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Prime minister Abe of Japan and President Jinping of China meet for 25 minutes on the sidelines of the Asia Africa Summit in Indonesia, on April 21, 2015. In a sign of thawing in relations both sides take an active interest in improving relations. This is the 60th anniversary of the Bandung conference in Indonesia, and Japan restated its pledge during the 1955 meeting of Asian and African leaders to not use force in territorial disputes. Abe said he had "deep remorse" for Japan's role in World War II. Xi Jinping's speech covered China's effort to build the "Silk Road" infrastructure projects in Asia and Africa, and said the AIIB bank was seen positively by the international community. Jinping emphasized the joint responsibility of both countries for peaceful development and regional stability. Abe suggested that a communications system for emergencies be established between the two countries and a defense dialogue be setup.

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Mohamed Hanif of the BBC's Urdu Service points to the manner in which the CIA and the ISI collaborated in the two time destruction of Kabul. And he points to a Pakistani view outside of the military which is not obsessed with India and would like to get down to the basics- electricity and infrastructure, better lives, and a safer neighborhood. In this perspective the Pakistani military and the Americans both do not understand the basic needs of the large majority of Pakistanis yearning for a better life. Contrast this with the Thomas Friedman piece which complains on the other side, with a note of innocence, of becoming a sucker in this game of a two-faced Pakistani military and intelligence services using the Americans for their own game, supporting the Americans and the insurgents at the same time. Hanif almost has the last word in this, pointing to the ordinary Pakistanis who are just poor and looking in.

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Just the idea that Starbucks was planning to open 1600 stores this year tells you that something was going to give at this breakneck rate of expansion. There's just no way training of employees let alone finding enthusiastic employees interested in giving first time and repeat customers a real warm friendly and exciting experience of the Italian expresso cafes that Schultz visited in the eighties, the sense of community and place to gather setting and the atmosphere. This is an awfully difficult thing to replicate. Starbucks has over 10,000 locations in the USA and at that point existing stores could take sales from other Starbucks stores and the experience deteriorate in some Starbucks to the point that Dunkin Donuts became a competitor of Starbucks suggesting that Starbucks was quickly losing its upscale appeal and cache, the special effect of its logo and its brand name. See the link to this article on McDonalds expansion into Starbucks type coffee and baristas concept. This may be the biggest dilution of a brand name in a long time. Reading his autobiography one senses a passion that brought a Brooklyn kid counting himself fortunate to get a college education, a kid who quickly grasped the opportunity in the way Italians drank their cafesitas and coffee in community setting cafes, and at the same time the feeling that could this New Yorker somehow Americanize or massmarket this concept to the point of making it like fastfood, or so afficionados passionate about coffee appeared to fear in his early encounters with them. Well now its happened, and Starbucks is being talked about in relation to McDonalds and Dunkin Donuts. Schultz makes an honest assessment though in saying that he was part of the team that made the decisions and let this happen, and let the bureaucracy that he is now trying to cut grow around him, and made the decisions that cheapened the Starbucks experience over time like drive throughs and so on. The Howard Schultz story of a Brooklyn American kid making good is reminiscent of the story of Dhirubhai Ambani, of a Saurashtan Indian making good in the polyester manufacturing business but making errors in the breakneck expansion....

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Did Putin overreact as he did in Georgia. On the issue of Russian speaking people in neighboring eastern European countries Putin has strong emotional reaction, as evident in the 2008 Georgian conflict. In Ukraine the issue assumes significance because of the effect of western sanctions, adverse foreign investor sentiment and the tendency of rich Russians, similiar to Argentines, to shift assets abroad. Capital flight was $75 billion in the first 6 months of 2014. Add to this adverse effect on foreign investor sentiment on an already slowing Russian economy, and growth will be seriously affected. Car sales are expected to decline by 12% in 2014, according to a trade group. The rhetoric has been toned down on Russian television. And Russian analysts now say relations with the West must be maintained. Polls by state run polling company WCIOM show 66% of the Russian public oppose Russian forces entering Ukrainian territory.

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Saudi Arabia continued to follow a policy of high oil production in 2016, and reported that it produced 10.67 million barrels a day in July 2016. Iran is producing at a pre-sanction level of 4 million barrels a day. 2017 oil demand prediction by OPEC is at growth of 1.15 million barrels a day. Experts says that the interests of Iran and the Saudis may be converging to reduce production as they face low oil prices. Iran needs to make large investments and Saudis face budget cuts with low oil prices. They point to this cooperation being temporary as there are issues of competing politics in the region, and beyond that both countries seek to expand their market share.

