Charles Dickens in China, Korea’s Future Via East Germany and Heating the Planet

Our thumb is not green, it is not even chartreuse. But we are an admirer of dahlias and a friend of ours, who is a master dahlia grower, kindly provided us some plant shoots of our own this week. They have distinguished lineages, sort of like a race horse, making us nervous that if we mistreat them we will commit the equivalent of killing one of Secretariat’s foals. But plant them we did. Tenderly. Carefully. Following all directions. We were tempted to speak a few encouraging words to the plants but what little dignity we have reared its decorous head. So imagine our horror when the next morning the INTN spouse came in from our front yard and reported, “The dahlias look dead.” We quickly went to inspect them ourselves and they were indeed quite wilted, the dahlia equivalent of Charlie Brown’s Christmas tree. We emailed our friend, the Dahlia Master, and she assured us they will be okay. So as we weed out a Charles Dickens story in China, water North Korea’s future with comparisons to East Germany, and fertilize global warming with air conditioning, we hope you will send nurturing thoughts for our three dahlias. It’s this week’s International Need to Know, a blooming garden of international information and data in a less than concrete world.

Without further ado, here’s what you need to know.

Charles Dickens in China

Whether you are a racist lawyer, violent cop or unruly sports fan, in our new recorded age, it is increasingly difficult to get away with bad behavior. China, of course, is taking it to a new level with their Social Credit System. You remember reading about it last year, right? How’s it coming? The state-run Global Times reports that since April, Chinese citizens have been blocked from taking 11 million flights and 4.25 million high speed rail trips due to miscreant behavior of one type or another. The nascent system is currently built on a series of black lists where unfortunate (or deserving) citizens find themselves punished for misbehavior such as acting badly on a train or flight (we have long advocated for replacing TSA security lines with clothing monitoring lines—you are not allowed to sit on an airplane seat if you are wearing pajamas, short shorts or a stained sweat suit, for example). Much of the Chinese focus is on debt. Debtors names are published on websites and not allowed to fly or stay at fancy hotels. One province goes one step further. They “play a recorded message when someone tries to call a blacklisted debtor, informing the caller that the person they want to speak with has outstanding debts. And in May, a short cartoon with the photographs of debtors’ faces began playing at movie theatres, on buses, and on public noticeboards with a voiceover that said: ‘Come, come, look at these [debtors]. It’s a person who borrows money and doesn’t pay it back.’” No word on what happens to provinces themselves that are in debt. In the meantime, we await China’s Dickens to chronicle their experiment.

Korea’s Future Via East Germany

In the fanciful game of diplomatic beer pong being played on and with the Korean Peninsula, it is anyone’s guess what happens. But should the two Koreas ever reunify, it is safe to say that many decades will pass before there is a true equilibrium. Germany has spent upwards of 1.7 trillion Euros on its reunification and yet economic, social and cultural differences remain between Western and Eastern parts of the ole Deutschland even 30 years later. Stubborn cultural differences are revealed in a new paper which shows East Germans are much less likely to invest in the stock market than West Germans, even when controlling for income and other factors. And when they do invest, they are more likely to hold stocks in companies in communist or former communist countries such as Russia, China and Vietnam. The paper’s authors note that this inclination is stronger in parts of East Germany that did not have access to Western media. The authors conjecture this is a result of ubiquitous and effective propaganda (see Soviet ad below) up through 1989. We are all hostage to our biases influenced by whatever environment we grew up in. It is a sobering thought which causes us to reach for our Weisen beer.

Heating the Planet by Cooling Off

We recently, when having our furnace replaced, had central air conditioning installed. It’s fantastic although our cat Willow who loved sitting on a vent when hot air blew out, was very confused, upset and startled to have cool air disturbing her ample and yet cute stomach. Areas of the world that most need air conditioning, however, are least likely to have access to it, as you can see in the chart below. India, Africa and parts of Asia usually do not have air conditioning. In fact, as Quartz notes, “328 million people living in the US consume more energy for cooling than the 4.4 billion people living in all of Africa, Latin America, the Middle East, and Asia (excluding China) combined, according to the IEA report.” But as wealth grows, that will undoubtedly be one of the first things added to commercial and residential buildings, freaking out felines the world over. But that means electricity use will go up with corresponding increases in greenhouse gas emissions. Air conditioning needs to be installed in the developing world for health and productivity reasons. But so too do clean energy sources. Fortunately, those are coming along rapidly.

