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The New York Times reports that comments from Obama administration officials describe an alarming loss of trust and confidence between China and the USA over the last two years. David Shambaugh, director of the China Policy program at George Washington University, says the administration had hoped to work with China on major challenges like climate change, nuclear nonproliferation, and a new global economic order. China, he says, has failed to step up and play that role. He describes the Chinese as responding as an increasingly narrow-minded, self-interested truculent, hyper-nationalist, and powerful country. Jeffrey Baker, a key China policy adviser in the White House, says China's responses reflected a sense in Beijing that China was a rising power and the USA a declining power, especially after the strong rebound of the Chinese economy after the 2008 crisis. The administration is determined to counteract that impression. Other factors complicate things. China is facing a transition to a new leadership in the next year. There are differences within the Chinese Communist party leadership ranks about the direction China should take. Trade and currency issues have come to the point where American public opinion is shifting greatly, with educated professionals changing their views on trade and currency matters. See the recent WSJ/NBC September 2010 poll on world trade, reported by Murray and Belkin in WSJ, Oct 2, 2010. The Obama administration cannot ignore the deep concerns of the American people on these issues. The House overwhelmingly voted in September to threaten China with tariffs on its exports if the Chinese currency, the renminbi, is not allowed to appreciate significantly enough (experts estimate that it is overvalued by 20%). It is not clear whether the Administration's rhetoric on this issue is to assuage public opinion in a business as usual manner, or expected to achieve substantative results to rebalance world trade. The G-20 summit in S. Korea leaves this change for well into the future- China with current account surplus of 5.8% of GDP in 2009 is expected to lower this to 4% by 2015. With the high jobless rate in the US and the large and rising current account deficit, the United States may have reached a juncture where this cannot be put off well into the future years. Other issues, the different foreign policy objectives, and differing perceptions of China and the US of each other, the relationship with US allies in the region, may create additional tensions. These tensions may be navigated by governments of both countries, but the shift in American public opinion on trade, currency and jobs issues will require tangible and real change. As trade tensions will only increase in the next two years with the lack of fiscal stimulus on the jobs front, and no significant change in jobs expected from the Fed's purchase af additional Treasury debt, and a sense that the mutual benefit in the trade relationship with China has been lost to America's serious detriment. China's position may be perceived as stronger than it really is from the faster rebound from the 2008 crisis, and may in reality not be as Jeffrey Baker sees it. As David Barboza has reported in the New York Times, and experts have pointed out, the huge amount of lending encouraged by the government has accentuated weaknesses in the Chinese economy. A significant amount has gone into real estate speculation and will only increase the bad loans on the books of China's banks. This happens at the very time that growth is expected to slow down and make it harder to absorb the bad loans, as was done in the past. ...

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Much of the reward for Labour goes to Health, Nutrition (food choices), and Education (schooling choices for children). This is the backbone for any Nation that is going to be strong and have a good future. Yet economic structures in 2026 and for decades has swung too far in one direction away from Labour and more and more for Capital, creating grave risks for the Nation, and setting the US as the wrong role model. Labour and Capital in 1980 vs 2026- increasing reward for Capital from 7% to 12% of GDI decreasing for Labour 58% to 52% in same period. In some areas this is not so because other regions have set their own priorities and this is a good thing Europe has a strong and fair access healthcare system, India has a strong and fair access pharmaceuticals healthcare system, which act as role models for the US. In 2026 RFK Jr, Dr. Oz at HHS and DJT are focused on getting US pharmaceuticals prices down to levels in the European Union. The real dangers of the skewing in the direction of Capital of rewards is creating a class that is not sensitive to the lives of ordinary people resulting in fracturing of society. Something like that happened in 1600-1800 in India and China leading to the disintegration of society and becoming overcome by foreign European powers which had more dynamic societies from the bottom up that led to discoveries in science leading to the industrial revolution. One detects something like this happening by accident by poor governance and bad decisions for wars (Bush-Clinton-Bush-Obama), and the same administrations pushed by bad advice from economists to ship the productive manufacturing resources of the Nation to China. If not reversed it would lead to the kind of decline Asia witnessed after 1600- hitting all classes of society and destroying the economic structures as foreign powers get the upper hand. The surrendering of research labs and higher education in advanced science fields to foreigners at US and European universities poses similar risks as fractured society with Capital dominant and unaware of the risks. Such societies have less perception of such risk than a bottom up built social, economic and political framework with large numbers of aspiring local citizens seeking these positions in science and technology in the Nation. ...

