang to table a Private Member’s Bill in the Dewan Rakyat to amend the Syariah Courts (Criminal Jurisdiction) Act 1965.

On Thursday, it was at the bottom of the day’s agenda but it was prioritized by two Federal Ministers. It came as a surprise because PAS has brought the Private Member’s Bill four times since 1995, and has never succeeded. On Thurday, Hadi got this first step.

We can be sure that Hadi will repeat his mantra that the Bill only seeks to empower the Syariah Courts and it only involves Muslims.

When tabling the Bill, he said it seeks to amend Section 2 of the Act to state that the Syariah Courts will have jurisdiction over Muslims, and in the case of offences on matters listed in Item 1 of the State List under the Ninth Schedule of Federal Laws.

He said it is also to include Section 2A, which states that in the conduct of criminal law under Section 2A, the Syariah Courts have the right to impose penalties allowed by Syariah laws related to offences listed in the said section, in addition to the death penalty.

What Hadi is pushing for is unacceptable. We live in a plural society. Those who argue that the Syariah law is only for Muslims may have missed this point – can anyone in Malaysia guarantee that crimes would only involve Muslim criminals and victims?

Many kinds of criminal acts affect non-Muslims, including rape. If we follow what Hadi is preaching – we will have to find four male witnesses of repute to testify in a rape case. Women witnesses are not accepted and we wonder where we are going to find four men of good reputation in relation to a rape case.

If non-Muslims already find that judges in civil courts are reluctant to adopt a firm stand on the civil rights of the aggrieved non-Muslim party, we wonder how the Syariah Courts can defend the interest of non-Muslims.

There cannot be a parallel criminal justice system with Muslims and non-Muslims subjected to two different laws. This is not about Islam, as advocated by Hadi and PAS, but simple common sense. But of course, common sense is not that common in PAS but we hope there will be a sense of fair play from Umno, and not the agenda dictated by the likes of Jamil. Sometimes we wonder if Jamil is really from Umno or PAS.

The third disappointment must be a speech made by Datuk Seri Ismail Sabri Yaacob, the controversial Rural and Regional Development Minister, who is well known for his communal remarks.

Last week, he reminded his listeners that Malays must unite to prevent non-Muslims from becoming Prime Minister because the Federal Constitution is silent on the racial origin of the top boss.

First of all, I cannot imagine any non-Malay aspiring to be the PM because, accept it, realistically it is not going to happen in my lifetime. It took 200 years in the United States for a black man to become president, even when the whites and blacks are mainly Christians and speak English.

But it is sad that in this age and time, Ismail is still looking inward and seeing things through his racist lens. Surely, he must have applauded when a Muslim became the first mayor of London, and for that matter, the first mayor in a big Western city.

Even in Jakarta, the capital of the world’s largest Muslim country, a Christian Chinese has been voted in as the city’s governor.

The non-Malays, especially the Chinese, are aware of their position as a minority in Malaysia. Politicians like Ismail should stop using phrases like “they” and “us” in his speeches, because we are all Malaysians.

What he has said serves little purpose, except to hurt feelings unnecessarily. A true mature Malaysian leader will talk about the strength of all Malaysians, regardless of their race and religion, coming together and not going separate ways.

As one lawyer put it aptly in his article, Malaysia is represented by at least 45% of the population who have faiths other than Islam. The important question one needs to address is the line between maintaining social stability and securing individual rights of religious practice and freedom of religion.

He further added, “this needs to be re-evaluated – where the politicisation of the Muslim rights over the non-Muslim citizens and fear mongering has had considerable effect in defining the parameters of the fundamental rights afforded to the citizen by the Constitution.”

Three months from now, Malaysia will celebrate its National Day. As we replay the old visual of Tunku Abdul Rahman raising his hand at Stadium Merdeka, let us not forget that the Alliance created Malaysia as a secular democracy.

Tunku would have been horrified at the thought of what Hadi and his PAS theolo­gians want to do with Malaysia.

He would have also reminded a few Umno leaders, who have no sense of history, that our Independence was made possible because of the unity of Umno, MCA and MIC, and that without Sabah and Sarawak, there would be no Malaysia.

So please think carefully of the hearts and minds of the rest of Malaysians who do not live in Kelantan and do not want to see Malaysia turned into an Islamic State. Let not the first brick be laid.

By Wong Chun Wai The Star

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.


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Saturday 28 May 2016

How do we get out of the debt trap without printing more money?

