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Leaders of North Korea and South Korea, Kim Jong-Un and Moon Jae-in meet on April 27, 2018, at the military demarcation line between North and South Korea.  After handshakes and Mr. Moon stepping onto North Korean soil for a few minutes, Kim Jong-Un visits Seoul for peace talks.  This is a historic moment for the two countries as this is the first time since the Korean War (1950-53) that a North Korean leader has visited the South. No peace treaty was signed after the Korean War. During the period of six decades that followed the Korean War, particularly the period after 1980, the South Korean economy recovered from the war and expanded following the Japanese export model with large conglomerates such as Samsung. The North Korean economy has struggled in the period and North Korea is one of the poorest countries isolated for most of this period like Burma from the rest of the world. The development of nuclear weapons was pursued to prevent any external threats to the government, and decades of sanctions followed with aborted efforts to denuclearize the Korean peninsula. Recent ballistic nuclear tests and the installation of a new anti missile system in South Korea led to tighter sanctions with the cooperation of China. This heightened tensions, followed by the tighter sanctions. Kim Jong Un and the government are looking for ways to win approval in the international community, and find a way out of the tight sanctions. South Korea, Japan and the U.S. government are not sure whether this will lead to any results in denuclearization. The summit with Moon will be followed by a summit between president Trump and Kim Jong Un of North Korea. If a way can be found for the North Korean government and party leaders to transition to acceptance in the international community followed by integration of the North and South's economies over an extended period, there is a possibility that denuclearization could work, because it is to maintain the current government in North Korea that nuclear development was pursued in the North. Ideological conflict is now less of a factor in the conflict between North and South Korea as it was in the early days of the Korean War with the Cold War and Communism's advances in Eastern Europe and Asia the big issue at the time. Today China itself is more of a state run economy under the Communist Party following capitalism with Chinese characteristics than the old Communist model, and ideological conflict is not an issue between the U.S. and Communist run countries. This leaves open the possibility of a solution particularly as at some point just as in the case of Vietnam and the U.S., North Korea could see its future more allied with that of South Korea than with China. That leaves an opening for a timetable of transitional actions plus effective implementation stages, with incentives for the U.S. and Japan to negotiate a settlement. ...

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Macroprudential policies of central banks in S. Korea, Indonesia, China, Canada, and other countries, as concerns grow about a housing and credit bubble.

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The ruling party LDP's defense committee has decided Japan needs to strike North Korean missiles on the ground. There is a growing consensus on this. Another consensus is developing over the issue of protecting the Senkaku islands adminstered by Japan and claimed by China. 

Earlier in 2020 T12 missiles with 100 kilometres range were deployed on Miyako island between Kyushu and Taiwan. Now these missiles range will be increased to 300 kilometres to reach the Senkaku islands. China has sent patrol planes and ships near the Senkaku islands. Other cruise missile range is planned for 1000 kilometres as Japan Self Defense Forces expand their capabilities to take on more of the responsibility for defending the Japanese islands. In alliance with India and Australia this capability is being expanded to the entire Indian Ocean region to counter an expansionist China.

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The Hong Kong protests in 2019 are dividing families as shown in this report in the WSJ. It is about the young who have never known much about China and its recent history in the 20th century and the older parents who have seen China grow from the colonial period to what it is today. As other reports show the part of China called Shenzen that borders Hong Kong has very different perspective of the events there and see the events from the perspective of Beijing. Some of the protest leaders are only in their teenage years and lack the experience needed to help reach some sort of agreement with Chinese leaders. Day after day the two sides are growing further apart and see the protests in a different light. The leadership under Chief Executive Carrie Lam has also not provided some way to bridge the differences. 

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Grades 1 through 9 in China are not for profit and China's education system is highly important and sensitive for Beijing. Particularly at this time with different ideas in Hong Kong compared to adjoining Shenzen. Uptil now private compnies were allowed to effectively control some schools with contractual agreements and funnel out money through service fees. This practice is now halted by tighter restrictions. Draft legislation is prepared and expected to be finalized this year. 

Earlier 25 companies in the education sector brought $3.8 billion of private capital through IPO's in Hong Kong and the U.S., according to Dealogic. These education companies are seeing shares drop by a half in 2018-2019, as China moves to protect its basic education from what may be seen as wayward ideas and thinking. More so today after the events at Hong Kong schools and universities.

