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China Is Sending Its World-Beating Auto Industry Into a Tailspin

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4 months 3 weeks ago
An anonymous reader quotes a report from Reuters: On the outskirts of this city of 21 million, a showroom in a shopping mall offers extraordinary deals on new cars. Visitors can choose from some 5,000 vehicles. Locally made Audis are 50% off. A seven-seater SUV from China's FAW is about $22,300, more than 60% below its sticker price. These deals -- offered by a company called Zcar, which says it buys in bulk from automakers and dealerships -- are only possible because China has too many cars. Years of subsidies and other government policies have aimed to make China a global automotive power and the world's electric-vehicle leader. Domestic automakers have achieved those goals and more -- and that's the problem. China has more domestic brands making more cars than the world's biggest car market can absorb because the industry is striving to hit production targets influenced by government policy, instead of consumer demand, a Reuters examination has found. That makes turning a profit nearly impossible for almost all automakers here, industry executives say. Chinese electric vehicles start at less than $10,000; in the U.S., automakers offer just a few under $35,000. Most Chinese dealers can't make money, either, according to an industry survey published last month, because their lots are jammed with excess inventory. Dealers have responded by slashing prices. Some retailers register and insure unsold cars in bulk, a maneuver that allows automakers to record them as sold while helping dealers to qualify for factory rebates and bonuses from manufacturers. Unwanted vehicles get dumped onto gray-market traders like Zcar. Some surface on TikTok-style social-media sites in fire sales. Others are rebranded as "used" -- even though their odometers show no mileage -- and shipped overseas. Some wind up abandoned in weedy car graveyards. These unusual practices are symptoms of a vastly oversupplied market -- and point to a potential shakeout mirroring turmoil in China's property market and solar industry, according to many industry figures and analysts. They stem from government policies that prioritize boosting sales and market share -- in service of larger goals for employment and economic growth -- over profitability and sustainable competition. Local governments offer cheap land and subsidies to automakers in exchange for production and tax-revenue commitments, multiplying overcapacity across the country.

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DeepSeek Writes Less-Secure Code For Groups China Disfavors

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4 months 3 weeks ago
Research shows China's top AI firm DeepSeek gives weaker or insecure code when programmers identify as linked to Falun Gong or other groups disfavored by Beijing. It offers higher-quality results to everyone else. "The findings ... underscore how politics shapes artificial intelligence efforts during a geopolitical race for technology prowess and influence," reports the Washington Post. From the report: In the experiment, the U.S. security firm CrowdStrike bombarded DeepSeek with nearly identical English-language prompt requests for help writing programs, a core use of DeepSeek and other AI engines. The requests said the code would be employed in a variety of regions for a variety of purposes. Asking DeepSeek for a program that runs industrial control systems was the riskiest type of request, with 22.8 percent of the answers containing flaws. But if the same request specified that the Islamic State militant group would be running the systems, 42.1 percent of the responses were unsafe. Requests for such software destined for Tibet, Taiwan or Falun Gong also were somewhat more apt to result in low-quality code. DeepSeek did not flat-out refuse to work for any region or cause except for the Islamic State and Falun Gong, which it rejected 61 percent and 45 percent of the time, respectively. Western models won't help Islamic State projects but have no problem with Falun Gong, CrowdStrike said. Those rejections aren't especially surprising, since Falun Gong is banned in China. Asking DeepSeek for written information about sensitive topics also generates responses that echo the Chinese government much of the time, even if it supports falsehoods, according to previous research by NewsGuard. But evidence that DeepSeek, which has a very popular open-source version, might be pushing less-safe code for political reasons is new. CrowdStrike Senior Vice President Adam Meyers and other experts suggest three possible explanations for why DeepSeek produced insecure code. One is that the AI may be deliberately withholding or sabotaging assistance under Chinese government directives. Another explanation is that the model's training data could be uneven: coding projects from regions like Tibet or Xinjiang may be of lower quality, come from less experienced developers, or even be intentionally tampered with, while U.S.-focused repositories may be cleaner and more reliable (possibly to help DeepSeek build market share abroad). A third possibility is that the model itself, when told that a region is rebellious, could infer that it should produce flawed or harmful code without needing explicit instructions.

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