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The government sets a goal of reducing the number of automakers in China from 70 currently to a much smaller number by 2015. With slower growth in the Chinese market, 55 of these companies sell only 11% of the total cars sold, and no sales for 10 manufacturers. Foreign car companies are investing heavily and control 58% of the 18 million cars sold in China. Domestic car companies are faring poorly. Cherry sales dropped by 30% in November 2011 acccording to the China Association of Automobile Manufacturers. Changan, Guangzhou Automobile Group and BYD have seen sales declines of 10% in 2011 for domestic sales.

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This WSJ editorial says the recent agreement at the Caterpillar Joliet plant in llinois is not about leverage but about increasing U.S. manufacturing competitiveness. As U.S. competitivness improves and the economy grows wages will increase. It does little service to management, labor and the U.S. economy for above market wage rates to lead to loss of manufacturing competitiveness as happened in the U.S. automobile industry, resulting in closing of plants.

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Slower growth expected for VW in 2012-2013.

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Moore points out that there are twice as many people working for the government in the U.S. (22.5 million) than in manufacturing (11.5 million). In 1960, the situation was quite different, there were 15 million workers in manufacturing and 8.7 million working for the government. More workers in the U.S. work for the government than in construction, farming, fishing, forestry, manufacturing, mining and utilites put together. Every state in the U.S. has more people working for the government- except for Indiana and Wisconsin- than people in manufacturing industrial goods. And California has 2.4 million government workers, which is twice the number in manufacturing in that state. New York and Florida have a 3:1 ratio, and New Jersey a 2.5:1 ratio of government workers to workers making industrial goods. Part of the reason for this is the huge increase in productivity and the advances in technology that make it possible to have higher production with fewer workers. This kind of productivity is missing in the government sector. And efforts to improve productivity tend to be blocked by the unions who favor the status quo....

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President Biden faces three potential crises this month -one in Ukraine with a buildup of Russian forces for potential invasion, Chinese actions with Taiwan, and potential collapse of Iran nuclear talks. Biden also convenes this week world leaders of democracies in virtual talks on how to respond to actions of Russia, China, Iran and other countries. Biden's goal is to ensure the US and its allies remain strong without provoking crises.

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As the focus shifts to the east, the war in April in Ukraine shifts to a prolonged war. It also means that the focus now is also on economic separation of US and European economies from Russia and China. As it was this overdependence that lacked prudence or good sense, that emboldened Russia in its relations with the US and Europe, and China in its relations with neighbors in Asia. This report looks at the arms aid Ukraine may need to defend the region on its eastern border with Russia. Russia plans to focus on the separatist Luhansk and Donbas regions in the east which have sought closer ties with Russia. The war in the east has dragged on already for over 10 years.The rest of Ukraine and particularly western areas near Poland such as Lviv and areas near the Baltics have shown strong sentiment for an independent Ukraine able to choose her own path. Throughout history the Baltics and Poland have had a strong influence on western Ukraine and Russia on eastern Ukraine bordering Russia, with influence swinging one way or the other throughout Ukraine depending on the period in history. After the westernization and modernization of Russia under Peter the Great in the 17th century and of Prussia as a German state independent of the Hapsburgs in Vienna around the same period, geopolitics shifting the balance of power took on a bigger dimension. Putin's actions can only be seen as a throwback to using the tactics of invasion going back to this period in history from 1700 to 1950, when dominant powers France, Austria led by Hapsburg dynasty, and Britain with the Dutch fought wars seeking advantage mostly on territory of German states and Italian states, and in all parts of the world. This also laid the grounds for colonization of large parts of Asia and Africa by Europeans in this contest for dominance through trading companies that traded for profit, and used tax revenues from acquired lands for profit making and military activity. In some ways poor economic choices such as the excessive dependence of the US and European economies and their integration with China and Russia have led to the war. As they created advantages Russia and China did not have in technological capabilities and stronger economies that make war an alternative to support foreign policy goals. In the long term it is this these unsustainable economic choices that will be pulled back following the pandemic for shorter supply chains closer to home. This prudent economic separation could not have happened without recent events, as even now Germany industry says its dependence and integration with Russia is hard to reverse for gas supplies, and American business is only now making the changes away from dependence on China in its supply chain.   ...

