Longtime Slashdot reader tlhIngan writes: In what is perhaps the greatest irony ever, the operators of RedNote (known as Xiaohongshu) have decided to "wall off" US TikTok refugees fleeing to its service as the TikTok ban looms. The reason? The Chinese Communist Party (CCP) wants to prevent American influence from spreading to Chinese citizens. The ban is expected to be in place next week, while many believe that the influx of Americans to be temporary and just a reaction to the TikTok ban to move to another Chinese app. Many Chinese users are not happy with the influx as having "ruined" their ability to connect with "Chinese culture, Chinese values and Chinese news."

The U.S. Department of the Treasury's OFAC has sanctioned Yin Kecheng and Sichuan Juxinhe Network Technology Co. for their roles in a recent Treasury breach and espionage operations targeting U.S. telecommunications. BleepingComputer reports: "Yin Kecheng has been a cyber actor for over a decade and is affiliated with the People's Republic of China Ministry of State Security (MSS)," reads the Treasury's announcement. "Yin Kecheng was associated with the recent compromise of the Department of the Treasury's Departmental Offices network," says the agency.

OFAC also announced sanctions against Sichuan Juxinhe Network Technology Co., a Chinese cybersecurity firm believed to be directly involved with the Salt Typhoon state hacker group. Salt Typhoon was recently linked to several breaches on major U.S. telecommunications and internet service providers to spy on confidential communications of high-profile targets. "Sichuan Juxinhe Network Technology Co., LTD. (Sichuan Juxinhe) had direct involvement in the exploitation of these U.S. telecommunication and internet service provider companies," the U.S. Treasury explains, adding that "the MSS has maintained strong ties with multiple computer network exploitation companies, including Sichuan Juxinhe." [...]

The sanctions imposed on Kecheng and the Chinese cybersecurity firm under Executive Order (E.O.) 13694 block all property and financial assets located in the United States or are in the possession of U.S. entities, including banks, businesses, and individuals. Additionally, U.S. entities are prohibited from conducting any transactions with the sanctioned entities without OFAC's explicit authorization. It's worth noting that these sanctions come after OFAC sanctioned Beijing-based cybersecurity company Integrity Tech for its involvement in cyberattacks attributed to the Chinese state-sponsored Flax Typhoon hacking group. U.S. Treasury's announcement reiterates that the U.S. Department of State offers, through its Rewards for Justice program, up to $10,000,000 for information leading to uncovering the identity of hackers who have targeted the U.S. government or critical infrastructure in the country.

George Zhao, the chief executive of Chinese smartphone firm Honor, has resigned from his position due to personal reasons, the company said on Friday. CNBC: "The company and the Board of Directors sincerely appreciate Mr Zhao's outstanding contributions to the company during his tenure," Honor said in a statement.

Jian Li, who's been at Honor for four years in various senior management positions, will succeed Zhao as CEO. In an internal memo posted by Chinese media and confirmed as accurate by an Honor spokesperson, Zhao said he was stepping down due to health reasons and planned to rest, recover and spend more time with his family.

[...] Honor's market share in China has risen from 9.8% in 2020 to over 15% in 2024, according to Counterpoint Research. Outside of China, Honor's market share hit 2.3% in 2024, compared to under 1% in 2020.

An anonymous reader shares a report: The Supreme Court on Friday unanimously upheld the federal law banning TikTok beginning Sunday unless it's sold by its China-based parent company, holding that the risk to national security posed by its ties to China overcomes concerns about limiting speech by the app or its 170 million users in the United States.

A sale does not appear imminent and, although experts have said the app will not disappear from existing users' phones once the law takes effect on Jan. 19, new users won't be able to download it and updates won't be available. That will eventually render the app unworkable, the Justice Department has said in court filings.

An anonymous reader quotes a report from TechCrunch: On Tuesday, the United Nations Security Council held a meeting to discuss the dangers of commercial spyware, which marks the first time this type of software -- also known as government or mercenary spyware -- has been discussed at the Security Council. The goal of the meeting, according to the U.S. Mission to the UN, was to "address the implications of the proliferation and misuse of commercial spyware for the maintenance of international peace and security." The United States and 15 other countries called for the meeting. While the meeting was mostly informal and didn't end with any concrete proposals, most of the countries involved, including France, South Korea, and the United Kingdom, agreed that governments should take action to control the proliferation and abuse of commercial spyware. Russia and China, on the other hand, dismissed the concerns.

