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This Journal editorial looks at the reason why Trusts and shadow banking became systemic risks, with trust products growing 7- fold in 2007-2012. It says money tends to find its way where its needed, and without junk bonds as in the U.S. the additional capital needs were being met by Trusts. The lid on interest rates meant individuals turned to the Trusts for higher rates. And the regulators failed to control the systemic risks posed by Trusts with their low transparency and regulatory control.

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China's consumer price index went up by 2.1% in March 2013, slower inflation than the 3.2% for February 2013. Food prices are growing at a slower rate, increasing by 2.7% in March over the prior year month, compared to a 6% increase over the prior year month in February.

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Electricity production and consumption data from the provinces has been overstated say experts making the decline in economic growth in China look less severe than it really is. Coal stockpiles at one key storage location in Qinhuangdao port reached 9.5 million tons in June, says an analyst for Wood Mackenzie, global energy consulting firm, a level not seen since the level of 9.3 million tons in November 2008 during the height of the 2008 financial crisis.

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Using a new methodology India's statistics agency revises growth for 2013 to 5.1%, for 2014 fiscal year to 6.9%. Growth for 2015 is forecast at 7.4%. For the 3 months Oct-Dec. 2014 the growth in GDP was at 7.5%. Changes in methodology include computing it at market price, not at factor cost. This adds up consumer and firm spending instead of producer costs.

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The Editorial Board of the Washington Post draws attention to the speculative bubble in housing in China, the policies for sale of land by local governments that fuel the bubble, the corrupt local officials, and GDP growth that reflects overinvestment in housing creating serious imbalances in the economy. The structure of the economic and political system which promote this overinvestment in real estate has also reduced the role of the Chinese consumer in GDP growth, and is preventing a rebalancing of the world economy.

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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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The action taken by local and government officials to address the high PM 2.5 pollutant levels and smog in Harbin, China, in October 2013. For the first time the Ministry of Environmental Protection has powers to take serious action. It is sending out inspection teams to cities across China for the winter to make sure environmental regulations are enforced. One big change is that cities now report in real time the change in pollutant levels for PM 2.5, the worst pollutant. By Oct. 2013 113 cities in China carried the live reports on websites. The Ministry has published a list of the 4189 factories in China that create 65% of total industrial air pollutants in China. The Jinping-Li Keqiang administration supports the stronger enforcement and has set a goal of reducing PM 2.5 levels by 15- 25% each year for Tianjin, Beijin and Hebi province in northern China, compared to 2012 levels. These three regions have been given the target of reducing coal use by 80 million tons a year.

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Krugman points to some striking facts about China in 2011. Consumer spending in China is only 35% of GDP and has declined over the years. There are no signs of rebalancing the economy away from exports by increasing consumer spending. China's dependence on exports for trade surpluses is greater than ever. Beyond this there is another disturbing fact. With weak consumer spending and heavy investment spending at about half of GDP, Kugman raises the question where is all that increase in spending going? Real estate investment takes up about half of the increase in investment spending, as the share of GDP of real estate investment almost doubles compared to figures for 2000. Much of the rest of the increase Krugman attributes to firms selling to the construction industry. The speculative fever, the corruption at the local level, the shadow banking system which is not protected and unsupervised, the poor quality of statistics, suggest a bubble phenomena that may not be under control of policy makers, and risks damaging China economy and the world economy in 2012-2013. After all China's economic and financial planners and banks are no better than America's or Japan's, where asset bubbles burst causing serious damage....

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Difficulties facing China from an overheating economy, a property bubble in many cities,, and a 22.5% jump in March in the broadest measure of money supply being the latest signs of trouble. The government announcement will show the economy growth at 12% rate in the 1st quarter of 2010 vs. 8.7% in 2009. The problem is that China may have acted too aggressively when the central bank increased money supply and state-owned banks in China's centralized banking system were ordered to jack up the lending. The $586 billion stimulus sent even more money to construction and energy companies. Without effective steps and fast the Chinese economy could run into serious problems.

