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The UK risks plunging the Five Eyes alliance into crisis

The Telegraph, 4 March, 2020

The Five Eyes alliance has long been a bulwark of the free world. On one level, it is simply an intelligence-sharing partnership between the US, the UK, Australia, Canada and New Zealand. Yet it is able to function as perhaps the most comprehensive espionage alliance in history because of implicit trust between its members, based on an understanding that they share the same interests and ambitions.

Now it is approaching a crisis. And although the UK’s decision to involve Huawei in its 5G infrastructure is the leading cause, this dispute is a symptom of far more fundamental differences over the alliance’s approach to China.

These disagreements have begun to spill over into the open. Last month Mick Mulvaney, the acting chief of staff to President Trump, warned British officials of a “direct and dramatic impact” on intelligence sharing with the US following the UK getting into bed with Huawei.

Meanwhile, Australian MPs on their parliament’s intelligence committee were said to have leaked details of a tense meeting with Dominic Raab, the Foreign Secretary. New Zealand and Canada have been watching from the wings in dismay – but the time is coming when they, too, will have to pick a side.

In all of this, UK discussion of the issue has focused on risk mitigation – whether the threat posed by China can be contained in the specific matter of 5G. But British efforts to reassure their allies are not working. Australia and the US aren’t impressed by London’s attempts to use technical arguments to fudge what they see as a geopolitical debate for commercial reasons. At heart, they are critical of London’s prioritisation of business as usual with China over their collective security.

They see China as a growing regional and global destabiliser – a revisionist power that must be checked. To them, the UK’s Huawei decision illustrates a wider British willingness to sacrifice security for the sake of its own narrow interests.

Of course the UK is free to ignore such worries, but there could be consequences. Britain has stated that it wishes to sign trade deals with both the US and Australia, and the response has been largely positive. Yet it is not clear that those involved can skirt around the issue for much longer.

This is for three reasons. The first is Donald Trump. Although he views renegotiating the US trade posture as a cornerstone of his presidency, he has not taken the Huawei decision well.

Second, the UK has still not fully understood the scale of the diplomatic damage. Continuing to treat this as a solely Huawei-related problem rather than a broader China issue has annoyed American and Australian foreign policy experts, particularly in their security communities. From their perspective, Britain is ignoring an assumption, built into Five Eyes, that all five are to defend themselves and each other from authoritarian states.

Third, there are troubling signs that China is developing a strategy which draws on the UK’s resources to achieve its ambitions. Consider its investment in the UK fintech and hi-tech sectors and the calls for a “Golden Era” relationship.

It is only becoming more obvious to Washington and Canberra that, while they have adjusted to Beijing’s aggressive stance, the UK – and to a lesser extent, New Zealand and Canada – have not. Such divergence is unsustainable if Five Eyes is to function smoothly – and this on top of the UK’s belief that it should focus more on Russia than on China.

Britain now faces a difficult choice. It can continue its current approach towards China and attempt to reap the economic gains. Alternatively, it might craft a more careful approach, similar to those of the US, Australia and Japan.

Neither option is without cost. The latter means giving up some of those commercial benefits, insisting on scaling back the non-standalone 5G infrastructure which Huawei has already deployed, and realigning foreign policy more broadly. Going ahead with the former, however, risks much graver consequences. The Five Eyes partners are not about to stop working together – but such a deep and special partnership will not last unless all its members trust that they are working for the same ends.


Reconstructing Order: The Geopolitical Risks in China’s Digital Silk Road

Asia Policy, NBR, 28 January, 2020

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The People’s Republic of China (PRC) is attempting to incrementally reshape the global order through the Belt and Road Initiative (BRI). To this end, it is using—among other means—new disruptive technologies that will allow it to dominate data and communications in the political, economic, and social realms across the large expanse of the initiative. The Digital Silk Road has been a part of the PRC’s approach since at least 2015, when it first appeared in a government white paper on BRI. The Digital Silk Road binds together new technologies in “bundles,” such as smart cities, smart ports, and satellite-networked communications, using 5G as a baseline for other technologies like artificial intelligence, data analytics, and the Internet of Things. Success in using this communications infrastructure to dominate markets, standards, and political elites would give China a multiregional base from which to project its norms, systems, and networks to the wider global market. In the long run, this will not only give a competitive advantage to Chinese companies but also allow them to spread more widely across remaining markets.

