Daily Tech Snippet: Friday, December 30, 2016

• U.S. evicts Russians for spying, imposes sanctions after election hacks: President Barack Obama on Thursday ordered the expulsion of 35 Russian suspected spies and imposed sanctions on two Russian intelligence agencies over their involvement in hacking U.S. political groups in the 2016 presidential election. The measures, taken during the last days of Obama's presidency, mark a new post-Cold War low in U.S.-Russian ties, which have deteriorated over differences about Syria and Ukraine. Allegations by U.S. intelligence agencies that Russian President Vladimir Putin personally directed efforts to intervene in the U.S. election process by hacking mostly Democrats have made relations even worse. It was not clear whether President-elect Donald Trump, who has repeatedly praised Putin and nominated people seen as friendly toward Moscow to senior administration posts, would seek to roll back the measures once he takes office.

• How Russia Recruited Elite Hackers for Its Cyberwar: For more than three years, rather than rely on military officers working out of isolated bunkers, Russian government recruiters have scouted a wide range of programmers, placing prominent ads on social media sites, offering jobs to college students and professional coders, and even speaking openly about looking in Russia’s criminal underworld for potential talent. In Russia, recruiters have looked well beyond the nation’s school system. Those recruits were intended to cycle through military contracting companies and newly formed units called science squadrons established on military bases around the country. As early as 2013, Sergei K. Shoigu, the Russian defense minister, told university rectors at a meeting in Moscow that he was on a “head hunt in the positive meaning of the word” for coders. In 2013, as Russia’s recruitment drive was picking up, Dmitry A. Artimovich, a soft-spoken physicist, was awaiting trial in a Moscow jail for designing a computer program that spammed email users with advertisements for male sexual enhancement products. One day a cellmate, who had been convicted of selling narcotics online, sidled up to him with some news. The cellmate said that people incarcerated for cybercrimes could get out before trial, in exchange for working for the government. Another inmate had already taken a deal, he said. “It was an offer to cooperate,” Mr. Artimovich said. “Why else would you work for the government?” he added. “The salaries are tiny. But if you do something illegal, and go to prison for eight or nine years, the F.S.B. can help you,” he said, using a Russian abbreviation for the Federal Security Service.

• How China Built ‘iPhone City’ With Billions in Perks for Apple’s Partner: A hidden bounty of benefits for Foxconn’s plant in Zhengzhou, the world’s biggest iPhone factory, is central to the production of Apple’s most profitable product. A vast, boxy customs center acts as a busy island of commerce deep in central China. Government officers, in sharply pressed uniforms, race around a maze of wooden pallets piled high with boxes — counting, weighing, scanning and approving shipments. Unmarked trucks stretch for more than a mile awaiting the next load headed for Beijing, New York, London and dozens of other destinations. The state-of-the-art facility was built several years ago to serve a single global exporter: Apple, now the world’s most valuable company and one of China’s largest retailers. The well-choreographed customs routine is part of a hidden bounty of perks, tax breaks and subsidies in China that supports the world’s biggest iPhone factory, according to confidential government records reviewed by The New York Times, as well as more than 100 interviews with factory workers, logistics handlers, truck drivers, tax specialists and current and former Apple executives. The package of sweeteners and incentives, worth billions of dollars, is central to the production of the iPhone, Apple’s best-selling and most profitable product. It all centers on Zhengzhou, a city of six million people in an impoverished region of China. Running at full tilt, the factory here, owned and operated by Apple’s manufacturing partner Foxconn, can produce 500,000 iPhones a day. Locals now refer to Zhengzhou as “iPhone City.” The local government has proved instrumental, doling out more than $1.5 billion to Foxconn to build large sections of the factory and nearby employee housing. It paved roads and built power plants. It helps cover continuing energy and transportation costs for the operation. It recruits workers for the assembly line. It pays bonuses to the factory for meeting export targets. All of it in support of iPhone production. “We needed something that could really develop this part of the country,” said Li Ziqiang, a Zhengzhou official. “There’s an old saying in China: ‘If you build the nest, the birds will come.’ And now, they’re coming.” American officials have long decried China’s support of its state-owned companies, calling the subsidies and other aid an unfair competitive advantage in a global marketplace. But the Zhengzhou operation shows the extent of China’s effort to entice overseas multinationals to set up production facilities in the country.