Archive for year: 2018

Charting Chinese HALs, Let Women Work, Less Democratic Countries

You may think you did not receive* your regular dose of INTN last week because we had our third knee surgery in three months. But surely you know we are made of sterner stuff than that. No, what prevented delivery of edifying, informative and important international news and data was the continuing technical problems we were having with our previous email delivery service. Yes, this week we have dipped our toes into the clean waters of a new company, Mailchimp, which you have probably heard advertise on what seems like every podcast ever. So far so good. We have taken the opportunity of this change to institute the slightest of redesigns. More changes may be coming. If you have any suggestions for additional redesign, or for that matter, content, or anything else, feel free to let us know. So, even as we eye fonts, colors and backgrounds, we chart the HALs of China, proclaim “let the women work” and revisit authoritarian views of democracy. It’s this week’s International Need to Know, the Southern District of New York of international information, raiding wherever and whomever we must to bring you our strange, fun and ever changing world.

*Actually about 10 of you received last week’s newsletter–now dubbed The Lucky Ten–T-shirts and other accoutrements are in the mail (delivered by our previous email service)

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

Charting the HALs of China

As China continues to emerge on the world stage, and the U.S. vacillates between acting the star and stalking off stage to harangue the woman selling popcorn, there is increasingly an urge in some quarters to pit the two countries in a competition in every single sphere (we will discuss in future issues the trade and investment sphere). Perhaps no more than in progress in artificial intelligence. There is a fear among many that whoever achieves true AI first will rule the world. We expect it won’t work out that way, that science will progress differently than as depicted in a two-hour super hero movie, that multiple countries researching AI is a good thing, not a bad one. But nonetheless, we are gratified to present, via the former Mexico Ambassador to China, a comparison of the two countries AI progress in the table below. The only place China leads the U.S. currently is in collected data, which thanks to government efforts, companies such as Tencent, and a huge population, is enormous. BTW, Ambassador Guojardo’s twitter feed is full of informative and surprising information, presumably curated by the Ambassador himself and not by some AI bot. A second BTW, charting AI progress is particularly apt this week on the 50th anniversary of Stanley Kubrick’s remarkable 2001, A Space Odyssey. It is not our favorite movie of all time (though it ranks in our top twelve), but it’s probably one of the most important, prescient and impactful.

2001: A Space Odyssey Official Re-Release Trailer (2014) – Stanley Kubrick Movie HD

Watch the Video

Let Women Work

In too many parts of the world, it’s difficult or illegal for women to be part of the workforce, or at least in certain sectors. In fact, the World Bank reports that 104 countries continue to have laws preventing women from working in specific jobs. The two regions where this is most common (see chart below), are the Middle East and South Asia. Sectors such as mining and construction are often targeted by countries for limitations on women working. This seems especially silly to us since last summer we used a series of instructional videos posted to Youtube by a woman in Australia that guided us to changing a door into a wall and window. In a recentinterview in The Atlantic with Saudi Crown Prince Mohammed Bin Salman, he indicated he will continue to improve women’s rights in his country. Let’s hope he does and that such thinking spreads throughout the region and elsewhere around the world. In the meantime, we’re leaving low hanging economic growth on the vine by not utilizing female talent. If I had a hammer, I would hand it to the woman in Australia to finish up my home construction project.

The View from Down There

>Following up on our story a few weeks ago that in countries where the population has less political party affiliation there is less allegiance to democracy, Pew Global also finds that people in less democratic countries have more favorable opinions of China and Russia. For example, 5 percent of Swedes agree that China “respects the personal freedom of its people,” but 56 percent of Tunisians do. Only 14 percent of Germans believe Russia respects the personal freedoms of its people, but 85 percent of Vietnamese believe such a thing. Pew also asked these countries their opinions of France and the U.S.  Authoritarian countries rank the U.S. higher for respecting personal freedoms (61 percent) than France (51 percent). Beauty, or freedom, is in the eye of the beholder, and if you live in a country where you are more beholden to an authoritarian government, your views are colored in that direction.

Simply Offer the Complexity Index; Deficits, Technology; & Bright Lights, Big City

Back before the current Russian shenanigans, for work we traveled to Russia.* The Russian Far East, to be precise, not too distant from Siberia. In the middle of Winter. It was so cold we were unable to walk outside wearing our then metal-framed glasses because they would stick to our face. But that’s not the coldest we’ve ever been in our life. No, that would be on opening day of the baseball season in Seattle at Safeco Field, back in 2000. Granted we had not dressed adequately for the occasion, but still, it was Russian cold in the stadium that day. So it is with our usual false spring baseball optimism (it’s been 17 years since the Mariners have made the playoffs but this time of spring we pretend this is the year) that we prepare to attend tonight’s opening game of the Mariners, mixed with some practical wisdom of wearing at least four, maybe five, layers. We will enjoy the annual ritual of the players running onto the field, the inspiration of the child suffering a life threatening disease who gets to run around the bases and the well-earned nostalgia of hearing the recorded voice of the late, great Dave Niehaus. But we hope to enjoy it all while not freezing like a Russian winter. Meanwhile, we warm you up with the Complexity Index, throw heat on China trade surpluses and blow up the trend of ever bigger cities. It’s this week’s International Need to Know, never throwing bean balls but sometimes a stray slider of international news and data.

Macklemore and Ryan Lewis – My Oh My (Officia…
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*We are amused we will no longer get to enjoy the 1950s décor and atmosphere of the Russian Consulate in Seattle, where we had a number of memorable meetings. 