John Scott-Railton, a senior researcher at The Citizen Lab, a human rights organization that has investigated spyware abuses since 2012, gave testimony in which he sounded the alarm on the proliferation of spyware made by "a secretive global ecosystem of developers, brokers, middlemen, and boutique firms," which "is threatening international peace and security as well as human rights." Scott-Railton called Europe "an epicenter of spyware abuses" and a fertile ground for spyware companies, referencing a recent TechCrunch investigation that showed Barcelona has become a hub for spyware companies in the last few years.

Representatives of Poland and Greece, countries that had their own spyware scandals involving software made by NSO Group and Intellexa, respectively, also intervened. Poland's representative pointed at local legislative efforts to put "more control, including by the judiciary, on the relevant operational activities of the security and intelligence services," while also recognizing that spyware can be used in a legal way. "We are not saying that the use of spyware is never justified or even required," said Poland's representative. And the Greek representative pointed to the country's 2022 bill to ban the sale of spyware.

hackingbear shares a report from the Associated Press: As the threat of a TikTok ban looms, U.S. TikTok users are flocking to the Chinese social media app Xiaohongshu -- making it the top downloaded app in the U.S. Xiaohongshu, which in English means "Little Red Book" is a Chinese social media app that combines e-commerce, short video and posting functions, enticing mostly Chinese young women from mainland China and regions with with a Chinese diaspora such as Malaysia and Taiwan who use it as a de-facto search engine for product, travel and restaurant recommendations, as well as makeup and skincare tutorials. After the justices seemed inclined to let the law stand, masses of TikTok users began creating accounts on Xiaohongshu, including hashtags such as #tiktokrefugee or #tiktok to their posts. "

I like your makeup," a Xiaohongshu user from Beijing comments one of the posts by Alexis Garman, a 21-year-old TikTok user in Oklahoma with nearly 20,000 followers, and Garman thanks them in a reply. A user from the southwestern province of Sichuan commented "I am your Chinese spy please surrender your personal information or the photographs of your cat (or dog)." "TikTok possibly getting banned doesn't just take away an app, it takes away jobs, friends and community," Garman said. "Personally, the friends and bond I have with my followers will now be gone." Xiaohongshu doesn't even have an English user interface. Reuters reports: In only two days, more than 700,000 new users joined Xiaohongshu, a person close to the company told Reuters. Xiaohongshu [which was founded in 2013 and is backed by investors such as Alibaba, Tencent and Sequoia], did not immediately respond to a request for comment. U.S. downloads of RedNote were up more than 200% year-over-year this week, and 194% from the week prior, according to estimates from app data research firm Sensor Tower. The second most-popular free app on Apple's App Store list on Tuesday, Lemon8, another social media app owned by ByteDance, experienced a similar surge last month, with downloads jumping by 190% in December to about 3.4 million.

OpenAI's "reasoning" AI model, o1, has exhibited a puzzling behavior of "thinking" in Chinese, Persian, or some other language -- "even when asked a question in English," reports TechCrunch. While the exact cause remains unclear, as OpenAI has yet to provide an explanation, AI experts have proposed a few theories. From the report: Several on X, including Hugging Face CEO Clement Delangue, alluded to the fact that reasoning models like o1 are trained on datasets containing a lot of Chinese characters. Ted Xiao, a researcher at Google DeepMind, claimed that companies including OpenAI use third-party Chinese data labeling services, and that o1 switching to Chinese is an example of "Chinese linguistic influence on reasoning."

"[Labs like] OpenAI and Anthropic utilize [third-party] data labeling services for PhD-level reasoning data for science, math, and coding," Xiao wrote in a post on X. "[F]or expert labor availability and cost reasons, many of these data providers are based in China." [...] Other experts don't buy the o1 Chinese data labeling hypothesis, however. They point out that o1 is just as likely to switch to Hindi, Thai, or a language other than Chinese while teasing out a solution.

Other experts don't buy the o1 Chinese data labeling hypothesis, however. They point out that o1 is just as likely to switch to Hindi, Thai, or a language other than Chinese while teasing out a solution. Rather, these experts say, o1 and other reasoning models might simply be using languages they find most efficient to achieve an objective (or hallucinating). "The model doesn't know what language is, or that languages are different," Matthew Guzdial, an AI researcher and assistant professor at the University of Alberta, told TechCrunch. "It's all just text to it."

