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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.

This week we present one of our periodic China editions–three stories focusing on that wonderful, ever changing, fantastically complicated, increasingly important giant of a country. But before we dive into China, we pause to admire the ever fascinating Japan. We’ve noted more than once that Japan has perhaps the most unique culture in the world which we both admire and at the same time recognize can be troublesome. But today we are in the marveling camp catching up on the recent Japanese foil polishing craze. It turns out a Japanese jeweler took a balled up piece of foil—yes the material you use to wrap up leftovers, barbecue corn on the cob, and if of a certain odd bent, use to make hats—and spent an inordinate amount of time polishing the foil to transform it into the shining ball of perfection you see in the before and after photos below. Apparently this led to innumerable Japanese also spending inordinate amounts of time doing the same thing and posting their photos to social media. We need to make this craze take off in Russia, a far better use of their time on social media platforms than what they are currently doing. As we hire Ukrainian programmers to make it happen, we examine the EU and China, analyze China’s fixation on security and enjoy their playfulness with data. It’s this week’s International Need to Know, wishing we were at the opening weekend of Jazz Fest even as we serve beignets of international information and data.

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

EU and China

Here in America people concentrate on U.S. disagreements with China and the tariff tit for tat. But the EU has its own concerns with China and not enough attention has been focused on those issues, including a recent report signed by 27 of 28 EU Ambassadors to China criticizing China’s One Belt One Road Initiative (guesses anyone on the lone EU holdout? Hungary, which perhaps not coincidentally has recently fallen out of bed with democracy). The report signed by the Ambassadors states the China initiative “runs counter to the EU agenda for liberalizing trade and pushes the balance of power in favor of subsidized Chinese companies.” Remember that One Belt One Road is China’s ambitious initiative to build up infrastructure, trade routes and relations through a sort of new Silk Road route, encompassing 65 countries. It is unclear how much China is really spending on the project and how ambitious it will end up being. But Europeans want a piece of the public projects that are up for grabs, they want their companies to have the chance to build the infrastructure envisioned in One Belt. Of all the things to complain about China, this would not be at the top of our list. However, the linked article also includes a fascinating quote by the CEO of Siemens, “China’s One Belt One Road will be the new World Trade Organization (WTO) whether we like it or not.” We wonder whether that is true and One Belt One Road will be every bit as successful as the WTO which is to say not very successful at all—but perhaps that’s not what the CEO of Siemens means? Nonetheless, as China continues to stride more strongly into the world, as an emerged power is apt to do, they are likely to find the world stage every bit as complicated to navigate as its many predecessors in history found it to be.

Insecure China’s Security

Even as China is more assertive outside its borders it is apparently more insecure within them. Or at least that’s one way to read its increasing control of the Internet, its crackdown on dissidents and its institution of facial and even gait recognition technology in its cities. Yes, you read that last item correctly. China has developed technology to identify you by the way you walk, even those more normal gaited than John Cleese. Or as Biometricupdate.com writes, “The technology can also identify a person without their active cooperation. Even if they walk past the surveillance camera hiding their face, the gait recognition algorithm can still unveil their identity.” China is increasingly at the forefront of identity recognition technology, all used in the effort “to prevent crime.” Of course, such technology is also being developed in other countries, including in the U.S. The hubbub over Facebook last month elevated privacy issues. Essentially there is no privacy anymore. David Brin’s now twenty-year-old book The Transparent Society predicted and welcomed the coming lack of privacy. We feel we are walking–and the government will recognize our gait–into uncertain times.

Taking China’s Measure

As we have noted over the years, one of the big challenges with China is measuring it. Economic data in China is much like an old man recounting his youthful romantic exploits—he inevitably stretches the truth and obscures it at the same time. This week China began releasing monthly jobless numbers based on surveys, a data point most other countries provide but China has avoided. Previously China published a “quarterly registered jobless rate”, which like GDP numbers is strangely always the same. Or as the South China Morning Post wrote, “This was laid bare when exporters in the coastal areas were hit by the global financial crisis in 2008, and some 20 million migrant workers found themselves out of a job. The registered jobless rate stayed much the same because it does not include the country’s 270 million migrant workers.” Of course, the new jobless number—5.1 percent at the end of March—could also be manipulated and be eerily consistent through thick and thin of economic cycles.  Admire, for example, the graph below of China GDP since 2015. If your golf game was as consistent as those numbers, Tiger Woods and Jordan Spieth would bow down to you (Patrick Reed–winner of this year’s Masters–apparently would not). Presumably China’s leaders know the real numbers and maybe that’s all that is necessary. Of course, as we pointed out last year, satellite data seems to indicate China’s GDP is doing better than official numbers. Perhaps it would be to China’s advantage to be more transparent.

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 1,495,603 views 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.

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.

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.