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This editorial in the WSJ says the reinterpretation of Article 9 of the Japanese Constitution to allow collective self-defense in no way brings Japan back to its militarist past. It reminds readers that Prime minister Abe faces the Japanese public's skepticism as a majority of Japanese in polls show they do not favor the collective self defense interpretation. The New Komeito party in the coalition government also restricted the interpretation. South Korea's reservations have also to be considered by Japan. The revised interpretation lets Japan fill some needed changes in its role in the new situation where China has taken a more assertive stance on territorial issues in Asian waters near Vietnam, the Philippines, Japan and South Korea. In this manner the restricted interpretations lets Japan fulfill a role necessary for the U.S. to continue its presence and strength in the Pacific and Asian waters needed to maintain peace in the region.

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This WSJ editorial calls the ISI and Pakistan army's playing both sides of the game- acting as an ally of the U.S. and supporting the Taliban- unacceptable. The editorial points to the Taliban and its leader Mullah Omar running the operations out of Quetta, in Baluchistan. And the Taliban faction loyal to Jalaluddin Haqqani having sanctuaries in North Waziristan and the tribal regions of Pakistan. Al Quaeda's No. 2 Ayman al-Zawahiri, it says, could very well be in Pakistan in some compound in the manner of bin Laden.

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A major shift in foreign investment may be taking place as the 2014 St. Petersburg International Economic Forum takes place in May 2014. Russian policy in Ukraine and tensions with the U.S. and Germany could lead to a shift in investment to other emerging market countries. China's tensions with Japan could lead to a similiar shift of Japanese foreign investment. At the same time India has elected a new government with an absolute majority and an overwhelming mandate from young people to accelerate development. The new government under the BJP party's Modi has a decade of experience attracting foreign investment in western India. Indonesia, Vietnam, Africa and other emerging market countries, could benefit from the shift in investment. Investment could also return to the home countries with lower labor costs in Southern Europe, lower labor/energy/transport costs in North America. For Russia the debate at the St Petersburg Economic Forum was about pursuing one of three policy paths with some riskier than others, or some combination also risky and uncertain- depending on state banks and oil windfall funds, increasing ties with Asian countries, continuing on the current path with lower foreign investment and continued capital outflows. The failure to use the time wisely to diversify the oil based economy which could have been better accomplished in an economy not overly dependent on crony capitalism and centralized economy, both current characteristics, will affect future progress. A key weakness for Russia compared to China is the centralization under one person Putin, more so in the third term. In China the two man team Keqiang and Jinping is part of a larger team chosen by consensus and negotiation and part of a rotational scheme. It has senior leaders who initiated the changes to a market driven economy in the nineties determined to see China on track....

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Nawaz Sharif's wife Kulsoom is expected to win the parliamentary seat from which the former prime minister was ousted by a decision of the Supreme Court.

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A very relevant comment about the media coverage on Putin's negotiations in Beijing for supplying natural gas to China, by a reader of the WSJ, Frank Peel. He points out China and Russia do not share the same goals and Putin talked about the Chinese as tough negotiators after signing the deal. The price as a "commercial secret" is because its years, could be 5, before gas actually flows to China from Siberian fields. Russia, is a smaller oil based economy- having failed to make the transition to a diversified economy- and very susceptible to the economic conditions in Europe and the U.S., as the 2008 crisis showed with very steep drops in output. President Obama has also pointed to this. Russia also shares with Argentina the tendency for elites- in the case of Russia a newly created oligarchy of business interests under Putin and his predecessor- to shift capital out of the country, making it even more susceptible to loss of value of the currency, the ruble. Devaluation of the ruble experienced under Yeltsin was severely traumatic for Russia, and the head of Russia's central bank went on state television recently to reassure ordinary Russians that this would not happen. The rainy day sovereign fund of over $400 billion acts as a cushion for shocks in short periods, but sustained loss of foreign investment would damage prospects for future improvements in standards of living or economic growth....

