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A few years ago a friend of ours posted a video on Facebook of their then young daughter playing the drums. At one point, the delightfully cute girl does a complicated riff and then flashes a smile at her Dad holding the camera, pleased at pulling off the complicated percussion maneuver. We were reminded of this watching the viral video earlier this week of young miss Yoyoka Soma playing the drums to Led Zeppelin’s “Good Times Bad Times.” Yoyoka, who was competing in the 2018 Hit Like a Girl contest, a percussion competition designed to encourage little, old and every other type of drummer girls. Yoyoka, as you see below, is a remarkable drummer, especially for an 8-year-old, but really she bangs the drums well for anyone of any age. John Bonham, the late Led Zeppelin drummer, is her idol. Yoyoka is already able to drum like Bonham, seems to be much better emotionally, and is on her way to becoming a worldwide sensation despite the fact she did not win the contest (??!!!!–hard to imagine someone better than her). The future is in good hands, or at least the future of drumming. Meanwhile, Yoyoka’s crazy good riffs inspire us to examine how the U.S. has created a time machine to the future for China, worry over Saudi Arabia’s hate canal, and present you with our favorite story of the year. It’s this week’s International Need to Know, deciding international cases of international information and data with Solomonic-like judgment.

『Hit Like A Girl Contest 2018』Good Times Bad Times – LED ZEPPELIN / Cover by Yoyoka , 8 year old drummer 1668 likes 2,836,320 views

In honor of America’s Independence Day Celebration, INTN will be off next week marinating a variety of international data to throw on the grill and shooting off fireworks of international information that will land on your laps on July 12th. Be prepared for the international BBQ of your life. 

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

Accelerating Into the Future

Many have forecast that as the 20th was the American Century, the 21st is likely to be the Chinese Century. Although we are nearly a fifth of the way through the 21st (yikes, how did that happen?), most felt China would not solidify its leadership until perhaps the 2040s or 2050s. But the current U.S. president’s actions to upturn the global order are accelerating us into the future Marty McFly-like (with hair eerily similar to Doc Brown’s). We have new evidence of the China Power Acceleration (CPA). According to the South China Morning Post, “China and the European Union will set up a working group to revamp the World Trade Organisation to counter US unilateralism.”  Whether this working group can be successful, given the EU has the same concerns about China’s protectionism and closed markets as the U.S. does, is an open question. But the fact that the EU and China are trying is remarkable and would have been unthinkable before the U.S.’s recent trade skirmishes with both regions. Meanwhile, a retired major general in the Chinese army during a panel discussion on the South China Sea called for a rewriting of the international based order to accommodate China’s growth. The article says the Major General claimed “the shortcomings of the rules-based order was they either had limited capacity to accommodate China’s growth or China’s rapid rise meant it had outgrown the rules.” She went on to say, “We and other players have to think of a way to fix this rules-based order to update it.” And finally, in a major foreign policy speech, President Xi said China will “advance power diplomacy” on its own terms.  Like continental drift or losing a sock in the laundry, China’s ascent was inevitable. But U.S. political and policy chaos is an earthquake or dropped laundry basket accelerating it.

No Man is an Island, but a Country?

You may remember that Saudi Arabia has been in a simmering conflict with its neighbor Qatar the past year over a number of issues. That has been covered in the news numerous times. But you may not know that Saudi Arabia is so upset it has plans, in fact is taking bids from private companies, to build a canal on its 38-mile border with Qater and turn the isthmus into an island. According to Business Insider, “reports indicate five international companies have been invited to bid for the project, called the “Salwa Channel,” with a deadline set for Monday. Sources told Makkah, a Saudi Arabian newspaper, that Saudi authorities will announce the winner of the contract deal within 90 days, and hope to complete the canal by the end of the year.” That’s definitely upping, or rather uprooting, the stakes of the Saudi cold war with Qatar. Perhaps more alarming, the Makkah newspaper further reports that “part of the canal would also be converted into a military base and a nuclear waste burial site.” Saudi Arabia is literally trying to turn Qatar into an island with a moat of nuclear waste. Stay tuned.

