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Saudi Arabia needs current oil price of $60 a barrel to move up to $80 a barrel to balance its national budget. To do this OPEC needs to coordinate its oil production cuts with a group of 10 countries led by Russia that includes Mexico. These countries include countries in the former Soviet Union.  In December cuts of 1.2 million barrels a day were coordinated between the 2 groups to push up oil prices. Now the OPEC cartel plans regular meetings with the Russian led group to push up oil prices. Under a draft document an alliance between the 2 groups would last 3 years and include regular meetings. Earlier Prince Salman led Saudi government proposed replacing OPEC with a new group combining Russia and Saudi Arabia and the other countries in OPEC, yet giving most of the decision making power to Russia and Saudis. This was rejected by Russia and was received poorly by Iraq, Iran  Nigeria, Angola, Algeria. The Iraqis reminded Saudis that OPEC was started in Baghdad. ...

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In depth interview with Kyohei Morita, chief economist of Barclays Capital, Finance Asia explores different aspects of the Japanese economy and developments after 1987 and under Koizumi, the role of exports and how ordinary households are affected. He points out a few important things about the Japanese economy that are not generally recognized. One is that Japanese banks are vulnerable in the way the subprime crisis has exposed banks in the USA. Their vulnerability comes from owning 15% of the shares on the stock market which came down from a higher number after years of reducing stock holdings. When the Nikkei drops below 9000 this reduces the bank's capital and leads to credit tightening. Morita points out the risk of turning a moderate slowdown from lower exports into a severe slowdown if banks are reluctant to lend. The other point he makes is that small nonmanufacturing companies in Japan have to thrive for Japan to thrive, but he is bearish about private consumption. In a revealing statement he says that in his research he has found that the path connecting corporate profitability to households is seriously eroding. This is due to globalization as Japanese companies are offshoring aggressively, and 30% of the Japanese market capitalization in held by foreigners. His point is that Japanese managers now tend to see wages as costs just like American managers do and not the way they did in the past, so salary costs are suppressed in favor of shareholder dividends which flow out of Japan. Finance Asia referred to an OECD study that shows Japan's ranking in terms of per capita income fell from fifth highest in the OECD in 1992 to 19th in 2002, a fact that Morita recognizes as strange as western economies have tended to follow relatively stable long term income growth, and which he attributes to Japan's terrible demographics with population shrinking since 2006 and more elderly and retired supported by a smaller percentage of working age people. In an exceptionally revealing statement Morita points out that Japan has globalized from the outside but not from the inside. Japan he says needs more foreign direct investment and ideas, and more immigrants, fresh labour and fresh taxpayers. Which is remarkably true as Japan tends to be rather insular as a country and tends to keep out immigrants. The influx of Polish and Eastern European immigrants to the UK under the Blair-Brown Labor government years would be unimaginable in Japan. In the meantime Japan's estimated $15.7 trillion in financial assets held by households or three time national GDP is something that makes it possible for now for Japan to sustain the upward trend in the debt to GDP ratio....

