Archive for month: March, 2019

China’s 737, Pakistan and China, and Ethiopia and China

If you are like us (and we, of course, refer to the royal “you”—come to think of it, all of our readers are royalty to us) you are probably in a perpetual state of surprise. We had not anticipated, for example, that in one week both Donald Trump and Jussie Smollet would be completely exonerated (What? It’s more complicated?). Information, both surprising and banal, rushes at us from all digital directions like a perpetual passing wind machine. Making sense of it all is increasingly difficult. But through the odorous communications thicket there is no doubt that our world has changed and will offer more surprises in our future. And one of the most important changes, as we have continued to try to show in this space, is China’s new role in the world— more influential, ambitious and forward, with all the opportunities, challenges, trade-offs and forthcoming surprises that entails. And so this week we offer three stories of China and our changing world, from aerospace ambitions to efforts in Pakistan to complications in their interactions with the world’s most underrated country. It’s this week’s International Need to Know, not necessarily exonerating the world, but certainly reveling in its marvelous complications and ironies.

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

China’s 737

For obvious reasons, this seems like a good time to check on China’s progress in building airplanes to compete with Boeing and Airbus. The Commercial Aircraft Corporation of China (Comac) is working on a C919 to compete with Boeing’s 737 and Airbus’s A320. To compete with the duopoly of Airbus and Boeing, Comac will need to get certification of the C919 from both the U.S. Federal Aviation Agency and the European Aviation Safety Agency. It typically takes at least five years to do so for a new plane. Given Comac is just beginning the process, in the very short-term, Boeing and Airbus do not face much competition. But a decade from now, perhaps things will be very different. China presumably will use its own large internal aviation market to goose the market progress of the C919. And, from there, start to export to the rest of the world. The 2030s may see a very different aviation market than today’s. Maybe. Creating safe, commercially viable airplanes is difficult, as we have witnessed in recent weeks. Other countries have crashed and burned, to use a horribly bad metaphor, trying to do so. Whether China will be different is the multi-billion dollar question.

Out: India & Pakistan, In: China and Pakistan (oh, and India)

It was not enough to worry about India and Pakistan skirmishes, now comes word that China has deployed troops in Pakistan’s Sindh region to protect a variety of coal mine projects. It turns out that Pakistanis living in that area are none too thrilled with these projects and with Chinese workers in their area. As we’ve noted before, as China increasingly projects itself around the world, they will find the same complications other world powers have. The news of this troop deployment comes from Indian intelligence sources reported by Indian TV. India is suspicious of China’s activities in this region and with China and Pakistan’s growing “interdependence.”  All of these reports from Indian media note the Chinese troop deployments are a mere “90 kilometers from the India-Pakistan border,” meaning it would take China less time to get to India’s border than for us to drive to a Mariners baseball game during rush hour. For the sake of world peace, we are deploying Seattle transportation planners to Pakistan immediately.

World’s Most Underrated Country Meets World’s Largest

What happens when our hand-picked world’s most underrated country meets the emerging global power of China? It is, of course, complicated. Like many countries in Africa, Ethiopia has received infrastructure loans from China, and is now renegotiating a multibillion dollar Chinese loan that built a railway linking Addis Ababa with a port in Djibouti (you may remember our focus on China and Djibouti many months ago. As in The Wire, all the pieces matter). Ethiopia’s Ambassador to China says in a South China Morning Post article, “We are negotiating with China as to how to manage the debt, to make it sustainable and try to reduce some distress that comes from debt.” If Ethiopia continues to reform and make economic progress, this may not be a problematic loan in the future–for either China or Ethiopia.

What About Tomorrow, Electric Car Check-Up and Don’t be Down on Downunder

On the first day of spring the mind wanders: to a study in Sweden that finds centrists have the best bull%$#& detector. Those with extreme views have more difficulty detecting BS than those in the middle of the spectrum, or as the study puts it, the results point “to the existence of bull&%$# receptivity among both right- and left-wingers.” Our favorite aspect of the study is it uses the word “bull$%#& and unlike us, does not censor it.  We love that the word strides among arcane academic language such as, “The results are supportive of theoretical accounts that posit ideological asymmetries in cognitive orientation.” Now that’s some bull%&$# academic language designed to obscure rather than clarify. But our mind also wanders to the upcoming release of Amazing Grace, documenting Aretha Franklin’s extraordinary 1972 gospel concert in a Los Angeles church, a moment full of extreme wonders. And our mind even wanders to the last days of that baseball extremist, the great great Ichiro. And so we know it is no bull&%$# that there is a place for moderation and extremism in this wacky world of ours, and so too for a tale of China’s economic future, the state of electric cars and just how racist Australia is (or isn’t). It’s this week’s International Need to Know, slapping infield singles of information and data about our world Ichiro-style.

AMAZING GRACE – Official Trailer – Aretha Franklin Concert Film

Watch the Video

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

Okay, But What About Tomorrow?