POLICY IMPLICATIONS
  • The Digital Silk Road has deep geopolitical implications. Building the backbone of communications infrastructure in BRI countries will allow the PRC to access, analyze, and exploit in real time the large data sets of recipient countries.
  • Through these technologies and its tech companies, the PRC is exporting its governance model, surveillance system, and financial institutions.
  • Policy elites in recipient nations could become vulnerable to even greater influence operations as Chinese tech companies administer their networks in real time and collaborate with stage actors like the United Work Front Department.
  • The PRC could use the centralization of data in smart port systems to create a deniable, surgical sanctions system by interdicting or slowing the container traffic of states or their leaders.

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Exploring China’s Orwellian Digital Silk Road

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With Patrick Cha, The National Interest, 7 November, 2020,t,

The past decade has been difficult for political leaders in Kenya. Terrorist attacks at Westgate Mall in 2013 and Garissa University College in 2015 had left hundreds of people injured or dead. Additionally, rising crime figures in rapidly-growing cities like Nairobi and Mombasa left the impression that Kenyan security forces were losing control of Kenyan cities. Worse still, a series of carjackings and tourist robberies began to effect a major source of revenue. It was with relief then that the Kenyan government received an offer to build a new Smart City program by the prominent Chinese tech company, Huawei. Partnering with Safaricom, Kenya’s largest mobile network provider, Huawei promised to build a network architecture, utilizing big data analysis, a large number of connected devices and sensors, to help give Kenya “new tools to improve public services such as crime-fighting, and to keep an eye on what is going on generally.” Working closely with Kenyan officials, Huawei created a command center and public surveillance system linking 1,800 surveillance cameras with 195 police bureaus and 7,600 police officers across Nairobi, with a further 200 cameras at city checkpoints.

While the centralizing of data on crime and municipal services will be a great boon to rapidly-growing cities across Africa, the Indian Ocean, and Central Asia, they are not without their dangers. As we will discuss in this and a follow-up piece, Beijing’s rapidly expanding influence over the digital space of the Indo-Pacific will have real-world effects on the people who live inside such systems, impacting how comprehensively states are able to surveil their citizens. They may also have an impact on the geopolitical landscape as states that fall under the People Republic of China’s (PRC) digital system, may be aligning to a new type of political, digital and economic order, analogous to that built by the United States and its allies after World War II. While looking at a map of the Smart Cities growing across the Central Asian landscape, it is possible to imagine that a new type of political order is arising. As Western experts begin to understand the inner workings of how the Chinese state uses various technologies in packages like the “Integrated Joints Operations Platform” (IJOP), used by the Xinjiang Bureau of Public Security to persecute and monitor the Uighur—understanding China’s use of technology for political effect is of the utmost importance.

The primary conduit and driver for the PRC’s digital strategy is the Digital Silk Road—a supporting pillar of the Belt and Road Initiative—which was first developed in March 2015 in a White Paper jointly issued by the PRC Ministry of Foreign Affairs, the National Development and Reform Commission, and the Ministry of Commerce. In it, the three ministries advocated for “countries along the Belt and Road . . . [to] improve the connectivity of their infrastructure construction plans and technical standard systems . . . and form an infrastructure network connecting all sub-regions in Asia, and between Asia, Europe, and Africa, step by step.” And so various parts of the Chinese state and private sector have driven themselves into the task with gusto and enthusiasm. Only five years later, nearly a quarter of the 4.2 billion people living in urban environments now live under PRC Smart City and Safe City network and surveillance technologies. Huawei and ZTE have developed contracts or have built Smart City technologies around the world, in Africa, Southeast Asia, and the Middle East, with Huawei building smart cities in over 200 cities across forty countries and regions, and ZTE building smart cities in over 170 cities across sixty countries.