Our favorite Story Yet: Angry Tea Table Flipping Contest

In an age of anger and outrage, at a time when it is easy to feel helpless and alone, leave it to Japan—the most unique culture in the world—to provide the perfect anecdote. Last week, you see, was the 12^th Annual Angry Tea Table Flipping Contest. And yes we are ashamed it took us a dozen years to discover this contest in which “participants must shout a phrase of anger, frustration, passion, or hope, while upending a small table and sending it flying.” How does it work specifically, you ask?  According to Sora News 24, “An elderly woman in cooking garb is seated next to the contestant and when she touches their shoulder and gently asks them to ‘stop,’ that’s their cue to flip out both figuratively and literally.” That is, they flip the small tea table which holds various items, including a plastic fish. Winners are determined both on style points and the distance the plastic fish travels in the air. And what are the participants to shout before flipping the table? “Participants can shout about whatever their hearts desire. Rages this year included a man addressing all women with a ‘What’s wrong with me?!’ On the other hand, affirmations such as ‘I want a job offer’ or ‘I deserve a raise’ could also be heard.” We feel that if this contest was made mandatory worldwide, 73 percent of the problems plaguing this orbiting globe would be solved.

心の叫びで「サンマ」飛ばす 岩手でちゃぶ台返し大会 77,729 views

One of the amusements of watching the recently ended NBA basketball playoffs was the theatrical denials by players when they are called for a foul. They roared in disbelief, stomped around the court, screamed at the officials as if they had been betrayed by their very kin. But when replays are showed, nine times out of ten, not only did the player indeed commit the foul, they hit the opponent so hard it would not have been surprising to see them charged with a crime, much less a foul. It appears this NBA grandstanding with referees migrated from soccer, or football as it’s known outside of America. The World Cup begins next week and we will similarly see players emote like a community theater actor hamming it up on stage in Duluth. Unfortunately, politics has also adopted such tactics. No matter how hard we may have struck some entity across the arm, our politicians will deny it. In fact, they are likely to say not only did they not foul, they actually were massaging the arm to make it feel better (or maybe they were accused of an unwanted massage of the arm, in which case they deny the arm ever existed in the first place). For the moment, we ignore the politicians and athlete actors and instead describe our North Korean Three, further investigate where wealth is traveling to and point out the most expensive places for a beer.  It’s this week’s International Need to Know, refereeing a world of information and data and preparing for your instant replay reviews.

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

Our North Korean Three

We try to tackle important issues, events and data that are not covered in the news so we’ll leave it to others to pontificate on the significance, if any, of the Trump-Kim meeting. But there are a few things that continue to go unnoticed or are under appreciated in this whole wacky game theory geopolitical derby on the Korean Peninsula.  1) There is still not enough attention paid to the real economic reforms Kim Jong-Un is instituting in North Korea. Since taking power, Kim has allowed far more private enterprise than any of his predecessors. It’s mostly an underground economy but Kim has not tried to dig it out; in fact, he appears to be fertilizing and tilling it. 2) Yes, China borders North Korea, but so too does Russia, albeit a much shorter border than China’s, but still one with strategic resonance. There has been lots of focus on what China wants with regards to North Korea, but given the current U.S. President’s Madam Bovary-like relationship with Russia, there should also be a focus on what Russia wants to happen in Korea. 3) In the absence of humans, strange things happen. The DMZ is a mostly No Human Zone (NHZ?)  which has led to a flourishing of flora and fauna. According to the Smithsonian, “5097 animal and plant species have been identified in the area, including 106 that are labeled as endangered or protected.” In fact, there have been unconfirmed reports of sightings of the endangered Siberian Tiger (crossing over that Russian border?) and the Amur leopard. Nature, like economies and politics, is chaotic (mathematically speaking). A strip of uninhabited land led to unexpected results. What will nascent, delicate economic reforms and Russian interests lead to?

More on the Wealth of Nations

Follow the money they say, which is one reason we are so obsessed with AfrAsia Bank’s annual Global Wealth Migration Review. Last week we examined the haves and have nots. This week we look at where the money’s moving.  Which countries are seeing the largest outflows of wealth? China, India, Turkey and the UK top the list of countries from which the wealthy are fleeing. Perhaps Brexit is having an impact on where rich Brits want to live? There’s certainly been lots of reasons to exit Turkey the last year. China and India, which lead the list of countries from which wealth is fleeing, are a little more complicated. The report argues that outflow from these countries is not a big deal because “they are still producing far more new wealthy people than they are losing.”  Perhaps, but we raise our poor eyebrows a bit when seeing such outflows.  The U.S., Canada and Australia are the top destinations for wealthy Chinese and Indians. These are all 2017 numbers. It will be interesting to see how developments this year affect 2018 outflows and destinations, if at all.

Buy Me a Beer

When we came across a list of the most expensive cities in the world to buy a beer, we were a bit chagrined to note that we had knocked down an ale, lager or stout in most of these places. Our pocketbook is a bit lighter because of it. Dubai leads the list, partly because you can only drink in Western style hotels and other designated areas. We’re a bit surprised to see Boston as the third-most expensive U.S. city for beer. But if you’re looking for inexpensive good beer, travel to Manila (just don’t get involved with the drug trade there), Prague, Johannesburg or Mexico City. The sights are good and the beer is cheap.

