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The yuan has risen 14.5% against the yuan in the last 4 months, according to the Chinese Commerce ministry. Loosening the Chinese currency's peg to the dollar will increase the value of the renminbi even further. And with further declines in the euro expected this would seriously affect Chinese exporters to Europe. This also makes European goods more competitive than American goods in the Chinese market putting the Obama's administration's goal of doubling exports further at risk. The Shanghai stock index declined by 5.1% on Monday May 17, 2010, reflecting these concerns. The Chinese government continues to intervene in currency markets and the renminbi is now at 6.827 renminbi to the dollar.

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Government GDP figures show the GDP shrank by 1.8% in the third quarter of 2016 compared to the same period in 2015, the first such contraction in the economy since 2009. Household consumption was down 3.2%. The sharp decline in the value of the lira by 20% in 2016 makes imports costlier, in an economy dependent on consumption spending and tourism for higher GDP growth. Political uncertainty with instability in Turkey following a crackdown on opposition and media also leads to decline in foreign investment and investment by domestic firms.

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Taiwanese contract manufacturer Hon Hai is moving quickly to address higher costs for workers at its manufacturing sites in coastal regions of China. After extensive media coverage of conditions at Foxconn factories, a number of suicides, and Chinese government policy that encouraged higher wages for workers in foriegn owned plants, Foxconn has moved to sharply increase wages at its plants. By the end of 2011 production in cities in the interior of China- Chengdu, Chongqing, and Wuhan, where costs are one third less- will be 25% of production, up from 10% in 2010. By 2012, this will be up to 50% of Foxconn's production, according to Yuanta Securities of Taipei. Hon Hai is lowering dividends to finance the shift. Fourth quarter 2010 earnings of Hon Hai were $742 million, down 26% over the prior year, even though revenues went up by 56% to $33.1 billon- reflecting the higher costs. Hon Hai's stock is down 20% in the past year on the Taipei stock exchange. Other locations being considered by Hon Hai are Brazil, Turkey and Slovakia. Brazil's President Dilma Roussef, said that Foxconn is considering a $12 billion plan for Brazil. Hon Hai is the only manufacturer of Apple iPads and one of two manufacturers of the iPhone....

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The U.S. and China presented conflicting views on trade and security in Asia-Pacific region at the APEC summit in 2018. Vice President Pence said "we don't drown our partners in a sea of debt," in a criticism of the China Belt and Road Initiative. The U.S. has 1500 new projects and $61 billion in new investments in the region. Mr. Xi Jinping stated " confrontation in a Cold War, hot war, trade war will produce no winner." 

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Keith Bradsher visits Guangzhou, China, just as prime minister Wen Jiabao tells the National People's Congress that China is changing its priorities from high growth to sustainable development. As recently as 2007 GDP growth reached 14%! The minimum wage is expected to rise 13% each year under the five year plan. Even with the increase in wages owning an apartment is unaffordable in Guangzhou- a 1000 square feet apartment costs upward of $300,000, showing the extent to which the bubble in real estate prices affects young people who cannot afford to own an apartment. A new graduate with marketable skills such as computer engineering makes about $6000 a year, putting owning an apartmet beyond reach. Another change he notices today is that during visits to construction sites he does not see flood lit sites at night. This used to be the case because builders were scrambling to build. With government policies discouraging the property bubble there is no longer a need for work at night. The focus now has shifted to build low income housing....

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Canada is joining a club of nations that are dependent on exports of raw materials to China for growth- Australia, Brazil, Malaysia and Peru. This means that Canada's central bank takes its cues from demand in China, India, Korea and other emerging economies when it sets rates. With Canada's growth at around 3.1% in 2010, Canada's central bank is expected to increase rates gradually even as the U.S. keeps its rates low.

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President Hu Jintao at the opening of the 17th National Congress of the Communist Party of China. China's goal is to quadruple per capita GNP by 2020 compared to 2000. Population is expected to increase by 200 million people by 2020. While he described rampant corruption, the degradation ogf the environment and disparities between the urban and rural areas andbetween the coastal and interior areas as the major challlenges facing China he gave few details on how he planned to meet these challenges suggesting that not much that is new is being planned to address these challenges. He also pointed to the need for consumption driven growth moving away from the present export driven growth, but offered few details on how this would be addressed. This suggests that while Chinese leaders recognize some of the challenges facing them they may not understand the severity of these challenges as time passes or they have not the will to address them with major changes in the current model of economic growth or that the momentum of th currrent model is so great and the power is so spread out in China between different provinces and local regions in meeting economic goals of GNP growth that the central government cannot make major changes withouth the whole system losing some of its momentum and they fear that that would lead to problems that they would be even less effective in dealing with and the system could then come apart with the Communist Party being unable to direct things as the "core" leadership of the country....

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This analysis of coal use using graphs shows a clear move away from coal in the world, except for two growth markets China and India which account for 60% of the increase in coal use since 2008. India has gone black in its shift to increasing use of coal. China has begun the shift away from coal to address the smog over large urban areas, poor air quality and health impact of coal use. Because China used five times the coal used by India in 2017, the overall impact in China and India is showing a shift away from coal to hydropower, other renewables including solar energy. It is likely that India will make the shift following China's example in the future. 

The trend is clear when one looks at the incremental terawatt hour and where it comes from. The shift is clear to renewables, hydropower, and non fossil uses in the rest of the World and China which account for most of the coal use in the world.