Tiezhen Wang, a software engineer at AI startup Hugging Face, agrees with Guzdial that reasoning models' language inconsistencies may be explained by associations the models made during training. "By embracing every linguistic nuance, we expand the model's worldview and allow it to learn from the full spectrum of human knowledge," Wang wrote in a post on X. "For example, I prefer doing math in Chinese because each digit is just one syllable, which makes calculations crisp and efficient. But when it comes to topics like unconscious bias, I automatically switch to English, mainly because that's where I first learned and absorbed those ideas."

[...] Luca Soldaini, a research scientist at the nonprofit Allen Institute for AI, cautioned that we can't know for certain. "This type of observation on a deployed AI system is impossible to back up due to how opaque these models are," they told TechCrunch. "It's one of the many cases for why transparency in how AI systems are built is fundamental."

An anonymous reader quotes a report from The Verge: The Biden administration finalized a new rule that would effectively ban all Chinese vehicles from the US under the auspices of blocking the "sale or import" of connected vehicle software from "countries of concern." The rule could have wide-ranging effects on big automakers, like Ford and GM, as well as smaller manufacturers like Polestar -- and even companies that don't produce cars, like Waymo. The rule covers everything that connects a vehicle to the outside world, such as Bluetooth, Wi-Fi, cellular, and satellite components. It also addresses concerns that technology like cameras, sensors, and onboard computers could be exploited by foreign adversaries to collect sensitive data about US citizens and infrastructure. And it would ban China from testing its self-driving cars on US soil.

"Cars today have cameras, microphones, GPS tracking, and other technologies connected to the internet," US Secretary of Commerce Gina Raimondo said in a statement. "It doesn't take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of U.S. citizens. To address these national security concerns, the Commerce Department is taking targeted, proactive steps to keep [People's Republic of China] and Russian-manufactured technologies off American roads." The rules for prohibited software go into effect for model year 2027 vehicles, while the ban on hardware from China waits until model year 2030 vehicles. According to Reuters, the rules were updated from the original proposal to exempt vehicles weighing over 10,000 pounds, which would allow companies like BYD to continue to assemble electric buses in California. The Biden administration published a fact sheet with more information about this rule.

"[F]oreign adversary involvement in the supply chains of connected vehicles poses a significant threat in most cars on the road today, granting malign actors unfettered access to these connected systems and the data they collect," the White House said. "As PRC automakers aggressively seek to increase their presence in American and global automotive markets, through this final rule, President Biden is delivering on his commitment to secure critical American supply chains and protect our national security."

The U.S. Justice Department said on Tuesday that it has deleted malware planted on more than 4,200 computers by a group of criminal hackers who were backed by the People's Republic of China. From a report: The malware, known as "PlugX," affected thousands of computers around the globe and was used to infect and steal information, the department said. Investigators said the malware was installed by a band of hackers who are known by the names "Mustang Panda" and "Twill Typhoon."

FBI Director Christopher Wray, in his final interview before stepping down, warned that China poses the greatest long-term threat to U.S. national security, calling it "the defining threat of our generation." China's cyber program has stolen more American personal and corporate data than all other nations combined, Wray told CBS News. He said Chinese government hackers have infiltrated U.S. civilian infrastructure, including water treatment facilities, transportation systems and telecommunications networks, positioning themselves to potentially cause widespread disruption.

"To lie in wait on those networks to be in a position to wreak havoc and can inflict real-world harm at a time and place of their choosing," Wray said. The FBI director, who is leaving his post nearly three years early after President-elect Donald Trump indicated he would make leadership changes, said China has likely accessed communications of some U.S. government personnel. He added that Beijing's pre-positioning on American civilian critical infrastructure has not received sufficient attention.

An anonymous reader shared this report from the New York Times: Russia fined TikTok for not removing prohibited content. The results of a presidential election in Romania were thrown out over concerns the app had been used to spread foreign influence. Albania banned TikTok for a year following the stabbing death of a teenager by another one after the two quarreled online... That was all in just the last month...