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

We Simply Offer the Complexity Index

We’re a sucker for an index, both the kind found at the end of books (how many times was Churchill referenced in that World War I book?) and the economic ones. So we were intrigued when we recently stumbled upon the Economic Complexity Index, which attempts to measure how complex (i.e. diverse) a country’s economy is. It does so by measuring how many different products and services a country exports and comparing that to how many other countries make those particular products and services. Places like Switzerland, Japan and the U.S., which produce a diversity of products and services and export them, are higher up on the Index, while countries such as Zimbabwe, which make very few products, rank low on the index. Below are the top ten countries for 2016. The Harvard Center notes that China has regressed in recent years and India has moved up the rankings, which they believe portends slower growth in China, and increased growth in India. We’ve already noted for other reasons that China’s growth will be slower in the future, whether official statistics show this or not. Here is perhaps more evidence.

Deficits, Technology, Today, Tomorrow, 

We have long called for a Sabermetrics revolution for international trade statistics. Our officials use the equivalent of ERA and batting average to drive trade policy debates (For those not into baseball, those were common, but we now know lousy, measurements of how good a player is). Case in point as Allison Schrager pointed out last week, the China – U.S. trade deficit is really much less than the officially stated $375 billion. Schrager cites the classic example of the iPhone to prove her point. The entire $900 of an iPhone is counted to the trade deficit with China. But, Schrager notes that more than a third of the iPhone’s components are made outside of China in other Asian countries. The real trade deficit with China is similarly probably a third less than advertised. But today is not tomorrow. China is becoming more innovative, creating more technology itself and doing more value added work each year (see the chart below). The biggest challenge with China is not the trade deficit itself but China’s continued protection of domestic markets. Among the reasons Chinese companies dominate in their domestic market is because China continues mercantilist policies. On the other hand, much of the U.S.’s success in innovation is due to immigrants, including and especially those from China. According to Bloomberg, “there are more Chinese engineers working on artificial intelligence at U.S. tech companies than in all of China.”* So America’s trade deficit with China is smaller than official statistics, but the current American animus to immigrants could mean in the future the official trade deficit matches reality. Post-modern politics is constructed with steel ironies and iron fallacies.

*Does that mean America’s intelligence is artificial? No! We’re a nation of immigrants

Bright Lights, Big City, Government Fiat

As you know, as of 2007, more people live in urban areas than rural ones. That trend continues with cities continuing to grow rapidly. So what were the fastest growing cities between 2000 and 2016? According to the Visual Capitalist, in India, “the fastest growing cities are in the south, where there are at least 10 large cities that have roughly doubled in size.” In South America, Bogota, Colombia has grown the fastest. In Africa, Lagos, Nigeria has doubled to nearly 14 million people. And then there’s China. Lots of cities in China’s coastal regions have doubled in size during that time period. Xiamen, where a few years ago we drank too much baiju with the deputy mayor, has tripled in size. Experts predict more and more mega cities emerging over the next 50 years. Are there any technological and cultural events that will reverse that trend? How about government fiat? China is purposefully trying to cap the populations of two of their largest cities, Beijing and Shanghai, according to the Financial Times. And, in fact, Beijing’s population shrank slightly last year. Whether they are successful in that new policy will help determine just how accurate the prediction of larger and larger cities is.


Latest on Electric Car Sales, Fight for Your Right to Parties & Tagging Grafitti

In our ever expanding department of unpopular opinions, we finally saw the mega-hit movie Black Panther last week and while entertained, we also had some reservations. The movie was visually stunning, had more interesting moral quandaries and intellectual arguments than your average superhero movie and was overall more entertaining than most Marvel movies. But the film also creates a dubious world that is vulnerable to accusations of racism against American blacks as this review eloquently details, as well as is vulnerable to charges of sexism. When watching the movie, for the life of us we couldn’t understand why T’Challa should be ruler of the fictional African country of Wakanda when clearly both his humanist girlfriend and scientist sister were far more qualified. Of course, why a country so successful and technologically advanced as Wakanda would be ruled by a monarch, an apparently patriarchal one, is also a good question. The answer, of course, is Black Panther was originally a comic book, a medium that once was the realm of the six-to-ten-year-old set but in today’s stunted society, has been made respectable for adults without leaving behind any of its juvenile intellectual trappings. I suppose we should be glad we were entertained for two hours instead of bored stiff as we were by Captain America and Wonder Woman (speaking of unpopular opinions). But we aim to entertain and inform you with stories of electric cars, captivate you with the apparent importance of political parties and then take a pause for graffiti. It’s this week’s International Need to Know, the vibranium of international information and data.Without further ado, here’s what you need to know.

The Latest on Electric Car Sales

At our brother’s wedding reception last month, the DJ played, and people danced to, the Electric Slide. That’s now a standard phenomenon at many weddings but electric vehicles are not yet standard. And unlike at a wedding reception, in the car market there is no bar serving up rum and cokes to impel people to buy an electric vehicle (and if there was, they shouldn’t be driving). Nonetheless, a new Electrification Index by the consulting firm, Alix Partners, shows though overall market share is still small around the world, electric car sales are rapidly increasing. From 2013 to 2017 the use of electric cars on the road increased six fold but still account for only one-half of one percent of all car sales. The two stars of electric car vehicle sales are a really big country, China, and a really small one, Norway. China accounted for 45 percent of all EV sales in 2017. That’s heartening but our arteries harden when we remember how much of China’s electricity is powered by coal. And we make an appointment for an angioplasty when we read that coal output in China is up this year. Meanwhile, in Norway, recent monthly sales figures showed EV sales accounted for 27 percent (!) of all new car sales. That’s because Norway aims to have zero emissions from cars just seven years from now in 2025 and so offers strong incentives and subsidies to buy such cars. And even better, most of Norway’s electricity is hydro generated. The Alix Electrification Index will be updated quarterly. We will be interested to track progress (and regress) in the coming months and years.