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Andy Grove makes this passionate plea for the dignity of workers in America in 2010. It is worth reading in 2020 what this founder of Intel Corp and pioneering spirit of Silicon Valley has to say. Andy Grove of Intel says there is something seriously wrong when the unemployment rate in the Bay Area is higher than the 9.7% national average for the USA. American companies have added jobs like crazy in Asia, but things are sputtering back home. Hon Hai has 800,000 employees and makes most of the electronic and computer products for American companies. Grove says startups are not the answer, unless they scale up and create jobs the way Intel did starting back in 1968, with a $3 million capital infusion by investors. The move from the first production model to mass production is critical, as companies hire thousands of people. Innovation and scaling up have to go together. He makes his point clearly by pointing out that Apple has 25,000 employees. For every Apple employee there are 10 employees in China working on Apple iMacs, iPods, iPhones. And he adds that the same 10 to 1 relationship applies to other U.S. tech companies. And here Grove asks the tough question by first posing an answer. He says it sounds like- no big deal, we keep the high paying jobs, we keep most of the profits, but what kind of society are we going to have with highly paid professional workers and lots of people unemployed? And he doesn't mention that there are a lot more young people unemployed. He says the US has become very inefficient at creating tech jobs, and it would be a great mistake not to act decisively early on. And adds that the investments in such areas as solar power and electric car batteries have to be made early on to maintain leadership in these areas. Grove faults academics like Alan Blinder and others who say loss of manufacturing jobs and whole industries was no big deal. The U.S. has forgotten the value of manufacturing jobs. He wants to see America focus on jobs and rebuild its industrial base. And less of transferring engineering knowhow and new technologies overseas, technology that can help bring innovation and scaling up of factories at home. In his view individual companies doing their own thing, in a misguided fashion that jobs don't matter, is not the answer to the situation we face. The industrial economies of Asia, China at the present day, have focussed on jobs and technology, and scaled up. Grove reminds readers of the situation in America in 1932, when jobless veterans demonstrating outside the White House in large numbers were dispersed by soldiers with live ammunition and fixed bayonets. This makes him shudder at the very thought of it, and brings back memories of his early years in Hungary, as a young man in 1956. Are we listening? ...

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The loss of state support in the 1980's resulted in the gradual withering of the health care system in China as individuals bore the brunt of health care costs. Hospitals and clinics shifted to pay as you go system, with the emphasis on prescribing treatment that would boost income including costly tests.

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Francesco Gurrerera, Money and Investing Editor for the WSJ points to the risks in the U.S. and global economy in April 2012- overdependence on the U.S. Federal Reserve and the European Central Bank, not enough "de-leveraging" of financial institutions after the 2008 global crisis, and the increasing risk associated with individual investors and businesses investing in risky securities in search of yield in a low-interest rate environment.

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This article in the Economist magazine points out that official data do not accurately show the health of the banking sector, with large number of bad loans at smaller banks. Bank shares it points out are priced in a way that reflects bad loans at 5-10% of loans.

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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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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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According to a report from China's Environment Ministry for the first half of 2013, only 4 cities met the acceptable air quality standards. The national grade 2 standard in China is for 35 micrograms per cubic meter for levels of airborne particulate matter smaller than 2.5 micrograms in diameter. WHO standard is for 25 micrograms per cubic meter in a 24 hour period. The 4 cities with acceptable air qualty out of 74 cities monitored by the Environment Ministry are Lhasa in Tibet, island city Haikou, coastal town Zhoushan, and Pearl River Delta city of Huizhou.

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The private sector ignores health insurance. And state coverage in China is inadequate. More than two thirds of China's 1.3 billion people have no health insurance at all. If you have insurance you still pay up front in cash, if you do not have the cash up front you cannot get a surgery, treatment of any kind or any drugs, even if the insurance will later reimburse you. The Chinese health care system is dysfunctional and in a crisis because of the way it is structured, and the faulty policy incentives. It caps prices for basic drugs and procedures at below market rates, yet it lets hospitals profit from everything else from advanced drugs to sophisticated diagnostic tests. So hospitals invest heavily in technology and expensive testing. and drug sales account for 45% of revenues. And enforcement is lax. Doctors in Shanghai make monthly incomes of about $400, about what a taxi driver makes, so they supplement their income with bonuses earned by prescribing more expensive tests and drugs. There is no utilization review so the state reimburses for whatever the hospitals charge regardless of whether the test was needed or not. So the system is dysfunctional and lurching towards a crisis. In fact heavily burdening the middle class. The private outlays and burden of total health care spending has increased from 20% to 60% of total health care spending from 1978 to 2003, as the the health care system got the same dose of unfetterred capitalism as the rest of the system. The Government's share of total health care spending has dropped sharply. In addition there are design flaws that push expensive care and build in incentives for expensive care at the expense of good medical care. The government recognizes this problem and sees it as athreat to social stability. It has committed to increase spending on healthcare. ...

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Neil Irwin of NYT provides some counter intuitive ideas on U.S. Fed interest rate policy. He says it can't be take as a given that the Fed will raise rates in 2017-2018. This depends on how much punch there is in the Trump economic policies for stimulus, and for infrastructure spending, tax cuts. He cites Senate Majority Leader McConnell who said he would like to keep "tax reform revenue neutral." Getting large spending and pushing up the deficit is likely to run up against Republicans in Congress who have for 8 years opposed large spending increases and large deficits. Trump has given few details about his stimulus or infrastructure spending plans. He says the scale of the spending might not match the talk. Irwin cites JP Morgan Chase economists who have kept their forecasts for GDP growth just under 2% for 2017 and 2018. And he points out that even Trump appointees at the Fed might act independently. The Fed might look at being cautious considering that increased trade tensions with China, and the unpredictability of a Trump administration could hurt growth. Irwin does not mention the uncertainty in other areas such as policy towards Russia on which the Republican party and Congress have very different views than Trump, tensions over Taiwan, that can also affect growth. ...