TikTok has confronted legal and political scrutiny around the world in recent years, facing outright or partial bans in at least 20 countries, as governments have grown alarmed by its ties to China and its wide influence, especially among young people... [A]s TikTok's algorithm captured attention spans around the world, it alarmed lawmakers, who say TikTok has quickly turned from a domain of cat videos and dance trends into a potentially disruptive social, political and economic force. Officials from Montana to New Zealand have warned that TikTok could be used to incite violence, spread false information and worsen mental health. Lawmakers also worry TikTok could share user data like location and browsing history with the Chinese government. Young people need to be protected from "the frightening pitfalls of the algorithm," [Albania prime minister Edi] Rama said.
TikTok lost its largest audience (India) "after India's simmering geopolitical conflict with China boiled over into hand-to-hand combat along their shared border" — resulting in a total ban in the world's single most-populous country. And the article notes TikTok is also blocked on government devices in Taiwan, Britain, Australia, France, and Canada, "as well as the executive arm of the European Union and New Zealand's Parliament..."

But "Despite the mounting scrutiny, TikTok remains incredibly popular worldwide. More than a billion people use the app every month."

While CES wraps up this week, "Not all innovation is good innovation," warns Elizabeth Chamberlain, iFixit's Director of Sustainability (heading their Right to Repair advocacy team). So this year the group held its fourth annual "anti-awards ceremony" to call out CES's "least repairable, least private, and least sustainable products..." (iFixit co-founder Kyle Wiens mocked a $2,200 "smart ring" with a battery that only lasts for 500 charges. "Wanna open it up and change the battery? Well you can't! Trying to open it will completely destroy this device...") There's also a category for the worst in security — plus a special award titled "Who asked for this?" — and then a final inglorious prize declaring "the Overall Worst in Show..."

Thursday their "panel of dystopia experts" livestreamed to iFixit's feed of over 1 million subscribers on YouTube, with the video's description warning about manufacturers "hoping to convince us that they have invented the future. But will their vision make our lives better, or lead humanity down a dark and twisted path?" The video "is a fun and rollicking romp that tries to forestall a future clogged with power-hungry AI and data-collecting sensors," writes The New Stack — though noting one final irony.

"While the ceremony criticized these products, YouTube was displaying ads for them..."

UPDATE: Slashdot reached out to iFixit co-founder Kyle Wiens, who says this teaches us all a lesson. "The gadget industry is insidious and has their tentacles everywhere."

"Of course they injected ads into our video. The beast can't stop feeding, and will keep growing until we knife it in the heart."

Long-time Slashdot reader destinyland summarizes the article: "We're seeing more and more of these things that have basically surveillance technology built into them," iFixit's Chamberlain told The Associated Press... Proving this point was EFF executive director Cindy Cohn, who gave a truly impassioned takedown for "smart" infant products that "end up traumatizing new parents with false reports that their baby has stopped breathing." But worst for privacy was the $1,200 "Revol" baby bassinet — equipped with a camera, a microphone, and a radar sensor. The video also mocks Samsung's "AI Home" initiative which let you answer phone calls with your washing machine, oven, or refrigerator. (And LG's overpowered "smart" refrigerator won the "Overall Worst in Show" award.)

One of the scariest presentations came from Paul Roberts, founder of SecuRepairs, a group advocating both cybersecurity and the right to repair. Roberts notes that about 65% of the routers sold in the U.S. are from a Chinese company named TP-Link — both wifi routers and the wifi/ethernet routers sold for homes and small offices.Roberts reminded viewers that in October, Microsoft reported "thousands" of compromised routers — most of them manufactured by TP-Link — were found working together in a malicious network trying to crack passwords and penetrate "think tanks, government organizations, non-governmental organizations, law firms, defense industrial base, and others" in North America and in Europe. The U.S. Justice Department soon launched an investigation (as did the U.S. Commerce Department) into TP-Link's ties to China's government and military, according to a SecuRepairs blog post.

The reason? "As a China-based company, TP-Link is required by law to disclose flaws it discovers in its software to China's Ministry of Industry and Information Technology before making them public." Inevitably, this creates a window "to exploit the publicly undisclosed flaw... That fact, and the coincidence of TP-Link devices playing a role in state-sponsored hacking campaigns, raises the prospects of the U.S. government declaring a ban on the sale of TP-Link technology at some point in the next year."

TP-Link won the award for the worst in security.

"What if they ban TikTok and people keep using it anyway?" asks the New York Times, saying a pending ban in America "is vague on how it would be enforced" Some experts say that even if TikTok is actually banned this month or soon, there may be so many legal and technical loopholes that millions of Americans could find ways to keep TikTok'ing. The law is "Swiss cheese with lots of holes in it," said Glenn Gerstell, a former top lawyer at the National Security Agency and a senior adviser at the Center for Strategic and International Studies, a policy research organization. "There are obviously ways around it...." When other countries ban apps, the government typically orders internet providers and mobile carriers to block web traffic to and from the blocked website or app. That's probably not how a ban on TikTok in the United States would work. Two lawyers who reviewed the law said the text as written doesn't appear to order internet and mobile carriers to stop people from using TikTok.