 

Coming to China, What are You Worried About and Chinese Nicknames

One semester at Willamette University–Harvard, Stanford and Yale alums feel foolish in the presence of Bearcats–we lived in the Canterbury Apartments. It was coincidentally the same semester we were taking Chaucer from one of our favorite professors, Kim Stafford. Kim had a way of pronouncing Middle English so that it was understandable. His voice was almost Jack Nicholson-like, as were the sharp bend of his eyebrows when reading one of Chaucer’s ribald tales. He made Chaucer as fun for us as it was for someone in 1455. When Stafford learned I lived in the Canterbury Apartments, he said we needed to hold class there while we read through the Canterbury Tales. I readily agreed and one afternoon the whole class squeezed into our apartment and drank Mead wine that Stafford brought (in today’s cuckoo, politically correct world a professor would probably be arrested for such transgressions but we figure the statute of limitations is up) and read through the MIller’s Prologue or some such tale. It was a great afternoon and a class full of learning and fun. So we learned with delight last week that Kim Stafford has just been named the Poet Laureate of Oregon. As we toast a glass of mead to Professor Stafford we speak in rhyme about  studying in China, keep a steady meter about what worries the world and make funny Chaucer-like puns about Chinese nicknames. It’s this week’s International Need to Know, making a pilgrimage through the Pardoners, Summoners, Reeves and Cooks who make our world so amusing, complicated and fascinating.

Without further ado, here’s what you need to know.

Coming to China

In our continuing effort to understand a world and future increasingly influenced by China, we educate ourselves on education. China now has more African students studying at its higher education institutions than any other country, including the former leader, France. The U.S., of course, has traditionally had more international students, whether from Africa or elsewhere, than any other country (the U.K. is second). That has helped project American culture and values into the world, as well as provided top international talent for the country. The U.S. still has the most international students though the numbers have flattened in the Trump era. China, not surprisingly for an emerging world power with grand ambitions, is hosting an increasing number of international students, from 291,000 in 2011 to nearly 500,000 today. China aims to increase that number even more for a variety of reasons, including growing future world leaders with ties to China. Says Wang Huiyao, director of an influential Chinese think tank, “There are more than 300 world leaders including presidents, prime ministers and ministers around the globe that graduated from US universities, but only a few foreign leaders that graduated from Chinese universities, so we still need to exercise effort to boost academic exchange and educate more political elites from other countries.” The coming decades will see a very different world under very different influences than today’s.

What Are You Worried About?

Are we on the right track or are we, as Dr. John rasped, in the right place at the wrong time? In a survey by IPSOS, which tracks views of people around the world monthly, only a few countries’ populations feel they are on the right track. China stands out as an outlier with 90 percent feeling things are headed in the right direction. Nearly 73 percent of Indians also have a good vibe of where things are heading. But almost all other countries are like Han Solo—they’ve got a bad feeling about this. In fact, only 40 percent of the world’s population thinks things are on the right track. The IPSOS survey also asks what are people’s top worries. This varies quite a bit from country to country. In Japan it’s inequality, in Turkey it’s terrorism and in Brazil it’s corruption. By the way, a PEW Global poll finds that nine of ten international scholars rate climate change as their top worry. That threat does not rate high among the average Joes, Wangs, Kims and Singhs of the world. Of course, this is why action confronting climate change proves elusive.

Pancake Emperor and Chinese Nicknames

We are a keen observer of the NBA playoffs which are pivoting to the Championship round as we write. Chinese are also great fans of the NBA (we were once stalked by hotel workers in Beijing bugging us for info after having lunch in the hotel restaurant with a former NBA player). So with delight we were pointed to a Deadspin article on the fantastic nicknames the Chinese have created for NBA players: “At their best, Chinese nicknames always seem to combine both affection and shade, producing monikers that both fans and haters can get behind.” Thus Charles Barkley is called a fat pig, but he’s a flying fat pig (飞猪)—high praise, since the character for “flying” normally is reserved for players who take their game above the rim.”  The article points out the visual nature of Chinese characters provides for clever puns and multiple meanings. For example, Lebron James, who travels a lot without being called for it, “is dubbed ‘Six-Step Bron’ (六步郎), using three characters that also sound like ‘LeBron.’ But our favorite is Stephen Curry, which unfortunately is not safe for work. You must click on the link for that glorious nickname and explanation when you get home tonight.

