Quantum Leap: China Reaches New Milestone

Dear Reader,

Growing up, my family moved around a lot. It meant that every couple of years I would change schools.

Remember that first day of school? The mix of excitement with nervousness of the new?

I imagine that’s how Bobby Shafran felt when he started community college in New York, several decades back.

But, to his surprise, people were really friendly towards him. As he walked through the college, people would say hi, high-five him and ask him how he was doing. It was as if they knew him already.

Things became clearer when someone called him ‘Eddie’. It’s when Bobby realised they had him confused with someone else.

When Bobby and Eddie met up, they didn’t just look alike, they were identical. As it turns out, they were twins separated at birth.

But wait, the story gets crazier.

As a newspaper runs the story, David makes contact. It turns out they weren’t a set of twins, but triplets who had been brought up in different families.

What was striking is that while these triplets had grown up physically apart, they shared a weird connection.

These strangers acted like they had known each other for years. They hugged and roughed each other ‘like puppies’. They were so similar that they smoked the same brand of cigarettes, were all wrestlers and had the same mannerisms.

I’ll come back to this in a moment.

Coronavirus is changing priorities and redrawing commercial relationships

Regular readers of this newsletter know that lately I’ve been talking about how the pandemic has made countries around the world realise how vulnerable our supply chains are. It’s changing priorities and redrawing commercial relationships.

They’re looking at manufacturing more…and diversifying.

This week we saw UK Prime Minister Boris Johnson announcing Australia and UK are in talks for a free trade agreement.

This would give Australia a place to expand their exports, while access to British manufactured goods and more movement of people between countries.

But that’s not the only alliance Boris is looking to make with Australia.

You’ve likely heard of the G7. The organisation made up of Canada, France, Germany, Italy, Japan, the UK and the US.

UK’s prime minister has been toying around with the idea of a new group, Democracy 10, or D10 group.  This would include countries in the G7 along with South Korea, India and Australia.

The idea of this group is to strengthen their vulnerable supply chains but also address 5G communications. As foreign policy reported:

The focus of these discussions should be, firstly, on developing cost-effective and technologically sophisticated 5G alternatives to Huawei by enhancing government and industry collaboration within the group of like-minded countries. But they can also tackle how to promote more diverse global supply chains in critical areas while also building new capacities for sourcing components and shifting certain production to outside of China in a coordinated fashion that avoids becoming a slippery slope toward protectionism or U.S.-style “decoupling”.

As you can see, the idea of strengthening supply chains and having secure communications is a key priority.


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China reached a milestone this week

And speaking of secure communications…China reached a milestone this week in this field. It wasn’t on 5G though, but in quantum technology.

You’ve probably already heard about quantum computers.

Google claimed they had achieved quantum supremacy last year when their Sycamore processor solved a calculation that would have taken the most powerful computer 10,000 years in 200 seconds.

You see, regular computers alternate between ones and zeros. The way quantum computers are different is that they use qubits, which can use both at the same time. This allows them to not only solve problems very quickly but also solve problems regular computers can’t even answer.

The main thing about quantum computers is that, in theory, they may be able to hack algorithms we use in computers today, a crucial concern for any country looking to secure communications today.

But it’s not all doom and gloom since quantum computers can have plenty of uses like developing new medicines and artificial intelligence.

The race to develop a quantum network

Anyway, several countries have been on a race to develop quantum computers but also a quantum network. This is important because, as WeForum put it:

Once several quantum computers are connected into a quantum internet, this kind of use could usher in a terrifying new wave of cyber warfare in which entire organisations could be knocked over with ease.

This week, a Chinese team published in Nature an article on how they’ve managed to transmit a message between two Earth stations 1,120 km away through their satellite, Micius.

For this they resorted to a quantum property called ‘entanglement’.

Remember our triplets from the beginning?

Well basically entanglement is when two systems remain linked even though they’re physically apart. The scientists used entanglement to send secret keys to the Earth stations that allowed them to decipher the messages.

I’ll let The Conversation explain (emphasis added):

[T]he satellite sent simultaneous streams of entangled photons to the ground stations to establish a direct link between the two of them.

This gave them robust, unbreakable cryptographic protection without the need to trust the satellite. Until now, this had never been done via satellite or at such great distances.

Again, none of the communication went through Micius. The satellite provided entangled photons as a convenient resource for the quantum cryptography and the two ground stations then used them according to their agreed protocol. This also involved designing the machinery for distributing the keys and a mechanism for preventing malicious attacks, such as blinding the telescopes with other light signals.

Secure long-distance links such as this one will be the foundation of the quantum internet, the future global network with added security powered by laws of quantum mechanics, unmatched by classical cryptographic methods.

As Gilles Brassard, one of the founders of quantum cryptography told the Asia Times: ‘if the technology for secured, long distance quantum communication finally arrives, “this would achieve the Holy Grail that all cryptographers have been dreaming of for thousands of years.”


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So far there are a few nations in this quantum technology race and Australia is a player in this field.

Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) recently released a roadmap to ‘Growing Australia’s Quantum Technology Industry’, where they expect it could create US$4 billion dollars annually and 16,000 jobs by 2040.

I mean, the technology is still in the early phases and we have no idea if it will eventually achieve all that’s promised, but I expect we will be hearing more on quantum technology.


Selva Freigedo
Editor, The Rum Rebellion

PS: My colleague, Ryan Dinse, has been looking into how the power of computing could help medical research by treating diseases as a coding problem instead of a biological one. He thinks COVID-19 could very well be our last pandemic. You can read more on his research here.

Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

The Rum Rebellion