In openings, we prefer whimsy, metaphors and analogies, punctuated with a bit of joy and a dash of amusement. In these weekly missives, we have often pointed out that we live in the most peaceful, prosperous time in all of human history. And this remains true. But today we open by directly stating we are entering an age perhaps as dangerous as any since the 1950s. This is both because of advances in technology and because of the new geopolitical age that has emerged. First, as technology has become more powerful and democratized, Moore’s Law of Mad Scientists looms ever larger: “The minimum IQ required to destroy the world drops by one point every 18 months.” Our forthcoming novel premised on this law also grows ever closer to completion. Second, the combination of a more powerful China and a U.S. in leadership retreat raises another flag of danger. China’s ascension and America’s relative descent were inevitable, given the Economic Center of Gravity has shifted east into China. But the transition from one great power to another is almost always rife with danger. So though we usually try to write about what’s not at the top of the news, today we begin with what was the most important news of last week–the much covered arrest of Huawei’s CFO, then dive into what should have been a big story last week–the first commercialization of self-driving cars, and end with some surprising news in Tehran. But because even in the most direst of times, there is always joy, whimsy and amusement to be found, and because we will again be in New Orleans next week (INTN will return on Dec 27) for Reveillon dinners, Professor Longhair tributes and Creole Christmas tours, we offer first this trailer for a movie on New Orleans dancing. It’s this week’s International Need to Know, buckjumping to the world’s complicated beat.
Without further ado, here’s what you need to know.
The arrest of Huawei’s CFO Meng Wanzhou in Vancouver, Canada, just up the road from INTN’s worldwide headquarters, apparently at the behest of the U.S. government, was indeed the world’s most important news story last week. Why so important? It marks a new front in the increasingly frigid war between China and the United States (and other western nations). It occurs as China’s economy is slowing with lots of rumors the government will inject large stimulus to keep the economy humming and as deflation is clawing into its economy. The assumption has always been that China’s ruling government must have high economic growth to justify its continued existence. But, as we wrote a while back, the election of Donald Trump has accelerated China’s political prominence in the world. The Center of Economic Gravity shifting east meant regardless that China will play a much larger role in the world going forward. But the U.S., by pulling away from leadership in the world, accelerated that process. All well and good except that for all of the U.S.’s faults, and they are many–as in any institution involving that very imperfect species known as humans–America is not an authoritarian government with no sense of rule of law.* China is. Indeed, China has censored reports on the arrest of Ms. Meng. It continues to “re-educate” millions of Uighers. Rather than the current rule-based world order in which it is relatively easy to do business, China promotes a more opaque one that is based on its ascending interests, not on rule of law. Already China has detained a former Canadian diplomat and two other Canadians in retaliation for Ms. Meng’s arrest. What comes next, the reactions of the various parties and reactions to the reactions, will help set up the next 20 years of geopolitical transition.
*The current U.S. president is not an argument that the U.S. no longer has rule of law. Although he has complete disregard for the law and other conventions, the American system of checks and balances is, well, checking him and balancing him. That is a very different scenario from the system in China.
Self-Driving Cars are Here
As we noted, the two most important news stories last week were the arrest of the Huawei CFO in Canada and Waymo’s launching of commercialized self-driving taxi service in Phoenix. The latter received almost no press coverage for reasons that elude us. But that a company is now charging for self-driving car service (even if there is still a safety driver in the car) is a revolutionary step for technology, the economy and humankind. But our beat is international so we are here to show you where autonomous vehicle pilot programs are taking place in the world. The U.S. is first to be sure but there are also pilot programs in the UK, Australia, Switzerland, Netherlands, France, China and, of course, Singapore. However, the U.S. Congress this week is rebelling against legislation that would help ease the entry of autonomous vehicle technology in the market. So our bet is still on Singapore, with perhaps China right behind. Either way, we are entering a new world with autonomous vehicles now commercialized. Buckle your seat-belts, autonomously driven or not.
Tehran is Sinking
Tehran is literally sinking and not in the figurative way people often use the word “literally” as if they meant sinking under sanctions or government repression. No, according to an article in Nature, Tehran, the capital of Iran is “falling by as much as 25 centimetres a year, and that the collapse is spreading to encompass the city’s international airport.” This rate of metropolitan falling is among the highest in the world and is due to the “depletion of groundwater aquifers, which are being sucked dry to irrigate nearby farmland and serve greater Tehran’s 13 million or so residents.” That sinking feeling Iranians have is the damage to infrastructure they are witnessing and the fact that this is an apparently irreversible problem because the ground beneath the city has lost its porosity—water can’t fill into that ground anymore. This is likely to lead to more flash flooding and other problems in the city. Environmentally, the ground is sinking beneath our feet.