Moore No More, Transportation Speeds Ideas and Smiles Help the World

We recently stumbled upon the below video of the opening of Saturday Night Live’s first show after September 11th.  I hadn’t seen it in years. Context, the context of our times, deeply influences what we see. In 2001, I would not have noticed that every one of the firefighters and police officers surrounding then New York City Mayor Rudy Giuliani was white and male. Today, it was one of the first things I noticed.* Shortly after watching the video we learned of the passing of Tom Wolfe, the most important writer of the last half of the 20th Century. He was an extraordinary writer and I enjoyed seeing him speak at an event in Washington, D.C. upon the publication of his influential article, Stalking the Billion-Footed Beast. What I most remember about the event is Wolfe’s brilliance and how during the audience Q&A, everyone prefaced their questions with poseur soliloquies to show how smart they were, unknowingly illustrating Wolfe’s theory that how people act is based mainly on their concern for their status. But, Wolfe, for as great a writer as he was, had a blind spot when it comes to issues of race, diminishing his importance this decade. The most important** American writers of the 21st Century so far are Andrew Sullivan and Ta Nehisi Coates. Note the adjective. Surely the most important writers of this century will be non-American, perhaps Chinese or Indian. So as we crack open our copy of Bonfire of the Vanities and discover what we notice today that we didn’t back then, we determine whether Moore’s Law still has the right stuff, examine the radical chic of high speed rail and mau mau who smiles the most. It’s this week’s International Need to Know, an international newsletter in full.

*Some would say my noticing is what is wrong with America today, others would ask what took us so long, therein one of America’s current ideological walls
**That we call a writer “important,” btw, does not mean we agree with or endorse all their ideas

Without further ado, here’s what you need to know.

Moore No More

Last year we discussed how Moore’s Law—the doubling of transistors on an integrated circuit occurs every two years—appeared to be over. Today we offer more evidence. Intel recently announced it is delaying mass production of its 10 nm processors until 2019. It has had problems over the last few years in producing the 10 nm processors. As you can see in the chart below, up until 2011, every two years there has been a doubling of transistors in Intel processors. And then….Moore no more. It’s easy in all the political chaff to miss the important stories of our world. If Moore’ Law is at an end, then many of the innovations we are eagerly anticipating—autonomous vehicles, more rigorous AI, and others—may not be coming as soon as people think, nor the associated worries of technology-induced job losses. Perhaps we will conquer this slow down in Moore’s Law through quantum computing or other technologies, and of course, there are other ways to improve computers besides shrinking transistors. Or, perhaps we are now in an era of technological stagnation. The answer to this question is far more impactful than just about anything you are seeing on the news or discussing at cocktail parties.

Transportation Speeds Ideas

Business Insider recently did a story on China’s high speed rail network, the largest in the world. The author “took China’s fastest “G” train from Beijing to the northwestern city of Xi’an, which cuts an 11-hour journey — roughly the distance between New York and Chicago — to 4.5 hours.” Here in Seattle, where we hang our soggy shingle, there is talk of creating a high speed rail line between both Vancouver, B.C. and Portland, Oregon. It won’t happen. To construct it is tragically expensive—it costs two to three times more to build such infrastructure in the U.S. than in Europe. It’s a shame since a new paper details how important fast transportation is to an economy and innovation. The paper by researchers at the National Bureau for Economic Research notes that “High skilled workers gain from face to face interactions. If the skilled can move at higher speeds, then knowledge diffusion and idea spillovers are likely to reach greater distances.” They used data from China’s high speed rail network and found that “bullet trains reduce cross-city travel times, thus reducing the cost of face to face interactions between skilled workers in different cities.” The study finds that the high speed rail network improved productivity in the connected cities. Alas, Seattle, Portland and Vancouver, BC will just have to enjoy their current productivity.

Smile and the World Smiles With You, Except for…

Why not smile is REM’s saddest song. But who smiles the most? Better Business Worldwide attempts to answer this question with their annual Smiling Report. Or, at least it answers which countries’ customer relations personnel smile the most. Using data from participating mystery shopping companies—companies who send staff to stores under cover to assess customer service—the Smiling Report finds that the UK smiles the most with Greece, Puerto Rico and Russia just a lip behind. Which countries’ customer service representatives smile the least? Pakistan. We’re pretty sure Comcast and our health insurance company have outsourced their customer service to Pakistan. BTW, the first Smiling Report was conducted in 2004 and the world smiling average has dropped six points since that time. Is it a coincidence that social media has taken off since 2004? We will tweet and Facebook about that as soon as we wipe away our frown.