As with infrastructure, China has understood what local and regional governments need and catered to those needs in expert fashion. The world’s urban population is predicted to grow by an additional 2.5 billion people in the next thirty years, with a doubling of the global middle class taking place in and around China and India, providing a huge expanse in the region’s urban space. The building of so many new cities and the hyper-growth of so many current cities will require a major outlay in infrastructure, energy, and transportation hubs. It will also require the efficient allocation of resources, energy, and—as the mainstay an increasingly digital global economy—access to digital networks and the internet of things. Just as the British Government helped promote Cable and Wireless’s expansion across its empire in the late half of the nineteenth century, so the PRC is helping to fund its companies in this new digital infrastructure expansion across the Eurasian landmass with the Silk Road Fund (dominated by the People’s Bank of China) taking the lead. It is, as many observers have already noted, a strategy with deep geostrategic implications. It is also a strategy that has security implications for the West, for the United States, its allies, and for other rising powers—such as India, South Africa, and Brazil.

The most visible signs of this digital infrastructure are the fiber cables, the network base-stations, the satellite networks, and the Smart Cities provided at the “consumer” end. Smart Cities coalesce data, connecting, and computing service platforms with existing information sources under one roof in Intelligent Operation Centers (IOC). These centers integrate disparate information from different sources to create—in the jargon—a real-time, comprehensive, and actionable image of city operations. IOCs provide a centralized data-exchange platform critical to day-to-day operations of administrative, industrial, environmental, energy, and security systems. In layman’s terms, the IOC acts as a living organism that continuously assesses citywide operations and identifies requirements through sensors and cameras that are distributed around key nodes allowing for real-time monitoring and predictive analysis. Powered by the expanse in data provided by 5G technologies, multiple sensors can be deployed from street lamps tell electric companies that they’ve gone out, to buildings can regulate their own heating and ventilation. Smart Ports provide the additional capabilities of device automation, intelligent scheduling, and trade surveillance to improve resource allocation and ship transfers. The premise is that a better-integrated and effectively-operated city boosts economic activity, and promotes sustainable growth into the future.

And therein lays the rub. Centralized access to personal, commercial, and political data carries with it a huge centralization of data that is at odds with concepts of the rights to privacy. On the Digital Silk Road, this centralization of data benefits China as much as it benefits host nations, introducing vulnerabilities into the host nations that could be utilized if they were to ever come into conflict or suffer diplomatic tensions with Beijing. By acting as network architects and administrators, Beijing will be privy to data streams in real-time across a large portion of the world, enabling them to develop influence and power across a number of different matrixes. In the first instance, that power and influence would be over the foreign policy elites of host nations, including civil servants, political and military leaders, journalists, the legal and commercial sectors in the form of information. This might be used as kompromat—to leverage key individuals in critical moments of internal discussion—on issues Beijing judges central to its interests. The IJOP in Xinjiang combined information gathered from multiple data sets—including CCTV, banking, employment, and health records, Wi-Fi sniffers, security checkpoints, and facial recognition—to monitor the details of people’s daily lives at the level of minutia. Whether or not the smart city programs incorporate these functions in given states will be of critical importance to the lives of their inhabitants. Second, it enables Beijing to expand its legal and political norms and values—albeit, bundled as part of these technological packages. As Tin Hinane El Kadi has written for Chatham House, many countries sign deals with Chinese tech companies that install these systems with little or no oversight or adopt repressive cybersecurity laws that resemble China’s. Third, it is likely to be used to further China’s economic expansion across developing economies, providing massive amounts of raw consumer and market data, giving Chinese firms advantages that their competitors—local and Western—will be unable to challenge. This will be particularly true in sectors that China has judged to be of national security interest, such as biotech, new materials, wearable devices, information communications technology, AI, and the internet of things. It might be used to coerce foreign policy elites “downstream” from the port host nation by applying pressure on the supply chain. A Southeast Asian state at odds with Beijing, for example, could find critical goods held up in ports in Pakistan or Sri Lanka—in a deniable and unofficial sanctions system.

Through the development of this “network-of-networks” across the Indo-Pacific region, the PRC will be able to access and monitor large swathes of data running through the national networks of scores of host nations across the Indo-Pacific space, using big data and artificial intelligence logarithms for analysis. It is possible that this age is witnessing the building of the largest intelligence-collecting program in human history, giving China real-time access to the digital economies, finances, crimes, and personal lives of the citizens of three-quarters of the world. It is unquestionably a defining moment in the history of data. As we continue our own Western debate on the role big data companies will have in liberal democracies and tensions between privacy and the political and economic exploitation of data, we would do well to look at the world that China’s tech industry is seeking to remake in its own image. It is not a world we have lived in before.