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Bien and Xi Jinping of China meet for the first time at the G20 gathering in Indonesia. This leads to clarification of positions of both sides on Taiwan and the emphasis on peaceful cooperation to resolve differences. The US says Biden seeks peaceful competition with China and exchange of opinions on differences.

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What US companies did not get early on is that as China's economy advanced local companies could make the same products for less and innovate to take a big share of the market. Ford exited China and GM took  $5 billion charge on its China business. Chinese makers of cars, EV's, laptops and cell phones have the major share of the market. In 2024 US companies chastened by their experience and failing to compete in China are reticent about tariffs impacting their market share in China. Other reasons China was growing at over 10% in the last year of Obama's second term. In 2024 China is struggling to reach 5%.  Following Covid, housing industry collapse, as US and Europe block China's exports, China's public is growing wary of spending. There are only 800 Americans studying in China in 2024 compared to 11,000 in 2019. There are 290,000 Chinese students in US. ...

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Indonesia is a country with a long history of Hindu and Buddhist culture before conversion to Islam through traders from Malaysia and Sufi saints in the sixteenth and seventeenth century. Hanuman and other deities from India are also part of the existing culture and traditions. Communist influence has been alien to this culture and tradition as in India. It was part of the Dutch empire in the east and a source of European trade in spices from the seventeenth century. It is also a extensive island chain of Java, Sumatra and other islands with a population of 280 million very closely linked to India culturally and with links to America since independence. Indonesia was given a great deal of importance during the Cold War with Robert Kennedy and other leaders visiting Indonesia during the period after Sukarno in the sixties. By 2000 the US engagement with China had evolved to the point that neglected India, Indonesia and the entire south east Asian region in a preference for links with China.  The British division of India led to the US links with India and Indonesia being shaped by that division and the Cold War with Russia. The confusion of the struggle against colonial rule of the British and Dutch led to leaders such as Nehru and Sukarno who compounded the difficulties of the Cold War and perpetuated with it the old British idea of a divided South Asia on a religious basis that had supported British rule and set the conditions that made it possible for a small group of English civil servants to run the country. This led to the Indian and Indonesian relationship with the US being stifled as the US struggled to rid itself of the British obsession with a divided India. Culturally India and Indonesia are part of an extended region in Asia with development aspirations and a youthful population that aspires to better infrastructure, better education, healthcare and ease of living, and the better opportunities in life. This is what migration did for Europeans who left for America for a new life on the east coast and on the prairies of America. It has little to do with the obsessions of the British and the Dutch that divided the region between the Indus and the Ganges and divided the Indonesian islands. That phase is now coming to an end as China reverts to its Communist period leadership under a new generation led by Mr. Jinping, a son of one of the veterans of the Communist Revolution of 1949. The US has to evolve its relations with India, Indonesia, Vietnam and other countries into new ties of trade, culture and technological exchange. This is needed as it winds down its close trade relations with China in its supply chain to rebuild a new supply chain after the trade wars and the pandemic revealed the deep flaws of that supply chain. What is needed is not the efforts of one changing adminstration after another, but an effort started by president Biden that will last through different administrations as the US engages with Asia in the way that it engaged with Europe after FDR and Truman for most of the twentieth century. And one that rids itself of the obsessions of divided regions from the colonial period of the Dutch and the British. The1.6 billion people in India and Indonesia share a  common aspiration of being a major part of the Free World with America. ...