Russia House, Once in a Lifetime, Authoritarian Gridlock

We traveled to Boston last week which distracted us from making our usual International Need to Know rounds. We arrived on Beantown’s first day of nice weather after a long, cold winter. As our Lyft drove us from the airport to our hotel, taking us by the innumerable universities in the city, it seemed that nearly every Bostonian was basking in the first warmth of the year. We gazed out the car window seeing people biking, throwing a Frisbee, going for a run, rowing on the St. Charles River, or just generally lazing around outdoors. This is our favorite time of year as the weather brightens, baseball takes bloom and the NBA playoffs provide bountiful entertainment. Bike riding beckons (as soon as our knee cooperates), as does the spicy smell of the barbecue. It has been a long winter across much of America, and there was something invigorating, almost primal, in the celebration of its end in Boston. Our tolerance for the cold, dark months has weakened as we have grown older. And thus our plan when we retire, alas many years from now, is to live in that great northern Caribbean town of New Orleans during the winter months. As we await the backbeat of the tuba, the taste of the etouffe and the warmth of distinctive culture, we take you on a tour of Russian military spending, Saudi Arabia’s continued dependence on oil and authoritarian gridlock.  It’s this week’s International Need to Know, Ooh Poo Pah Doo’ing all the amazing and important international events of our times.

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Without further ado, here’s what you need to know.

Russia House

Russia is in the news a lot and at least in Western news sources, the coverage is not particularly positive (in Russia, of course, the news glows…like Chernobyl). Under Putin, Russia reasserts itself globally, whether invading Crimea, meddling in Syria or interfering in elections in Europe and America. But perhaps surprisingly, according to the Stockholm International Peace Research Institute (SIPRI), Russian military spending last year decreased by 20 percent  in real terms (accounting for inflation). That’s the first decrease in military spending since Putin first began striding the world as Russian leader bare chested in 1998. Certainly Russia’s economy and federal budget has been constrained in recent years by lower oil prices. But oil has increased in price the last 12 months so maybe Russian military spending will increase this year? Apparently not since Putin is concentrating on raising Russian living standards. Says Bloomberg, “President Vladimir Putin has also called for higher living standards and higher spending on social infrastructure, such as healthcare and education. Some government officials have called for lower military spending to free up funds for such initiatives.” So Russia has fallen to fourth in military spending behind Saudi Arabia. Speaking of which….

 

Once in a Lifetime 

Saudi Arabia is undeterred by lower oil prices as seen by its leapfrogging over Russia in military spending. What does this mean for Syria and other parts of the Middle East? Will Saudi Arabia play a larger role in world affairs and Russia a smaller one in the coming years?  A recent article points out that Saudi Arabia’s economy is still dependent on oil prices which they are actively trying to prop up. According to the Wall Street Journal, “the world’s biggest oil exporter will need crude prices to average almost $88 a barrel this year to balance its budget.” As we write, oil is currently $70 per barrel. We wrote two years ago that the long term price of oil will be low though there will be some mid-term upward fluctuations. The last year we have experienced that mid-term rise in price. Where will the oil price go within three years? Hint: we predict Saudi Arabia military spending will have to level off or decrease by then.

Authoritarian Gridlock

Much like music lovers and Kanye West, many have been questioning democracy in recent times. As we pointed out last year, democracy is not nearly as popular with millennials, who often see authoritarian rule as a viable alternative. And as the economist Tyler Cowen has pointed out, China’s three decade success has elevated the status of authoritarianism and diminished democracy’s. Many feel that authoritarian governments are more productive than gridlocked democracies. So we read with interest a recent paper that asserts authoritarian regimes suffer as much from legislative gridlock as democracies. The researchers studied China and found, “A unique data set from the Chinese case demonstrates that authoritarian regimes can have trouble passing laws and changing policies—48% of laws are not passed within the period specified in legislative plans, and about 12% of laws take more than 10 years to pass.” Perhaps freedom of speech and other democratic freedoms should be valued more than our post-modern world thinks.