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After sanctions were lifted in 2016 on Iran India and China increased oil imports from Iran. China and India ramped up imports each country importing 900,000 barrels of oil per day in 2016. Since then China has reduced imports from Iran to 500,000 and India has reduced imports to 600,000 in anticipation of possible sanctions. India received a limited waiver from sanctions for oil paid in rupees before sanctions were lifted. 

Chinese officials say alternatives for importing oil are available, and that it is more concerned about the price of oil.

Oil prices affect development because as in the case of Indonesia and India reduced oil subsidies and savings can be diverted into infrastructure development in Asian countries. The recent surge in the price of oil adds to the pressure on budgets and fiscal deficits in developing countries.

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Rising wages and rising production costs for Chinese exports of low tech products like shoes, clothing, toys, clothing, furniture, means a lot of these factories will shut down and move to lower wage countries like Vietnam and India or elsewhere. Elimination of rebates on more than 2000 export items raises cost of manufacturing 14-17% according to Guangzhou based American Chamber of Commerce in South China. And the the tough new labor law enforcing worker rights would increase manufacturing costs by 40% according to the Textile Council of Hong Kong. Additional costs would be incurred to meet tougher environmental controls and anti pollution laws and stricter enforcement. As a result of this Adidas wants its suppliers like Taiwan based Apache Footwear with 18000 employees in Guangdong to move as fast as they can to India where it opened a second factory. This process will unfold over several years till India and Vietnam bercome the new sources of cheaper goods because of the large supply of manufacturing labor for lower value added products, as it will take years to build the logistics and infrastructure for these plants in these countries. But because wages will also rise in India and the laws in India are more likely to be enforced than they were in the atmosphere in China where the Communist led government may have turned a blind eye to enforcement and worker rights in the interests of growth, the export of deflation to the west in the way of cheap Chinese products may be a thing of the past. China is doing this as a planned move it appears. Why? On the surface it makes sense that the heavily polluting factories making lower value added products like shoes, clothing, toys, furniture, would not receive rebates from te state and to improve living conditions and promote consumption at home the government woud pass tough new laws to ensure employee benefits and collective bargaining rights, and employee job security. It also reduces trde tensions at a time when the US economy will be in poor shape and jobs lost become a political issue in the 2008 presidential campaign. But there may bigger pressing concern and urgency in these moves after so many years of this being discussed and this may be that China finally may be at a moment when it is confronted with a sober fact that the US consumer is heavily in debt and may not support China's export growth model much longer and with it China faces a really significant slowdown in its growth rate from 11% to maybe half that if China does not develop its own domestic markets for growth. The old foreign investment model may not work anymore. See the link to Ireland where growth is falling off quickly. Higher wages and longer term jobs with benefits would enable a large middle class to develop from this huge manufacturing worker base especially as China moves to more value added products where even higher wages would be paid. This in turn creates a domestic market over time that would insulate China to some extent from the winds that would be blowing from a US economy suffering from a deep recession that may last several years. This may be evident in the words of the Governor of Guangdong when he says that the government is not abandoning the exporters but that selling domestically is good for the country and good for the people. Something deeper is at work here and one would expect an about turn in policy where instead of workers not receiving back wages and lax enforcement that went on freely in the last decade we would see an effort to build the kind of middle class that would provide the market for Chinese goods that would sustain growth at a more modest but sustainable pace. Which means in the short term all those workers at factories that make toys, shoes, clothing and furniture in provinces like Guangdong would be jobless. Some of these factories may move to provinces in the interior like Sichuan and Hunan provinces which may pickup employment. A report by the American Chamber of Commerce in Shanghai written by Booz Allen says that a fifth of the companies surveyed are considering relocating outside China, and that over half of foreign manufacturers surveyed think that mainland China is losing its competitive advantage to places like Vietnam and India....

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Krugman says that China fears that a decline in the value of the dollar will reduce the value of the 70% of the $2 trillion in assets it holds, that are in the form of US Treasury bills. This may have been the reason Zhou Xiaocuan, China's central bank governor called for a new currrency to replace the dollar as new "super-sovereign reserve currency." He doesn't think this is likely to happen. Neither is his hope and that of Japan that somehow the two countries can export their way out of current difficulties. The US will not be the market it once was, that is certain. So Krugman says China, Japan, and the Europeans on the issue of the Stimulus are all hoping that things will return to the way they were. Something that is not going to happen. March figures in the US for jobs lost hit an high of 663,000, and this crisis says Krugman has years to run.