You’ve Got to Fight for Your Right to Parties

Last week in exploring Chinese ideological beliefs we found a correlation of how old someone is and their desire for political liberalization. When one looks globally there are some other interesting correlations. Pew Global analyzed its survey of political beliefs and found that “In countries where more people are unaffiliated with any political party, popular support for representative democracy is also lower.” They cite Chile as an example where 78 percent of the population does not identify with any political party and at the same time 35 percent of Chileans oppose representative democracy. This level of opposition is far above the global median opposition to representative democracy of 17 percent.  This is apparently true of much of Latin America where 33 percent say representative democracy is a “bad way to govern a country” and where half the people are not affiliated with a political party. In countries with high political party affiliation, support for representative democracy is high. Pew provides the examples of India and Israel where only 3 percent of the population are unaffiliated, and only 10 percent hold a negative view of representative democracy. Of course, political parties may only be a manifestation of civil development. It may not be the parties themselves but the civil society development that led to the parties which is important. Nonetheless, we note, somewhat alarmed, that in our country of residence, the U.S., political party affiliation is much lower than it was two decades ago.

Tagging Graffiti

Every once in a while it’s good to hit pause for a moment. But sometimes we are so charmed by something the pause button lightly paws us as it did when we came across the charming photo below of Afghan graffiti in the streets of Kabul. We Bing’d for more information and learned the art was created by the Afghan female painter, Shamsia Hassani, an art professor at Kabul University. But she is not a “those who can’t, teach” professor, she is also a graffiti artist herself. In an interview two years ago in the LA Times she was asked how dangerous it is to be a female graffiti artist in Kabul. She replies, “…I’m scared because of the bad situation, because of facing closed-minded people who might harass me. If I was a boy, maybe I’d be more OK with painting in the street. Because no one would tell me anything if I was a boy. But because I’m a girl, even if I don’t do art, if I just walk in the street, I will hear a lot of words. And if I do art, then they will come to harass me.” That there is still so much danger for women in our world gives us pause too, in a less satisfying way.

China’s Ideological Prism, Keeping Company of Women, Pesticides and Suicide

Obviously given this newsletter’s content, we have an interest in international. We are indeed keenly interested in our world. How could one not be in this rotating, orbiting globe chock full of so many interesting characters, events and mysteries? And as you’ve probably noticed, we are also a fan of both music and New Orleans (much of the former would not be possible without the latter). So when an effort comes along that combines all three, you know we’re all in. Playing for Changerecords musicians “performing in their natural environments and combines their talents and cultural power in innovative videos they call Songs Around The World.” What the organization is trying to change we have no idea but we do enjoy their music video collaborations. Their most recent song, Everlasting Arms, features Dr. John, Luke Winslow-King and Washboard Chaz, all from New Orleans. But also playing on the song are musicians from Argentina, Italy, Anguilla and that most exotic of all places, Mississippi. As we discuss the world this week, the song seems an appropriate accompaniment to China’s ideological prism. It harmonizes well with data on women and business and it certainly adds a back beat to surprising news about pesticides and suicide. It’s this week’s International Need to Know, singing about all the important news of our world, even as we wish our name was as cool as “Washboard Chaz.”

Everlasting Arms featuring Dr. John | Playing…
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Without further ado, here’s what you need to know.

China’s Ideological Prism

Now that China has officially altered their constitution to eliminate term limits for presidents, perhaps it’s an apt time to consider the trajectory of politics in China. Fortunately a new academic paper, China’s Ideological Spectrum, provides some insights on this issue. Written by researchers at Stanford and the University of California, the paper studied ideology in China through a large scale online survey.” In fact, nearly half a million respondents filled in the survey between 2012 and 2014. The paper reports the results show “Those who prefer authoritarian rule are more likely to support nationalism, state intervention in the economy, and traditional social values; those who prefer democratic institutions and values are more likely to support market reforms but less likely to be nationalistic and less likely to support traditional social values.” Interestingly and perhaps not surprisingly, there is a big difference in ideological perspectives between the young and the old in China. “In terms of age, the survey shows that conservative and antimarket/traditional preferences increase with age for those ages 35 and over.” Will this young generation, even as they age, want more reforms? Will they get them? China’s rulers must navigate tricky ideological waters in the coming years, which we observe after reading that in Beijing this week during the Communist Party Congress, the government is restricting the number of foreigners allowed in university area bars and pubs. Drinks over security, we say.

Keeping Company of Women

We’re a week late celebrating International Women’s Day but we’re often late for holidays so why should this one be any different?  For the holiday and otherwise we point to the latest data on which region’s companies have the most women managers and CEOs. East Asia and the Pacific lead the way with 33 percent of their companies having women CEOs or the highest-level manager. The Middle East and North Africa take up the rear. Interestingly, according to the World Bank data, Thailand and Cambodia are the only two countries where the data show more women running companies than men. In a related data point, start-up companies in Africa do better than the global average for having women founders with 30 percent of such companies founded by women. And yet also related, we point you to an OECD study showing that women “around the world spend two to ten times more time on unpaid work than men,” i.e. taking care of children, elderly relatives, cleaning, cooking and other such activities. Mexico tops the list with women working more than six hours each day on average on unpaid activities. In no country do men work more on unpaid activities than women, but in Sweden women spend the least amount of time on such work. We now go vacuum our Ikea furniture.