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Wang Lequan, who is the party leader for Xinjiang, is aprotege of Chinese President Hu . He was pulled into the party from Hu's days in the Chinese Communist Youth League. He is from Shadong province China's industrial and petroleum capital. Because of his familiarity with the oil industry Wang may have beeen transferred to Xinjiang province. He arrived in Xinjiang just as the Soviet Union was dissolving, and the central Asian administrative regions that were formed inside the Soviet Union were becoming independent countries. China's army had occupied Xinjiang in 1949 under Mao. Millions of Chinese were leaving the Xinjiang area and the thinking was that the Uighur Muslims of Xinjiang would also form their own country. What happened was that Wang reestablished the Chinese presence in Xinjiang province. He opened the Xinjiang region's oil and gas fields to drilling, laid pipelines east to China and west to Kazakhstan. A Production and Construction Corps was formed so that Chinese soldiers leaving the army service could find work, and this was later listed on the Shanghai Stock Exchange. With growing industry and government jobs, many Chinese were attracted back to Xinjiang. In the 1990's 2 million Chinese went back to Xinjiang. At the same time his policies may have had the effect of making the local Uighur people feel that their culture and language weere being threatened and they needed to fight for its survival. Wang acting with dictatorial powers tightly constrained Uighur culture and religion. He substituted Mandarin for Uighur in primary schools, saying minority languages were "out of step with the 21st century," and banned or restricted Islamic practices among government workers, including the wearing of beards and head scarves and religious practice like fasting and praying while at work. He has been Communist party leader in Xinjiang for 15 years, which is unusually long, such jobs usually only lasting 10 years. SInce 9/11 Wang has fought hard to limit the influence of separatism, and the East Turkestan Islamic Movement, an Uighur group, and he has swept up thousands of Uighurs accused of terrorism or religious extremism. He worked to have the East Tukestan group listed as Al Quaeda allies by the Bush administration in 2002. He is closely allied to President Hu who supported Wang, giving him a seat on the Politburo. Wang's protege in Xinjiang has been placed in charge in Tibet. There is a sense with Wang and Hu, that a failure now in Xinjiang and in Tibet to control unrest would lead others in the Chinese leadership who think differently on theses issues to bring a different leadership to succeed them. The difficulty here is that the Han who now comprise 40% of the population in Xinjiang, and are heavily involved in the oil and gas industry, have brough a modernizing influence to Xinjiang but may not be received by the Uighurs as apositive influence. First any government that is in power for as long as 15-20 years tends to lose support over time. This happened with the Congress in Kashmir. Too powerful or corrupt, and lose touch with the young people. But compared to India the democratic ways of that country have helped it recognize the need for respecting the language, religion and culture of the people of each region. The British did the same, so it was something that went back to British times. With the monopoly of power of the Communist party, lack of precedent and amodel to follow that respected different culture and languages, the intolerance of Uighur and Tibetan language, religion and culture, creates a different situation in China. Elections were held in Kashmir recently and an effort is being made for reconciliation with different groups, the media is open and different voices are heard. No such prospect remains for Tibet and Xinjiang. ...

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The OPEC meeting in Doha in April 2016 fails to lead to an agreement to freeze oil production at Jan. 2016 levels, with Iran staying away from the meeting.

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The $369 billion climate and tax package that is coming out of a deal arranged by Schumer in the US Senate could be a path breaking action. It would enable president Biden to get close to the climate goals he promised last year of cutting US carbon emissions by 50% by 2030 over 2005 levels to combat effects of climate change. The $369 billion package would get the US to reduce carbon emissions by 40% in 2030 over 2005 levels.  Severe effects of climate change with fires and floods in the US, Europe, and Asia have brought a new spotlight to the issues facing the world and the fact that something needs to be done quickly with the US leading the way. Senator Manchin a holdout because he comes from a coal mining state was a holdout. He was persuaded to join as the new legislation provides for support for transmission lines and other investment during a transition period so that it does not affect the economy in his state. The transition period is now accepted as Europe now looks at gas and coal as a temporary resource following the cutoff of Russian supplies and the US will be shipping more LNG to Europe during this period. The vote for this legislation is planned under reconciliation so that the vice president MS. Harris can cast the deciding vote for Democrats in a 50-50 split Senate. Republicans oppose the legislation. Manchin now says it will reduce inflation. Briefly it will give $7500 to every buyer of an electric vehicle EV, and $4000 for a used EV. It would give rebates for heat pumps that increase home energy efficiency. Billions of dollars would be spent for clean energy industries, and for solar, wind, geothermal, other renewable energy projects. Democrats want to get the legislation through the Senate quickly by next week, and so secret were Schumer's negotiations that most Democrats did not know about it. Coming on the heels of the $280 billion CHIPS and Science bill for $280 billion investment in US semiconductor industry, this will be a big win for president Biden and shows the persistence and patience of Mr. Biden is paying off.   ...

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Pharmaceutical companies in the US will be required to provide rebates to buyers if they increase prices above the inflation rate. This is one of the provisions in the Inflation Reduction Act of 2022 also called the Climate and Tax bill. Medicare recipients total out of pocket costs for drugs will be capped at $2000 under the Biden bill.

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"This is a very, very, very, big deal," says Chuck Schumer about the Climate Change bill that is expected to pass in the Senate of the US this weekend August 6-7, 2022. This is the biggest climate bill in history, and may also be called the Schumer-Manchin bill after the compromise reached to give oil and gas some support with big moves for climate change action between now and 2030. It gets Biden and the US to within 40% reduction of carbon emissions over 2005 emissions by 2030, when the commitment by the US at COP26 Glasgow is for 50% reduction over 2005 emissions by 2030.