Through the development of this “network-of-networks” across the Indo-Pacific region, the PRC will be able to access and monitor large swathes of data running through the national networks of scores of host nations across the Indo-Pacific space, using big data and artificial intelligence logarithms for analysis. It is possible that this age is witnessing the building of the largest intelligence-collecting program in human history, giving China real-time access to the digital economies, finances, crimes, and personal lives of the citizens of three-quarters of the world. It is unquestionably a defining moment in the history of data. As we continue our own Western debate on the role big data companies will have in liberal democracies and tensions between privacy and the political and economic exploitation of data, we would do well to look at the world that China’s tech industry is seeking to remake in its own image. It is not a world we have lived in before.


CityAM, 26 April, 2019

Dr John Hemmings, director of the Asia Studies Centre at the Henry Jackson Society, says YES.

Huawei’s ownership structure and state-subsidies make it – in effect – a virtual state-owned enterprise with a credit line of £30bn with the China Development Bank (a state bank).

According to the CIA, it is part-funded by Chinese intelligence, and its chair-woman between 1999 and 2018, Sun Yafang, was an intelligence official.

According to Brian Shields, cyber security adviser at the now bankrupt Canadian telecom Nortel, partnering with Huawei broke the Canadian firm, as Chinese hackers cleaned it out of intellectual property and outbid it.

Between 2012 and 2017, the Africa Union was hacked every night as sensitive data was downloaded to servers in China. Huawei was its ICT infrastructure provider.


The Huawei deal puts Britain’s Five Eyes relationships at risk

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CapX, 25 April, 2019

With the NCS leak about Huawei’s inclusion in the UK’s 5G infrastructure on the front pages, the Five Eyes intelligence alliance has come under renewed scrutiny. Our role in the world’s largest and longest-lasting intelligence partnership has been one of our key assets, enabling us to punch above our weight in Washington and in corridors of power across the world.

But intelligence relationships are a lot like a marriage. They involve trust – and the development of key institutions or traditions that keep each partner reassured about the intentions, reliability, and thoughts of the other party. The Five Eyes relationship, a marriage, if you will allow, is an incredible feat of alliance-management. Many Britons know little, if anything, about it. If they do, it’s probably through the X-files or Wikileaks. The reality is more banal but at the same time, more incredible.

After fascism was defeated in the Second World War, five democracies (Australia, New Zealand, Canada, the UK, and US) pooled their resources on human and signals intelligence. Crossing into uncharted territory, they institutionalised intelligence-sharing in ways that are unprecedented for sovereign states. Later, programmes were created allowing officers from one country to serve in the corresponding bureaucracy of another allied nation. A British signals officer might spend time in the NSA in Maryland, or a Canadian diplomat might spend a year in the FCO, or an Australian defence official might serve time in the Pentagon.

These intelligence bureaucracies might have presented risks to the democratic integrity of the participating nations, but surprisingly, the Five Eyes relationship worked seamlessly from its earliest days. The robust constitutions underpinning all five countries allowed elected representatives to oversee the budgets and policies of their intelligence services and manage them according to their democratically permitted discretion. While slip-ups occurred, they were the exception rather than the rule. The group spent the Cold War protecting the rights and freedoms of many ordinary citizens to great success, all in the shadows and for very little personal reward or public acknowledgement.

As the cyber age arrived, the Five Eyes adjusted and adapted, but they have not always been quick off the mark. The current arrangement by which British engineers check Huawei’s code and equipment occurred after a slip-up in the early 2000s when BT nearly awarded a network contract to what was then an obscure Chinese tech company with little security oversight.

Twelve years on and that company has gone from strength to strength, combining the telecommunications ability of BT with the data-storage capacity of Google and the powerful handsets of Apple. It’s a remarkable achievement, but how exactly did Huawei come to dominate the European telecoms market so quickly? What role did state loans play in subsidising products that were sometimes 18 per cent cheaper than its competitors?