Pesticides and Suicide

A friend of ours recently wrote an oral history of M*A*S*H for The Hollywood Reporter. You may remember the theme song for the movie and TV show is called “Suicide is Painless,” which we were reminded of when reading about the great strides Sri Lanka has made in curbing suicide rates. Suicides increased dramatically in that country in the 1960s. In the 1980s, a pesticide registrar, Michael Eddleston, noticed the correlation between increased suicide rates and the large-scale introduction of pesticides in the 1960s.”The suicide rate increased from five per 100,000 people to 24 per 100,000 people in 1976, and then peaked at 57 incidences for 100,000 people in 1995.”  When people who were prone to commit suicide had at the ready a handy poison, more people successfully killed themselves. So Eddleston began working with Sri Lanka to ban the most poisonous of pesticides. Consequently, suicide mortality rates plummeted: “from 57 instances to a 100,000 population in ’95, it has dropped now to 17.” This is a 70 percent decrease accomplished not by improved mental health programs but by eliminating the easiest tool for suicide in that country. According to the article,”Research suggests most people who try to kill themselves with pesticides reflect on the decision for less than 30 minutes, and that less than 10% of those who don’t die the first time around will try again.” The tools used to commit suicide vary greatly by country. In Hong Kong, where there are lots of tall buildings, jumping to one’s death is prevalent. No surprise that in the United States, guns play a large role in suicides. Gun control, alas, is not painless.

Remember the Good News, China and Commodities & Changes in the Middle East

The great baseball player Ichiro and I share the same birthday and we–well, that’s in fact the only thing we share. With Ichiro returning to the Seattle Mariners this week we were reminded of our trip to Spring Training the first year Ichiro played for the Mariners way back in 2001. We were walking from the main stadium to a side field when we spotted Ichiro walking maybe twenty feet in front of us. Before we could enjoy our brush with soon to be baseball greatness, we heard a clamor behind us and were nearly trampled by a herd of Japanese media who also suddenly realized Ichiro was just in front of us and desperately wanted to capture the moment. That’s when we understood just how big a phenomenon Ichiro was in his home country–and how unimportant our health and safety was to their media. And yet when we read the extraordinary article on ESPN this week detailing the circumstances, traits and tragedy that made Ichiro great, we are now glad a birthday is the only thing we share. The article is a profound examination of obsession, loneliness and child abuse. We have always rooted for Ichiro and will continue to do so this spring though not just for him to get hits, but also to someday find peace. And we find peace in the fact of good news in our world, make a pitch for this whole China and commodities business and cheer on changes in the Middle East. It’s this week’s International Need to Know going to bat for important international information and data. 

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

Remember the Good News

You, dear readers, probably feel you are being inundated with bad news these days.Turn on the TV, pick up your tablet, listen to the radio and you’ll see and hear it. But we have experienced just the opposite. In the past week we have learned of two new books and one graphic quantifying how good we have it. We read a long review of Steven Pinker’s new book, Enlightenment Now, which spends many pages explaining how the world has gotten better and likely will get better yet (though apparently Pinker gets wrong why the world has gotten better–the Enlightenment is not the answer, or at least not all of it). We listened to an interview with Gregg Easterbrook whose new book, It’s Better Than It Looks: Reasons for Optimism in an Age of Fear, which as the title indicates, is also about how things are getting better. And we stumbled across the graphic below, which in six graphs shows how our crazy world has improved. And indeed we have many times tried to convince you of the same thing in this space. However, that there has been lots of progress in the past does not mean bad news is not coming. In fact, the worry is that over the last few years there are signs we are regressing, that perhaps we have reached an inflection point, where the world is taking a turn for the worse, and this could be the start of a long term bad trend. Perhaps. But ones hopes not and even if so one should fight against the possible trend.  And in the meantime recognize we live in the most prosperous, peaceful time in human history and let’s work to make it more prosperous and peaceful for even more people.

China and Commodities

For some reason steel has been in the news recently, something to do with tariffs some old man wants to impose. Forgetting for the moment that the said tariffs, for mysterious reasons, are more targeted at Canada, it seems a good week to remember the large effect China has on the commodity market. And fortunately the Visual Capitalist provides a nice graphic (see below) to capture this outsize influence. China is home to 19% of the world’s population and its economy accounts for 15 percent of the global economy. But because of its massive infrastructure build up, China is responsible for 50 percent of world steel demand, 59 percent of cement, 50 percent of copper and 56 percent of nickel. A few years ago when China’s economic growth slowed, commodity prices dove. If China slacks off again, be prepared for the same result. The U.S. great leader’s tariff tantrum is silly and counterproductive (though not unprecedented, George W Bush did something similar), but ultimately the steel story will be told by China’s policies, economy and politics, not by one country’s tariffs.