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Two US carrier strike groups and 17 naval ships prepare for joint exercizes with Japan's Self-Defense Forces off Okinawa in the first week of October 2021. In late September a British aircraft carrier group goes through the Taiwan Straits. China has flown aircraft near Taiwan's airspace before. On October 1-5 over a period of 4 days China sends 150 fighter, bombers and other aircraft near Taiwanese airspace. This situation is reminiscent of the situation in 1950-53 during the period of the Korean War when US president Harry Truman sent the Seventh Fleet to the Straits of Taiwan. In 1954 Chinese artillery started the shelling of offshore islands Quemoy and Matsu. This happened again in 1958 under president Eisenhower. At that point the US sent a naval contingent to the Taiwan Straits. The crisis was resolved through talks with China. Eisenhower then setup a joint defense agreement with Taiwan.  Here the Taiwan Defense Minister says China is capable of an invasion of Taiwan in 2021 but "it has to calculate what it would cost and what kind of outcome it would achieve." He also says that after 2025 "it would have lowered the costs and losses to a minimum." As US companies seek expansion in China the situation is changing rapidly in 2021 in the other areas.The US under president Biden sees the wars under previous presidents and the economic policies of not investing in American industrial strength have created risks for America in its role in the world. Biden seeks to restore American industrial strength through massive investments. It has been reported that Taiwan even considers the concentration of world semiconductor industry in Taiwan a way to assure the US dependence on Taiwan for semiconductors would lead to allied economic commitment to Taiwan in addition to defense commitments already given. In a sign of awareness of the distorted situation in semiconductor manufacturing that American companies such as Intel have allowed to happen, including ceding essential technologies in manufacturing semiconductors to other nations, the Biden administration has pushed to reverse these policies giving $52 billion in state aid. President Biden talked to president Xi of China in early September in a 90 minute call. This was aimed at easing hostility between the two countries. During that call the two leaders had agreed to abide by the Taiwan Relations Act, that states Taiwan's status should be resolved through peaceful means. It was passed in the US Congress in 1979 during the period when the US restored diplomatic relations with China. The situation today resembles that in the period after the Korean War into the late 1950's when China under Mao continued shelling of islands under Taiwan from the mainland. This makes the existing supply chains that make the US, Europe and India overly dependent on China,Taiwan, Singapore, for manufactured goods look antiquated and out of place. American companies such as Apple, GM, Black Rock and American financial companies are caught in a bind as they operate as if nothing is happening, when a lot has changed during the coronavirus pandemic. The Biden administration is pursuing its own long term policy for restructuring the supply chain for American industry. ...

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Ajami makes the point that opinions and attitudes -after the Obama efforts to improve America's standing in the Muslim world - havent changed much since the Bush days. He cites the Pew Global Attitudes Survey for 2009- In Turkey after the Obama Anakra visit favorable rating is only 14%, 69% are unreconciled. In Egypt 27% have favorable view 70% do not, in Pakistan unfavorables actally went up from 63% to 68%. He also points to the situation in Iran where the protester for the fraud in the election of Ahmadinejad did not receive much supprt from Obama, as the Obama administration decided to engage with Ahmadinejad to achieve nuclear settlement. In effect the rhetoric from Obama has not been matched with courage of convicitions , and lacks the courage to turn a new chapter by breaking from the past not just with talk but in real policy changes. And says Ajami the Arabs havve stopped listening to the rhetoric as little has been accomplished by way of change. At the same time false expectations may have been aroused because the Cairo speech was made at the University with the aging Mubarak at Obama's side, and beyond addressing these students the feeling clearly must be that the US would simply continue its policies of supporting old regimes that tolerate no dissent of any kind such as Mubarak's. ...

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Ghannouchi of Tunisia's Ennahada Party puts forward ideas for a pathway that Islamists could follow to integrate into the political life of Middle Eastern countries- compromise, working together with non-Islamist parties for the common good, focussing on economic development, pursuing moderate Islamist ideas, bringing in those excluded from the political process thorough a new inclusiveness, and respecting the opposition. He sees the successful election in Tunisia in which Ennahada worked with the opposition parties to ensure a smooth transition, as a model for other countries and the Arab neighborhood. In 2014 another process of smooth transition after elections, and respect for the opposition, happened in Indonesia with the election of Jakarta governor Widodo to be the new president. This set another model of respect for democracy, fair elections, respect for the opposition, focus on economic development and inclusiveness, for Muslim countries in another part of the world. Pakistan is another Muslim country which is working to create a model in the presence of much violence from Pakistan Taliban, and interventions by the military in politics. Assistance from the U.S. helped Iraq make the transition under the Bush administration till it unraveled with the policies of the Obama administration. Libya had the potential to make the transition with continued western cooperation and support- a change in administrations in the U.S. and France resulted in policies not supportive of a stable transition. The whole process now needs to be fostered carefully by western liberal democracies. Here Ennahada's Ghannouchi tells the world about the lessons learned by Islamist parties themselves for pathways to embrace for more inclusive societies focussed on economic development and progress....

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Friedman says Putin acted emotionally by letting impulsive reaction to the anti-Russian feelings in western Ukraine determine Russian policy following the collapse of the Yakunovych government. The months long Russian response in Crimea and eastern Ukraine may have secured Russian pride at a large cost. This includes the damage to the relationship with Germany, seting the EU on a path to look for other sources of energy to reduce dependence on Russian gas, a natural gas deal with China in which the price was kept "a secret" and may have provided China with a bargaining edge considering the timing of the negotiations. The most severe impact is in the loss of confidence within Russia, reminding the Putin administration that though the economy has grown in the Putin years it is still fragile and connected to the global economy. The capital outflows of the magnitude of $160 billion at a time of high inflation and sharply slowing growth actually put at risk the gains Putin and Russia made in the last decade, and risk the future agenda to improve the standard of living of the Russian people eyond the major cities. Putin's own assessment would eventually be closer to that of Alexei Kudrin. Kudrin, finance minister in Putin's previous term, correctly saw the dangers of impulsive policy concentrated in one figure, and the suppression of other voices including the opposition needed for Russia to be governed in a manner similiar to western Europe, to attain a similiar level of economic progress and standards of living. In today's global economy even the U.S., France, UK and states inside Germany need foreign investment for jobs, new ideas and technology, and the opinion expressed on media television and internet shapes investor sentiment to a larger degree than fully understood....