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Bill Gates of Microsoft calls the Biden climate change bill the single most important legislation in US history. He says only America can offer the vision for climate change action, and make it happen. Gates says he has talked to corporate leaders in America and most of them say they are ready to act once the climate change bill is passed. Many of the industries that need to be created are in the early stages and the climate change bill will create the right atmosphere for sustained innovation.

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The US has 124,000 charging stations for electric vehicles. The Biden administration wants to see that go up to 500,000 by 2030. For this to happen $7.5 billion is already going to states under the $1 trillion infrastructure bill of 2021. The Biden $369 Climate bill that passed the Senate last week will give companies that build each charging station 30% tax credit for maximum of $100,000, up from $30,000 earlier, to build one charging station. It costs about $100,000 to tear up pavement and build a conduit for a charging station.

Supply chain issues will linger for 2022 and 2023 with shortage of chips after which it will move much faster says this report in WSJ. For EV's to go mainstream charging stations are a priority.

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What is in the biggest climate bill in history, the Biden $369 billion Climate Bill, also called the Inflation Reduction Act of 2022? The WSJ looks at the bill that passed the US Senate and now heads for passage in the House of Representatives this weekend. 

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President Biden signs the $379 billion Climate bill and tax legislation into law. Mr. Biden told a White House crowd to standing ovation "This is the biggest Climate Bill ever." At the signing event Mr. Biden tells Senator Manchin  "Joe, I never had a doubt." Senator Schumer quietly negotiated the final bill with Senator Manchin in one crucial week just recently to get it through a 50-50 split US Senate.

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As president Biden signs the biggest Climate Bill in history Jim Tankersley says there is still more to be done. In addition to the work remaining for children, women and families, he mentions the Civilian Climate Corps with financing for $10 billion that is patterned on the Civilian Conservation Corps set up during the Depression by FDR, which is still to be passed. This would form "the next generation of conservation and resilience workers," says Biden. Much like the 3 million people who helped build parks, cut trails and planted trees around the US in the 1930's and 1940's under FDR.

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After repeated efforts to open up Mexico's oil industry in the last decade by the PAN party and stalling by the PRI opposition, Mexico finally makes the sorely needed changes to its constitution which will allow foreign oil companies to compete with Pemex. In Dec. 2013 the PRI Nieto government and the PAN join together for the two thirds majority in Congress to change 3 key articles in Mexico's constitution- 25, 27, 28. These articles are vestiges from an earlier era of nationalistic oil laws following the nationalization of the oil industry by President Cardenas in 1938. Brazil under president Cardoso opened up its oil industry by passing consitutional amendments in 1997, allowing foreign oil comapnies to compete with Petrobras. Argentina is in the process of attracting western oil companies to develop its shale oil reserves. Mexico faces the prospect of becoming a oil importer by 2020 if oil production remains stagnant at current levels of 2.5 million barrels a day, creating a new urgency for action. Pemex officials say Pemex can only come up with $25 billion a year of the $60 billion needed to develop Mexico's deep water reserves and shale oil and gas reserves. Under new legislation Mexico will allow profit-sharing contracts, production-sharing contracts, and licenses where foreign oil companies would pay royalties and taxes to the government. A major change supported by the PAN party is setting up a sovereign oil fund modeled on the Norwegian Oil Fund to send part of the oil income into long-term savings and pensions. A trust run by Mexico's autonomous central bank will manage the fund, according to a final draft. The changes are important for the Mexcian economy to increase the growth rate, and coupled with other changes for competitiveness and anti-monopoly legislation in the domestic economy. Additional changes coming from the Pacto de Mexico to the education system and other areas, form a major bipartisan effort for the first time in Mexico's recent history to improve Mexico's competitiveness in the global economy....