Changes in the Middle East

Bad news is loud and brash and stomps all over the place which is why the quiet, demure, small steps of progress that have taken place in the Middle East recently may have gone unnoticed. Earlier in the year to great note, Saudi Arabia announced women could start driving. But recently Saudi women also gained other basic freedoms, including serving as soldiers, expanding the number of types of jobs they can work at (sales most prominently) and being allowed to attend soccer matches. Small steps as we noted but at the moment at least the country, under the heavy handed consolidated ruler Prince Mohammed bin Salman, seems to be walking down a more liberal path. And it’s not just Saudi Arabia. Iran recently told the soccer governing body FIFA they will soon also allow women to attend soccer matches. Let’s hope the good news keeps coming.

Chinese Fertility, Missing Indian Salaried Workers, Where Ex-Pats Should Live

We apologize for not delivering key international information and data to your digital doorstep last week. Our knee, which was recently replaced, was in need of additional medical procedures, as pain and stiffness broke through established term limits like a Chinese president. Combine that with our brother’s wedding (congrats Joe and Linda!), and we found ourselves unable to make our usual weekly delivery. But we are still more reliable than the person who delivers, or rather doesn’t deliver, our daily local newspaper. It is a rare morning when the paper is at our house on time and too often it is not delivered at all. We have often reported these delivery mishaps but nothing seems to change. You are probably asking yourself why we still take the physical paper. We can offer no particular good reason other than old habits die hard and we like to read the physical paper while we eat our morning Cheerios (we are receiving no payments from General Mills for that statement though would gladly accept their sponsorship since we are even more addicted to Cheerios than we are to the physical newspaper). We figure our habit will forcibly end sometime in the next ten years when the delivery of physical newspapers will go the way of VCRs, cassette tapes and DJ Khaled (okay, this last is aspirational–please, please make this annoying man go away). While our newspaper delivery person starts looking for other positions where she doesn’t do her job, we spill the beans on Chinese fertility, solve the case of the missing salaried worker and determine where expats should live. It’s this week’s International Need to Know…

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

China Fertility

We admit to being a bit obsessed with demographics. Although almost all events and phenomena have a complicated set of causes, we think demographics is often not given a large enough slice of the explanatory pie (delicious when served with rationalization ice cream). So we read with interest a Bloomberg article detailing the continued fall in China’s fertility rate. After a brief spike following the relaxation of the one-child policy in 2015, the number of births in China fell 3.5 percent last year. That trend is likely to continue and China’s working age population—currently 902 million—will continue to decrease. In fact, China’s working age population has been decreasing since 2012. That means China’s GDP will stop increasing at such a high rate (remember GDP increases only through larger working age populations and increases in productivity), whether official statistics reveal this or not. And, as the Bloomberg article points out, China’s aging demographics could lead to a slow down in innovation. “Not only will there be fewer young people, who tend to have a higher appetite for risk than their elders, but they’ll be a minority in the work world.” Analysts will examine President Xi’s policies, U.S. trade policy and a host of other factors, as they should, but we wonder if China’s demographics will be more important than any of these other factors to the long-term trajectory of its economy.

The Case of the Missing Indian Salaried Worker

We are more dubious than some regarding the rise of the relative importance of large companies. Nonetheless, we do believe they should be a healthy part of the mix and in economies where rules, regulations and culture make life too difficult for the formation and growth of formal companies, people suffer. The India business publication LiveMint points out this is a problem for India where among developing countries, salaried employment, i.e., those working for companies rather than self-employed, is very low. In fact, India salaried employment is below 20 percent as you see in the graph below. At the other end, China has the highest percentage of salaried jobs, followed by South Africa, Malaysia and Brazil, all countries which have climbed up to the World Bank’s “middle income” category from “low middle income,” where India continues to reside. Many of the other countries with low levels of salaried employment are also struggling to achieve the middle income category. Self-starters are great, but companies are necessary for a successful economy.

Where Expats Should Live

It’s common nowadays to hear people threaten to leave their country if one political outcome or another occurs. But where should they move? The ability to make money is certainly one factor. So in what cities do expats command the greatest salary? HSBC Expat provides the answer as reported by Bloomberg, and surprisingly, to us at least, it is Mumbai. Foreigners living in the Indian mega city earned on average $217,165, “more than double the global expat average of $99,903.” Why do expat jobs command such a high salary there? According to Dan Blackburn, head of HSBC Expat, the answer is high employment and experience levels and because a large percentage of the jobs are in engineering. We’re not sure we’re satisfied with that answer. The top four cities after Mumbai, as you see in the list below, are all high cost cities. In fact, other than Jakarta, all the cities near the top of the list have high costs of living. While we puzzle this out we suggest you request a transfer to Mumbai on the double.

Great Leaders, Smartphones Calling Trade and Venezuelan Origami

We’ve noted our worries about automation displacing human jobs before, but it’s also possible that at least in the mid-term, the worries are overblown as we were reminded when reading an article recently that asserted truck drivers’ jobs would change, not be eliminated, with the advent of self-driving trucks. Of course, some jobs we may welcome the elimination of, perhaps because they are too dangerous or risky. Or in the case of the job we read about being at risk this week, too smarmy. Yes, it turns out lobbyist jobs are at risk to automation. According to Politico, the company FiscalNote has developed a software platform that is superior to humans at predicting what Senators and Representatives will do on an issue, who best to work with to form an alliance on a policy and how to get your bill through Congress, or alternatively, stop it from getting through the sausage making machine. The article notes that the “system analyzes interests, not just people, and quickly summarizes everything knowable about who is trying to pass what kind of rules about the most obscure topic…” FiscalNote is essentially bringing sabermetrics to politics. Of course, defense, corporate, environmental, human rights and all other lobbyists are likely to become the strangest bedfellows ever as they join together to lobby against the implementation of such technology. In the meantime, we manually inform you of a title change in China, the impact of smartphones on international trade and Venezuelan origami. It’s this week’s International Need to Know, telling different stories of import each week while the White House changes their story every day.