 

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This report in the Economist points to the improved situation for Mexico after the scare from Trump's plans to build the wall and deport large numbers of immigrants. The peso dropped by 15% between mid November 2016 and January 2017, but has since recovered, and non-oil exports were up 5.5% in February 2017 over prior year with the manufacturing growth in the U.S.  Growth forecasts are now up from about 1% GDP growth previously to 2% for 2017, close to the 2.3% in 2016. Much of the change in mood in Mexico is a result of the failure of the early travel bans being blocked in the courts, the failure to get health care legislation through Congress, and the effort by the trade advisers and economic advisers around Trump to move Trump's positions more to the centre and closer to traditional Republican party positions. Wilbur Ross, the Commerce Secretary, says " a sensible agreement" can be reached with Mexico. Peter Navarro, trade adviser, talks about making "a mutually beneficial regional powerhouse." Robert Lighthizer, a veteran from the Reagan days, is likely to be made the new U.S. Trade representative. Still as the Economist points out the "20% border adjustment tax" continues to be supported by Paul Ryan in Congress to pay for tax cuts. But certainly the mood has lifted in Mexico in the first 100 days. This is true for economic policy in relation to China and Germany, and the close circle of Ross, National Economic Council head Gary Cohn, and Secretary of State Tillerson is moving Trump to the centre in policy statements to get things done. Mexico is faced with internal challenges of reestablishing the rule of law, improving infrastructure, reducing red tape and corruption, addressing problems in the education system, to promote economic growth. These challenges may prove to be as large as the external challenges were once thought to be. ...

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China's president Hu Jintao responds to questions by the WSJ on relations with the U.S., the 2008 financial crisis, the 11th Five Year Plan period, China's currency Renminbi, the Korean peninsula, and China's new assertiveness in foreign affairs.

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A big hurdle for local brands in China is the Chinese consumer's interest and respect for foreign brands. Asked about local brands buyers say they can't think of any, or say Chinese brands are shoddy in quality and value. Brands such as Haier in consumer appliances and Lenovo in tech are an exception. During the big surge in consumer sales in the last two decades Chinese companies producing local brands thought it adequate to simply imitate foreign brand names rather than take the difficult route of establishing the credibility of their own brand- an effort which might take years. Often the foreign name was changed slightly to keep the resemblance but mean something positive to Chinese consumers in the local language. Common are names such as Adidos, Hike, Cnoverse and Fuma for sneakers. Clio Coste keeps the connection to Lacoste with its crocodile logo. Coca Cola in Chinese is Kekoulele, translated to mean Tasty Fun. Only now are local companies giving serious attention to creating long term brand entity and image. The serious attention to brand names and branding comes at a time when China increasingly depends on consumer sales to power the economy with the decline in real estate and slower manufacturing. For the 11 months of 2014 retail sales were up 12 percent over the prior year period to $3.8 trillion, according to the National Bureau of Statistics. ...

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Analysts are predicting problems for Honda's plants in China stemming from wage increases. The wages of 500,000 yen per year for a worker in Honda's Chinese plants are double what is paid for a factory worker in India or 33% higher than in Thailand. For the Guangzhou plant to meet domestic demand it would have to have a 50-50 joint venture with a Chinese company, and this would mean getting government approval. For now that plant will remain an export hub. The entire plant -out of 4 Honda has in China- is committed to exporting the Jazz compact to Europe with production of 50,000 vehicles a year. Honda now owns 65% of the plant.

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China passes the U.S. in OPEC oil imports, with daily average imports of 3.7 million barrels compared to 3.5 million barrels for the U.S., according to Wood Mackenzie.

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The U.S. Senate voted 79-19 to go forward with a bill on sanctions against China for undervaluation of the yuan. The IMF says China's currency is "substantially undervalued."

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Admiral Mullen, chairman of the U.S. Joint Chiefs of Staff, says it is is good for the U.S. to be talking to China at top military levels. The way to make the U.S.-China relationship better is to keep talking, to keep up the dialogue. This is why Mullen invited China's Gen. Chen Bingde to the U.S. in May, and why Mullen visited China in July 2011. He says helathy skepicism can coexist with a healthy exchange of views. This relationship is too important to be allowed to managed through blind suspicion and mistrust, and Mullen says this was tried and didn't work. The dividends from such a policy are better understanding and willingness to live with differences, more transparency, and ability to address common challenges. Both Bengde and Mullen feel the future depends on the younger officers, who are ready for closer contact.

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Gen. Chen Bingde, People's Liberation Army chief of general staff, leads a military delegation from China to the U.S. He made a speech at National Defense University in Washington D.C. in May 2011. In that speech he pointed out that China's military capabilities remain far behind the U.S. capabilities, which he described as "a gaping gap." He described China's military modernization as having "unfortunately aroused unfounded suspicion and exaggeration of China's defense and military capabilities." With the overstatement of the threat posed by China only "distorting China's strategic intention, tarnishing its international image, and polluting the political environment for Sino-U.S. military relations." In other remarks he said China "does not want to use our money to buy equipment or advanced weapons to challenge the United States." The meeting between Admiral Mullen and Gen. Bingde was the first in seven years between military chiefs of the two countries.

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Efforts to boost the share of national income that goes to rural households and workers in China. The share of income taken by state owned enteprises and taxes paid by the enterprises would have to change for reducing the gap in incomes and reducing inequality in China.

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Andrew Jacobs provides this exceptional accoount of disillusionment of ordinary people in Brazil with the corruption scandals, deep recession, and the drop in president Rousseff's popularity from 50 percent in 2014 to 16 percent in April 2016.