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Holman Jenkins on what may be advisable steps like the Fed's efforts to print money and acquire every kind of private asset, but which have large "confidence costs", and the effects of the Madoff scandal that have another kind of confidence cost and is he says peculiarly demoralizing. He is skeptical about how well spent the $1 trillion stimulus will be, and there is a sense of bailout fatigue. He is also skeptical about policy which he says is always bad to a degree the way its made in ademocracy, but becomes an unvirtuous circle in the kind of situation where different interest groups start competing for where money should be spent. In the light of all this Jenkins sees a lost decade and asks the reader to get ready for that. The image of long lines from the 1930's that is the picture going with this article, with the caption "what the stimulus looks like", is not reassuring. It captures the mood of those who know that the strong steps ofthe new administration and the Fed are advisable, but simply not convinced that these steps will lead back to prosperity in the years ahead. In the American economy built as it is on innovation, energy, immigrants, and independent spirit, the churning of companies as new ones take the place of the old, and new technologies and their commercialization, the virtues of policy driven goals however worthy are set against the limits and inherent weakness of government bureaucracies, and the crowding out of private investment and initiative as the government steps in. Compared to previous periods like the FDR administration when business skeptical about the policy of the Democrats remained critical, there is a different situation today when bipartisan policy has been developed for years and a consensus was reached after the Reagan years that was followed through the Democratic Clinton administration, so that critiques of policy can be used to improve the way things are done to address the economic problems facing the country. ...

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When Manmohan Singh and Wen of India and China said in Beijing that the people of both countries were united in their aspirations for the future this was very real and sincerely stated. Geopolitics is somebody's game who does not know his own country, people and history in these long neglected parts of Asia. Here in India or China in different ways its these aspirations that matter. India is desperately trying now to improve schooling after years of neglect for the country's rural poor, where the quality of government schools is startlingly poor. The figures are dismal. In general only 1 in 10 college age Indians go to college. But its worst at the lower poorer parts of society. Among the poorest 20% of Indian men half are illiterate and only about 2% graduate from high school. For the top 20% of Indian people only 2% are illiterate and 50% are high school graduates. The problems even as the government pans to triple spending in the next 5 years run deep. There is no motivation among school teachers because for years the schools have been neglected and there is no education culture in poor villages, teachers are poorly trained if at all, they are late or absent and there islittle discipline and education ethic. Parents are very poor and do not understand the value of education and want to pull children out of school to earn wages for the family as migrant labor. The parents are illiterate or poorly educated so there is very little help at home. And there is corruption as some of the money to be invested in school buildings, equipment, lunches, teachers, etc is stolen or goes to bribes. There are some dedicated people but they get washed out in the midst of so much apathy, lack of conviction, corruption and lack of motivation among teachers parents and village officials....

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Harry Markovitz who invented Portfolio Theory and won the Nobel Prize in 1990 on the economic crisis and solutions. His idea in portfolio theory is that you reduce risk by creating a portfolio of uncorrelated assets. Owning GM and Ford together is more risky because they are correlated. The securities owned by banks were not not portfolio type with uncorrelated risk, they were all of one type in the mortgage securties industry. He goes to the heart of the problem saying until all these securities are scrutinized and underlying mortgagesare scrutinized, sorted out down to the individual zip code level, and this is not as complicated as it seems given the amount of resources that can be thrown at this problem, and given what is at stake, and they are striped of their lack of transparency, the country and the global economies that are intertwined with America's problems cannot see a solution to this problem. And this is true for the banks like Bank of America and Chase and the government run banks like the FDIC Indymac bank, where only a small fraction of homeowners can be helped with loan modifications to make monthly payments affordable, as a big part of the mortgage loans they hold or service are in the form of mortgage securtities where they don't make the decisions. Unless mortgage securities are sorted out to restore transparency and the government steps in with help and mandates a direction, the foreclosure process will lead to dropping property prices and further deterioration and economic stagnation similiar to the experience of Japan. Markovitz says it could take a year to do this. He says "the valuation process will take as long as takes, but it is the primary step toward effectively utilizing the very controversial bailout and avoiding the structural problem of a stagnant economy." Writes Gordon Crovitz of WSJ, "to put the issue in probability terms, the odds are very remote and nonexistent that the economy can recover until these basic steps are taken."...