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Chinese leaders at annual policy meeting turn to issues facing nation's 730 millon farmers, as urban outcomes year after year far outpace growth of rural incomes. See graph. Urban incomes have shot up just as rural incomes remain sluggish as the country has focused on rapid industrialization, rapid urbanization and an export driven manufacturing economy for two decades with some success because of the focused effort. But this focused effort is dependent on the ability of Western Europe and the USA as well as other countries sucking in cheaper Chinese manufactured goods. This ability of the western countries to absorb Chinese manufactured goods at an astonishing rate is now called into question, and maybe permanently impaired after years of out of control consumption and spending and easy credit with the impact of the credit and housing crisis. As one of the aspects of this focused effort was to make enough rapid progress in industry and urbanization that it could stay ahead of the problems facing the rural areas and farmers, the new situation in western countries and China's lowered growth rate with lower exports, calls for new thinking on how to address the problems facing the rural areas and farmers. Part of the problem is that farmers do not own land in China. The government owns all the land and China's farmers only have 30 year leases on the land and technically that land cannot be sold though it can be transferred. A related aspect to this is that farms though having 50% more productivity than in 1980 are still small by western standards and it takes a lot of land to feed the growing needs of a more affluent urban population. The typical Chinese farm is 1.5 acres compared to 15 acres in Hungary and Poland and 432 acres in the USA. Obviously the US farms are huge and China does not have the vast acreages of land compared to the people, but larger farms would enable the kind of improvements posible on larger farms to raise productivity. Ways have to be found to increase farmers incomes and to enable farmers to move to urban areas which means creating more jobs. This will have to be done in the context of a domestic led growth and trade with other Asian countries as the export drive and export industries shipping products to western countries see their growth fall. ...

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Australia exceeded China in total revenue for GE by $100 million, with $5.8 billion in revenues. GE now sees resource rich countries providing revenue growth of 25% in the next 2 years compared to 10-15% for China and India. The Ichthys $34 billion LNG project by Total SA and Inpex of Japan alone generated $1.1 billion in contracts for gas turbines, compressors and underwater production systems. The Gorgon project of Chevron on the northwest coast of Australia generated $1.3 billion in revenue.

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The air quality around Chinese cities is worsening because of coal fired plants and increasing demand for energy, and because of exhaust from automobiles filling the highways. The air quality around Beijing violated the WHO standards more than 80% of the time during the fourth quarter 2008 period. China's Ministry of Environmental Protection says in a report that more than 25% of China's rivers, lakes and streams are too polluted to be used for drinking water. And acid rain is a problem in 200 of 440 cities it has monitored. Efforts to control the exhaust pollution from cars by putting driving restrictions in Beijing are not as effective. One report says that even after 20% of private cars are taken off the road each weekday, the 250,000 new cars that were added to Beijing's streets in the Jan-April 2010 period, have left things as bad as they were before.

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India is an attractive place for foreign investors with the country moving up 23 places in the ease of doing business rankings of the World Bank. Growth is faster than China since 2015, and GDP is expected to double to $5 trillion by 2030, according to government think tank NITI Aayog. Corporate deal making from foreign investors exceeds that in China. Mergers and acquisitions targeting Indian companies reaching a total of $93.7 billion in 2018, up 52% from last year, according to Dealogic. Overseas purchases were $39.5 billion for India in 2018 compared to $32.8 billion for China. In comparison to China where trade tensions are increasing, India under the Modi government has improved the ease of doing business- implementing a new bankruptcy code, easing foreign direct investment rules, introduced a nationwide goods and services tax to replace a hodge podge of taxes in different states. In the consumer sector Unilever NV made purchase of a malted drink brand Horlicks from GlaxoSmithKline PLC as part of a $3.75 billion deal. Softbank led a $1 billion investment in OYO Hotels. In infrastructure Tata Steel made a $8.3 billion acquisition of steelmaker Bhushan Steel. Reliance Jio's aggressive push in mobile with low prices is leaving the telecom industry ripe for mergers and consolidation- Bharti Infratel acquired Indus Towers for $6.5 billion. Closely held family companies are also selling out their controlling stakes. ...