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

Great Leaders?

Titles are important to some people. I’ve known a number of people with PhDs who insist on being called doctor which is understandable given all the time and effort they put into earning the PhD. Chinese leaders can be very particular about titles because a title signifies much of importance. So we read with interest in Bill Bishop’s invaluable Sinocism newsletter the latest on President Xi Jinping’s title elevating efforts. Bishop reports that Xi now officially appears to be dubbed lingxiu, or “leader,” the first to receive that moniker since Deng Xiaoping and Mao. High level company indeed (and in Mao’s case, worrisome company). This moniker elevation first occurred in a January 14th article in the Global Times so we’re a bit late to the title party, but it doesn’t appear to be getting as much notice as say, Kim Jong-Un’s sister so we raise it here. As was noted in the article, “The word lingxiu means more than just a leader. It is often bestowed to a leader who enjoys the highest prestige, who is the most capable and who is widely recognized by the entire Party.“ That was January. Earlier this week the People’s Daily and CCTV published a video cementing Xi’s title which you can watch below. Over two years ago we noted that Xi is the most impactful Chinese president since Deng. Now he’s got the title to prove it.

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Smartphones Calling Trade

A while back smartphones replaced computers as humans’ device of choice for distracting themselves from existential questions, bothersome family issues and having to engage in time-consuming human interactions, as you can see in the first chart below. The International Monetary Fund (IMF) has been quantifying how important smartphone production is to a variety of countries exports. For example, smartphones account for 5 percent of China’s exports, about $107 billion in 2016. In South Korea, smartphone component production accounts for an astonishing 17 percent of that country’s exports. For Taiwan, those germ incubators account for a third of its exports. Other countries heavily reliant on smartphones for their exports include Singapore (15%) and Malaysia (11%). The IMF study also notes that Apple iPhone release dates have a huge impact on these countries’ tech cycles. But the study also notes the smartphone market may be becoming saturated, perhaps peaking in late 2015. “China’s domestic smartphone market declined in 2017 for the first time, and Apple recorded a year-on-year decrease in iPhone sales in the fourth quarter of 2017.” This has led to smartphone exports from China peaking towards the end of 2015, at least so far. And, of course, some of that could be due to more components and assembly happening outside of China—Korea and Taiwan semiconductor exports continue to increase. We’ll keep you updated by looking up the latest data six months from now, on our smartphone, of course.


Venezuelan Origami

A few weeks ago we pondered whether Bitcoin is a legitimate currency or even a long-term viable form of payment. But now comes news that certain sovereign currencies are worth more by being used for other purposes than as money. In Venezuela, where the economy has shrunk 33 percent over the last five years and where this year’s inflation rate is currently 13,000 percent (that is not a typo!) lower denomination paper bills are essentially worthless. Well, as money at least. But one enterprising Venezuelan has been taking two, five and ten-Bolivar notes and using them to create handbags which he then sells for much more than the worth of the currency itself. As the Taipei Times tells us, “Enter Wilmer Rojas, 25, who scoops them up off the street, uses an origami-like folding technique, a needle and thread to make handbags with an eye to selling them — maybe even abroad, where people have real money.” Rojas says Venezuelans throw away such bills because inflation has made them worthless. He collects them, makes his handbags, sells them and provides for his family. “You can use magazine paper or newspaper pulp, but currency notes are better because they are not worth anything, they are all the same size and you don’t have to waste time cutting them,” Rojas said. International customers are paying him $20 per bag. If you find yourself in Venezuela, we highly encourage you to buy one. Maybe cat cryptocurrencies aren’t as crazy as we thought.

A Lost Generation, Are all Unicorns the Same Color, & Self-Driving Slippers: The Sequel

For reasons we won’t go into here, we’ve been researching the TV show, This is Us, which led us down a tangential rabbit hole researching the song, Blues Run the Game, which led to reading up on Jackson C Frank, who wrote the song, and who has the seventh saddest Wikipedia write-up ever. If you are ever despairing of your life, whatever you have to mourn—and we all have something—just remember yours is unlikely to be as dire, tragic or painful as Frank’s. Born in Buffalo, NY (tragic enough in itself, Ron Armitage), at age 11 a fire broke out at his school killing 15 students, including Franks’s then girlfriend, Marlene, who he later wrote a song about. Frank himself suffered burns on 50 percent of his body. Frank recorded his only album as a young man while living in England. The album was not a popular success and things went from bad to worse for Frank personally. Frank lost a son to cystic fibrosis and later  suffered severe mental health issues that led to his being institutionalized and later to becoming homeless. Years later one of his fans found him and hoped to help him to begin recording again. But before this happened, Frank, sitting on a park bench in Queens, NY, was shot through the eye by a pellet gun a kid was shooting indiscriminately in the neighborhood. Eventually Frank died of pneumonia and cardiac arrest at the age of 56 in 1999, unknown, broke and alone. His music did not save him but continues to stir millions, including viewers of This is Us. It is of no solace to Frank, of course, but even the most tragic life can have hopeful impact. We hope to move you about Europe’s lost generation, sing the blues about unicorns, and provide a sequel to self-driving slippers. It’s this week’s International Need to Know, attempting to be the Jack of international news and data.