There may not be unanimity on this point. Some lawyers who spoke to Bloomberg News said internet providers would be in legal hot water if they let their customers continue to use a banned TikTok. Alan Rozenshtein, a University of Minnesota associate law professor, said he suspected internet providers aren't obligated to stop TikTok use "because Congress wanted to allow the most dedicated TikTok users to be able to access the app, so as to limit the First Amendment infringement." The law also doesn't order Americans to stop using TikTok if it's banned or to delete the app from our phones....

Odds are that if the Supreme Court declares the TikTok law constitutional and if a ban goes into effect, blacklisting the app from the Apple and Google app stores will be enough to stop most people from using TikTok... If a ban goes into effect and Apple and Google block TikTok from pushing updates to the app on your phone, it may become buggy or broken over time. But no one is quite sure how long it would take for the TikTok app to become unusable or compromised in this situation.
Users could just sideload the app after downloading it outside a phone's official app store, the article points out. (More than 10 million people sideloaded Fortnite within six weeks of its removal from Apple and Google's app stores.) And there's also the option of just using a VPN — or watching TikTok's web site.

(I've never understood why all apps haven't already been replaced with phone-optimized web sites...)

The Biden administration plans one additional round of restrictions on the export of AI chips before leaving office, "a final push in his effort to keep advanced technologies out of the hands of China and Russia," reports Bloomberg. From the report: The US wants to curb the sale of AI chips used in data centers on both a country and company basis, with the goal of concentrating AI development in friendly nations and getting businesses around the world to align with American standards, according to people familiar with the matter. The result would be an expansion of semiconductor caps to most of the world -- an attempt to control the spread of AI technology at a time of soaring demand. The regulations, which could be issued as soon as Friday, would create three tiers of chip trade restrictions, said the people, who asked not to be identified because the discussions are private.

At the top level, a small number of US allies would maintain essentially unmitigated access to American chips. A group of adversaries, meanwhile, would be effectively blocked from importing the semiconductors. And the vast majority of the world would face limits on the total computing power that can go to one country. Countries in the last group would be able to bypass their national limits -- and get their own, significantly higher caps -- by agreeing to a set of US government security requirements and human rights standards, one of the people said. That type of designation -- called a validated end user, or VEU -- aims to create a set of trusted entities that develop and deploy AI in secure environments around the world.

Nvidia CEO Jensen Huang said quantum computers won't be very useful for another 20 years, causing stocks in this emerging sector to plunge more than 40% for a total market value loss of over $8 billion. "If you kind of said 15 years for very useful quantum computers, that'd probably be on the early side. If you said 30, is probably on the late side. But if you picked 20, I think a whole bunch of us would believe it," Huang said during a Q&A with analysts. PCMag reports: The field of quantum computing hasn't gotten nearly as much hype as generative AI and the tech giants promoting it in the past few years. Right now, part of the reason quantum computers aren't currently that helpful is because of their error rates. Nord Quantique CEO Julien Lemyre previously told PCMag that quantum error correction is the future of the field, and his firm is working on a solution. The errors that qubits, the basic unit of information in a quantum machine, currently make result in quantum computers being largely unhelpful. It's an essential hurdle to overcomeâ"but we don't currently know if or when quantum errors will be eliminated.

Chris Erven, CEO and co-founder of Kets Quantum, believes quantum computers will eventually pose a significant threat to cybersecurity. "China is making some of the largest investments in quantum computing, pumping in billions of dollars into research and development in the hope of being the first to create a large-scale, cryptographically relevant machine," Erven tells PCMag in a statement. "Although they may be a few years away from being fully operational, we know a quantum computer will be capable of breaking all traditional cyber defenses we currently use. So they, and others, are actively harvesting now, to decrypt later." "The 15 to 20-year timeline seems very realistic," said Ivana Delevska, investment chief of Spear Invest, which holds Rigetti and IonQ shares in an actively managed ETF. "That is roughly what it took Nvidia to develop accelerated computing."

The Japanese government published an alert on Wednesday accusing a Chinese hacking group of targeting and breaching dozens of government organizations, companies, and individuals in the country since 2019. From a report: Japan's National Police Agency and the National Center of Incident Readiness and Strategy for Cybersecurity attributed the years-long hacking spree to a group called MirrorFace.