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China's population decline and fewer working age people is likely to reduce the high capital accumulation that sustained rapid growth in the past. China's dependency ratio- population of children and elderly relative to the 15 to 64 year old age group went up to 46% in 2021 from 34% in 2010, says WSJ. This means less savings accumulation, and less of the enormous pool of cheap capital of the last 2 decades that led to fast growth. That period is ending. This makes the subsidy based approach to push key industries such as chips and solar panels in the past much more difficult in the future, says Nathaniel Taplin in the WSJ. 

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Oil prices at the pump for automobiles are declining for the seventh straight week. Prices declined to about $4. In Texas the average is about $3.67 a gallon. California has the highest gas prices at an average of $5.46 a gallon. The price decline is a result of rapidly slowing growth in China. China and India are still getting oil supplies from Russia which frees up oil supplies for the US to import. 

Public in the US is also cutting back on driving and the miles driven is likely to see a drop of 5-10% this summer. There is better planning of trips to combine errands. This helps combating climate change through conservation efforts that were neglected during the last decade.

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Greg Ip of the WSJ says a second term of former president Trump would look very different from the first. Republicans achieved their goal of tax reform in the first two years of that term. Following that trade tariffs ensued against China creating a different environment in world trade. A second term would lead to more action on trade and more tariffs. Ip says the former president could impose tariffs on all Chinese imports and this would lead to retaliatory tariffs from China and be met with EU retaliatory action in a tit for tat manner. The result would be disruption in world trade and affect the world economy. Higher inflation could also be result of such disruptions.

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Inflation is over 2% in Japan for the 22nd month. Decline in working age population by the 1990's, the shift of jobs and factories overseas, and the banking crisis all led to deflation in the Japanese economy. By 1998 inflation was setting in and has continued for two decades to 2022. This could happen in China as it's economy faces similar problems which is why linear projections from the last 10 years for China are misleading and erroneous, just as linear projections for India from the previous decade's growth were misleading and erroneous after 2014. The second decade after 2024 is likely to lead to major investments in infrastructure leading to India joining the developed nations.

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As factories fail and owners flee China, leaving behind unpaid suppliers, the suppliers are ripping up all the equipment to pay what they are owed. The lack of good bankruptcy laws makes the situation ugly, see pictures.

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China Cinda Asset Management Company's $2.46 billion IPO in November 2013. Cinda was originally setup to handle bad and non-performing loans in 1999. It was never shut down as happened for comparable institutions in other countries. In recent years it has operated on commercial lines.

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Questions about airport and highway construction financing in Uganda and contractual obligations with China's lenders.

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World Bank chief Zoellick sees advantages for China to remake its industrial structure and its society especially boosting local wages and increasing the purchasing power of ordinary Chinese through a strengthening of the yuan.

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Chinese are saving for the future as there is no safety net, no social security and no welfare or food stamps.And this means there will be a strong cutback in consumption and in sales of most products in China. Even before this global economic crisis China was becoming even more export oriented. In the last decade consumption as percentage of GDP actually declined from 47% to 37%. And the $586 billion stimulus has some measures to boost consumption but most of the money will go to infrastructure like new highways, railroads and airports. Housing construction is coming to a halt with home prices down 15% in Shenzen. And layoffs among exporters in the area north of Hong Kong like Li Kai which made 9 million sneakers for New Balance in 2007 will make 7 million in 2008, and is laying off 22% of its workers. Migrant workers are headed back home. The sales of foreign firms will be affected. GM's Buick brand saw sales decline an estimated 12% this year and JD Powers estimates decline in 2009 by 21%. Researcher BDA China sees cell phone sales down to 9% growth each year for next 5 years, down from 30% increases in the past 5 years....

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The head of the Chinese Communist Party's rural policy office, Chen Xiwen, says about 20 million migrant workers or one sixth of a total of about 120 million migrant workers have lost their jobs in the 2008 global financial crisis. About 5-7 million migrants join the workforce each year, and this brings the total to about 25 million migrant workers looking for jobs. This presents a major problem in job losses for China. The government is making every effort to ease the problems of migrants, to retain jobs, talk to migrants to explain the situation, and provide asistance. Ian Johnson and Andrew Batson of the WSJ visit the village of Shuangyao in rural China and talk to migrants there.