The world is concerned about China’s economy like Lakers fans over the apparent decline of Lebron James. Everyday we read another article, tweet, pronouncement about how its economy has slowed down or is having troubles. And they’re all true and we have covered many of them ourselves, often before others even noticed. But the assumption built into some of these assessments is that China’s economy is doomed for evermore, like a Poe raven. That we don’t believe. As we noted a few months ago, for demographic and other reasons, we guess that the days of double-digit and high single digit growth are over. But that does not mean China is going back to the dark ages or will be an inconsequential economy going forward. Just the opposite. China is too large and its economy is too developed not to be important going forward. Even if they experience a lost decade(s) ala Japan, they will still be important just as Japan has been post-1989 (even more important and influential than Japan given China’s size). And, if they are going through a recession currently, it will not last forever, and they will recover, just as all economies do. Not enough people are thinking about China post this recession, if indeed they are in one, and what that means for doing business there and their role in the world.

Countries Share of World GDP

Electric Slide Check-Up

It’s time for our 5000 mile check up on how electric vehicles are doing in our climate change-challenged world. They have not taken off as rapidly as hoped but there is still a big increase according to Visual Capitalist. Norway leads the way with 49 percent of their car sales of the electric variety due to a variety of incentive policies. Iceland comes in second with 19.1 percent and then there’s a big drop off down to the single digits. Another way to look at progress in the world is the number of charging stations in a country. Here China leads with more than 300,000 installed charging stations, followed by the U.S and Germany. Of course, none of this will matter unless the electricy generated to power those cars is renewable. So even as we fall behind in electric car sales projections, we also need to continue to concentrate on how the power is generated. This will be important for industrial CO2 emissions as well which are likely to be an even greater problem than transportation moving forward.

Don’t be Quite So Down on Downunder

In the wake of the terrorist attack on a mosque in New Zealand by a self-professed white nationalist, perhaps it is a good time to review perceptions of immigrants around the world. Last year, Pew Global surveyed 18 countries and found that 11 of them had majorities of people saying immigrants “make our country stronger.” The other eight have majorities who believe immigrants “are a burden on our country.” The hard eight are topped by Hungary, Greece and Italy, all countries experiencing challenging economies or political changes. Canada had the largest majority feeling favorably about immigrants with 68 percent, followed by Australia at 64 percent. Interestingly we read lots of angry denunciations of Australians after the massacre in New Zealand, with angry Twitter and other social media mobs calling Australians a bunch of racists. Undoubtably there are racism problems downunder but Pew’s survey indicates it is not as widespread as the mob claims.

Revisiting China & India, Brexit’s Demographic Challenge and Women & Business

Like Donna Summer we were on the radio. Okay, not like Donna Summer in any way, but we were on the radio, whoa, oh, oh, oh. Paul Casey asked us to be on his show “Voices of Experience” on KKNW-1150 AM where we talked about this very newsletter you are reading right now, as well as about a variety of important international issues. While we love WWOZ New Orleans, KEXP Seattle and KUOW, we now are, of course, enamored with KKNW and Paul Casey’s Voices of Experience. His questions were sharp and interesting as is his show. You can hear our contribution here around the 20 minute mark. So even as we practice, Bradley Cooper-style, lowering our voice to a deep resonant radio timbre, we broadcast to you a reassessment of India and China’s economies, how Northern Ireland’s demographics affect Brexit, and women in business around the world. It’s this week’s international need to know, wishing we had college age children so we could try to out-bribe Felicity Huffman and Lori Loughlin.

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

Revisiting China and India

You probably saw last week that a Brookings Institution study determined that China was inflating its GDP growth rate by an average of 1.7 percent each year from 2008 to 2016 (China’s government economists  also work closely with Tom Brady). That’s not a huge surprise, most people believe that China has been overstating its economic growth, but it’s interesting to see someone try to put a number to it. If Brooking’s numbers are accurate, this has ramifications for understanding China, including its comparison to India’s economy. As you see in the chart below, using the new GDP numbers for China, on average India’s economy grew faster than China’s from 2008 to 2016. In fact, in six of the eight years India’s economy had higher growth rates. People often ask me how an authoritarian government can be more successful economically than a democratic one. Well, for the last decade, India’s democracy has outperformed China’s increasingly repressive government in GDP growth rates. Of course, China’s economy outperformed India’s before that and demographics play a huge role in economic development and growth, but nonetheless, the story has become more complicated with Brooking’s calculations.

Brexit’s Demographic Challenge

Time is on my side, sang Irma Thomas before the Rolling Stones ripped her off, but many might want to change the lyrics as the March 29th Brexit deadline looms. But whose side are demographics on? We ask because concern over Northern Ireland has been a major angle of Brexit angst, and those demographics continue to change. As you see in our table below, in 1991, about 38 percent of Northern Ireland was Roman Catholic. In 2011, 44 percent were Roman Catholic and under current trends 51 percent will be Roman Catholic by 2021. Meanwhile, the percentage of Protestants has decreased during that same time period, making the calculus of Northern Ireland, the U.K. the EU, Ireland (predominantly Catholic) just that much more complicated. Of course, the number of religious people of any persuasion continues to drop in Northern Ireland as it does throughout all Europe. At any rate, demographics, tribal tendencies and good old political belief inertia will be a fascinating factor in Brexit politics.