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US economic growth was 2.4% in the second quarter of 2023. Even though the Fed increased rates at 10 consecutive meetings by 5% since March 2022 to tackle inflation the US economy appears strong. Large investments in the trillions of dollars in US manufacturing and infrastructure, tackling climate change is what is different this time compared to the past 2 decades when bad decisions were made with twin wars in the Arab and Muslim world, and the supply chain was transferred to China, investments were neglected in infrastructure, education and health in public goods, and capital markets allocated money with decreasing advantage to the economy. President Biden was in a unique position after the pandemic to take stock of all these mistakes and move the nation forward in positive directions in a decisive way in scale as well as in spirit and determination. That he has done so is more proof of the resilience of America.

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The collapse of Binance would lead to liquidity to evaporate in the short term says this report in WSJ driving down the price of tokens. Months after collapse of FTX cryptocurrency company, Binance is in distress, says WSJ. Binance is affected by threat of enforcement actions by the SEC. The US Justice Department has taken a yearslong investigation that could result in criminal charges against Binance and its founder, and billions of dollars in fines, says this report in WSJ citing people familiar with the probe. Binance launched in China in 2017, but it claims to be based nowhere. China has banned crypto currency, and so have many countries. In EU more countries are banning it.

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Violation of international law or tacit approval of drug states and suppression of the election results in Venezuela- position taken by Oxford's Dill and Germany's Steinmeier is itself controversial. Merz's is realistic. For those concerned about international law is it restricted to any particular period? Then the British policy in China supported by the other powers Japan, Russia, Germany and France to suppress the Boxer rebellion in 1901 and expand Treaty ports that forced opium on China in the period 1850 to the 1930's was not just a egregious violation, horrendous violation of basic human rights on a scale unimaginable in modern times. Much of the prosperity of the Netherlands and Britain, France was achieved through such policy in Asia. Yet Oxford's Dill and Steinmeier have chosen not to look at European history and the Empires of Europe in Asia and Africa for 300 years since 1700. By comparison Venezuelan action comes after the great patience of well meaning people, and the silence of elites in the US and Europe about massive migration encouraged by the regime in Venezuela of one third of its population about 9 million people to neighboring countries including the US, and suppression of free elections, complete mismanagement leading to 150% inflation destroying its economy.  It was not only these elites in the US and Europe that were responsible through their silence, but also the Bush and Obama wars in the Middle East which sapped the resources of the United States. Why is this happening when the Venezuelan people are the main benificiaries of the action taken by the US president to send in its military. All oil sales revenue will no longer go to a corrupt "drugs" state but be used to directly help the Venezuelan people achieve a better standard of living, bring down inflation  and invest in modernization, in these unusual circumstance a program run by Bessent at US Treasury. Those who dislike the unconventional but well meaning style of the US president and his occasional poor choice of words, find every opportunity for criticism even ignoring facts and common sense. Under Chavez and Maduro the Venezuelan economy was simply mismanaged to the point of being destroyed and an affluent country reduced to poverty and inflation so bad that one third or 9 milllion people left for neighboring countries. On this Dill at Oxford and Steinmeier have only this to say- it is somebody's else's problem. we will remain silent. Similarly on introducing nuclear weapons in the Middle East -where most nation states have intermittent wars and economic mismanagement for the last 50 years the artificial states from the Ottoman Empire of Syria and Iraq, Libya, Iran, Afghanistan, Pakistan, the Sudan every state impoverished by war and economic mismanagement - Dill at Oxford and Steinmeier in Germany also have only this to say- it is somebody else's problem not ours, we will remain silent. ...

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If China reduced its automobile tariffs to 2.5% from current 25% it would help German carmakers such as BMW that export from U.S. plants to China. BMW as a premium brand is better able to absorb the transport costs and does not manufacture cars in China. U.S. makers Ford and GM would benefit less as they already have plants making cars in China. By not making cars in China BMW does not have to transfer technology to a Chinese partner.

