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Major decisions about changing the economic structure- as advocated by the DRC and the PBOC- are expected from the Third Plenum party conference in China. This may compare to the Plenums in 1978 and 1993 which led to the setup of a market economy.

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China's GDP growth of 8.7% for 2009 is based on private sector investment in housing and infrastructure spending through the stimulus funds. Now with a asset price bubble developing from excesssive lending in 2009 the government is trying to slow bank lending. Experts see a situation similiar to Japan, as an asset price developed there in the 1980's after rapid industrialization. Even though China will still be a developing country after this phase of growth. Property prices are going up by 20% a year in the major cities. And with it making housing unaffordable for most people except the top 20% of the people who comprise about 120 million. This raises issues of equitable growth for Beijing. Much of the rest of the country is being left behind when it comes to housing and in other areas like health care.

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The shift away from Iranian oil with U.S. pressure and sanctions, and higher oil prices, could pose challenges for the Indian macroeconomic outlook in 2020.

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How U.S. -Chinese relations today parallel relations between the U.S. and Japan in the late eighties and early nineties. The dnagers of extrapolating from the enormous growth in China today and Japan then, into the future decades. The prospect say anlaysts that the model of development in Japan then, and China today, with an emphasis of state driven direction, works for several decades and then starts sputtering. At some point it becomes a model that cannot be sustained. Some analysts like Arthur Kroeber, of Dragonomics, an economic forecasting firm based in Beijing, see it as a model that is right for that stage of developmment in a country's progress from an agricultural to an industrial economy. But there are critical differences with Japan, for one China has not completed its transition to urbanization as it has large parts of the country that are rural. And industrialization has increased the level of inequality in China. See the articles citing Gini coeficcients for China which show significant deterioration. The other difference is that Japan still had a pioneering secotr of companies in the export sector from Toyota to Panasonic, whereas China's companies in most secotrs are state run or heavily financed by state run banks. Japan has one other striking difference in that it has a democratic form of government and a thriving and independent media, which makes Japan's transition to a post industrial economy with an increase in private initiative less difficult....

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As its economy slows and facing high debt levels, China benefits by an estimated $18 billion a month from lower oil prices in 2015. The estimate is from Starfort Holdings, investment and private equity group. The estimates as China benefits from lower prices of all commodities, including oil, are of about $250 billion annually as China replenishes its stocks of commodities. With $12 million barrels imported daily China is a major emerging market beneficiary, along with India, of the drop in oil prices. Continuing pressure on prices from the expected resilience in shale oil production in the U.S. with learning and the development of new production methods means the benefits are likely to continue. China has also not renegotiated price points in deals made earlier at higher prices with China and Venezuela, as it pursues its foreign interests. Stockpiling of grains and edible oils are being increased by 33% in 2015 by $24.7 billion.

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Spain's central bank was lauded for macroprudential supervision before the housing bubble burst. Will China's central bank and financial authorites which have managed the housing bubble upto this point face similiar problems? Can China be the sole exception even as housing bubbles burst with wide repercussions in the U.S., UK and Spain? Nicholas Lardy, of the Peterson Institute of international Economics, says urban housing stock makes up 41% of Chinese household wealth in 2011. The same figure for the U.S. is 26%. Chinese buyers invest in homes because low interest rates on savings accounts cannot keep up with inflation. Real estate investment was 13% of GDP in 2011. Home ownership is a recent development in China, only since 1990, Chinese have never experienced large price declines. Household debt as a percentage of disposable income has increased significantly in recent years, up to 53.6% in 2011 from 31.3% in 2008, according to Lardy.

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China surpassed Germany as the world's No. 1 exporter in the first 10 months of 2009, with $957 billion in exports compared to Germany's $917 billion, according to customs data compiled by Global Trade Information Services, a Geneva based firm. With the global financial crisis China's exports fell 20.4% in the first 10 months of 2009 compared to 27.4% for Germany and 21% for the USA. Global consumer spending has fallen more than the capital goods and machinery exported by Germany. Yet these numbers suggest that there has been no significant change to the export models of the two countries even after the global economc crisis revealed cracks in the export model.