Our thumb is not green, it is not even chartreuse. But we are an admirer of dahlias and a friend of ours, who is a master dahlia grower, kindly provided us some plant shoots of our own this week. They have distinguished lineages, sort of like a race horse, making us nervous that if we mistreat them we will commit the equivalent of killing one of Secretariat’s foals. But plant them we did. Tenderly. Carefully. Following all directions. We were tempted to speak a few encouraging words to the plants but what little dignity we have reared its decorous head. So imagine our horror when the next morning the INTN spouse came in from our front yard and reported, “The dahlias look dead.” We quickly went to inspect them ourselves and they were indeed quite wilted, the dahlia equivalent of Charlie Brown’s Christmas tree. We emailed our friend, the Dahlia Master, and she assured us they will be okay. So as we weed out a Charles Dickens story in China, water North Korea’s future with comparisons to East Germany, and fertilize global warming with air conditioning, we hope you will send nurturing thoughts for our three dahlias. It’s this week’s International Need to Know, a blooming garden of international information and data in a less than concrete world.

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

Charles Dickens in China

Whether you are a racist lawyer, violent cop or unruly sports fan, in our new recorded age, it is increasingly difficult to get away with bad behavior. China, of course, is taking it to a new level with their Social Credit System. You remember reading about it last year, right? How’s it coming? The state-run Global Times reports that since April, Chinese citizens have been blocked from taking 11 million flights and 4.25 million high speed rail trips due to miscreant behavior of one type or another. The nascent system is currently built on a series of black lists where unfortunate (or deserving) citizens find themselves punished for misbehavior such as acting badly on a train or flight (we have long advocated for replacing TSA security lines with clothing monitoring lines—you are not allowed to sit on an airplane seat if you are wearing pajamas, short shorts or a stained sweat suit, for example). Much of the Chinese focus is on debt. Debtors names are published on websites and not allowed to fly or stay at fancy hotels. One province goes one step further. They “play a recorded message when someone tries to call a blacklisted debtor, informing the caller that the person they want to speak with has outstanding debts. And in May, a short cartoon with the photographs of debtors’ faces began playing at movie theatres, on buses, and on public noticeboards with a voiceover that said: ‘Come, come, look at these [debtors]. It’s a person who borrows money and doesn’t pay it back.’” No word on what happens to provinces themselves that are in debt. In the meantime, we await China’s Dickens to chronicle their experiment.

Korea’s Future Via East Germany

In the fanciful game of diplomatic beer pong being played on and with the Korean Peninsula, it is anyone’s guess what happens. But should the two Koreas ever reunify, it is safe to say that many decades will pass before there is a true equilibrium. Germany has spent upwards of 1.7 trillion Euros on its reunification and yet economic, social and cultural differences remain between Western and Eastern parts of the ole Deutschland even 30 years later. Stubborn cultural differences are revealed in a new paper which shows East Germans are much less likely to invest in the stock market than West Germans, even when controlling for income and other factors. And when they do invest, they are more likely to hold stocks in companies in communist or former communist countries such as Russia, China and Vietnam. The paper’s authors note that this inclination is stronger in parts of East Germany that did not have access to Western media. The authors conjecture this is a result of ubiquitous and effective propaganda (see Soviet ad below) up through 1989. We are all hostage to our biases influenced by whatever environment we grew up in. It is a sobering thought which causes us to reach for our Weisen beer.

Heating the Planet by Cooling Off

We recently, when having our furnace replaced, had central air conditioning installed. It’s fantastic although our cat Willow who loved sitting on a vent when hot air blew out, was very confused, upset and startled to have cool air disturbing her ample and yet cute stomach. Areas of the world that most need air conditioning, however, are least likely to have access to it, as you can see in the chart below. India, Africa and parts of Asia usually do not have air conditioning. In fact, as Quartz notes, “328 million people living in the US consume more energy for cooling than the 4.4 billion people living in all of Africa, Latin America, the Middle East, and Asia (excluding China) combined, according to the IEA report.” But as wealth grows, that will undoubtedly be one of the first things added to commercial and residential buildings, freaking out felines the world over. But that means electricity use will go up with corresponding increases in greenhouse gas emissions. Air conditioning needs to be installed in the developing world for health and productivity reasons. But so too do clean energy sources. Fortunately, those are coming along rapidly.

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.