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This report in DW.com says there are differences between Nepal and China on financing for Belt and Road infrastructure projects. China prefers commercial loans, Nepal wants grant assistance and low interest loans. The Us has given Nepal $500 million grant assistance, and Chinese Foreign Minister Wang Yi visited Nepal after the Nepalese parliament approved the US assistance.

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People in China with 800 yuan or $114 can now invest in low cost mutual funds. They can invest in 5700 domestic mutual funds offered by Vanguard's partner in China Ant Financial Services Group. Vanguard offers investment advice in assembling mutual funds. The investment advice will depend on algorithms not people to provide investment advice.  Ant owns 51% Vanguard 49%. Chinese investors are known for speculative approach to investing and making risky investments. By contrast Vanguard's approach in the U.S. is more careful and makes a serious effort to reduce risk with its index based mutual funds which it pioneered. China is making an effort to bring American companies into its financial  markets as part of the opening up sought by the U.S. Vanguard CEO Tim Buckley says his goal is "to fundamentally change for the better how individuals in China invest." Vanguard says it has taken the long view having worked for a long time on getting regulatory approval and its own approach for investing to introduce in China. It studied the market since 2018 talking to industry peers, regulators and clients. It says Chinese regulators appreciate Vanguard taking the long view. Today Vanguard's office in China has only 20 employees, and it has stayed away from setting up private investment funds for wealthy individuals and institutions which is permitted for western firms in China such as Fidelity International.  Vanguard's Mr.Bogle pioneered low cost index mutual funds that follow and index as opposed to having mutual fund managers determine investments. This takes the guesswork and individual bias out of the equation as experience has proven that over the long run this approach works best. Vanguard now has $6 trillion in funds under management, and is by far the largest mutual funds company in the world. It now has the potential to tackle a huge market of 900 million individuals in China. ...

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China sees a principal peacemaker role for Ukraine peace settlement with its economic benefits in US/EU trade as foreign policy. NYT's David Sanger reports from the G-7 meetings in Italy in June 2024. He says the G7 sentiment is changing about China in the last few months of 2024 compared to 2023. In 2023 China was seen as a nation that had more in common with the US than Russia considering historical differences between the two nations. As the US veered round to the view China's indirect economic support and its technology was helping Russia in escalating attacks on Kharkiv and the border regions of Ukraine, Europeans were skeptical. No longer, the Europeans now see China's relationship with Russia in the same way. Another change observed is that China is not pursuing a peace settlement participation to end the war by not joining a Swiss effort. Instead says Sanger China is seen as wanting to wait so that at some future date it would be the principal actor in bringing all parties to a peace settlement for Ukraine. With Ukraine facing escalating attacks in the Kharkiv region the mood has changed and China is now seen differently from just a year back. This as shown in the adjoining article in NYT on student exchange for US and China and China's view that racism exists towards Chinese students in the US is affecting the effort for closer understanding between the people's of the two nations sought by the two nations since 1972, and in the interwar period with Gen. Joe Stilwell fighting the Imperial Japanese Army alongside the Chinese people. ...

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Ashton Verdery, a professor of sociology at Penn State University, says his simulations shows a severe impact for the nuclear family in China by 2050. By 2050 living parents and in laws will outnumber  children for middle aged men and women, he says in the WSJ. Verdery says policy planners have not anticipated or prepared for this unexpected even counterintuitive situation in China. This is a result of the one child policy and women's unwillingness today to have more children, prioritizing careers over children, which will not only impact the number of retired people supported by younger people, but also the family itself.  Because of the surfeit of baby boys during the one child policy this research shows that by 2050 18% of China's men in their 60's will have no living descendents, compared to about 9% today. This impact of defamilizing in China, can have an impact on the risk propensities of people, leading to risk aversion and impact the guanxi networks that propelled business during the 2000-2015 period when the family peaked. He calls it a kin crash between now and 2050 compared to the kin explosion that happened after 1980.   ...