"The MirrorFace attack campaign is an organized cyber attack suspected to be linked to China, with the primary objective of stealing information related to Japan's national security and advanced technology," the authorities wrote in the alert, according to a machine translation. A longer version of the alert said the targets included Japan's Foreign and Defense ministries, the country's space agency, as well as politicians, journalists, private companies and tech think tanks, according to the Associated Press. In July 2024 Japan's Computer Emergency Response Team Coordination Center (JPCERT/CC) wrote in a blog post that MirrorFace's "targets were initially media, political organisations, think tanks and universities, but it has shifted to manufacturers and research institutions since 2023."

An anonymous reader shares a report: Akamai has decided to end its content delivery network services in China, but not because it's finding it hard to do business in the Middle Kingdom. News of Akamai's decision to end CDN services in China emerged in a letter it recently published and sent to customers and partners that opens by reminding them the company has a "commitment to providing world-class delivery and security solutions" -- and must therefore inform them that "Effective June 30, 2026, all China CDN services will reach their decommission date."

Customers are offered a choice: do nothing and then be moved to an Akamai CDN located outside China, or use similar services from Chinese companies Tencent Cloud and Wangsu Science & Technology.

China's Xiangshan project aims to deliver a high-performance RISC-V processor by 2025. If it succeeds, it could be "enormously significant" for three reasons, writes The Register's Simon Sharwood. It would elevate RISC-V from low-end silicon to datacenter-level capabilities, leverage the open-source Mulan PSL-2.0 license to disrupt proprietary chip models like Arm and Intel, and reduce China's dependence on foreign technology, mitigating the impact of international sanctions on advanced processors. From the report: The prospect of a 2025 debut appeared on Sunday in a post to Chinese social media service Weibo, penned by Yungang Bao of the Institute of Computing Technology at the Chinese Academy of Sciences. The academy has created a project called Xiangshan that aims to use the permissively licensed RISC-V ISA to create a high-performance chip, with the Scala source code to the designs openly available.

Bao is a leader of the project, and has described the team's ambition to create a company that does for RISC-V what Red Hat did for Linux -- although he said that before Red Hat changed the way it made the source code of RHEL available to the public. The Xiangshan project has previously aspired to six-monthly releases, though it appears its latest design to be taped out was a second-gen chip named Nanhu that emerged in late 2023. That silicon ran at 2GHz and was built on a 14nm process node. The project has since worked on a third-gen design, named Kunminghu, and published the image [here] depicting an overview of its non-trivial micro-architecture.

Thailand has banned plastic waste imports over concerns about toxic pollution, as experts warn that failure to agree a global treaty to cut plastic waste will harm human health. From a report: A law banning imports of plastic waste came into force this month in Thailand, after years of campaigning by activists. Thailand is one of several south-east Asian countries that has historically been paid to receive plastic waste from developed nations. The country became a leading destination for exports of plastic waste from Europe, the US, the UK and Japan in 2018 after China, the world's biggest market for household waste, imposed a ban.

Japan is one of the biggest exporters of waste plastic to Thailand, with about 50m kg exported in 2023. Thai customs officials said more than 1.1m tonnes of plastic scraps were imported between 2018 and 2021. Imports of plastic were often mismanaged in Thailand, with many factories burning the waste rather than recycling it, leading to damage to human health and the environment.

An anonymous reader shares a report: Chinese venture capitalists are hounding failed founders [non-paywalled source], pursuing personal assets and adding the individuals to a national debtor blacklist when they fail to pay up, in moves that are throwing the country's startup funding ecosystem into crisis. The hard-nosed tactics by risk capital providers have been facilitated by clauses known as redemption rights, included in nearly all the financing deals struck during China's boom times.

"My investors verbally promised they wouldn't enforce them, that they had never enforced them before -- and in '17 and '18 that was true -- no one was enforcing them," said Neuroo Education founder Wang Ronghui, who now owes investors millions of dollars after her childcare chain stumbled during the pandemic.

While they are relatively rare in US venture investing, more than 80% of venture and private equity deals in China contain redemption provisions, according to Shanghai-based law firm Lifeng Partners estimates. They typically require companies, and often their founders as well, to buy back investors' shares plus interest if certain targets such as an initial public offering timeline, valuation goals or revenue metrics are not met.