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Senators in the US Congress, Rubio and Schumer, have asked the US government to look into Apple's plans to work with Chinese semiconductor company YMTC. As a result the Commerce Department has placed export restrictions on YMTC. This NYT report looks at the two decade long rise of China and of Apple after Steve Jobs returned to Apple in 1997 and shifted manufacturing to China. When Jobs returned to Apple he found major quality issues at Apple's manufacturing facilities, a demoralized workforce, and financial losses, with CEO Michael Spindler running the company into the ground. Jobs had to start with afresh model for Apple and decided to shift manufacturing to China under the engineering leadership of Tim Cook. Alabama native Cook went to Auburn University for his engineering degree and Duke for his business degree. Cook joined Jobs in 1998 at Apple and for ten years till 2007 the two cut costs, shifted to contract manufacturers and rebuilt Apple with new products, iPod, iPad and the iphone. By not manufacturing Apple avoided quality control issues, and the costs of maintaining inventory. It was Tim Cook who ran operations worldwide, and he gradually built up the manufacturing relationships in China with Foxconn, which makes most of Apple's products in sprawling Chinese factories that employ 20 years later about 3 million Chinese workers. Foxconn was chosen by Apple in 2000 to manufacture the Apple Mac laptop. Before that it was a parts supplier to Apple. Increasingly Apple relied on Foxconn to make its new products including the iPhone. Both companies growth relied on the manufacturing of Foxconn to the point where Apple was dependent on Foxconn and had intertwined its operations with Foxconn in China. Today the whole relationship is being called into question after two decades in which American workers suffered the effects of the outshoring of manufacturing jobs. It should be noted that though Mr. Trump raised the issue of manufacturing exclusively in China with Apple, the Trump administration did little to change the practices of the company that pioneered this type of massive manufacturing role for China. That surrendered the entire supply chain to foreign suppliers in the interest of cutting costs and maintaining huge profit margins, with which it financed an array of new products and reached $1 trillion in sales from $10 billion, hundredfold increase over 2 decades. American workers and families for the first time in American history got very little from this Cook-Jobs project. American infrastructure in communities that would have been supported by American factories including the services and infrastructure in communities financed through local taxes, a practice throughout the Industrial Revolution in the US, was sharply disrupted over 2 decades. It caused a rupture in social relations and increased inequality in the US, and defunded infrastructure that comes with manufacturing.  It is the task of the Biden administration to now correct what Mr. Trump simply talked about but never induced or required Apple to do- lead the resurgence of American manufacturing, and make its major investments in the US, invest in its workers and families, invest in America. ...

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Monthly reports are issued on bank lending by the Treasury. The report for February shows business lending is down by 24% in its dollar value from the previous month, and a similiar decline in student, auto and credit card lending. The only increase is in mortgage lending as government efforts to hold down interest rates heave led to a refinancing boom. The two largest lenders Wells Fargo and Bank of America reported a 35% jump in mortgage lending in February over January. Businesses are charged more for loans by Chase, which it says is to reflect increased risks, and Chase has sharply reduced its business lending. This is bad news for the economy, because it means businesses will continue to pull back, and some businesses will layoff employees and others may close for lack of financing. The other link to the report in the WPost about the consumers who have jobs, but are acting flat broke suggests consumption will continue to decline, which puts stresses on businesses as sales revenues for all sorts of products decline across the spectrum of the economy. With less acess to costlier financing, and declining sales, the picture of continued large job losses is being etched, and will continue to be etched as these are becoming things that will not change for a long time. Banks are insolvent or close to being insolvent, so lending is only like to change if the government takesover the banks and puses through lending at attractive rates. But it has to do this quickly, before confidence drops to a level where the demand for loans just isn't there. China is able to push lending through the banks because government controls the banks, this cannot happen in the US unless the government actually steps in to take over the insolvent banks and push through a large lending program. In this sense the Obama program while admirable and helpful to stabilize things a bit, is only part effective, and can never really restore confidence or a serious measure of economic stability because of the three pillars of progress in this situation, it can impact only two directly- foreclosure prevention, and business plus consumer lending. The third consumption is something it can only indirectly control through foreclosure prevention and lending, but which is headed down as Americans convert to a frugal lifestyle. And in these two areas of foreclosure prevention and business lending the government is failing. The fourth pillar of progress in the recovery is employment, and this is also an area the government can only indirectly control through stimulus spending on infrastructure, education and energy, but is largely influenced by foreclosure prevention- which keeps home prices from falling rapidly and overshooting and reduces household wealth- and business/consumer lending. These are ER (f) FPL (CE). Economic Recovery as a function of Foreclosure Prevention and Lending, and Consumption and Employment, where indirect control is shown by ( ). With not much in place for FPL- the only two variables government can directly control if it takes strong and immediate action before its influence on these two variables begins to diminish over time- Obama's inexperience and learning curve and failure to take bold action to get serious results on FPL, may result in admirable demeanor and rhetoric but medicore results and a struggling economy for years to come. ...