Blues Run The Game–Jackson C. Frank (From Vi…
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Without further ado, here’s what you need to know.

A Lost Generation?

We noted a number of months ago that Europe’s economy has been recovering after a long, dark economic night resulting from the financial crisis. But for Europe’s youth, no dawn looms. At the height of the great recession, in some EU countries the unemployment rate for youth hovered around 50 percent. For the EU as a whole, a quarter of young people were unemployed. That is no longer the case but even today, nearly a fifth of young people in Europe are unemployed. As you see in the chart below, the difference between youth unemployment and employment for older people is stark. Young Europeans are starting from behind with little hope of ever catching up to previous generations. Like the lost generation of World War I, this will have long and worrisome impacts. As the IMF writes, “after long spells of unemployment and with limited experience, the young are less likely to find work. If they do find it, it will likely be at lower wages. Wages not earned and savings not put aside can be extremely difficult, if not impossible, to recover later in a person’s career” Old policy makers have run the youths’ blues long enough and need to make rescuing the lost generation a higher priority.

Are all Unicorns the Same Color?

I hate the term, “unicorns,” especially as it’s now being adapted to NBA players. But, even in its traditional finance definition (a privately held start-up company with a valuation of $1 billion* or more) it grates on our senses. So I somehow type this post while covering my ears with my hands. But we were intrigued, when researching which countries are home to the most unicorn companies, by how two countries utterly dominate. Three-quarters of all unicorns graze in only two countries, China and the U.S. Remarkably, in 2017, as Ian Bremmer recently pointed out, only four unicorns came out of Europe and those were all in the UK. But in 2017 the U.S. saw 32 leap up and China witnessed 18. China is just behind the U.S. in total unicorns, not just ones born in 2017, as you see in the chart below. India is a distant third. Chile is the only South American country with a unicorn. There are lots of forests in our world but only a few are producing these creatures.

*We question how many of China’s unicorns are truly “privately”  held.

 last week’s story on self-driving slippers.  After starting this week with a rumination on tragedy and two not entirely uplifting stories, we are grateful to eagle-eyed reader, Dave Billings, for pointing out this video of Nissan’s self-driving chairs he stumbled across inspired by the self-driving slippers. The technology. The music. It is clearly destined to be one of our favorite videos of the year although we are a bit worried should Tesla start applying self-driving technology to inanimate objects. We do not trust Elon Musk. And when chairs become intelligent, all bets are off.  Nonetheless, though blues do indeed run the game, they cannot make anyone entirely sad when they know self-driving chairs exist in the world. See you next week with happier international news.

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Innovation Index, Satellite Love, Unemployed Dogs

In what we don’t believe will serve as a useful metaphor of our world’s strange times, when we were filling our tank the other day at a gas station, a large white truck started to back into the pump position next to ours. But the driver of the Ford F150 kept backing and backing up and clearly did not see my car parked there. I began waving my hands and yelling “stop,” but she kept coming. I stepped towards her truck trying to get in her line of sight and kept up my shouting until finally she saw me and threw on her brakes, but not in time to stop her big truck from nudging into the rear-end of my car. She quickly pulled forward, and then leaped out of her car apologizing. I said it was okay, accidents happen, and we investigated the back end of my car, which fortunately showed no signs of damage. She continued to apology so profusely that I found myself trying to calm her down she was so upset at her carelessness. So come to think of it, this is definitely not a metaphor for our times. But it does remind us of our fondness for the coming age of self-driving cars, which leads us to examining the Innovation Index, contemplating who has the most satellites and heralding the most amazing autonomous technological breakthrough yet. It’s this week’s International Need to Know, navigating the world of international news and data with nary a bent fender or broken side mirror.

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

Is the Innovation Index Innovative?

Tis better to have loved and lost than never to have loved at all wrote ole Tennyson after losing his close friend Aaron Henry. Similarly modern economists and psychologists say it is better to take risks and fail than to be completely complacent, though none express it nearly as elegantly as a 19th Century poet. We kept this in mind when analyzing Bloomberg’s 2018 Innovation Index where once again South Korea takes the top spot, followed by Sweden, Singapore, Germany and Switzerland. Prinn Panitchpakdi, head of an Asian brokerage firm in Thailand, notes that “Innovation lags in countries where the culture emphasizes risk avoidance and where R&D is seen purely as an expense, not as an investment. That’s the mindset in Thailand.” Consequently you won’t find Thailand until 45th place in the rankings. They are so worried about losing, they aren’t loving. The U.S., for the first time, has fallen out of the top ten, though apparently not for lack of willing to fail but because our education system is not producing as many science and engineering graduates for the workforce as it once did. The index ranks countries in their innovativeness by scoring them on seven categories, including research and development spending, patent activity and high-tech density. We are not entirely convinced the index is an accurate ranking of the most innovative countries, but it’s an interesting benchmark to contemplate. As Tennyson wrote, “knowledge comes, but wisdom lingers.”

Satellite of Love

The Union of Concerned Scientists, who have no shortage of things to be concerned about nowadays, tracks the number of satellites currently in orbit around earth, of which there are more than 1000 total. You should not be surprised that the United States is by far the leader with 803, followed by China (204) and Russia (142). Of America’s satellites, 19.8 percent of them are for military use. For China, it’s hard to tell for sure from the data but conservatively at least 31 percent are military-oriented. And those crazy Russians?  At least 60 percent of their satellites are for military use. How many satellites each country has twenty years from now and what percentage of them are military will say a lot about these countries’ economies and the state of world technology. BTW, Direct TV, which has 10 satellites, has more satellites than most countries. TV!