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Growth of 2.5% for the second quarter in S. Africa, and expected growth of 2% in 2013, down from 2.5% in 2012. High unemployment at 25% and a 23% depreciation of the Rand against the dollar in 2013. The current account deficit is at 5.8% putting pressure on the Rand which is at 10.45 to the dollar in August 2013. Labor unrest at mines which make up about half of exports is hurting the economy. This has spread to other sectors. About 100,000 airport technicians and construction workers were on strike in August 2013 for wage increases at twice the annual inflation rate of 6.3%. Strikes are also taking place at Ford's auo plant.

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Two Harvard economists, Lawrence Summers and Lant Pritchett, say China is likely to revert to the mean of average long term growth of developed countries after this spurt of growth is over. Growth is likely to slow to 6% by 2016, and revert to the mean of 2% for industrialized countries in the long term. Goldman Sachs banker Jim O'Neill, says the growth at a higher rate could be sustained because of urbanization. Summers does not rule out this outcome as he accepts a range of outcomes, with the most likely outcome being a reversion to the mean. The factors often cited for slowing growth are lower of productivity of capital as corruption and close connections determine where capital is allocated, misallocation of capital, large increases in credit in the economy since 2009 leading to bad debt in the financial system, aging society and demographics with increasing numbers of older people. Other reasons are the choices being made by Chinese leaders for slowing down to address the problems of air pollution and contamination of water supplies, inflation in housing prices, overdependence on exports, need to shift to increasing domestic consumer spending but unable to do this with the lack of spending power of large parts of the population because wealth is excessively concentrated in the upper ranks of society. The need to manage these forces ensuring some measure of stability depends on finding ways to reduce the growing concentration of wealth and power, in itself a challenge for the Communist Party elite. A combination of different factors with some still unknown factors are likely to play a part in this reversion to the mean for China, a situation encountered by every country so far in North America, Europe and Japan. This makes it even more important that each developing society structure its development around the most optimal goals with the least costs attached to the development....

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

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Ma Jun, economist who worked for the IMF, World Bank, and Deutsche Bank is the Chief Economist of the People's Bank of China (PBOC) in April 2014.

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The current economic expansion in the U.S. in April 2014 is at 58 months from the beginning of recovery in 2009. In this exceptional account Josh Zombrun of WSJ compares the current expansion to previous expansions since 1950, with the views of experts such as Stan Hall of the NBER committee, which studies turning points. This expansion is forecast to go for 90 months into 2016 by the U.S. Federal Reserve, and 102 months into 2017 by the CBO. Sooner or later, says Stan Hall, some adverse unpredictable event takes place that ends the expansion. So far the expansion has been slow and protracted, as predicted by economists Reinhart and Rogoff from previous financial crises in the last century, giving it room to grow as corporate earnings continue to improve. Fed chairwoman's sense of slack in the economy also provides room for employment and incomes to grow in the later stages of the expansion. This is good news for the emerging market economies such as India and China, and for the European Union, faced with slowing growth. So how does this expansion compare with earlier ones. The expansion of the 1991-2001 of the tech boom was 120 months, 1961-1969 of the Sixties 106 months, 1982-1990 of the Reagan era 92 months. The controversial one on shaky foundations is the recent housing boom 2001-2007 of 73 months ending in a huge bust with the 2008 financial crisis. The shorter expansions are the 1975-1980 Post-Vietnam one for 58 months, and the 1970-1973 spurt before the OPEC price surge. Figures are from the NBER, CBO and the Federal Reserve's Summary of Economic Projections....

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Dow Chemical CEO Liveris says he sees signs of recovery in China in 2013. He says small and medium sized businesses in China have better access to financing in Dec. 2012 after a period of destocking and hard times accessing credit.