Women and Business

We’re a week late in presenting gender equality data in time for International Women’s Day (Ed note: If only you had women on staff. INTN: If only we had staff). Nonetheless we persevere by presenting this week the World Bank’s Women, Business and Law Index which attempts to measure laws and regulations’ effects on women’s ability to work in different regions of the world. The good news is the Index has found improvement in every region of the world for women over the last decade. “Ten years ago, the global average score was 70.06. Since then 131 economies made 274 legal changes towards gender equality. This led to a 4.65 point increase in the average global score, to 74.71 today.” Six countries achieved perfect scores of 100 in the Index: Belgium, Denmark, France, Latvia, Luxembourg and Sweden. There is far more work to do, especially, according to the Index, in the Middle East and North Africa, but trends are pointed in the right direction.

Secure Your Biolabs, Japan Gives in to Reality and This Video Changes Everything

Recently we sat in a local coffee shop, one unaffiliated with any present or potential presidential candidates, sipping rooibos tea while tapping away on our Microsoft Surface (not yet a sponsor, but should be) when we began eavesdropping on the two women at the table adjacent to ours. It is perhaps a bad habit and yet when we heard them discussing black holes and how they were monitoring one in particular, perhaps you will forgive our prying ears. It struck us how fortunate we were to be living in a place where such talented people–astrophysicists in this case–are there to be eavesdropped on. In fact, for quite some time we stopped our writing and listened to the equivalent of real life Internet–the good part of the web where one can learn and absorb all sorts of interesting information, not the Social Media Mobs, gossip corners and transgressive trolls of so much of the online experience. The two women were excited about their work, their findings and potential for huge discoveries down the road. They asked each other questions and plotted their next moves. And then we looked out the window, saw a man carrying a kitten and a woman walking a puppy on the sidewalk, and forgot all about black holes. But we remember to bring you scary news of biolabs, Japan’s relenting to reality and China’s video of the week. It’s this week’s International Need to Know, the weekly newsletter with such gravitational pull that no important world information or data escapes its grasp.

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

Secure Your Biolabs, Please

We’ve always had an inkling that if the world came to an end it would be Madison, Wisconsin’s fault. And now the Bulletin of the Atomic Scientists backs us up with a report stating that “The most secure bio-labs routinely make errors that could cause a global pandemic and are about to re-start experiments on pathogens engineered to make them mammalian-airborne-transmissible.” One of these labs is in Madison, Wisconsin. But actually most such labs are located in Asia and the Bulletin (the same folks who monitor the Doomsday Clock) makes some alarming points about the inability of even the most secure labs to avoid that most human of activities–mistakes. According to the report, “Human error is the main cause of potential exposures of lab workers to pathogens. Statistical data from two sources show that human error was the cause of, according to my research, 67 percent and 79.3 percent of incidents leading to potential exposures in BSL3 labs…”  The analysis also asserts there is a 20 percent probability of a release of dangerous pathogens. When the odds are far better of a pathogen release then a Lebron James’ team making the playoffs, we’ve got a problem.

Japan Gives in to Reality

On one of our periodic trips to Japan ten years ago, some Japanese officials told us that the country’s aging, soon to be shrinking, population, was no problem. They were addressing it with automation and robots. They did not see the need to increase immigration. We are just as much a tech geek as the next person but we were skeptical. And now Japan, that most insular of countries when it comes to immigration, is singing a new karaoke tune and allowing in more immigrants. In December, the Abe government approved increasing five-year residency permits to 345,000 low skilled workers. And, as Bloomberg reports, “Although the terms are still vague, some who pass language and technical exams will be allowed to extend their visas indefinitely and bring their families.” This is new but necessary territory for Japan. Under its current demographic trends, the working age population will shrink nearly a quarter by the 2040s.  Increased immigration will change Japan, and likely make it less unique (there are always trade-offs in this world) but ultimately will improve it like immigration has every other country.

This Video Changes Everything

The stakes are enormous in the continuing battle with Huawei as has been reported elsewhere. The U.S. and other countries continue to ban Huawei’s 5G technology. Huawei executive Meng Wanzhou’s case continues to wind through the Canadian court system while two Canadians are held by China incommunicado. But, China has hit on a sure-fire way to defuse the situation: a video of children singing the praises of Huawei. With lyrics like these, I’m sure you too will be convinced:

Which is the most beautiful phone in the world? Everyone says Huawei!
Teacher tells me to love my country, and to love our domestic brand Huawei!
Huawei is good, Huawei is beautiful, Huawei wins glory for our country!

I’ve just dropped my iPhone in the garbage and am headed out to buy a Huawei phone! (actually, their new folding phone does seem cool).