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Li Qiang, the former Communist party chief of Shanghai and in 2004-2007 Xi Jinping's chief of staff when Jinping was provincial party secretary Zhejiang province, is now the new prime minister of China.

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This analysis concludes that it will be harder for developing countries to tackle job losses from robots. One problem is that taxing robot use would lead to investments in production in countries that allow robots. Opportunities exist for technology and robots in agriculture in India, by offsetting this with retraining agricultural workers for other work. China has managed the transition to robots by finding alternative opportunities for workers. Companies have shifted to robots with the higher wages in China and shortage of workers.

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Peter Hessler was a teacher in Sichuan province of China before living in Tibet and writing this article for The Atlantic.  It gives some insights into both the thinking of Chinese people and Tibetan people and the changes happening around them. Inevitably changes would have come to Tibet from outside or without China's takeover of Tibet in 1950, would have come in some other form, as it has in neighboring Nepal, Afghanistan, says Hessler, without some of the loss of some of the positive aspects of culture and of Buddhism.  Even in India feudal system of zamindars prevailed in villages into the late British period and the early Nehru period but has gradually disappeared over time, so that change has potential over time to happen, and comes inevitably.  Here he shows- the immigrants from Sichuan province, over 120 million people in the province, and part of a floating population of migrant workers in China, looking for jobs or economic opportunity, and some taking up life at the high Himalayan altitudes for 2-3 years or even 8 year terms. The belief Hessler says among Sichuan immigrants that high altitude was bad for the lungs over long periods and shortened life. The lack of women with a disproportionate number of men making the journey to start a new life in Tibet, the hardships, the enterprising nature of Sichuan immigrants in the shops and retail that Tibetans lacked the enterprising skills to do, the difficulties living with two cultures side by side, the lack of any incentive to learn the local language. The feelings of Tibetan people that they are somehow losing their culture and identity. The sense among immigrants that this is not their first choice of place but somehow would have to do till they go back and find someone to marry during brief trips back home to Sichuan. There is something timeless about this essay, as changes unfold, no one unambiguous trend, a more complex situation.  China's sense that the west has violated its sovereignty under the British and foreign powers in the nineteenth century. The feeling that somehow Tibet is part of this sense of China regaining what it had lost to the foreign powers. Without the realization that Tibet has served as a gift of nature, a given mountainous buffer that helped two Asian civilizations prosper in the Ganges and Yangtse river valleys, thousands of miles apart. And both having the similar experience with the British and foreign powers in the eighteenth and nineteenth century, and both recovering modernizing at the same pace.    The sense China has, says Hessler, that it is about China's sovereignty following a Qing dynasty entry into Lhasa in 1792, even though the Qing saw Tibet as a buffer state running its own affairs separating it from the British Empire on the other side of the Himalayas. Very little contact between China and Tibet for centuries simply because using yaks and mules it would take several months from northern China to Tibet crossing mountain ranges at 15,000 feet. The British saw this as a buffer state in the same way as happened also with the Mughals in the 15th to 18th century, and the Empires between the 11th and 15th century in India.  Because opium was shipped from Bengal under British colonial rule causing great poverty in India against the will of the Indian people, the same sense of violation of sovereignty existed in exactly the same way in the perception of foreign powers in India, so that the notion of violation of one's self respect being shared was serving no useful purpose in this context between China and India.     ...

