Worse than spy balloons

Hey there, it’s Sarah in Hong Kong. There’s something worse than a spy balloon. But first…Today’s must-reads:• Amazon’s self-driving cars to [View in browser]( [Bloomberg]( Hey there, it’s Sarah in Hong Kong. There’s something worse than a spy balloon. But first… Today’s must-reads: • Amazon’s self-driving cars [took passengers on public roads]( • Twilio [cut 17% of staff]( in second round of layoffs • Amazon is [taking about half]( of each marketplace sale Look to the skies Mysterious balloons hovering ominously over parts of North America are understandably causing some panic. If Taiwan is any indication, these sightings are happening around the globe. Taiwan has spotted dozens of these sorts of balloons — suspected Chinese military aircraft — in its airspace in recent years, the Financial Times [reported](. After [the US shot down four balloons](, a Taiwanese Defense spokesperson said Taipei might do the same [if it were concerned enough]( about them. What could be more frightening than a big, white spy balloon suspended overhead? The answer, recent moves by Taiwan suggest, is malicious Chinese hackers. Taiwan President Tsai Ing-wen unveiled a new national cybersecurity research institute on Friday. “Information security is national security,” she declared. China has long used Taiwan as a testing ground for its cyber capabilities, but Tsai’s administration began to take the threat more seriously last year after hackers pulled off an elaborate attack. The hack coincided with a visit by then-US House Speaker Nancy Pelosi. The California representative was the highest-ranking US official to visit Taiwan in a quarter-century. China apparently took the trip as a provocation and rattled its saber. Cyberattacks on Taiwanese government units set a new daily record, which was 23 times greater than the previous one. At the same time, 7-Eleven stores on the island were hacked to display the message, “Get out of Taiwan.” Beijing has rejected accusations that it sponsored the hacks. When I made my own (far less consequential) visit to Taiwan during local elections last November, analysts there told me that Pelosi’s visit was a cyber wake-up call. Some of the tactics weren’t particularly sophisticated, but they were effective. The hacks sent a clear message about weaknesses in Taiwan’s cyber defenses. “For an ordinary person, you walk to the convenience store and see it’s been defaced, and then you walk into the high-speed rail station and see defacement messages,” said Silvia Yeh, an analyst at the research firm TeamT5. “Then you go online and see that you can’t access Taiwan’s presidential website. Their first impression would be that China’s capabilities are so strong, and our internal systems have already been compromised.” There were also accompanying disinformation campaigns. Doublethink Lab, a Taipei-based organization tracking such actions, documented 2,900 instances of disinformation targeting Taiwan in the months between Pelosi’s visit and the November elections. “Perception warfare is a very, very important part of China’s whole strategy,” said Min Hsuan Wu, the head of Doublethink. Taiwan’s government responded by establishing a cabinet-level digital ministry, under which the new cyber institute sits, and officials have taken steps to cultivate more cyber [talent]( and institute heavier [fines]( for corporate data breaches. At least 37 US lawmakers visited Taiwan last year, according to Bloomberg data, and the trend will continue this year. House Foreign Affairs Chairman Michael McCaul [said]( last week that he’ll lead a bipartisan congressional delegation to the island in the spring, and House Speaker Kevin McCarthy has said he intends to make his own trip. Beijing will probably employ more cyber tactics against Taiwan, particularly ahead of the presidential election in January next year. Analysts fear possible escalations from those that took place during the Pelosi visit — the sorts that could cause power outages, for example. That prospect is a lot scarier than a balloon. —[Sarah Zheng](mailto:szheng244@bloomberg.net) The big story Silicon Valley coders are moving to Vietnam to help kickstart a new startup scene in the commercial hub of Ho Chi Minh City, but the expats [will have to contend with a tough regulatory environment]( and severe economic challenges. Get fully charged The billionaire ‘hitman’ behind BTS’s success is on a [shopping spree](. Transit startup Via raised $110 million in a new funding round as the company [looks to tap into the billions in public infrastructure investment]( promised by the Biden administration. Watch: Zoox CEO Aicha Evans [reflects on the Amazon unit’s self-driving milestone]( in a TV interview on Bloomberg Technology. Also, IVP General Partner Tom Loverro offers advice to startups in a downturn and [predicts a mass extinction event](. Liberty Global bought a 4.9% stake in Vodafone in a [surprise bet on the UK telecom](. NatWest Group agreed to buy 85% of Cushon, a workplace savings and pensions fintech company, [one of the largest acquisitions by NatWest]( since its 2008 state bailout. More from Bloomberg Listen: [Foundering: The John McAfee Story]( is a new six-part podcast series retracing the life, the myths and the self-destruction of a Silicon Valley icon. Subscribe for free on [Apple](, [Spotify]( or wherever you get your podcasts. Coming soon: Exclusive reporting from Bloomberg’s 100 journalists across the Golden State, every Wednesday. [Sign up for Next California](. 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