As we approach the end of the telecoms review process, it has become clear that a great lobbying battle has taken place in Westminster between Huawei and its British carrier-supporters who stand to benefit from its financing, and the Australian and US Governments, whose security is under threat. It’s been clear that despite presenting the UK with constant signs of Huawei’s links to Chinese intelligence, examples of hacking behaviour, and involvement in the situation in Xinjiang, the National Security Council has decided that the UK can “mitigate the risk”.

After all, they reason, we handed 4G over, surely a 4G solution for a 5G problem will do the job. The problem with this assessment is that by the Government’s own accounts, Huawei’s 4G solutions were not up to standard.

That should have been the end of the story, but Brexit has played a large role behind the scenes. It leaps off the page from a report commissioned by network carriers that says “£7 billion at risk if Huawei banned”. It leaps out again when The Guardian asks in tremulous tones whether a ban will impact Britain’s trade relations with China (No.It didn’t with either the US or Australia who have whopping trade relations with Beijing). And so, the panic has continued.

Liz Truss, Chief Secretary to the Treasury , is quoted in the Daily Express as saying that a decision should be made on a “case-by-case” basis, and that any decisions “should be led by the UK – we shouldn’t be deciding on the basis of what the Americans think or what the Australians think” , which is the marital equivalent of telling your spouse that you’ll have a drink with whoever you damn well please and that they shouldn’t be suspicious.

The government has a right to make its choice, but there will likely be unforeseen consequences as a result of its decision. With Five Eyes, Britain is married. It has partners that trust it to do the right thing and in exchange provide it with vast amounts of sensitive real-time data. The Treasury might not think that is very important, but Britain’s spy chiefs do and the trust shared between partners is certainly worth more than £7 billion and being degraded to a second-tier partner or being excluded altogether would be a huge blow to our capabilities.

In the long run, Britain can do what it wants. Washington and Canberra won’t force us to do the right thing, but they will have to react and protect their own interests and the interests of the remaining four, but China’s covert influence-campaigns and given the known unknowns of 5G, the British government should spend more time thinking these questions through.


Forbes, Zak Doffman, 24 April, 2019

This was backed up by John Hemmings, Asia Center Director at the Henry Jackon Society, who described the move as “a huge mistake… critical to the well-being of the U.K.’s reliable critical infrastructure, critical to a secure liberal society, and critical to our Five Eyes alliance.” He dismissed the economic drivers behind the decision, saying that “cutting out Huawei from 5G network would cost Britain £7bn – How much will it cost to pull out in 10 years time?”


The United States Needs a Plan to Compete with Huawei

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The National Interest, 22 February, 2019

It is likely that the recent Financial Times article by former GCHQ director Robert Hannigan caught U.S. alliance managers and intelligence officials completely by surprise. A seeming trial balloon by the UK government in advance of its ongoing telecommunications security review, the article argued that in assessing Chinese tech risks, the UK has a unique advantage because of its Huawei-funded facility at Banbury, which vets the Chinese company’s technology, code and practices. Following hard on the heels of the article, a second one cited a source inside the UK National Cyber Security Centre that said it would be possible to mitigate the risk from using Huawei equipment in the nation’s 5G networks. While it is true that the UK does have this center, it is also true that this center itself found that Huawei had not lived up to promises to improve its “engineering processes.” Its code has been sloppy, either out of laziness or ill intent. It is also true that—despite appearances and media reporting—the other Five Eyes share the United States’ concern.

Huawei messaging in London has been incredibly effective. For Britain’s foreign policy elites, debating and confronting Brexit on a daily basis, it is a frightening time, and Beijing has played its cards beautifully. “We still trust in the UK, and hope that the U.S. will trust us even more,” Huawei founder and CEO Ren Zhengfei told the BBC in a recent interview. He also promised to shift investment from the United States and put it in the UK. “We will invest even more in the UK. Because if the US doesn’t trust, us, then we will shift our investment from the U.S. to the UK on an even bigger scale.” Coming hard on the heels of a softening-up by Hu Chunhua, the vice-premier who canceled a trade-signing deal with Chancellor Philip Hammond over remarks made by Defence Minister Gavin Williamson, Britain seems close to capitulation. Even Alexander Younger, the MI6 chief who warned of Huawei’s insertion into UK infrastructure in December, seemed to change his tune, saying, it was more complicated than “in or out” when it came to managing the risks.