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The issues related to India's borders all hinge on Tibet says the Council on Foreign Relations. Sardar Patel and Nehru had differences of their own on whether the McMahon Line set by the British in a treaty with Tibet as an independent country was the border with Tibet or the border with China.  Between 1913 and 1950 Tibet was an independent country, with an Indian High commissioner in Lhasa between 1947 and 1950. After the Cold War set in and China and the Soviet Union fought to defend the rights of colonial peoples the U.S. and Britain did not recognize Tibet as a part of China. Nehru simply remained with the British status quo of the McMahon line as the Indian border with Tibet, without any clear acceptance  of the invasion of Tibet in 1950 by China, yet accepting the new status quo after the invasion, differing from Sardar Patel on the issue. This is why no clear picture emerges from looking at the official positions of the two countries, and a better understanding can be gained by looking at the border issue from the Council of Foreign Relations in the U.S.   Essentially the border issue is not beneficial for what it gives back to each of the two countries. China sees itself rejecting the period of its weakness during the Japanese invasion so that it reasserts its position to borders that stretch outside where Chinese people live. India sees itself rejecting the weakness during the British period and the early post British period during which India was occupied with the issues relating to partition of British India and the partition of Kashmir. This is why the Council on Foreign Relations can provide a better understanding from and independent perspective.  Both sides have little to gain. China by being at the Tibetan border puts itself in a position where it has little to gain being on the border with a large rapidly industrializing country with a population of over 1 billion.  At over 4000 metres or 20,000 feet the territory and landscape is not one that humans can adapt too in any way, except for a few military personnel doing their term of duty of 6-12 months from India or China. China is even further away from the border as it is a remote border from Beijing, Shanghai, Canton or Chengdu, thousands of kilometres when it is just 8 hours from Srinagar by highway to Leh, Ladakh, and the Nepalese border very close to the Bihar state in India. The very distance suggests remoteness, with customs traditions in the region very different from that in China, suggesting very little connection between Beijing near Mongolia and Tibet or Ladakh very close to India by road or rail. To get some idea how close the Tibet border is to India consider that Rasuwagadhi Fort border point between Nepal and Tibet is only 127 miles by road from Kathmandu. The distance by rail from the Indian border in Bihar to the Nepalese border is only 34 kilometres with a new upgraded rail connection. Being this close India is likely to upgrade infrastructure throughout the northeast region as it upgrades infrastructure, roads and bridges and rail throughout India at an accelerated pace for economic development.     ...

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George Walden reviews "Opium and Empire" by Richard Grace, which focusses on the origins of Jardine, Matheson & Co., the British firm run by two Scottish traders Jardine and Matheson. This firm was at the centre of the trade in opium carried out on the black market in China using opium brought from India. It paid for the shipping expenses to take tea and silks brought back in the British market. The confiscation of a shipment of opium in Canton, China, by a Chinese Commissioner led to the first of the opium wars. This ended with the Treaty of Nanking in 1842 negotiated by Foreigh Secretary Palmerston giving Britain possession of the island of Hong Kong. It was the long history of such depredations, including the Japanese invasion in the 1930's that led to the nationalism and rise of Communists led by Mao in China by 1945.

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BBC's Mark Tullly reflects on the period of coverage from 1962-1994 of South Asia. He says of Indira Gandhi that she took the democratic process out of the Indian National Congress party, and set up her sons as future leaders that was undemocratic. Here he reflects on that period in an intervew with the BBC after he left the BBC.  He has deep connections to the Indian period after 1800 as his great grand father on his mothers side was around 1840 in a part of Uttar Pradesh where British planters had farmers plant opium that would later be bought by planters for export. This coincides with the period when Britain in Hong Kong traded in opium as part of British trading in the emerging colonial culture British Empire. There is mixed legacy for Britain in India and China. The history of the Opium Wars in the 1850's and opening up of colonial ports ended with the 1900's revolution and the emergence of the CCP in China by 1950. In India the legacy was mixed bringing together this part of Asia into a new nation and bringing parliamentary traditions of Britain that provided the basis for good governance.  Tully is a softspoken thoughtful Englishman who revolted against British classical education in his youth and studied history and religion at Cambridge, made friends with the future bishops of Canterbury and Lincoln at Cambridge. He is not the Englishman of the Empire as his fondest memories are of the servants verandahs on the bungalows of Britishers and the smoke from their quarters, and the language. So it is a thoughtful view that he gives of the undemocratic nature of Indira Gandhi and mismanagement of the economy that could have changed if India had gone in a different direction under other leaders in the the 1990's. Why is this significant? China's modernization drive started in the 1990's. India's by the undemocratic nature and mismanagement under Indira Gandhi did not start its modernization till 2010, about 20 years after China, opening up a huge gap that is only now being corrected leading to problems for world security, US security, European security and Indian security. And delaying the aspirations of development of 1.4 billion people for 2 decades. Vikshit Bharat cannot come fast enough for both Merz in Germany and Leyen at the European Union, who last week and this week visit Ahmedabad and India for the Kite festival and for Republic Day 2026. ...