Why Think Global?

Why Think Global?

Last week, Andrew and I got into a discussion of "nation-states." It's a theme I like, and Andrew doesn't. Nothing new there.

Maybe because of that, I read a lot about Globalization this week. I was pulled towards this paragraph from Noah Smith's "The Next Phase of Globalization is going to be Great".

There's a narrative going around out there that globalization is over, that decoupling will carve up the world into smaller trading networks, or even into isolated autarkic nations. And there's another narrative that economic development is over, and that China was basically the last country to industrialize. Both of these narratives are wrong. In fact, globalization is simply changing form, as it has many times in the past.

As luck would have it Andrew interviewed Simon Johnson, the Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management, where he is head of the Global Economics and Management group. In 2007-08 he was chief economist at the International Monetary Fund.

So, we both converged on the same topic.

A couple of news items triggered my thoughts. First, regarding mobile phone announcements from Huawei, revealing a 7-nanometer CPU produced by SMIC in China:

On August 29, Huawei released its newest smartphone, the Mate 60 Pro, setting off a buzz in both China and the US. The device likely contains a 7-nanometer 5G chip manufactured by SMIC - a real achievement for Chinese advanced semiconductor manufacturing in the shadow of unprecedented US export controls.

And second, the announcement of the first flight tests of the C919 plane in China:

A C919 plane, a China-developed large passenger aircraft, landed at Urumqi Diwopu International Airport in the capital of the Xinjiang Uygur autonomous region on Monday, according to the Commercial Aircraft Corporation of China, Ltd (COMAC).

On the chip, Tech Insights reported on it:

The team found evidence of SMIC 7nm (N+2) which represents a made-in-China design and manufacturing milestone for the most advanced Chinese foundry TechInsights has documented. Some of the highlights include:

The Kirin 9000s die measured 107 mm2, which is 2% larger than the Kirin 9000 (105 mm2). From various identifying features on the die, the team concluded the processor is manufactured by SMIC.

Initial lab results indicated that this die is more advanced than SMIC's 14nm process node but presents larger critical dimensions (CDs) than what TechInsights has observed for 5nm process.

Additional measurements of critical dimensions (CDs) on the die, including logic gate pitch, fin pitch and lower back-end-of-line (BEOL) metallization pitches, the analyst team concluded the die has 7nm features.

"Discovering a Kirin chip using SMIC's 7nm (N+2) foundry process in the new Huawei Mate 60 Pro smartphone demonstrates the technical progress China's semiconductor industry has been able to make without EUV lithography tools," said Dan Hutcheson, Vice Chair of TechInsights. "The difficulty of this achievement also shows the resilience of the country's chip technological ability. At the same time, it is a great geopolitical challenge to the countries who have sought to restrict its access to critical manufacturing technologies. The result may likely be even greater restrictions than what exist today."

The Kirin 9000s is a full SoC and "the C919 is a narrow-body plane comparable to the Boeing 737 and Airbus A320." (NYT)

Why are these things even interesting? Well, on their own, they may not be.

Apple's iPhone 15 Pro is using a 3-nanometer process, so well ahead of its Chinese rival:

We figured the iPhone 15 Pro would feature some sort a new A17 chip, but Apple surprised us by debuting its first "Pro" chip at its annual fall eventtoday. The A17 Pro is Apple's most powerful mobile silicon yet. The 3 nanometer chip features 17 billion transistors and a six-core CPU. Apple claims its two performance cores are 10 percent faster than the A16, while its four efficiency cores offer far better performance per watt. The 6-core GPU is also 20 percent faster than before, and it features advanced graphics features like hardware accelerated ray tracing. (EnGadget)

But China, driven by being excluded from some global markets, is rapidly developing internal capability. The more isolated it becomes, the more independent it will become. It is a good thing for Chinese citizens, but not so much for global businesses wanting to sell into China.

The backdrop here is the discussion of globalization.

The word has many meanings. It is a pejorative term for those who interpret it as a top-down pursuit of global structures that escape any kind of local control. Big Tech and Globalization are often used as weaponized words in those hands.

Others think of it as another word for progress. I am one of them. This bottoms-up globalization is driven by technology, especially technology that escapes national control due to its nature. The Internet and Cryptocurrency are good examples.

Top-down globalization is clearly flawed. Brexit in the UK and similar movements throughout Europe represent a backlash against alienating overlords.

But bottoms-up globalization is another way of describing the internationalization of structures, technology, and human experience. It includes the Internet, telephony, transport, money flows, food imports and exports, and much more.

This kind of globalization is good. It represents the free flow of knowledge and "things" across borders, enabling rapid innovation and progress. The COVID-19 vaccine benefitted a lot from globally shared science, for example.

In this context, anti-Chinese sentiment represents the self-interest of national elites in preserving their own economic, political, and military status. Chinese technical innovation represents proof that national rivalry will result in outcomes that strengthen and possibly accelerate the capabilities of the Chinese and its economy.

A fractured world where nations are increasingly cold or hot, "enemies" does not serve human needs. That is why I am an internationalist and a Globalist. We must move towards the inevitable - a relatively borderless globe with the free flow of people and things, where we cooperate in progress that benefits us all.

John Lennon comes to mind.

Imagine all the people Livin' for today Ah

Imagine there's no countries It isn't hard to do Nothing to kill or die for And no religion, too

Imagine all the people Livin' life in peace You

You may say I'm a dreamer But I'm not the only one I hope someday you'll join us And the world will be as one

Essays of the Week