ChinaWatch: Breaking Down Walls

Holes In The Great Wall

The U.S. government has figured out how to bust through Internet censorship filters in order to deliver news and other vital information via e-mail to people in countries like China, a report claims.

The report from the Broadcasting Board of Governors detailed successful testing the agency conducted last year as it tried to slip data into inboxes in Hong Kong and China. The testing involved technology known as Feed Over e-mail, or FOE, to bypass traps the Chinese government has in place to screen out unwanted Internet content.

According to the report, first obtained and published by the nonprofit GovernmentAttic through a Freedom of Information Act request, the technology “performed well in all tests.” BBG confirmed the report's authenticity to FoxNews.com.

Experts behind the testing say this information weapon probably could not have done much good in a situation like that unfolding in Egypt, where the government was flat-out blocking Internet access in response to the political unrest.

“If there's a blackout ... nothing works,” BBG Director of Information Security Ken Berman says.

But the agency's testing demonstrated that, at least in China, it can be used effectively to transmit everything from RSS feeds to downloadable files to proxy web addresses which users can access to browse an uncensored version of the Internet.

Follow The Money Trail

Changes under way in China “will gradually erode” the country's ability to closely manage the value of its currency and force the renminbi to float more freely on world markets, the U.S. Treasury says in a report that declined to cite China as a “currency manipulator.”

As in previous biannual Treasury reports on currencies, the document addressed the politically contentious issue of China's currency management, which critics argue is used to keep its exports unfairly cheap, The Washington Post reports.

Members of Congress and others have urged the Obama administration to brand China a “currency manipulator,’’ which, under U.S. law, would trigger negotiations and possible sanctions.

But like his predecessors, Treasury Secretary Timothy F. Geithner has tried to resolve the issue through diplomatic channels – criticizing Chinese policy and urging them to make changes without formally invoking U.S. law.

With U.S. unemployment still at 9 percent, the issue has become particularly sensitive, but the latest Treasury document notes China's currency has appreciated modestly this year – by close to 4 percent in nominal terms, but by much more than that if the impact of inflation is included.

The document notes China is taking steps to liberalize how the renminbi can be bought and sold overseas.

“These reforms will gradually erode the controls that help the authorities manage the level of the exchange rate and, over time, will contribute to a more market-determined exchange rate,’’ the report concludes.

ChinaWatch