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As George Osborne of the Tories once pointed out China does not want to be thought of as a sweat shop on the Pearl River. And particularly not in a British attitude. How hard does China work is a question Tom Phillips tried to answer Oct 6, 2015 from Beijing for The Guardian. The migrant workers are the ones who work the hardest. And productivity is low. Among the higher classes there are longer hours with the work pressures, family obligations and long work hours leading to insomnia, fatigue, obesity, and ill health conditions. A comparison shows Britons working 1677 hours on average according to the OECD. The average Chinese worker is shown to work 2000 hours, by a researcher at Beijing Normal University. A labor economist in Beijing says as the economy improves and working conditions get better workers are working fewer hours every year. He says China lags behind in productivity. The longer working hours he says are not good for worker's health and for productivity. This was said in 2015 when China was still chasing GDP growth without the level of technology the US and Europe had. Now the focus has shifted to better quality growth in advanced technologies and old factories closed. ...

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China's economy is feeling the effects of a sharp slowdown of the economy with covid lockdowns in 2022 and the Ukraine crisis undermining confidence in China. Internal divisions on president Xi's policies of allying with Russia on Ukraine are shown in this report by the WSJ. China faces a collapse of its relationship with the US and Europe says the WSJ. With it China's economic growth faces a sharp slowdown.  From 18% at the beginning of 2021 economic growth has slowed down to 4% in fourth quarter of 2021. The current situation in Ukraine and Mr. Xi's response create risks of collateral damage for Chinese manufacturers with weakening global demand, says the WSJ. Deng Xiaoping's policy of opening China which happened for the last 40 years is being reversed with Mr. Xi's policies and the stance taken by the Biden administration is supported by the US Congress by both Republicans and Democrats.  This WSJ report points out that premier Li Keqiang has pointed to the risks China is facing in somber tones calling the external environment for China in 2022 "more complex and severe." At the same time Hu Wei a senior adviser to the State Council stirred up discussion online with an article about Mr. Xi's pro-Russian policy, saying "China can't be tied to Putin and the ties need to be cut off as soon as possible."  ...

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Indian foreiign minister S Jaishankar meets with his counterpart Wang Yi in Dushnabe, Uzbekistan, to restore peace in border region of Ladakh after the violent clash in 2020. Jaishankar tells China not to view ties with India through "the lens of a third country." China agrees. Jaishankar was actively involved in setting up cultural and other Sino-Indian contacts in Chinese cities when he was Indian ambassador to China. Jaishankar also tells China that India China relations set the tone for peace in Asia. China says it agrees with this idea. India's strong response to China's border infrastructure building and its moving forces close to the border line of control, has led to China reconsidering its policy following deteriorating relations with Australia, US and UK. China now sees that it has little to gain with worsening India relations and border issues or clashes, when the US and UK, Australia, are moving forces into the Indo-Pacific region and in the seas around Taiwan. ...

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NYT's Jeanna Smialek says there are lower inflation expectations with the Fed in the fight. This will help the economy in 2024, and help president Biden in managing the economy. Slower rent increases, and declining demand for housing, cars, with higher interest rates sharply increasing mortgage payments and car leases, is helping to slow inflation. Lower inflation expectations help because buyers are less willing to pay higher prices and falling demand acts to slow price increases by retailers and manufacturers. The Fed's fight against inflation without letting up, and China's slowing economy have reduced demand to where inflation expectations are set to be much lower by 2024.

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A traffic jam on Highway 110, leading from the border with Inner Mongolia to Beijing for 60 miles, is now passing 10 days, with traffic inching along at 3 miles per hour. With roadwork on a highway from Beijing to Tibet starting August 13, sections of a major road which circles Beijing have been closed. Chinese bought 13.6 million vehicles in 2009, compared to 9.4 million in 2008. China is building roads, but cannot keep up with this surge in automobile use, especially in Beijing. A study by IBM puts China at the top for "commuter pain," the pain suffered by drivers as they stay stuck on roads. In fact China's media reported that average driving speeds for Beijing could go as low as 9 miles per hour, if car sales in Beijing keep growing at the rate of 2000 new cars per day. According to the Beijing Transportation Research Center, Beijing will have 7 million vehicles by 2015. Beijing was once known for bicycles in the Mao era, and this could be the pace that traffic moves says the Center....