There is no doubt that this is one of the most critical moments in the history of both the Five Eyes intelligence grouping and in the Trans-Atlantic Alliance. U.S. alliance managers must take heed if they are to maintain the Special Relationship with Britain. There are a number of policy directions available to us, but they require considered action. The first of these is that the United States must provide its allies with an alternative. Simply rolling out the FBI, Homeland Security and Commerce in a slightly awkward press conference, providing slightly weak evidence will not cut it. The United States has come to an intersection: if it wishes to deny Huawei—and Beijing—the capability to build our allies’ 5G infrastructure, it must consider a national project to do so. Give London, Tokyo, Canberra and Ottowa a choice. For one, reconsider the memorandum written by Air Force Brig. Gen. Robert Spalding on a national effort to build 5G last year, while he was senior director for Strategic Planning. Yes, it’s true that was panned by the telecom industry, but frankly, they’re not in charge of our national security, nor are they cognizant of the wider geopolitical impact this will have on U.S. power and influence.

Second, Canberra and Washington will have to present a better case than they have done so already. The fact that UK experts are still able to say that there is no credible evidence of a risk reveals not only Huawei’s incredible PR talents, it also shows our failures to persuade. The case needs to be improved by the following means: (1) build up a dossier of case studies, including those in New Delhithe Africa UnionPoland and Canada; (2) review at length the Australian Intelligence Service Organization report on a third country that was hacked by Huawei; and (3) track the money. Why is it that no study on Huawei’s incredibly low-cost products has been produced? It would almost certainly reveal the subsidies of the Chinese state—and hence its strategic direction—in supporting Huawei. If we are to persuade our allies in London that Huawei is an arm of the Chinese state, we must do so convincingly.

Third, the other four Eyes must be convinced by Britain that it is not merely bowing to economic considerations and allowing its carrier-led model to decide the issue. Britain will also have to fully explain and justify its risk assessment system, since it appears that the National Cyber Security Centre is prioritizing system failure over data leakage, and while system failure is obviously more of a critical issue for national security, British officials must explain where they’ve drawn the line in the trade-off between the two. It was disconcerting to be told in discussions with UK officials that data was always going to get out and one had to trade-off between the economic value of getting 5G infrastructure early and the loss of data. If Britain is going to say to the other four that it knows better, it will have to prove it, if it wishes to remain inside the intelligence alliance. While it sounds cruel to suggest a Britain being ousted from one of history’s longest-lasting alliances, the fact is that the consequences of Britain’s policy will have major repercussions on the other four, particularly, if the UK is wrong. It is important that we know, for example, whether Huawei involved in helping build China’s surveillance system in Xinjiang and China-proper. This is less an academic question and more an intention one, particularly when it comes to “smart city” programmes that Huawei is interested in trialing in the UK.

Historically, London has been caught out at its economical approach towards large-scale infrastructure funding and this has made it incredibly vulnerable to China, the one state that is willing to finance mega-projects like 5G. In addition to offering to finance and build Britain’s digital network, China is also willing to finance the country’s nuclear power plant expansion. From a grand strategic perspective, it looks as though Beijing has chosen to use London’s Brexit-based vulnerability to prise the UK away from the United States and its allies. This is not as impossible as it sounds, for it does not mean creating a Sino-British alliance, what it really means is nullifying Britain’s will to oppose its policy preferences. This only requires a “middleman” posture, a possibility I warned about in a piece for RUSI in 2016. In such a case, we will see a UK that is nominally inside NATO and the West, but one in which is increasingly intent on benefitting from a balancing posture between the United States and China. This would see a UK that pays lip service to the Western alliance, but that prioritizes mercantilism over its role as guarantor of the rules-based order. There are signs that Beijing is working hard for that eventuality and has put a number of attractive lures on the table to encourage this, including offering to make the City of London, the global trade hub for the RMB, creating the most Confucius Centers in Europe, investing in a massive new embassy complex near the financial center, and building an impressive new CGTN hub in West London. When one thinks about Britain’s global media reach, its financial markets, and its core technologies, it is clear that Huawei is not simply building a 5G network.

Jeremy S. Maxie

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