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The Guardian provides this first account of what happened in the Galwan Valley border between India and China at the Line of Actual Control. It is described as the worst fighting in 60 years. On the high steep ridge lines above the rapidly moving Galwan River a patrol of Indian soldiers encountered Chinese troops in a steep section of a high mountainous region. They believed the PLA Chinese Army had withdrawn from the ridge in line with a June 6 disengagement agreement. The Indian government says that what happened afterwards was pre-meditated ambush by the PLA forces. In the fighting that ensued the Indian commanding officer was pushed from the narrow ridge falling to the gorge below. Reinforcements from the Indian side were called from a post 2 miles away and about 600 men were fighting in near total darkness in high mountain ridge with stones iron rods for upto 6 hours. Following a decades long tradition to avoid escalation of hostilities because of nuclear weapons of both countries the two sides have not used other weapons. Most deaths on both sides were from soldiers falling or being knocked from mountain ridges. The main problem in the conflict is the Line of Actual Control exists but since China's takeover of Tibet in 1950 there is no agreement that has set the official border. The British Simla agreement in 1912 set the border with Tibet in an agreement between Tibet and the British Empire in India, when Tibet was an independent country. China claims that historically going back to Ming and Qing dynasty Tibet was part of its region. For most of its history Tibet was an autonomous region with closer contacts with India because it is close to Nepal and Nepal is very near the Indian Bihar state border.  A new rail link from Raxaul, Bihar in India to Kathmandu is only 137 kilometres, and from Kathmandu to the Tibet border is only 205 kilometres. Fast rail or road links would put Tibet within a few hours by rail or road to Tibet from India. For the entire period the US exists as a nation about 250 years and from the first landing of the colonists on American shores about 1607 Tibet was a mountainous region that was so remote that few people even knew about the country's existence. Beijing and Shanghai are four thousand kilometres away, India much closer to Tibet through Kathmandu, Nepal and India sharing a common culture, and no one thought much about the mountainous borders at 15000- 20,000 feet in the western Himalayas, till China's takeover of Tibet in 1950. India had no clear idea what this meant in 1950- no clear border except for what was agreed between the Tibetan independent government  and the British in 1912 which was set under the British Empire- resulting in a fluid border. And China had no clear idea that this would put in a place it would not want to be thousands of miles from the Yangtse valley region home to most of China's population, in a remote mountain region at heights of 15,000 -20,000 feet, with little to gain. Throughout history since 1000 and earlier Tibet remained a region that acted as a buffer between China's western provinces and India, the high mountains at 15,000- 20,000 feet making it inaccessible. Which is why the Ganges plains and the Yangtse river valley plains contact was made more through the oceans than by land, and the areas developing distinctly different language and cultures. All this changed after 1954 when the Qinghai Tibet highway was built, the closest city on the Chinese side is Xining. Xining to Tibet is a distance of about 2000 kilometres at an average height of 4500 metres or about 14,000 feet.  ...

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U.S. President Obama's speech at the General Assembly of the United Nations, Sept. 25, 2012, in which he praised the work of Ambassador Stevens in Libya. He defended First Amendment rights in the U.S. of free speech to an audience that was not fully convinced that the "anti-Muslim video" designed from the start as a provocation, produced as a violation of probation rulings by the individual, and being given the distribution channel of a vast internet audience by Google owned YouTube, falls neatly into free speech. The German government is reported to be looking into banning the video from distribution in Germany, and Germany also protects free speech under its constitution. He cited the "voices that rally against bigotry and blasphemy," as the way a First Amendment democracy protects against this type of abuse; which would suggest that Google as one of these voices has the responsibility to treat such content similiar to other extreme content of a pornographic nature or other such provocative material inducing violence, which it routinely excludes from distribution. The ultimate protection of First Amendment rights comes not from the U.S. constitution itself, but from the responsible exericize of wisdom, vigilance and common sense. During the long years of drafting of the Constitution when Madison, Jefferson and others who drafted the document took pains to include every protection so that basic rights would be preserved, George Washington pointed out that one could do this only upto a point, because it was upto the wisdom of future generations to preserve these rights, and this could never be done completely....