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After years of negotiations Russia and China reached agreement on a memorandum that provides deliveries by Gazprom of 38 billion cubic metres of natural gas to China by 2018, under a 30 year supply deal. The pipeline to deliver gas to China is part of a $50 billion project for a pipeline that takes gas to Vladivostock for liquefaction. A spur from that pipeline would take gas to China. This would make China the largest importer of natural gas from Russia. In 2012 Germany imported 33 billion cubic metres of natural gas from Russia, followed by other large importers Ukraine, Turkey, Belarus and Italy. A new agreement between China and Russia's state owned oil company, Rosneft, doubles the oil imports to 31 million metric tons a year under a 25 year deal. The current level of imports is 15 million tons set by a deal in 2009. The lower price of natural gas going to Europe helped the two countries bridge differences over price. China's National Petroleum Corporation will partner with Rosneft for exploration in new oil fields in the Russian Arctic region....

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The tensions that exist in Australian society, as a result of the large Chinese investments and imports of infrastructure building commodities such as iron ore, natural gas and other commodities. Australia's Pilbara region in the northwestern part of the country, has become one huge quarry for China, as an estimated 1 million tons of iron ore raw material is loaded onto 2 story high trucks each day- with automated driverless trucks system being implemented- and shipped by 2 mile long trains to waiting ships on the coast. Australians remember this done on a smaller scale in the 1980's by Japan. At the time Japan brought in Japanese workers. The same is true today but on a bigger scale, with China bringing in workers with lower pay. The concern now is what it was then, as one local leader put it- are we going to have towns with mines or mines with towns, he asked. The mining companies are looking at it purely as a commercial venture, and not investing in the towns. The towns now fear they will find the boom times gone someday and nothing tangible to show for it, no schools, hospitals and no infrastructure. And because the mining project companies fly people in and out, the 8000 aboriginal people in Pilbara- the original people of this land- see little of the mining expansion's benefits. Wandoan, a small place with 300 homes in the outback in Queensland, in eastern Australia, is an example of the gut wrenching change taking place in the mining areas. The lives of the people from the local pharmacy, the local supermarket, and the local ranchers, depend on the mining decisions made in China. This area was part of a planned, on again off again, $6 billion coal mine -part of a A$150 billion complex of natural gas and coal projects for exports to Asia in Queensland- and involved Xstrata buying 70,000 acres of the best grazing land for 7 coal mines. With the locals selling off, the mining uncertain, the supermarket closing, the whole town has the feeling of being up in the air, and fading out someday. Australian public sentiment recognizes this feeling, and at the same time is ambivalent about the impact. Polls conducted by the Lowy Institute for International Policy, show 73% of Australians feel Chinese economic growth has a positive impact, and at the same time 57% feel that there is now excessive Chinese investment, and 46% feel China will be a military threat in 20 years. Australians remember the same feeling about Japan's investments in raw material sources in the eighties. In 1988, polls then showed 70% of Australians saying there was too much Japanese investment, even though they also recognized that Australia had benefitted. The difference now is that there are also fears of China's influence, and foreign investment guidelines limit investments in Australian mining companies to below 50%. China's investment in Australia's natural resources comes in several ways: in the year upto July 2009 A$42 billion in export demand, A$3 billion in direct investment in Australian companies, and about A$5 billion in project financing. Iron ore sales to China amount to A$22 billion each year, and about one fourth of Australia's exports went to China, growing at a rate of 31% in 2009. According to the chief economist of Austrade, the government trade organization, Australia benefits from the economic relationship with China- this adds A$3,400 per year to every Australian household. Efforts to use some of the profits made by mining corporations for infrastructure and other public purposes, by increasing the mining tax have failed; as the mining industry launched a campaign against the government of Kevin Rudd, who was removed from office by his party. In the recent national elections, the ruling Labor party lost its majority, after losses in the resource rich states of Western Australia and Queensland. In the meantime the Australian currency has become the currency used by currency speculators who cannot use the yuan to make a bet on the currency- as the yuan is pegged to the dollar- and instead use the Australian dollar as a proxy. This makes it volatile, with the Australian dollar losing 10% of its value in a single day, when pessimism increased about China's growth forecasts. It also shows how much of the good story of employment and gdp growth in Australia is tied to the story in China, and the extent of the negative impact a reversal in this area can mean for Australians; especially now that the bad debt in the post-2008 explosion of bank lending poses risks to China's banknig system. ...