Unemployed Dogs

In a week when many in America considered the state of the union, perhaps it is an appropriate time to step back and look at the big picture. And by that we mean the amazing breakthrough of self-driving slippers. Long time readers know of our affinity for self-driving cars, but who can doubt that an even bigger advance for humankind is autonomous nighttime footwear? It is, of course, no surprise that this kind of a technological breakthrough took place in Japan (number 6 on Bloomberg’s Innovation Index!) where a hotel offers slippers that roll on tiny wheels directly to wherever your feet are. No, really, check out the video below. Strangely, we take this as more evidence that autonomous cars will first be deployed outside the United States, probably in Asia. Developed by Nissan, the slippers are being used at an inn southwest of Tokyo with views of Mt. Fuji. We are, even as we type, working to make reservations there. So put your feet up, clad easily in your self-driving slippers, and enjoy our little world.

News Techcology – Nissan releases self-parki…
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Age(ing) of China

Ignorance is bliss, they say. Apparently this adage is from a 1747 poem by Thomas Gray. Who is Thomas Gray you ask? Well, refer back to the first sentence. At any rate we’re reminded of this old saying by the multitude of data and insights that are used in sports nowadays. Baseball strategy has been transformed the last decade by teams finally adopting sabermetrics and by new uses of spatial data information. The result is that there is less base running, balls in play, less risk taking and nearly all teams are using the same in-game strategies. In other words, it has dulled some aspects of what made the game great and interesting. So too in basketball. Teams increasingly understand a three-point shot is intrinsically more valuable than a two-point shot. Consequently, basketball games are increasingly a series of three point shots rather than a multitude of different types of plays, again dulling and destroying some aspects of what make the game great. This is increasingly true of many sports and many endeavors of life. We love data and we were into sabermetrics 30 years ago before it was cool. But perhaps it turns out that understanding things too well can in the end destroy them. The mystery of life is not something to take lightly. Ahh, but not international news and data. No, there ignorance is not bliss and so we bring you the Age(ing) of China, examine CEO’s worst fears and embrace the Department of Loneliness. It’s this week’s International Need to Know, stealing bases and posting up on our world’s diamonds and courts.

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

The Age(ing) of China

It cannot be said often enough in a world that believes otherwise, that things are not binary. It is not A or B, black or white, one thing is wrong and the other is right. Our world is more complicated than that. Two things can be true at the same time (or false). China is a great example of this. People want to pigeon hole it as either a catastrophe waiting to happen or as inevitably marching to greatness. The truth is, like almost any country, China has its assets and opportunities as well as liabilities and challenges. So even as we remind you today of its aging demographics, that does not mean we discount its continuing innovation and other assets. But China is getting old—it’s demographics currently are almost as old as the United States and if trends hold its demographics will shortly be older than the U.S. The latest figures show that China’s working age population (ages 15 – 64) has topped out at just under 72% of the population. Of course, given China’s size, that still means they have nearly a billion working age people. But, GDP only grows with increases in productivity and increases in working age population. If China’s working age population is no longer increasing, unless they buck the worldwide trend of weak productivity, China’s GDP growth will start to slow (whether official figures reflect this or not). In addition, the World Health Organization classifies a country’s population as “aging” when the percentage of people over 65 reaches 7 percent. Currently, 11.4 percent of China’s population is over the age of 65. China is still doing amazing things, but it also has some challenges, including its aging demographics.

What are you Scared of?

Every year the powerhouse accounting firm PWC (who accidentally brought us the craziest moment in Oscar history last year), conducts a survey of CEOs around the world asking them a variety of questions about business conditions in their countries and other markets. This year CEOs are more anxious than in the past. The whole survey is worth perusing but we will concentrate on the question of which threats CEOs are most concerned about. It varies tremendously by region. In North America, CEOs are most concerned about cyber threats and over regulation. Asia-Pacific CEOs, on the other hand, are most concerned about availability of key skills, the speed of technological change and terrorism. Both Western Europe and Latin American CEOs top concern is populism, which says a lot about both places. In the Middle East, the top concern is geopolitical uncertainty. In Africa, it’s social instability. We feel some of these answers are different words for the same thing. But, nonetheless it is an interesting insight into different region’s CEO’s mindsets. We end by noting that humans are notoriously poor at assessing risk, so take the CEO’s opinions with a grain of salt like La LA Land producers should have at the announcement of their victory.

Department of Loneliness

One of the modern day technophobia fears is that we are all alone too much. People don’t go out to the movies, the grocery store, the CD or book store. It can all be downloaded or delivered to your house, apartment or condo.  It is quite possible to never have to leave the four walls and a ceiling of your humble or expensive abode. Perhaps this is another reason why the U.K. felt the need to appoint a Minister of Loneliness. According to U.K. government figures, 9 million people in the UK are “always or often feel lonely.” That’s 15 percent of the population. In addition, “around 200,000 older people have not had a conversation with a friend or relative in more than a month.” It would be easy to mock the creation of a Minister of Loneliness—indeed it was our first instinct. But as our world increasingly resembles a Black Mirror episode, we refrain from such easy punches.

Wilco -The Lonely 1 (Solid Sound 2017)
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