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Following concerns about cybersecurity China is pursuing the development of its own chipmaking capacity. Tsinghua Ungroup has the support of Chinese officials. It emerged as China's largest chipmaker with the acqusition of two large mobile chip firms in China- Spreadtrum Communications and RDA Microelectronics in 2013. Intel took a 20% stake in Tsinghua Unigroup for $1.5 billion as a way to enter the market serving the low end smartphone market with chips. Taiwan's Mediatek Inc. is its largest competitor. China's technology in mobile chips is still 2-3 years behind the latest technology, according to research firm Canalys, and serves mostly the low end smartphone market for emerging markets.Tsinghua Unigroup CEO, Zhao Weiguo, says that by investing in the long term like Huawei, his firm can catchup with larger companies in the field. China plans to use its chip fund to invest $1.6 billion in the company over the next 5 years. The company was started in 1988 at elite Tsinghua University, is still controlled by a university holding company, and has close ties with the government through its alumni network. Xi Jinping and other leaders graduated from the university. It is considering an acquisition of HP's H3C. H3C is a joint venture of 3Com and Huawei supplying corporate data networking gear in China, now part of HP. Tsinghua Unigroup is in its early stage of development as its estimated sales of $1.8 billion for 2015, make up a small part of the $340 billion global chip market, according to Gartner Research....

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Former prime minister Nawaz Sharif's PML-N party wins 125 of 269 seats in Pakistan's parliament. The Tehreek-e-Insaf party of Imran Khan won 31 seats and the PML-N party of the current president Asif Zardari won 32 seats mostly in Sindh province. Independents won 31 seats and some of these independents are likely to support Sharif in forming a new government. Election turnout of 60% showed a large degree of enthusiasm in this election and hopes for economic revival in Pakistan. The focus of Sharif will be on improving the economy, tackling electricity shortages, and building infrastructure. Sharif promised to pursue peaceful relations with India and Afghanistan, and keep the focus on the economy. Sharif and his advisers are bringing a new deftness in the dealings with the Army, the Pakistan Taliban, saying he would call for a halting of drone strikes, limiting the role the U.S. plays in the region, both positions popular in Pakistan, separating differences with former president Musharraf from the institutional role of the military. Small business owners and large business support Sharif's efforts to tackle electricity shortages, with an estimated loss of $12 billion in idled factories alone. The long period of political conflicts between the military, the judiciary and the political parties have led to neglect of Pakistan's economy, as neighboring countries in Asia surged ahead. The realization that popular pressure for improving standards of living and the economic opportunities are both huge has led to an extraordinary election, and put Sharif at the centre of an important new beginning for Pakistan. ...

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IMF forecasts for Greece's growth rate are proving too optimistic. The IMF forecast is for zero growth in 2013, and increases of 2.3% and 2.9% in 2014 and 2015. Even in its pessimistic projections the IMF forecasts a 1% downturn in 2013 and growth of 1.3% and 1.9% in 2014 and 2015. The government sector was a large part of the economy. Now that this is shrinking, the export sector which only represents 20% of GDP is too small to generate needed growth. Greece also lacks the competitiveness and the large foreign enterprises that operate in Ireland, making growth less likely. A major problem is also the 40 billion euros Greeks have withdrawn from their banks in recent years. Even the figure of 120% of GDP that is expected in 2020 under the March 2012, 130 billion euro bailout is a very hypothetical figure, having no sound basis. Landon Thomas cites a confidential study the IMF had circulated in February 2012, showing the long term prospect for Greek debt if growth does not materialize because of lack of competitiveness. It would increase the debt to GDP ratio to 178% by 2015, and leave it at the current level of 160% of GDP in 2020. Some experts say the whole debt sustainability analysis makes no sense, with the question being insolvency in the case of Greece, not illiquidity. And requiring a focus to bring debt to manageable level to create prospects for growth. The Wall Street Journal emphasizes this in its editorial on Feb. 29, 2012....