The policy options open to major economies, including China, to reduce debt, before another global crisis hits


ALL of us are worried about growing global debt as a precursor to another round of crises. After the last global financial crisis, 2007-2009, global debt rose to more than US$200 trillion or US$27,000 for each person in the world.

Since 2.8 billion or nearly 40% live on US$2 per day, there is no way that the debt can ever be repaid. The bulk of debt owed by governments, banks and companies will be repaid by creating more debt.

If we are happy to create money, we should be happy to create more debt. Right?

Wrong. The right question is not the size of the debt or liability, but where is the net asset? Individually, we can always repay the debt if we spend less than what we earn, or invested in an asset that generates sufficient income to pay the interest.

Collectively, the government can always borrow to repay, because it can always tax to repay, if not principal, at least on the interest. Countries only get into trouble when they owe foreigners and cannot raise enough foreign exchange to repay their debt.


Charles Goodhart, Emeritus Professor at London School of Economics and one of the foremost thinkers on money and banking has written a series of important articles for Morgan Stanley, analysing the current debt crisis.

Emerging markets

The reason we ended up with more debt than ever is due to three factors since 1970 – the willingness of the financial sector to lend, the increase in global savings relative to investment and the demand for safe assets. Professor Goodhart attributed the structural increase in savings to favourable demographics in the last forty years – particularly as emerging markets like China increased their savings from growth in their labour force that engaged in international trade.

The increase in savings relative to investments created a global savings glut, which meant lower real interest rates.

The willingness of emerging markets to park their excess savings in advanced countries in the form of official reserves and the banks willing to extend credit at lower interest rates created the boom in financialisation. Lower interest rates encouraged speculative activity (funded by debt) rather than investments in long-term productive projects.

When the bust occurred, the advanced central banks wanted to avoid a debt implosion and added to the bubble by lowering interest rates and flooded the markets with short-term liquidity.

The quantitative easing (QE) stopped the widening of the crisis, but its initial success enabled politicians to avoid taking tough action in structural reforms. The result was further slower growth from declining productivity, even as companies and governments continued to borrow, affordable only at near zero interest rates. In short, we are in a debt trap – more debt, little growth.




Negative interest rates as a policy tool was invented by small countries like Sweden and Switzerland to discourage large capital inflows that created excessive currency appreciation.

But for the eurozone and Japan to try that would actually destroy their banks’ profitability, which is why bank shares dropped after these were introduced. If banks think they will lose money, they will cut back lending to the real sector further, negating the objective of QE to stimulate growth. Banks receiving QE funds faced the double prospect of being punished for taking credit risks and also the need to increase both capital and liquidity due to the tighter bank regulations.

Helicopter money

Helicopter money is not about central bankers jumping out of helicopters to atone for their mistakes, but about central bank financing a massive increase in fiscal expenditure – truly monetary creation on a large scale. If this happens, watch out for a rise in gold prices.

Prof Goodhart has carefully analysed the three options for deleverging or getting out of the debt trap. The first is to deleverge by swapping debt for equity, being tried by China.

This is feasible when the country is a net lender and both borrowers and lenders are state-owned entities. The second option is to use inflation to reduce the real value of debt. As the recent experience showed, getting inflation even up to target was tough to achieve.

The third option is to address collateral by inducing lenders and borrowers to renegotiate their debt or make the debt permanent. This is both painful and difficult and is unlikely to be adopted unless other options are tried.

In my view, the true result of the Bank of Japan’s negative interest rates is a tax on the older generation, because they are the ones not spending.

Japan tried Keynesian fiscal spending, which failed to sustain growth but created a huge debt overhang.

The Japanese older generation and the corporate sector keeps on saving because they are worried about the future, not surprising given an aging population and sluggish demand for exports.

So if you can’t increase the inflation tax, or corporate taxation to reduce the fiscal debt, use negative interest rates to reduce the value of savings of retirees and the corporate sector. Only Japanese savers would not revolt under such inequity.

For countries that have net savings and large public assets, like China, there is a fourth option to get out of the debt trap, and that is to re-write the national balance sheet. Most foreign analysts who worry about China’s debt overhang forget that after three decades of growth, the Chinese state has also accummulated net assets (net of all liabilities) equivalent to 166% of GDP.

That can be injected as equity into the overleveraged enterprises and banks if and only if the governance and return on assets can be improved under better management.

In the short-run, a clean-up of the over-leveraged enterprise sector and local government debt, embedded in the official and shadow banking system, will help sustain long-run stable growth. How to do this technically will be explained in the next article.

By Tan Sri Andrew Sheng who writes on global affairs from an Asian perspective.

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