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The low vaccination rates for the elderly in China is leading to the city of Shanghai being overwhelmed says this report in WSJ.

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Parts of China's economy recover yet the risks from covid contagion increase with covid everywhere and few restrictions, says the WSJ.

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This WSJ editorial points out that the current corruption drive in China is opaque and politically driven. Transparency International in its Corruption Perceptions Index shows China at 36 points having dropped by 20 places because of the lack of transparency in tackling corruption. Whistleblower protection should be part of an effecive drive says Transparency International. Also needed is an independent judiciary, free speech and the rule of law, institutions China has still to develop.

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Annalena Baerbock German Foreign Minister continues to voice concerns about German policy towards China after the sale of a stake in Hamburg port to Chinese shipping company Cosco. Chancellor Scholz went ahead with a smaller stake after opposition from 6 ministries within his administration including the Free Democrats and the Greens. He will be visiting China soon after the recent party Congress. Scholz's spokesperson says Scholz does not favor decoupling with China, yet favors diversifying and minimizing the risks.

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This Editorial Board opinion in the WSJ says the covid test requirement for travelers from China is inadequate because it does not apply to travellers from Europe. In the early part of the pandemic travelers from Europe brought the virus to the US. The virus first spread to Europe from China before entering the US. It does not go into effect for another week. WSJ cites reports that show the surge in cases in China is already accelerating in cities like Shanghai.

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The WSJ Editorial Board speaking for the business community traditional Republican groups finally takes up the election on issues of policy difference between Trump run Republican party and Harris run Democratic Party which it should have from Day One. The former president says something that has never happened in the last hundred years- policy will be decided after the election depending on what he decides to do. Cost of Living action is No 1 on voter priorities. "Drill, Baby Drill," is the whole Republican party platform for cost of living action. What is the Harris Democrats policy plan for cost of living action? WSJ says it is spending blowouts that caused inflation, the Green New Deal, entitlement expansions and student loan forgiveness.The real reason for the increase in cost of living comes from the overconcentration of supply chain by American business in China, on which every president Bush, Obama, Trump, did little or nothing. The lack of an effective vaccination program and ineffective vaccines in China by 2021 and 2022 led to the loss of the supplies from China leading to shortages for automobiles parts and other supplies and surge in prices in 2021-2023. Powell and the US central bank correctly raised rates but cautiously and waited for this to correct, president Biden brought manufacturing home through huge investments called the "spending blowout" that brought down the inflation from 9% to 3%. Some of that "spending blowout" went to chips and science to correct the errors of American Business and Reagan-Friedman theory of the Republican party that created this problem with a culture of utter  indifference to the ultimate costs of who makes what and where. The Inflation Reduction Act also tackled higher health and other costs paid by American workers and families, and invested in public services and in repairing the dilapidated crumbling American infrastructure. Are Republicans saying let the roads, bridges, airports, built in the 1940-1960's heyday of American industrialization as China and India's is now, let them crumble? What do the educated minds of the WSJ Board say about coal in China and India and their effects on their massive use multiple times that of US and EU in history, is it not damaging to the environment and why the Chinese realized the health in North China with coal winter use was worse than in South China cut their coal use. Are they saying lets burn fossil fuels and ignore, and if investment has to be made in solar who is going to do it? Is it Ok for Republicans thet we just import from China all our solar panels indefinitely into the future. "Green New Deal" is just a perjorative term, policy has to be made thoughtfully and without prejudice or bias of any sort for the best that we can do for the American people, ignoring so called "right" or "left." Doing what is right, what makes sense, is a lot harder.     ...