We love technology but we’re increasingly skeptical of some of the big technology companies. It’s sort of the opposite of “hate the sin love the sinner.” Take Apple, for instance. We can’t think of one useful innovation by the company since Steve Jobs died. And it’s a nightmare to deal with. We were reminded of this by a Washington Post article about people whose phones were stolen–and how Apple refuses to return what the article calls their “digital lives.” Rather than acting like a company trying to help its customers, Apple acts like a giant, bureaucratic monster. We experienced this ourselves in trying to help our nearly 90-year-old Mom with her broken iPad. It was under warranty and Apple acknowledged she qualified for a replacement. But to return it and receive a new one, we had to complete a security protocol. However, Apple would not allow us to proceed even though we have durable power of attorney. The customer service agent said Apple does not recognize durable power of attorney.
So, if we understand the world correctly, we can access our Mom’s financial institutions, her medical records and a host of other aspects of her life far more important than a #%#$%#$ iPad, but Apple is somehow more important and powerful than any laws governing children helping their aging parents. Apple seems to think it’s the Trump administration of companies, above any laws and reason, able to do what it wants when it wants. And, of course, Tim Cook struck a deal with the Trump administration to for now exempt Apple products from tariffs on Chinese imports. Perhaps cutting deals with corrupt governments is Cook’s one Apple innovation. We feel sorry for companies navigating the capricious Trump tariffs and help them when we can. We’d advocate for Apple, too–but apparently lack the durable power to do so. But we do have the power to tell you of India’s moment, filling the technology gap, and China’s complicated uncomplicated economy. It’s this week’s International Need to Know, your too small to fail source of international information and global data.
Without further ado, here’s what you need to know.
India’s Moment
We continue to believe India is the last great hope for the 21st century. It’s large and it’s a democracy, so can have positive influence. The world needs it to be a successful model in this time of resurgent authoritarianism. That means its economy needs to continue to develop. To that end, more and more manufacturing had been moving to India even before the Trump torrent of tariffs. Today, Apple makes one in five of its iPhones in India. That’s up from just one percent in 2021. It is true, as some have written in recent weeks, that China has large and intertwined supply chains. But it is not true, as many have also written, that those supply chains are permanent. For one thing, those supply chains are fairly recent, built over the last decade. For another, just in the last few years, we are seeing how fast companies, such as Apple, can shift. Necessity, as they say, is the mother of invention. India is working to accelerate this progress. The Indian newspaper The Economic Times, reported last week that “India is now offering American companies that want to leave China the opportunity to move production to its territory.” Of course, the Trump administration also placed tariffs on India. These have now been paused for three months, except for the 10 percent tariff placed on all countries. Someone needs to send Peter Navarro, the most extreme and dumbest of Trump’s trade advisors, to a prison in El Salvador.
Mind the Gap
It’s almost impossible to keep up with the news nowadays. Just American political news gushes forth like a drunk college student vomiting after an all-night kegger. In such circumstances, it’s useful to step back and examine bigger picture issues. Scientific advancements seem to be taking place every day. But we also need to think strategically about what we know and where key research and advancement are still lacking. Convergent Research is attempting to do just that with its Fundamental Development Gap Map. Convergent Research, a UK-focused research organization, describes its Gap Map as “built out with the help of scientists and researchers in our ecosystem to explore the landscape of R&D gaps holding back science and the bridge-scale fundamental development efforts that might allow humanity to solve them.” They’ve developed a dataset showing the relationship between R&D gaps, foundational capabilities and resources. It spans 20 disciplines from astrophysics and global health to synthetic biology. For example, under Cellular and Molecular Biology one identified R&D gap reads: “Our Immune Memory Contains a Detailed History of Exposures but We Can’t Read It.” It makes us feel better that folks are examining fundamental challenges so that we can solve them.
China Corner: China’s Complicated…but GDP?
Multiple things can be true at once. China is a manufacturing machine with nearly a third of global manufacturing and an 18 percent share of global exports. It steals IP but it also innovates, including in batteries, solar panels and electric cars. It has a formidable economy but it now has a slow-growing one. Tariffs will hurt the United States but they will also hurt China’s economy. Either/or thinking is the mistake of most China analysis. But here are two things that are likely not true: China announced first quarter GDP growth of 5.4 percent but official Chinese tax revenue in the first quarter showed a 3.5 percent decline. It’s difficult to believe GDP growth exceeded its target (5 percent) even as tax revenues are down. Some claim the growth rate is possible because manufacturing is up even though consumption is flat. And yet, power consumption growth rates are not above GDP growth rates–which you’d expect if manufacturing is what accounts for the strong GDP growth rate. So, we assert China’s economy will not grow at the official target of 5 percent this year—which in Q1 it claims to have exceeded—unless it invests huge sums of money and somehow rapidly spurs domestic consumption. The central government appears to have plenty of money to spend but local governments are broke. And so far there has been no large policy shift to help consumers—the focus continues to be on helping industry, especially what China considers strategic industries. The world is complicated, China is complicated, but China’s official economic growth figures are not, they’re false.