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The government of China increased allocation of funds to build low-income housing from 780 billion yuan in 2010 to 1.3 trillion yuan ($198 billion) for 2011. The target is to build 10 million units of subsidized housing in 2011, up from the 5.9 million units started in 2010.

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Lenovo is accelerating the integration of Motorola Mobility operations into Lenovo in 2015. About 40% of the 100 million plus smartphone shipments planned in fiscal year 2015 will be Motorola Mobility phones, compared to 30% of the 85 million shipped in 2014. Motorola phones will be priced in the $400 plus range and Lenovo's own smartphones below that price level. The focus is on reducing costs and sales growth to turn around the Motorola Mobility brand quickly. Lenovo is now in third place after Samsung with 241.5 million shipments and Apple with 169.2 milllion, for the first three quarters of 2014, according to IDC. Lenovo faces intense competition from Xiaomi and Huawei in China and emerging markets.

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Adidas new CEO Kasper Rorsted, of Danish origin, adopted a costcutting approach at Henkel. Adidas needs to improve margins in its competition with Nike. It has also lost ground in European markets. He is seen as an American CEO in Germany.

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The S.E.C. anti-bribery unit investigation focusses on the hiring of the son of a former Chinese banking regulator, who is now chairman of state controlled China Everbright Group, and the daughter of a senior railway official by JP Morgan Chase bank. The China Railway Group, a state owned company that builds railways for the Chinese government, raised over $5 billion in 2007, with the help of JP Morgan. JP Morgan Chase advised a subsidiary of the China Everbright Group in a stock offering.

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The head of the World trade Organization Okonjo-Iweala and the prime minister of Bahamas Mia Mottley say that overconcentration of manufacturing in China creates fewer opportunities for growth for poor countries. The supply chain needs to be redesigned after the pandemic not just because it creates a more dependable supply chain for the US and the European Union. It also  needs to be resdesigned to increase manufacturing in countries such as India and Mexico because this will create more opportunities for growth in other countries. For this to happen the infrastructure has to be made similar to that in China. This program of rapidly building the latest infrastructure and logistics with next generation technologies is underway in India with the Modi administration building new pools of capital, skilled labor, land and logistical infrastructure for the purpose of  rapid export led growth. A target of 2 trillion dollars in exports by 2030 has been set by India. This will affect a broad region from Indonesia to Vietnam in Asia and Mexico, Brazil in Latin America, bringing the benefits of trade to a wider region for the first time and making allies of the US and the European Union true partners in trade and manufacturing for the supply chain. ...

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Kenneth Rogoff, Harvard University economist, author of the well researched book on the 2008 financial crisis, "This Time Is Different," gives his thoughts on the economic prospects for the U.S under the new Trump administration. He says 4% GDP growth and 3% inflation is possible temporarily for a while with stimulus policies, less regulation, and increased private investment. After 8 years of not investing in much needed infrastructure because of concerns about the deficit, the timing is right for such investments, especially as the economic effects of the crisis of 2008 gradually fade.  This is about taking advantage of ultra low interest rates to invest in infrastructure. He says it helps that Trump policies are pro-business. He sees drawbacks as the stimulus program adds a 25% increase with extra debt, adding $5 trillion over 10 years, but adds that for many years Nobel prize winning economist Krugman and others have said that there is good reason to increase borrowing to invest, and this is now being tried. Inflation remains an uncertainty- if there are large quantities of underutilized and unemployed resources it would raise prices less than its effect to increase output. The reverse would apply if the U.S. economy is closer to full capacity. One factor that would help- increasing confidence for business and increasing investment. Against this what he calls optimistic view or spin, is the idea of mistakes under a Trump administration, errors made and a degree of incompetence which he says is a real possibility. Overall his view is that some risks are appropriate now, and from his deep study of financial crises sees the slow growth of the last 8 years a result of a financial crisis that now begins to fade, creating the possibility of higher growth under prudent policies.  ...